<PAGE> PAGE 1
000 B000000 10/31/96
000 C000000 0000872687
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001 A000000 ADJUSTABLE RATE SECURITIES PORTFOLIOS
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001 C000000 4153122000
002 A000000 777 MARINERS ISLAND BOULEVARD
002 B000000 SAN MATEO
002 C000000 CA
002 D010000 94404
002 D020000 1585
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007 C020100 U.S. GOV'T ADJUSTABLE RATE MORTGAGE PORTFOLIO
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007 C020200 ADJUSTABLE RATE SECURITIES PORTFOLIO
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007 C010400 4
007 C010500 5
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007 C010800 8
007 C010900 9
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010 A00AA01 FRANKLIN ADVISERS, INC.
010 B00AA01 801-26292
010 C01AA01 SAN MATEO
010 C02AA01 CA
010 C03AA01 94403
010 C04AA01 7777
012 A00AA01 FRANKLIN/TEMPLETON INVESTOR SERVICES, INC.
012 B00AA01 84-1036
012 C01AA01 SAN MATEO
012 C02AA01 CA
012 C03AA01 94403
012 C04AA01 7777
013 A00AA01 COOPERS & LYBRAND L.L.P.
013 B01AA01 SAN FRANCISCO
<PAGE> PAGE 2
013 B02AA01 CA
013 B03AA01 94105
013 B04AA01 2119
015 A00AA01 BANK OF AMERICA NT & SA
015 B00AA01 C
015 C01AA01 SAN FRANCISCO
015 C02AA01 CA
015 C03AA01 94104
015 C04AA01 1502
015 E01AA01 X
015 A00AA02 BANK OF NEW YORK
015 B00AA02 C
015 C01AA02 NEW YORK
015 C02AA02 NY
015 C03AA02 10286
015 E01AA02 X
018 00AA00 Y
019 A00AA00 Y
019 B00AA00 193
019 C00AA00 FRNKTEMGRP
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021 000000 0
022 A000001 SBCI SWISS BANK CORP. INV. BANK
022 B000001 13-2639550
022 C000001 678124
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022 C000002 612366
022 D000002 3368
022 A000003 DAIWA SECURITIES AMERICA, INC.
022 B000003 13-5680329
022 C000003 588638
022 D000003 0
022 A000004 DONALDSON LUFKIN & JENRETTE
022 B000004 13-2741729
022 C000004 528910
022 D000004 0
022 A000005 BEAR, STEARNS & CO., INC.
022 B000005 13-3299429
022 C000005 523838
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<PAGE> PAGE 3
022 A000006 UBS SECURITIES, INC.
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022 C000006 483686
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022 A000007 BANKERS TRUST CO.
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022 C000009 332383
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<PAGE> PAGE 4
042 D00AA00 0
042 E00AA00 0
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<PAGE> PAGE 5
054 L00AA00 Y
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067 00AA00 N
068 A00AA00 N
068 B00AA00 N
069 00AA00 N
077 A000000 Y
077 B000000 Y
078 000000 N
080 A00AA00 ICI MUTUAL INSURANCE COMPANY
080 B00AA00 NONE
080 C00AA00 130000
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083 A00AA00 N
083 B00AA00 0
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<PAGE> PAGE 6
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<PAGE> PAGE 7
070 C020100 N
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070 E020100 N
070 F010100 N
070 F020100 N
070 G010100 N
070 G020100 N
070 H010100 N
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070 I010100 N
070 I020100 N
070 J010100 Y
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070 L010100 N
070 L020100 N
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070 M020100 N
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070 O010100 Y
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<PAGE> PAGE 8
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<PAGE> PAGE 9
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<PAGE> PAGE 10
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<PAGE> PAGE 11
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<PAGE> PAGE 12
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SIGNATURE DIOMEDES LOO-TAM
TITLE TREASURER
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
ADJUSTABLE RATE SECURITIES PORTFOLIOS OCTOBER 31, 1996 ANNUAL REPORT AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 01
<NAME> U.S. GOVERNMENT ADJUSTABLE RATE MORTGAGE PORTFOLIO
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 381,367,161
<INVESTMENTS-AT-VALUE> 380,757,717
<RECEIVABLES> 26,905,332
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 407,663,049
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,232,052
<TOTAL-LIABILITIES> 1,232,052
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 544,861,030
<SHARES-COMMON-STOCK> 43,397,073
<SHARES-COMMON-PRIOR> 56,035,644
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (137,820,589)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (609,444)
<NET-ASSETS> 406,430,997
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 30,994,231
<OTHER-INCOME> 0
<EXPENSES-NET> (1,180,414)
<NET-INVESTMENT-INCOME> 29,813,817
<REALIZED-GAINS-CURRENT> (419,303)
<APPREC-INCREASE-CURRENT> 2,011,283
<NET-CHANGE-FROM-OPS> 31,405,797
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (29,813,817)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 8,516,434
<NUMBER-OF-SHARES-REDEEMED> (24,351,072)
<SHARES-REINVESTED> 3,196,067
<NET-CHANGE-IN-ASSETS> (116,370,960)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (137,401,286)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,891,159
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,980,697
<AVERAGE-NET-ASSETS> 472,677,613
<PER-SHARE-NAV-BEGIN> 9.33
<PER-SHARE-NII> .589
<PER-SHARE-GAIN-APPREC> .040
<PER-SHARE-DIVIDEND> (.589)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.37
<EXPENSE-RATIO> .25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> .000
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
ADJUSTABLE RATE SECURITIES PORTFOLIOS OCTOBER 31, 1996 ANNUAL REPORT AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NUMBER> 2
<NAME> ADJUSTABLE RATE SECURITIES PORTFOLIO
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 19,050,053
<INVESTMENTS-AT-VALUE> 18,645,902
<RECEIVABLES> 1,920,398
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 20,566,300
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<OTHER-ITEMS-LIABILITIES> 32,053
<TOTAL-LIABILITIES> 32,053
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 23,682,114
<SHARES-COMMON-STOCK> 2,083,336
<SHARES-COMMON-PRIOR> 2,760,971
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (2,743,716)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (404,151)
<NET-ASSETS> 20,534,247
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,447,481
<OTHER-INCOME> 0
<EXPENSES-NET> (56,372)
<NET-INVESTMENT-INCOME> 1,391,109
<REALIZED-GAINS-CURRENT> (37,828)
<APPREC-INCREASE-CURRENT> 139,862
<NET-CHANGE-FROM-OPS> 1,493,143
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,391,109)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 741,450
<NUMBER-OF-SHARES-REDEEMED> (1,560,875)
<SHARES-REINVESTED> 141,790
<NET-CHANGE-IN-ASSETS> (6,544,653)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (2,705,888)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 89,969
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 104,963
<AVERAGE-NET-ASSETS> 22,483,590
<PER-SHARE-NAV-BEGIN> 9.810
<PER-SHARE-NII> 0.607
<PER-SHARE-GAIN-APPREC> 0.050
<PER-SHARE-DIVIDEND> (0.607)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.860
<EXPENSE-RATIO> 0.250
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000
</TABLE>
REPORT OF INDEPENDENT AUDITORS
To the Shareholders and Board of Trustees of Franklin
Adjustable Rate Securities Portfolios:
In planning and performing our audit of the financial
statements and financial highlights of the funds
comprising the Franklin Adjustable Rate Securities Portfolios
for the year ended October 31, 1996, we considered its internal
control structure, including procedures for
safeguarding securities, in order to determine our
auditing procedures for the purpose of expressing our
opinion on the financial statements and financial
highlights and to comply with the requirements of Form
N-SAR, not to provide assurance on the internal control
structure.
The management of the Franklin Adjustable Rate Securities
Portfolios is responsible for establishing and maintaining an
internal control structure. In fulfilling this
responsibility, estimates and judgments by management
are required to assess the expected benefits and
related costs of internal control structure policies
and procedures. Two of the objectives of an internal
control structure are to provide management with
reasonable, but not absolute, assurance that assets are
safeguarded against loss from unauthorized use or
disposition and that transactions are executed in
accordance with management's authorization and recorded
properly to permit preparation of financial statements
in conformity with generally accepted accounting
principles.
Because of inherent limitations in any internal control
structure, errors or irregularities may occur and not
be detected. Also, projection of any evaluation of the
structure to future periods is subject to the risk that
it may become inadequate because of changes in
conditions or that the effectiveness of the design and
operation may deteriorate.
Our consideration of the internal control structure
would not necessarily disclose all matters in the
internal control structure that might be material
weaknesses under standards established by the American
Institute of Certified Public Accountants. A material
weakness is a condition in which the design or
operation of the specific internal control structure
elements does not reduce to a relatively low level the
risk that errors or irregularities in amounts that
would be material in relation to the financial
statements and financial highlights being audited may
occur and not be detected within a timely period by
employees in the normal course of performing their
assigned functions. However, we noted no matters
involving the internal control structure, including
procedures for safeguarding securities, that we
consider to be material weaknesses, as defined above,
as of October 31, 1996.
This report is intended solely for the information and
use of management of the Franklin Adjustable Rate Securities
Portfolios and the Securities and Exchange Commission.
S\Coopers & Lybrand L.L.P.
San Francisco, California
December 4, 1996
