O 711 *PA2
SUPPLEMENT DATED JANUARY 1, 1999
TO THE PROSPECTUS OF
TEMPLETON DEVELOPING MARKETS TRUST - ADVISOR CLASS
DATED MAY 1, 1998
The prospectus is amended as follows:
I. As of January 1, 1999, the fund offers four classes of shares: Class A,
Class B, Class C and Advisor Class. Before January 1, 1999, Class A
shares were designated Class I and Class C shares were designated Class
II. All references in the prospectus to Class I shares are replaced
with Class A.
II. The following is added under "What Are the Risks of Investing in the
Fund?":
YEAR 2000. When evaluating current and potential portfolio positions,
Year 2000 is one of the factors Asset Management Hong Kong considers.
Asset Management Hong Kong will rely upon public filings and other
statements made by companies about their Year 2000 readiness. Issuers
in countries outside the U.S., particularly in emerging markets, may
not be required to make the same level of disclosure about Year 2000
readiness as is required in the U.S. Asset Management Hong Kong, of
course, cannot audit each company and its major suppliers to verify
their Year 2000 readiness.
If a company in which the fund is invested is adversely affected by
Year 2000 problems, it is likely that the price of its security will
also be adversely affected. A decrease in the value of one or more of
the fund's portfolio holdings will have a similar impact on the price
of the fund's shares. Please see "Year 2000 Problem" under "Who Manages
the Fund?" for more information.
EURO RISK. On January 1, 1999, the European Monetary Union (EMU) plans
to introduce a new single currency, the euro, which will replace the
national currency for participating member countries. If the fund holds
investments in countries with currencies replaced by the euro, the
investment process, including trading, foreign exchange, payments,
settlements, cash accounts, custody and accounting will be impacted.
The process to establish the euro may result in market volatility. It
is not possible to predict the impact of the euro on the business or
financial condition of European issuers or on the fund. The transition
and the elimination of currency risk among EMU countries may change the
economic environment and behavior of investors, particularly in
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European markets. To the extent the fund holds non-U.S. dollar (euro or
other) denominated securities, it will still be exposed to currency
risk due to fluctuations in those currencies versus the U.S. dollar.
Resources has created an interdepartmental team to handle all
euro-related changes to enable the Franklin Templeton Funds to process
transactions accurately and completely with minimal disruption to
business activities. While there can be no assurance that the fund will
not be adversely affected, Asset Management Hong Kong and its
affiliated service providers are taking steps that they believe are
reasonably designed to address the euro issue.
III. Under "Who Manages the Fund?", the following is added after the
"Administrative Services" section:
YEAR 2000 PROBLEM. The fund's business operations depend on a worldwide
network of computer systems that contain date fields, including
securities trading systems, securities transfer agent operations and
stock market links. Many of the systems currently use a two digit date
field to represent the date, and unless these systems are changed or
modified, they may not be able to distinguish the Year 1900 from the
Year 2000 (commonly referred to as the Year 2000 problem). In addition,
the fact that the Year 2000 is a non-standard leap year may create
difficulties for some systems.
When the Year 2000 arrives, the fund's operations could be adversely
affected if the computer systems used by Asset Management Hong Kong,
its service providers and other third parties it does business with are
not Year 2000 ready. For example, the fund's portfolio and operational
areas could be impacted, including securities trade processing,
interest and dividend payments, securities pricing, shareholder account
services, reporting, custody functions and others. The fund could
experience difficulties in effecting transactions if any of its foreign
subcustodians, or if foreign broker-dealers or foreign markets are not
ready for Year 2000.
Asset Management Hong Kong and its affiliated service providers are
making a concerted effort to take steps they believe are reasonably
designed to address their Year 2000 problems. Of course, the fund's
ability to reduce the effects of the Year 2000 problem is also very
much dependent upon the efforts of third parties over which the fund
and Asset Management Hong Kong may have no control.
IV. Under "How Is the Fund Organized?", the first paragraph is replaced
with the following:
The fund is a diversified, open-end management investment company,
commonly called a mutual fund. It was organized as a Massachusetts
business trust on August 9, 1991, and is registered with the SEC. The
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fund offers four classes of shares: Templeton Developing Markets Trust
- Class A, Templeton Developing Markets Trust - Class B, Templeton
Developing Markets Trust - Class C and Templeton Developing Markets
Trust - Advisor Class. Additional series and classes of shares may be
offered in the future.
V. In step 2 under "How Do I Buy Shares? - Opening Your Account," the
minimum investment to add to your account is changed from $25 to $50.
VI. Under "May I Exchange Shares for Shares of Another Fund? - Exchange
Restrictions":
(a) the second item is replaced with the following:
/bullet/ Generally exchanges may only be made between identically
registered accounts, unless you send written instructions
with a signature guarantee. You may, however, exchange
shares from a fund account requiring two or more signatures
into an identically registered money fund account requiring
only one signature for all transactions. PLEASE NOTIFY US IN
WRITING IF YOU DO NOT WANT THIS OPTION TO BE AVAILABLE ON
YOUR ACCOUNT. Additional procedures may apply. Please see
"Transaction Procedures and Special Requirements."
(b) and the following new item is added:
/bullet/ You must meet the applicable minimum investment amount of the
fund you are exchanging into, or exchange 100% of your fund
shares.
VII. In the "By Phone" section of the chart under "How Do I Sell Shares?",
the first bulleted item is replaced with the following:
/bullet/ If the request is $100,000 or less. Institutional accounts
may exceed $100,000 by completing a separate agreement. Call
Institutional Services to receive a copy.
VIII. Distribution option 3 in the section "What Distributions Might I
Receive From the Fund? - Distribution Options" is replaced with the
following:
3. RECEIVE DISTRIBUTIONS IN CASH - You may receive dividends, or both
dividend and capital gain distributions in cash. If you have the money
sent to another person or to a checking or savings account, you may
need a signature guarantee. If you send the money to a checking or
savings account, please see "Electronic Fund Transfers" under "Services
to Help You Manage Your Account."
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IX. Under "Transaction Procedures and Special Requirements,"
(a) the section "Joint Accounts" is replaced with the following:
JOINT ACCOUNTS. For accounts with more than one registered owner, the
fund accepts written instructions signed by only one owner for
transactions and account changes that could otherwise be made by phone.
For all other transactions and changes, all registered owners must sign
the instructions.
Please keep in mind that if you have previously told us that you do not
want telephone exchange or redemption privileges on your account, then
we can only accept written instructions to exchange or redeem shares if
they are signed by all registered owners on the account.
(b) the reference to $50,000 in the section "Signature Guarantees" is
replaced with $100,000.
(c) and the section "Keeping Your Account Open" is replaced with the
following:
KEEPING YOUR ACCOUNT OPEN
Due to the relatively high cost of maintaining a small account, we may
close your account if the value of your shares is less than $250, or
less than $50 for employee accounts. We will only do this if the value
of your account fell below this amount because you voluntarily sold
your shares and your account has been inactive (except for the
reinvestment of distributions) for at least six months. Before we close
your account, we will notify you and give you 30 days to increase the
value of your account to $1,000, or $100 for employee accounts. These
minimums do not apply to IRAs, accounts managed by the Franklin
Templeton Group, the Franklin Templeton Profit Sharing 401(k) Plan, or
the series of Franklin Templeton Fund Allocator Series.
X. Under "Services to Help You Manage Your Account,"
(a) the second sentence in the section "Automatic Investment Plan" is
replaced with the following:
Under the plan, you can have money transferred automatically from your
checking or savings account to the fund each month to buy additional
shares.
(b) the second paragraph under "Systematic Withdrawal Plan" is replaced
with the following:
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If you would like to establish a systematic withdrawal plan, please
complete the systematic withdrawal plan section of the account
application included with this prospectus and indicate how you would
like to receive your payments. You may choose to direct your payments
to buy the same class of shares of another Franklin Templeton Fund or
have the money sent directly to you, to another person, or to a
checking or savings account. If you choose to have the money sent to a
checking or savings account, please see "Electronic Fund Transfers"
below. Once your plan is established, any distributions paid by the
fund will be automatically reinvested in your account.
(c) and the following new section is added after the section
"Systematic Withdrawal Plan":
ELECTRONIC FUND TRANSFERS
You may choose to have dividend and capital gain distributions or
payments under a systematic withdrawal plan sent directly to a checking
or savings account. If the account is with a bank that is a member of
the Automated Clearing House, the payments may be made automatically by
electronic funds transfer. If you choose this option, please allow at
least fifteen days for initial processing. We will send any payments
made during that time to the address of record on your account.
XI. In the "Useful Terms and Definitions" section, the definition of "Class
I, Class II and Advisor Class" is replaced with the following:
CLASS A, CLASS B, CLASS C AND ADVISOR CLASS - The fund offers four
classes of shares, designated "Class A," "Class B," "Class C" and
"Advisor Class." The four classes have proportionate interests in the
fund's portfolio. They differ, however, primarily in their sales charge
and expense structures.
Please keep this supplement for future reference.
