FRANKLIN TEMPLETON JAPAN FUND
SUPPLEMENT TO THE CLASS I
STATEMENT OF ADDITIONAL INFORMATION ("SAI")
SAI dated August 1, 1996
I. As of January 1, 1997 the Fund offers a second class of shares,
designated "Advisor Class." This SAI describes the Class I shares of the Fund.
All Fund shares outstanding before the offering of Advisor Class shares will
retain their previous rights and privileges.
Class I and Advisor Class shares differ as to sales charges, expenses and
services. Different fees and expenses will affect performance. Advisor Class
shares are described in a separate prospectus and SAI relating only to that
class. For more information concerning Advisor Class shares, contact your
investment representative or Distributors.
II. The discussion under "HOW DO I BUY, SELL AND EXCHANGE SHARES? - LETTER
OF INTENT" is amended by replacing the fifth sentence of the first paragraph
with the following text:
Your holdings in the Franklin Templeton Funds, acquired more than 90
days before the Letter is filed, will be counted towards completion of
the Letter but will not be entitled to a retroactive downward adjustment
in the sales charge.
III. The discussion under "THE FUND'S UNDERWRITER - THE FUND'S RULE 12B-1 PLAN"
is amended by replacing the heading and the first paragraph with the following
text:
THE FUND'S RULE 12B-1 PLAN - CLASS I
The Fund has adopted a distribution plan or "Rule 12b-1 plan" with
respect to its Class I shares pursuant to Rule 12b-1 of the 1940 Act.
Under the plan, the Fund may reimburse Distributors or others up to a
maximum of 0.35% per year of its average daily net assets, payable
quarterly, for costs and expenses incurred in connection with any
activity which is primarily intended to result in the sale of the Fund's
Class I shares. Payments to Distributors or others could be for various
types of activities, including (1) payments to broker-dealers who
provide certain services of value to the Fund's shareholders (sometimes
referred to as a "trail fee"); (2) reimbursement of expenses relating to
selling and servicing efforts or of organizing and conducting sales
seminars; (3) payments to employees or agents of Distributors who engage
in or support distribution of Class I shares; (4) payments of the costs
of preparing, printing and distributing prospectuses and reports to
prospective investors and of printing and advertising expenses; (5)
payment of dealer commissions and wholesaler compensation in connection
with sales of the Fund's Class I shares exceeding $1 million (on which
the Fund imposes no initial sales charge) and interest or carrying
charges in connection therewith; and (6) such other similar services as
the Board determines to be reasonably calculated to result in the sale
of Class I shares. Under the plan, the costs and expenses not reimbursed
in any one given quarter (including costs and expenses not reimbursed
because they exceed 0.35% of the Fund's average daily net assets) may be
reimbursed in subsequent quarters or years.
January 17, 1997
