UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

Securities Exchange Act of 1934
Release No. 34-53844 / May 19, 2006

Administrative Proceeding File No. 3-11769

Notice of Proposed Plan for Distribution of a Fair Fund and Opportunity for Comment

Notice is hereby given, pursuant to Rule 1103 of the Securities and Exchange Commission's ("Commission") Rules on Fair Fund and Disgorgement Plans, 17 C.F.R. § 201.1103, that the Division of Enforcement has submitted to the Commission a proposed plan ("Distribution Plan") for the distribution of monies placed into a Fair Fund in the above-captioned matter. On December 13, 2004, in the above-captioned matter, the Commission issued a Corrected Order Instituting Administrative and Cease-and Desist Proceedings, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order Pursuant to Sections 203(e) and 203(k) of the Investment Advisers Act of 1940, Sections 9(b) and 9(f) of the Investment Company Act of 1940, and Section 15(b) of the Securities Exchange Act of 1934 ("Order") (Securities Act of 1934 Release No. 50841A, Investment Advisers Act of 1940 Release No. 2337A, Investment Company Act of 1940 Release No. 26692A). Among other things, the Commission's Order authorized and established the Fair Fund at issue.

OPPORTUNITY FOR COMMENT

Pursuant to this Notice, all interested parties are advised that they may print a copy of the proposed Distribution Plan from the Commission's public website, http://www.sec.gov/litigation/admin/34-53844-pdp.pdf, and Franklin Templeton's public website, http://www.franklintempleton.com. Interested parties may also obtain a written copy of the proposed Distribution Plan by submitting a written request to Marc J. Fagel, Esq., Associate District Administrator, United States Securities and Exchange Commission, 44 Montgomery Street, Suite 2600, San Francisco, CA 94104. All persons who desire to comment on the Distribution Plan may submit their comments, in writing, no later than June 19, 2006:

1. to the Office of the Secretary, United States Securities and Exchange Commission, 100 F Street, N.E., Washington, DC 20549-1090;
    
2. by using the Commission's Internet comment form (http://www.sec.gov/litigation/admin.shtml); or
    
3. by sending an e-mail to rule-comments@sec.gov. Please include the appropriate Administrative Proceeding File Number on the subject line.
    

Comments received will be publicly available. Persons should submit only information that they wish to make available publicly.

THE DISTRIBUTION PLAN

The Distribution Plan provides for distribution of the disgorgement, interest and civil penalties paid by Franklin Distributors, Inc. ("FTDI") and Franklin Advisors, Inc. ("FA") in this matter to the Franklin Templeton Funds ("FT Funds"). The Fair Fund consists of the $20,000,001 paid by Franklin Templeton Distributors, Inc. and Franklin Advisors, Inc. plus any accumulated interest. As proposed in the Distribution Plan, if approved, each FT Fund would receive a pro rata share of the Fair Fund as calculated by the Independent Distibution Consultant. The pro rata shares of the Fair Fund would be determined based on information contained in FTDI's and FA's records.

For the Commission, by its Secretary, pursuant to delegated authority.

http://www.sec.gov/litigation/admin/34-53844.htm