0000353291-22-000013.txt : 20221215 0000353291-22-000013.hdr.sgml : 20221215 20221215181933 ACCESSION NUMBER: 0000353291-22-000013 CONFORMED SUBMISSION TYPE: TA-1/A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20221129 DATE AS OF CHANGE: 20221215 EFFECTIVENESS DATE: 20221209 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FRANKLIN TEMPLETON INVESTOR SERVICES LLC /TA CENTRAL INDEX KEY: 0000353291 IRS NUMBER: 000000000 STATE OF INCORPORATION: CA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: TA-1/A SEC ACT: 1934 Act SEC FILE NUMBER: 084-01036 FILM NUMBER: 221465996 BUSINESS ADDRESS: STREET 1: 3344 QUALITY DR CITY: RANCHO CORDOVA STATE: CA ZIP: 95670 BUSINESS PHONE: 916-463-4350 MAIL ADDRESS: STREET 1: P O BOX 997152 CITY: RANCHO CORDOVA STATE: CA ZIP: 95899-7152 FORMER COMPANY: FORMER CONFORMED NAME: FRANKLIN TEMPLETON INVESTOR SERVICES INC /TA DATE OF NAME CHANGE: 20010427 FORMER COMPANY: FORMER CONFORMED NAME: FRANKLIN ADMINISTRATIVE SERVICES INC /TA DATE OF NAME CHANGE: 19931214 FORMER COMPANY: FORMER CONFORMED NAME: FRANKLIN TEMPLETON INVESTOR SERVICES LLC /TA DATE OF NAME CHANGE: 19810605 TA-1/A 1 primary_doc.xml X0405 TA-1/A 0000353291 XXXXXXXX 084-01036 true LIVE SEC FRANKLIN TEMPLETON INVESTOR SERVICES LLC /TA FRANKLIN TEMPLETON INVESTOR SERVICES INC /TA 404665 3344 Quality Drive Rancho Cordova CA 95670 N 916-463-4350 Y 100 Fountain Parkway St. Petersburg FL 33716 300 Atlantic Street 12th Floor Stamford CT 06901 N Y FIS Investor Services LLC/TA 084-06522 4249 Easton Way Suite 400 Columbus OH 43219 N Other Templeton Worldwide, Inc. 01/01/2001 Sole Member Mgmt of business & affairs of registrant Limited Liability Company Y Legg Mason, Inc. 100% Ownership of Templeton Worldwide, Inc. Franklin Resources, Inc. 100% ownership of Legg Mason, Inc. N N N N N Y Franklin Advisers, Inc. (FAV) In the matter of FAV, Administrative Proceeding File No. 3-11572 08/02/2004 U.S. Securities and Exchange Commission (SEC) The action concerned the SEC's investigation of market timing activity. FAV and the SEC reached an agreement that resolved the issues resulting from the investigation into market timing activity. FAV and Franklin Templeton Distributors, Inc. (FTDI) In the matter of FAV and FTDI, Administrative Proceeding File No. 12/13/2004 U.S. Securities and Exchange Commission (SEC) The action concerned the SEC's investigation of marketing support payments to securities dealer who sell fund shares. FAV and FTDI reached an agreement with the SEC that resolved the issues resulting from the investigation into marketing support payments to securities dealers who sell fund shares. Y FAV In the matter of FAV Admnistrative Proceeding File No. 3-11572 08/08/2004 SEC The action concerned the SEC's investigation of market timing activity. FAV and SEC reached an agreement that resolved the issues from the investigation into market timing activity. FAV and FTDI In the matter of FAV and FTDI, Administrative Proceeding No. 3-11769 12/13/2004 SEC The action concerned the SEC's investigation of marketing support payments to securities dealers who sell fund shares. FAV and FTDI reached an agreement with the SEC that resolved the issues resulting from the investigation into marketing support payments to securities dealers who sell fund shares. Franklin Advisers, Inc (FAV) FRANKLIN ADVISERS INC & FRANKLIN TEMPLETON INVESTMENTS CORP Case Number: 3-19854 07/02/2020 U.S. Securities and Exchange Commission (SEC), Washington D.C. On 7/2/20, the SEC entered an order instituting administrative and cease-and-desist proceedings pursuant to Section 9(f) of the Investment Company Act of 1940 (40 Act) and Sections 203(e) and 203(k) of the Investment Advisers Act of 1940, making findings, and imposing remedial sanctions and a cease-and-desist order against FAV. The SEC found that FAV (1) between 12/14 and 11/15, caused certain funds it manages to invest in shares of three unaffiliated ETFs in excess of the 10% investment limit under Section 12(d)(1)(A)(iii) of the 40 Act; (2) did not implement certain of the Funds policies and procedures (P&P) designed to prevent such violations, thereby causing the Funds to violate Rule 38a-1(a) of the 40 Act, and (3) in not reimbursing the Funds for losses that resulted from the corrective sale of one of the ETFs by offsetting gains realized from the corrective sale of two other ETFs, did not follow its P&P and did not disclose material information to the relevant Funds board, thereby violating Sections 206(2) and 206(4) and Rule 206(4)-7 of the Advisers Act. FAV later reported the losses to the Funds board and fully reimbursed the relevant Funds for the losses including interest. FAV neither admitted nor denied the SECs findings. Resolved by consent order. For purposes of settlement, FAV consented to the entry of the Order and a censure, and agreed to pay a civil monetary penalty of $250,000.00. Franklin Templeton Investments Corp. (FTIC) FRANKLIN ADVISERS INC & FRANKLIN TEMPLETON INVESTMENTS CORP Case Number: 3-19854 07/02/2020 U.S. Securities and Exchange Commission (SEC), Washington D. C. On 7/2/2020, the SEC entered an order instituting administrative and cease-and-desist proceedings pursuant to Section 9(f) of the Investment Company Act of 1940 and Sections 203(e) and 203(k) of the Investment Advisers Act of 1940, making findings, and imposing remedial sanctions and a cease-and-desist order against FTIC (the Order). In the Order, the SEC found that at various points between October 2013 and September 2016, FTIC caused certain Franklin Templeton funds it manages to invest in shares of two unaffiliated exchanged-traded funds in excess of the 3% investment limit under Section 12(d)(1)(A)(i) of the Investment Company Act. FTIC neither admitted nor denied the SECs findings. Resolved by consent order. For purposes of settlement, FTIC consented to the entry of the Order and a censure, and agreed to pay a civil monetary penalty of $75,000.00. Legg Mason, Inc. Exchg Act Rel #839948;Acctg&Auditing Rel #3961; Admin Proceeding File #3-18684 08/27/2018 U.S. Securities and Exchange Commission (SEC), Washington D.C. ON AUGUST 27, 2018, THE SEC ISSUED AN ORDER THAT FOUND THAT LEGG MASON HAD VIOLATED SECTION 13(B)(2)(B) OF THE SECURITIES EXCHANGE ACT OF 1934 BY FAILING TO DEVISE AND MAINTAIN A SYSTEM OF APPROPRIATE INTERNAL ACCOUNTING CONTROLS WITH RESPECT TO THE USE OF INTRODUCING BROKERS AND OTHER INTERMEDIARIES IN EMERGING MARKETS, INCLUDING LIBYA, AND THAT IMPOSED A CEASE AND DESIST ORDER ON LEGG MASON WITH RESPECT TO ANY VIOLATIONS OR FUTURE VIOLATIONS OF SECTION 13(B)(2)(B). PREVIOUSLY, LEGG MASON HAD SUBMITTED AN OFFER OF SETTLEMENT IN CONNECTION WITH THE MATTER WHICH THE SEC DETERMINED TO ACCEPT. THE ORDER RESOLVED A FCPA INVESTIGATION CONCERNING THE ACTIVITIES OF LEGG MASON'S FORMER PERMAL BUSINESS IN CONNECTION WITH MANAGING ASSETS OF LIBYAN GOVERNMENTAL ENTITIES IN STRUCTURES ESTABLISHED BY A THIRD-PARTY FINANCIAL INSTITUTION. THOSE INVESTMENTS WERE MADE IN CALENDAR YEARS 2005-2007 AND ALL WERE TERMINATED BY 2012. THE MATTER DOES NOT RELATE TO ANY CURRENT BUSINESS ACTIVITIES OR CLIENT RELATIONSHIPS OF LEGG MASON OR ANY AFFILIATE, AND WAS FOCUSED ON THE ACTIONS OF FORMER PERMAL EMPLOYEES WHO LEFT THAT FIRM FOUR OR MORE YEARS AGO. AGREED ORDER, DISGORGEMENT AND PREJUDGMENT INTEREST. SEPARATELY, ON 6/4/2018 LEGG MASON AGREED TO PAY A PENALTY AND DISGORGEMENT TO RESOLVE A U.S. DOJ INVESTIGATION INTO FCPA VIOLATIONS ARISING OUT OF THE SAME MATTER. THE SEC DISGORGEMENT AMOUNT WILL BE C N N Y FAV and Franklin Templeton Alternative Strategies, Inc. (FTASI) In the matter of FAV and FTASI, Docket No. E-2004-007 09/20/2004 Securities Division Office of the Secretary of the Commonwealth of Massachusetts The action concerned the Commonwealth of Massachusetts' investigation of market timing activity. FAV and FTASI reached an agreement with the Commonwealth of Massachusetts that resolved the issues resulting from the investigation of market timing activityl Franklin Resources, Inc. (FRI) In the matter of FRI, Docket No. 2004-0044 11/19/2004 Securities Division Office of the Secretary of the Commonwealth of Massachusetts FRI's disclosure in Form 8-K regarding FAV and FTASI's agreement with the Commonwealth of Massachusetts that resolved the issues from the investigation of market timing activity. FRI and the Commonwealth of Massachusetts reached an agreement that resolved the issue resulting from FRI's Form 8-K disclosure. Y FAV and FTASI In the matter of FAV and FTASI, Docket No. E-2004-007 09/20/2004 Securities Division of the Secretary of the Commonwealth of Massachusetts The action concerned the Commonwealth of Massachusetts' investigation of market timing activity. FAV and FTASI reached an agreement with the Commonwealth of Massachusetts that resolved the issue resulting from the investigation of market timing activity. FRI In the matter of FRI, Docket No. E-2004-0044 11/19/2004 Securities Division of the Secretary of the Commonwealth of Massachusetts FRI's disclosure in Form 8-K regarding FAV and FTASI's agreement with the Commonwealth of Massachusetts that resolved the issues from the investigation of market timing activity. FTI and the Commonwealth of Massachusetts reached an agreement that resolved the issue resulting from FTI's Form 8-K disclosure. N N N N N N N N Y Franklin Templeton Investments Corp. (FTIC) Securities Act R.S.O. 1990, C.S.5., as amended and FTIC 03/03/2005 Ontario Securities Commission (OSC) The action concerned the OSC's investigation into market timing activity. FTIC and the OSC reached and agreement the resolved the issues resulting from the OSC's investigation into market timing activity. Templeton Asset Management Ltd. (TAML) Stipulated Censure 12/14/2010 The Hong Kong Securities and Futures Commission (SFC) SFC issued a public censure of TAML in connection with its finding that TAML breached Rule 22 of the Hong Kong Takeovers Code as a result of TAML's inadvertent failure to disclose its dealings in the shares of a Hong Kong company between January 26, 2010 and April 15, 2010. Resolved. TAML cooperated with the SFC and consented to the censure in connection with its inadvertent failure to make disclosures required by the Takeovers Code. TAML publicly disclosed its holdings, but missed the additional code requirements. Franklin Templeton Asset Management (India) Private Limited Adjudication Order No. NP/JS/AO/4-6/2016 05/03/2016 Securities and Exhange Board of India (SEBI) SEBI issued a finding that an Indian-domiciled mutual fund was not operated in accordance with the SEBI regulations that stipulate the for of the fund's investment committee (IC) and require that the fund carry out all of its operations, including location of IC Members, within India. In connection with that finding, SEBI imposed a penalty on the fund, fund's trustee company and the advisor a manager of the fund in the amount of approximately US$14,672 (the equivalent of the INR amount as of the date of payment) which was paid by the adviser on behalf of all parties. SEBI imposed a penalty on the Fund, Fund's trustee company and the adviser as manager of the fund of INR 1,000,000 (approximately US$14,672 as of date of payment) was paid by the adviser on behalf of all the parties to resolve the matter on 11/29/16. Franklin Templeton Investment Trust Management Co. LTD. (FTITMC); Certain Employees of Franklin Templeton Investment Trust Management Co. LTD. Regulatory Inspection 04/11/2019 Asset Management Examination Dept. of the Korean Financial Supervisory Service In connection with a review of FTITMC's risk management controls and procedures applicable to funds domiciled in Korea under Korean law, the Asset Management Examination Department of the Korean Financial Supervisory Service (FSS) alleged the following deficiencies in connection with the bankruptcies of certain portfolio holdings of certain such funds managed by FTITMC: failure to disclose the details of non-performing assets; failure to provide timely net asset value of such funds reflecting fair market valuation of debt/equity swaps; failure to manage the funds in line with trust agreements with respect to credit and asset limits; and failure to prepare adequate risk management standards for certain Korean domiciled funds that held loans to companies that entered into Chapter 11 bankruptcy in the U.S. FTITMC cooperated with the review throughout the administrative proceeding. FSS imposed an institutional caution and fine of KRW 50 million, ultimately reduced to KRW 40 million (approximately $34,036 at time of payment) for timely payment. Franklin Templeton Asset Management (India) Pvt Ltd (FTAMI) Franklin Templeton Trustee Services Pvt Ltd (FTTS) Certain employees & officers of FTAMI Show Cause Notices and Orders 06/07/2021 Securities and Exchange Board of India (SEBI) THE INITIAL SHOW CAUSE NOTICES AND FINAL SEBI ORDERS INCLUDE ALLEGATIONS AND FINDINGS RELATING TO : DIFFERENTIATION BETWEEN PRODUCTS; RISK MANAGEMENT; CALCULATION OF DURATION AND VALUATION OF CERTAIN SECURITIES AND DELAY IN REPORTING CHANGES TO INSTRUMENT TERMS TO RATING/VALUATION AGENCIES; STANDARDS FOR DUE DILIGENCE, INVESTMENT PROCESS AND MONITORING OF INVESTMENTS; DECISIONS ON EXERCISE OF EXIT RIGHTS FOR CERTAIN SECURITIES; AND ONE INSTANCE WHERE AN INVESTOR WHO WAS RESTRAINED BY SEBI FROM ACCESSING THE SECURITIES MARKET WAS ERRONEOUSLY ALLOWED TO REDEEM INVESTMENTS. ON 6/7/21, SEBI ISSUED AN ORDER AGAINST FTAMI, AND ON 6/14/21, SEBI ISSUED A JOINT ORDER AGAINST FTTS AND CERTAIN FTAMI OFFICERS AND EMPLOYEES. THE ORDER AGAINST FTAMI: (1) PROHIBITS THE LAUNCH OF ANY NEW DEBT FUNDS IN INDIA FOR 2 YEARS; (2) ORDERS DISGORGEMENT OF CERTAIN INVESTMENT MANAGEMENT AND ADVISORY FEES ; AND (3) PAYMENT OF A MONETARY PENALTY. THE JOINT ORDER AGAINST FITS AND THE FTAMI EMPLOYEES/OFFICERS REQUIRES THE PAYMENT OF MONETARY PENALTIES: (1) BY FTTS (2) BY FTAMI'S CHIEF EXECUTIVE OFFICER AND CHIEF INVESTMENT OFFICER-FIXED INCOME; (3) BY 5 PORTFOLIO MANAGERS; AND (4) BY FTAMI'S COMPLIANCE OFFICER. FTAMI FILED AN APPEAL WITH THE SECURITIES APPELLATE TRIBUNAL ON JUNE 21, 2021. FITS AND THE INDIVIDUAL RESPONDENTS (EMPLOYEES AND OFFICERS OF FTAMI) INTEND TO APPEAL THE SEPARATE SEBI ORDER ISSUED AGAINST THOSE RESPONDENTS. FRANKLIN TEMPLETON INTERNATIONAL SERVICES S.A R.L.(FTIS) OPC.21/46123-BAM/S964 CSP 19.10 12/09/2021 Commission de Surveillance du Secteur Financier - Luxembourg In connection with a regulatory inspection of FTISs AML/CFT framework in March 2019, the Luxembourg Commission de Surveillance du Secteur Financier (CSSF) sent a letter dated May 14, 2021 (the Letter) identifying alleged deficiencies and observations with regard to FTISs anti-money laundering processes and documentation relating to new European and Luxembourg legislation and regulations that came into effect over the last two years and notifying FTIS of the CSSFs intention to impose a potential administrative sanction. The Letter did not identify any actual instances of money laundering. The CSSF imposed a fine that has been paid by FTIS, as described below. All observations in the Letter have been addressed with a remediation plan that has been reviewed by an independent auditor and that has been communicated to the CSSF. Following FTISs response to the May 2021 Letter, in a letter dated December 9, 2021, the CSSF communicated its decision to impose a fine of EUR 261,000 on FTIS. FTIS paid the fine in full on December 16, 2021. Franklin Mutual Advisers, LLC (FMA) Civil Monetary Fine 02/10/2022 The Mexican Federal Economic Competition Commission (COFECE) In April 2019, certain portfolios managed by FMA sold shares of International Automotive Components Group North America, LLC to GCM SPVMI, L.P. (the Sale). Following the initiation of a verification procedure regarding the Sale, COFECE determined that the parties failed to comply with the Federal Economic Competition Law (LFCE) requirement to apply to COFECE for approval of the Sale prior to its consummation. COFECE rendered its decision with respect to the Sale on February 10, 2022, and informed FMA of this decision on February 17, 2022. COFECE imposed a fine that has since been paid in full by FMA. The fine relates solely to COFECE's determination that FMA failed to comply with the pre-consummation approval requirements. COFECE approved the Sale based on its determination that the Sale did not impose a risk of harming free competition and open access to the markets. COFECE imposed a civil monetary fine of 1,734,917.66 MXN pesos on FMA for failing to comply with LFCE requirements to apply for approval of the Sale by COFECE prior to its consummation. FMA paid USD 82,743, constituting the full fine, on March 10, 2022. N N N Basil K. Fox, Jr. 916-463-1515 President 11/29/2022