UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-06481

Franklin Municipal Securities Trust

(Exact name of registrant as specified in charter)

One Franklin Parkway, San Mateo, CA 94403-1906

(Address of principal executive offices) (Zip code)

Craig S. Tyle, One Franklin Parkway, San Mateo, CA  94403-1906

(Name and address of agent for service)

Registrant's telephone number, including area code: 650 312-2000

Date of fiscal year end: 5/31

Date of reporting period: 5/31/21

Item 1. Reports to Stockholders.

a.)

The following is a copy of the report transmitted to shareholders pursuant to Rule30e-1 under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30e-1.)

b.)

Include a copy of each notice transmitted to stockholders in reliance on Rule 30e-3 under the Act (17 CFR 270.30e-3) that contains disclosures specified by paragraph (c)(3) of that rule.

Not Applicable

.

ANNUAL

REPORT

AND

SHAREHOLDER

LETTER

Franklin

Municipal

Securities

Trust

May

31,

2021

Sign

up

for

electronic

delivery

at

franklintempleton.com/edelivery

Franklin

California

High

Yield

Municipal

Fund

Franklin

Tennessee

Municipal

Bond

Fund

Not

FDIC

Insured

May

Lose

Value

No

Bank

Guarantee

franklintempleton.com

Not

part

of

the

annual

report

1

Shareholder

Letter

Dear

Shareholder:

During

the

12

months

ended

May

31,

2021,

the

coronavirus

(COVID-19)

pandemic

caused

the

U.S.

economy

to

contract

in

2020’s

first

half.

For

the

remainder

of

2020,

the

economy

recovered

substantially

based

on

increased

business

and

residential

investment

and

consumer

spending.

U.S.

economic

growth

accelerated

during

2021’s

first

quarter

and

may

further

increase

in

the

second

quarter

as

the

reopening

of

businesses,

widespread

COVID-19

vaccinations

and

federal

assistance

programs

continue

to

boost

consumer

spending.

Before

the

reporting

period,

the

U.S.

Federal

Reserve,

in

its

efforts

to

support

U.S.

economic

activity,

lowered

the

federal

funds

rate

twice

in

March

2020

and

implemented

broad

quantitative

easing

measures

to

support

credit

markets.

During

the

reporting

period,

the

Federal

Reserve

held

its

key

rate

unchanged

at

0.25%,

but

it

continued

quantitative

easing

and

adjusted

its

policy

in

August

2020

to

allow

more

flexibility

to

keep

interest

rates

low,

while

maintaining

a

2%

average

inflation

target.

During

the

12-month

period,

municipal

bonds

delivered

positive

total

returns

as

investors

were

attracted

to

tax-free

income

in

a

declining

interest-rate

environment.

Factors

contributing

to

this

positive

investment

environment

for

municipals

included

relatively

low

inflation,

interest-rate

declines

and

actions

by

the

Federal

Reserve

to

support

a

low

interest-rate

environment.

Franklin

Municipal

Securities

Trust’s

annual

report

includes

more

detail

about

municipal

bond

market

conditions

and

a

discussion

from

the

portfolio

managers.

In

addition,

on

our

website,

franklintempleton.com,

you

can

find

updated

commentary

by

our

municipal

bond

experts.

Municipal

bonds

provide

tax-free

income

and

diversification

from

equities.

Despite

periods

of

volatility,

municipal

bonds

historically

have

had

a

solid

long-term

record

of

performance,

driven

mostly

by

their

compounding

tax-free

income

component.

As

you

know,

all

securities

markets

fluctuate,

as

do

mutual

fund

share

prices.

As

always,

we

recommend

investors

consult

their

financial

professionals

to

help

them

make

the

best

decisions

for

the

long

term.

In

a

constantly

changing

market

environment,

we

remain

committed

to

our

disciplined

strategy

as

we

manage

the

Funds,

keeping

in

mind

the

trust

you

have

placed

in

us.

We

appreciate

your

confidence

in

us

and

encourage

you

to

contact

us

or

your

financial

professional

when

you

have

questions

about

your

Franklin

tax-free

investment.

Sincerely,

Rupert

H.

Johnson,

Jr.

Chairman

Franklin

Municipal

Securities

Trust

Ben

Barber

Senior

Vice

President

Director

of

Municipal

Bonds

This

letter

reflects

our

analysis

and

opinions

as

of

May

31,

2021

,

unless

otherwise

indicated.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

state,

industry,

security

or

fund.

Statements

of

fact

are

from

sources

considered

reliable.

franklintempleton.com

Annual

Report

2

Contents

Annual

Report

Municipal

Bond

Market

Overview

3

Franklin

California

High

Yield

Municipal

Fund

5

Franklin

Tennessee

Municipal

Bond

Fund

11

Financial

Highlights

and

Statements

of

Investments

17

Financial

Statements

48

Notes

to

Financial

Statements

52

Report

of

Independent

Registered

Public

Accounting

Firm

62

Tax

Information

63

Board

Members

and

Officers

64

Shareholder

Information

69

Visit

franklintempleton.com

for

fund

updates,

to

access

your

account,

or

to

find

helpful

financial

planning

tools.

3

franklintempleton.com

Annual

Report

ANNUAL

REPORT

Municipal

Bond

Market

Overview

Over

the

past

12

months

ended

May

31,

2021,

the

novel

coronavirus

(COVID-19)

pandemic

has

reshaped

economies

across

the

world

as

some

countries

shut

down

large

portions

of

their

economies

through

social

distancing

mandates

that

contained,

in

some

instances,

stay-at-home

orders.

Starting

in

April

2020,

fixed

income

market

sectors—including

municipal

(muni)

bonds—began

the

slow

process

of

recovery

from

the

dislocations

seen

in

March

2020

as

swift

policy

responses

from

both

monetary

and

fiscal

authorities

bolstered

investor

sentiment.

Bid/ask

spreads

tightened

and

liquidity

across

most

fixed

income

sectors

improved

substantially.

The

U.S.

experienced

its

largest

quarter-over-

quarter

drop

in

gross

domestic

product,

falling

31.4%

in

the

second

quarter

of

2020.

The

U.S.

economy

has

since

improved,

but

measures

such

as

industrial

production

and

employment

remained

below

their

pre-pandemic,

February

2020

levels.

Through

the

summer

of

2020,

COVID-19

infection

rates

fell

across

the

U.S.,

allowing

some

states

to

begin

the

process

of

reopening

parts

of

their

economies.

However,

starting

in

the

fall,

new

cases

and

hospitalizations

increased

to

all-time

highs.

The

virus

spread

to

areas

in

the

U.S.

that

had

not

seen

large

numbers

of

infections,

causing

some

states

to

slow

or

abandon

their

reopening

plans.

This

was

tempered

by

the

emergency

approval

of

COVID-19

vaccines

from

multiple

pharmaceutical

manufacturers

by

the

U.S.

Food

and

Drug

Administration

in

December

2020

with

plans

to

provide

mass

inoculations

in

the

first

half

of

2021.

As

the

vaccination

program

progressed,

case

rates

and

hospitalizations

dropped

significantly,

allowing

the

resumption

of

the

reopening

process

including

a

return

to

in-person

schooling.

By

the

end

of

May

2021,

approximately

40%

of

the

U.S.

adult

population

had

been

fully

immunized.

Valuations

in

the

muni

bond

market

improved

starting

in

April

2020

amid

strong

technical

conditions.

After

seeing

record

outflows

in

March

and

April

of

2020,

funds

flowed

back

into

muni

bond

retail

vehicles,

creating

significant

demand

for

bonds.

These

flows

outstripped

new

issuance

of

tax-

exempt

bonds

as

many

issuers

turned

to

the

taxable

muni

bond

market

for

refundings

and

new

issuance.

Ratios

of

muni

bond

yields

versus

duration-matched

U.S.

Treasuries

(USTs)

improved

from

the

all-time

highs

seen

in

March

2020

throughout

the

remainder

of

2020

and

into

2021,

with

the

30-

year

ratio

reaching

an

all-time

low

in

May

2021.

State

and

local

muni

bond

issuers

projected

severe

budget

deficits

for

2020

and

going

forward

as

they

anticipated

tax

receipts

and

usage

fees

falling

and

outlays

for

social

programs

such

as

health

care

and

unemployment

benefits

rising

strongly.

By

the

end

of

2020,

many

of

these

deficit

projection

fears

proved

unfounded

as

consumer

spending

recovered

more

quickly

than

anticipated,

leading

to

higher

sales

tax

collections.

A

strong

U.S.

housing

market

also

provided

additional

support.

In

March

2021,

the

U.S.

federal

government

passed

a

$1.9

trillion

additional

fiscal

spending

bill,

providing

large

one-time

cash

payments

to

individuals

and

continuation

of

enhanced

unemployment

benefits.

Included

in

this

package

was

$350

billion

worth

of

grants

to

state

and

local

governments,

further

supporting

budgets

and

improving

the

credit

profile

of

the

muni

sector

as

a

whole.

The

Biden

administration

has

also

announced

additional

spending

programs

that

would

partially

be

paid

for

with

increased

tax

rates

on

wealthy

individuals.

Although

the

final

size

of

the

programs

had

not

been

decided

as

of

period-

end,

we

believe

there

could

be

significant

implications

for

the

muni

market,

including

additional

bond

issuance

for

infrastructure

projects

and

the

potential

for

increased

demand

for

tax-exempt

sources

of

income.

Another

challenge

facing

the

muni

market

is

the

rise

of

UST

rates

and

increased

volatility

across

fixed

income

sectors.

Historically,

muni

yields

are

slow

to

respond

to

fast-rising

UST

yields

and

fund

flows

tend

to

slow

during

times

of

higher

volatility.

The

Investment

Company

Institute

(ICI)

reported

net

inflows

of

approximately

$5.0

billion

into

municipal

bond

retail

vehicles

in

May

2021.

For

the

12-month

period,

muni

bond

retail

vehicles

had

approximately

$98.6

billion

of

net

inflows,

according

to

the

ICI.

For

the

12-month

period,

U.S.

fixed

income

sectors

broadly

underperformed

relative

to

equities,

as

measured

by

the

Standard

&

Poor’s

®

500

Index,

which

posted

a

+40.32%

total

return

for

the

period.

1

Investment-grade

muni

bonds,

as

measured

by

the

Bloomberg

Barclays

Municipal

Bond

Index,

posted

a

+4.74%

total

return,

while

USTs,

as

measured

by

the

Bloomberg

Barclays

U.S.

Treasury

Index,

posted

a

-3.75%

total

return,

and

investment-grade

corporate

bonds,

as

measured

by

the

Bloomberg

Barclays

U.S.

Corporate

Bond

Index,

posted

a

+3.64%

total

return.

1

1.

Source:

Morningstar.

Treasuries,

if

held

to

maturity,

offer

a

fixed

rate

of

return

and

a

fixed

principal

value;

their

interest

payments

and

principal

are

guaranteed.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

4

franklintempleton.com

Annual

Report

The

foregoing

information

reflects

our

analysis

and

opinions

as

of

May

31,

2021

.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

state,

industry,

security

or

fund.

Statements

of

fact

are

from

sources

considered

reliable.

5

franklintempleton.com

Annual

Report

Franklin

California

High

Yield

Municipal

Fund

This

annual

report

for

Franklin

California

High

Yield

Municipal

Fund

covers

the

fiscal

year

ended

May

31,

2021

.

Your

Fund’s

Goal

and

Main

Investments

The

Fund

seeks

to

provide

investors

with

a

high

level

of

income

exempt

from

federal

and

California

personal

income

taxes

by

normally

investing

at

least

80%

of

its

net

assets

in

municipal

securities

in

any

rating

category,

including

securities

rated

below

investment

grade,

that

pay

interest

free

from

such

taxes.

1

Its

secondary

goal

is

capital

appreciation

to

the

extent

possible

and

consistent

with

its

principal

investment

goal.

Performance

Overview

The

Fund’s

Class

A

share

price,

as

measured

by

net

asset

value,

increased

from

$10.81

on

May

31,

2020,

to

$11.49

on

May

31,

2021.

2

The

Fund’s

Class

A

shares

paid

dividends

totaling

34.2754

cents

per

share

for

the

reporting

period.

The

Performance

Summary

beginning

on

page

7

shows

that

at

the

end

of

this

reporting

period

the

Fund’s

Class

A

shares’

distribution

rate

was

2.55%,

based

on

an

annualization

of

May’s

2.5422

cents

per

share

monthly

dividend

and

the

maximum

offering

price

of

$11.94

on

May

31,

2021.

An

investor

in

the

2021

maximum

combined

effective

federal

and

California

personal

income

tax

bracket

of

53.10%

(including

3.80%

Medicare

tax)

would

need

to

earn

a

distribution

rate

of

5.44%

from

a

taxable

investment

to

match

the

Fund’s

Class

A

tax-free

distribution

rate.

For

other

performance

data,

please

see

the

Performance

Summary

beginning

on

page

7

.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236

.

State

Update

California’s

large,

diverse

economy,

which

was

strong

before

the

novel

coronavirus

(COVID-19)

pandemic,

was

negatively

impacted

but

began

to

recover

during

the

12-month

period.

California’s

unemployment

rate

began

the

period

at

15.6%

and

ended

at

7.9%,

compared

with

the

5.8%

national

rate.

3

The

state’s

enacted

fiscal

year

(FY)

2020

budget

increased

spending

while

maintaining

strong

reserves,

but

revenues

declined

during

the

pandemic.

Further

revenue

declines

projected

for

FY

2021

were

offset

by

use

of

reserves,

education

spending

cuts,

suspension

of

certain

business

tax

breaks,

and

increased

federal

Medicaid

reimbursement

and

COVID-19

aid.

These

factors

and

overall

increased

tax

revenue

resulted

in

a

sizable

budget

surplus

by

period-end.

The

governor’s

2022

executive

budget

projected

increased

general

revenue

and

reversed

most

of

the

FY

2021

spending

cuts

and

tax

increases.

California’s

net

tax-supported

debt

was

$2,144

per

capita

and

3.0%

of

personal

income,

compared

with

the

$1,039

and

1.9%

national

medians,

respectively.

4

Independent

credit

rating

agency

Moody’s

Investors

Service

affirmed

California’s

general

obligations

bonds’

Aa2

rating

with

a

stable

outlook.

5

The

rating

reflected

Moody’s

view

of

the

state’s

large

and

diverse

economy,

strong

revenue

collection

throughout

the

pandemic,

and

use

of

surpluses

to

build

reserves.

Moody’s

noted

challenges,

including

high

revenue

volatility

given

the

state’s

disproportionate

dependence

on

income

taxes,

constrained

flexibility

to

adjust

spending

and

revenue,

and

relatively

high

debt

and

recurring

costs.

Investment

Strategy

We

select

securities

that

we

believe

will

provide

the

best

balance

between

risk

and

return

within

the

Fund’s

range

of

allowable

investments

and

typically

use

a

buy-and-hold

strategy.

This

means

we

generally

hold

securities

in

the

Fund’s

portfolio

for

income

purposes,

rather

than

trading

securities

for

capital

gains,

although

we

may

sell

a

security

at

any

time

if

we

believe

it

could

help

the

Fund

meet

its

goal.

1.

The

Fund

may

invest

up

to

100%

of

its

assets

in

bonds

whose

interest

payments

are

subject

to

federal

alternative

minimum

tax.

All

or

a

significant

portion

of

the

income

on

these

obligations

may

be

subject

to

such

tax.

Distributions

of

capital

gains

are

generally

taxable.

To

avoid

imposition

of

28%

backup

withholding

on

all

Fund

distributions

and

redemption

proceeds,

U.S.

investors

must

be

properly

certified

on

Form

W-9

and

non-U.S.

investors

on

Form

W-8BEN.

2.

The

distribution

amount

is

the

sum

of

all

net

investment

income

distributions

for

the

period

shown.

Assumes

shares

were

purchased

and

held

for

the

entire

accrual

period.

Since

dividends

accrue

daily,

your

actual

distributions

will

vary

depending

on

the

date

you

purchased

your

shares

and

any

account

activity.

All

Fund

distributions

will

vary

depending

upon

current

market

conditions,

and

past

distributions

are

not

indicative

of

future

trends.

3.

Source:

Bureau

of

Labor

Statistics.

4.

Source:

Moody’s

Investors

Service,

State

government

–

U.S.:

Medians

–

State

debt

rose

2.5%

in

2020,

spurred

by

pandemic-linked

borrowing,

6/14/21.

5.

This

does

not

indicate

Moody’s

rating

of

the

Fund.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

The

dollar

value,

number

of

shares

or

principal

amount,

and

names

of

all

portfolio

holdings

are

listed

in

the

Fund’s

Statement

of

Investments

(SOI).

The

SOI

begins

on

page

22

.

Franklin

California

High

Yield

Municipal

Fund

6

franklintempleton.com

Annual

Report

Manager’s

Discussion

Consistent

with

our

strategy,

we

sought

to

remain

invested

in

bonds

that

have

an

average

weighted

maturity

of

15

to

30

years

with

good

call

features.

Based

on

the

combination

of

our

value-oriented

philosophy

of

investing

primarily

for

income

and

a

positively

sloping

municipal

yield

curve,

in

which

interest

rates

for

longer-term

bonds

are

higher

than

those

for

shorter-term

bonds,

we

favored

the

use

of

longer-

term

bonds.

We

believe

our

conservative,

buy-and-hold

investment

strategy

can

help

us

achieve

high,

current,

tax-

free

income

for

shareholders.

Thank

you

for

your

continued

participation

in

Franklin

California

High

Yield

Municipal

Fund.

We

look

forward

to

serving

your

future

investment

needs.

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

May

31,

2021,

the

end

of

the

reporting

period.

The

way

we

implement

our

main

investment

strategies

and

the

resulting

portfolio

holdings

may

change

depending

on

factors

such

as

market

and

economic

conditions.

These

opinions

may

not

be

relied

upon

as

investment

advice

or

an

offer

for

a

particular

security.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

state,

industry,

security

or

the

Fund.

Statements

of

fact

are

from

sources

considered

reliable,

but

the

investment

manager

makes

no

representation

or

warranty

as

to

their

completeness

or

accuracy.

Although

historical

performance

is

no

guarantee

of

future

results,

these

insights

may

help

you

understand

our

investment

management

philosophy.

Portfolio

Composition

5/31/21

%

of

Total

Investments*

Special

Tax

22.78%

Transportation

16.32%

Housing

11.19%

Industrial

Dev.

Revenue

and

Pollution

Control

9.74%

Education

9.15%

Local

8.95%

Health

Care

8.31%

Refunded

6.61%

Utilities

3.23%

Other

Revenue

Bonds

2.26%

Lease

0.82%

State

General

Obligation

0.64%

*Does

not

include

cash

and

cash

equivalents.

Performance

Summary

as

May

31,

2021

Franklin

California

High

Yield

Municipal

Fund

7

franklintempleton.com

Annual

Report

The

performance

tables

and

graphs

do

not

reflect

any

taxes

that

a

shareholder

would

pay

on

Fund

dividends,

capital

gain

distributions,

if

any,

or

any

realized

gains

on

the

sale

of

Fund

shares.

Total

return

reflects

reinvestment

of

the

Fund’s

dividends

and

capital

gain

distributions,

if

any,

and

any

unrealized

gains

or

losses.

Your

dividend

income

will

vary

depending

on

dividends

or

interest

paid

by

securities

in

the

Fund’s

portfolio,

adjusted

for

operating

expenses

of

each

class.

Capital

gain

distributions

are

net

profits

realized

from

the

sale

of

portfolio

securities.

Performance

as

of

5/31/21

Cumulative

total

return

excludes

sales

charges.

Average

annual

total

return

includes

maximum

sales

charges.

Sales

charges

will

vary

depending

on

the

size

of

the

investment

and

the

class

of

share

purchased.

The

maximum

is

3.75%

and

the

minimum

is

0%.

Class

A

:

3.75%

maximum

initial

sales

charge;

Advisor

Class:

no

sales

charges.

For

other

share

classes,

visit

franklintempleton.com.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236

.

Share

Class

Cumulative

Total

Return

1

Average

Annual

Total

Return

2

–

A

3,4

1-Year

+9.57%

+5.46%

5-Year

+22.76%

+3.39%

10-Year

+87.65%

+6.09%

Advisor

1-Year

+9.84%

+9.84%

5-Year

+23.73%

+4.35%

10-Year

+89.72%

+6.61%

Share

Class

Distribution

Rate

5

Taxable

Equivalent

Distribution

Rate

6

30-Day

Standardized

Yield

7

Taxable

Equivalent

30-Day

Standardized

Yield

6

A

2.55%

5.44%

1.62%

3.45%

Advisor

2.88%

6.14%

1.93%

4.12%

See

page

9

for

Performance

Summary

footnotes.

Franklin

California

High

Yield

Municipal

Fund

Performance

Summary

8

franklintempleton.com

Annual

Report

See

page

9

for

Performance

Summary

footnotes.

Total

Return

Index

Comparison

for

a

Hypothetical

$10,000

Investment

Total

return

represents

the

change

in

value

of

an

investment

over

the

periods

shown.

It

includes

any

applicable

maximum

sales

charge,

Fund

expenses,

account

fees

and

reinvested

distributions.

The

unmanaged

index

includes

reinvestment

of

any

income

or

distributions.

It

differs

from

the

Fund

in

composition

and

does

not

pay

management

fees

or

expenses.

One

cannot

invest

directly

in

an

index.

Class

A

(6/1/11–5/31/21)

Advisor

Class

(6/1/11–5/31/21)

Franklin

California

High

Yield

Municipal

Fund

Performance

Summary

9

franklintempleton.com

Annual

Report

Each

class

of

shares

is

available

to

certain

eligible

investors

and

has

different

annual

fees

and

expenses,

as

described

in

the

prospectus.

All

investments

involve

risks,

including

loss

of

principal.

Because

municipal

bonds

are

sensitive

to

interest-rate

movements,

the

Fund’s

yield

and

share

price

will

fluctuate

with

market

conditions.

Bond

prices

generally

move

in

the

opposite

direction

of

interest

rates.

Thus,

as

prices

of

bonds

in

the

Fund

adjust

to

a

rise

in

interest

rates,

the

Fund’s

share

price

may

decline.

Because

the

Fund

invests

principally

in

a

single

state,

it

is

subject

to

greater

risk

of

adverse

economic

and

regulatory

changes

in

that

state

than

a

geographically

diversified

fund.

Investments

in

lower-rated

bonds

include

higher

risk

of

default

and

loss

of

principal.

Puerto

Rico

municipal

bonds

have

been

impacted

by

recent

adverse

economic

and

market

changes,

which

may

cause

the

Fund’s

share

price

to

decline.

Changes

in

the

credit

rating

of

a

bond,

or

in

the

credit

rating

or

financial

strength

of

a

bond’s

issuer,

insurer

or

guarantor,

may

affect

the

bond’s

value.

The

Fund

may

in-

vest

a

significant

part

of

its

assets

in

municipal

securities

that

finance

similar

types

of

projects,

such

as

utilities,

hospitals,

higher

education

and

transportation.

A

change

that

affects

one

project

would

likely

affect

all

similar

projects,

thereby

increasing

market

risk.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

1.

Cumulative

total

return

represents

the

change

in

value

of

an

investment

over

the

periods

indicated.

2.

Average

annual

total

return

represents

the

average

annual

change

in

value

of

an

investment

over

the

periods

indicated.

Return

for

less

than

one

year,

if

any,

has

not

been

annualized.

3.

Effective

9/10/18,

Class

A

shares

closed

to

new

investors,

were

renamed

Class

A1

shares,

and

a

new

Class

A

share

with

a

different

expense

structure

became

available.

Class

A

performance

shown

has

been

calculated

as

follows:

(a)

for

periods

prior

to

9/10/18,

a

restated

figure

is

used

based

on

the

Fund’s

Class

A1

performance

that

includes

any

Rule

12b-1

rate

differential

that

exists

between

Class

A1

and

Class

A;

and

(b)

for

periods

after

9/10/18,

actual

Class

A

performance

is

used,

reflecting

all

charges

and

fees

applicable

to

that

class.

4.

Prior

to

3/1/19,

these

shares

were

offered

at

a

higher

initial

sales

charge

of

4.25%,

thus

actual

returns

(with

sales

charges)

would

have

differed.

Average

annual

total

returns

(with

sales

charges)

have

been

restated

to

reflect

the

current

maximum

initial

sales

charge

of

3.75%.

5.

Distribution

rate

is

based

on

an

annualization

of

the

respective

class’s

May

dividend

and

the

maximum

offering

price

(NAV

for

Advisor

Class)

per

share

on

5/31/21.

6.

Taxable

equivalent

distribution

rate

and

yield

assume

the

published

rates

as

of

12/17/20

for

the

maximum

combined

effective

federal

and

California

state

personal

income

tax

rate

of

53.10%,

based

on

the

federal

income

tax

rate

of

37.00%

plus

3.80%

Medicare

tax.

7.

The

Fund’s

30-day

standardized

yield

is

calculated

over

a

trailing

30-day

period

using

the

yield

to

maturity

on

bonds

and/or

the

dividends

accrued

on

stocks.

It

may

not

equal

the

Fund’s

actual

income

distribution

rate,

which

reflects

the

Fund’s

past

dividends

paid

to

shareholders.

8.

Source:

Morningstar.

The

Bloomberg

Barclays

Municipal

Bond

Index

is

a

market

value-weighted

index

engineered

for

the

long-term

tax-exempt

bond

market.

To

be

included

in

the

index,

bonds

must

be

fixed

rate,

have

at

least

one

year

to

final

maturity

and

be

rated

investment

grade

(Baa3/BBB-

or

higher)

by

at

least

two

of

the

following

agencies:

Moody’s,

S&P

and

Fitch.

9.

Figures

are

as

stated

in

the

Fund’s

current

prospectus

and

may

differ

from

the

expense

ratios

disclosed

in

the

Your

Fund’s

Expenses

and

Financial

Highlights

sections

in

this

report.

In

periods

of

market

volatility,

assets

may

decline

significantly,

causing

total

annual

Fund

operating

expenses

to

become

higher

than

the

figures

shown.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

Distributions

(6/1/20–5/31/21)

Share

Class

Net

Investment

Income

A

$0.342754

A1

$0.359546

C

$0.297791

R6

$0.374451

Advisor

$0.370813

Total

Annual

Operating

Expenses

9

Share

Class

A

0.80%

Advisor

0.55%

Your

Fund’s

Expenses

Franklin

California

High

Yield

Municipal

Fund

10

franklintempleton.com

Annual

Report

As

a

Fund

shareholder,

you

can

incur

two

types

of

costs:

(1)

transaction

costs,

including

sales

charges

(loads)

on

Fund

purchases

and

redemptions;

and

(2)

ongoing

Fund

costs,

including

management

fees,

distribution

and

service

(12b-1)

fees,

and

other

Fund

expenses.

All

mutual

funds

have

ongoing

costs,

sometimes

referred

to

as

operating

expenses.

The

table

below

shows

ongoing

costs

of

investing

in

the

Fund

and

can

help

you

understand

these

costs

and

compare

them

with

those

of

other

mutual

funds.

The

table

assumes

a

$1,000

investment

held

for

the

six

months

indicated.

Actual

Fund

Expenses

The

table

below

provides

information

about

actual

account

values

and

actual

expenses

in

the

columns

under

the

heading

“Actual.”

In

these

columns

the

Fund’s

actual

return,

which

includes

the

effect

of

Fund

expenses,

is

used

to

calculate

the

“Ending

Account

Value”

for

each

class

of

shares.

You

can

estimate

the

expenses

you

paid

during

the

period

by

following

these

steps

(

of

course,

your

account

value

and

expenses

will

differ

from

those

in

this

illustration

):

Divide

your

account

value

by

$1,000

(

if

your

account

had

an

$8,600

value,

then

$8,600

÷

$1,000

=

8.6

).

Then

multiply

the

result

by

the

number

in

the

row

for

your

class

of

shares

under

the

headings

“Actual”

and

“Expenses

Paid

During

Period”

(

if

Actual

Expenses

Paid

During

Period

were

$7.50,

then

8.6

x

$7.50

=$64.50

).

In

this

illustration,

the

actual

expenses

paid

this

period

are

$64.50.

Hypothetical

Example

for

Comparison

with

Other

Funds

Under

the

heading

“Hypothetical”

in

the

table,

information

is

provided

about

hypothetical

account

values

and

hypothetical

expenses

based

on

the

Fund’s

actual

expense

ratio

and

an

assumed

rate

of

return

of

5%

per

year

before

expenses,

which

is

not

the

Fund’s

actual

return.

This

information

may

not

be

used

to

estimate

the

actual

ending

account

balance

or

expenses

you

paid

for

the

period,

but

it

can

help

you

compare

ongoing

costs

of

investing

in

the

Fund

with

those

of

other

funds.

To

do

so,

compare

this

5%

hypothetical

example

for

the

class

of

shares

you

hold

with

the

5%

hypothetical

examples

that

appear

in

the

shareholder

reports

of

other

funds.

Please

note

that

expenses

shown

in

the

table

are

meant

to

highlight

ongoing

costs

and

do

not

reflect

any

transactional

costs.

Therefore,

information

under

the

heading

“Hypothetical”

is

useful

in

comparing

ongoing

costs

only,

and

will

not

help

you

compare

total

costs

of

owning

different

funds.

In

addition,

if

transactional

costs

were

included,

your

total

costs

would

have

been

higher.

1.

Expenses

are

equal

to

the

annualized

expense

ratio

for

the

six-month

period

as

indicated

above—in

the

far

right

column—multiplied

by

the

simple

average

account

value

over

the

period

indicated,

and

then

multiplied

by

182/365

to

reflect

the

one-half

year

period.

2.

Reflects

expenses

after

fee

waivers

and

expense

reimbursements.

Does

not

include

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

12/1/20

Ending

Account

Value

5/31/21

Expenses

Paid

During

Period

12/1/20–5/31/21

1,2

Ending

Account

Value

5/31/21

Expenses

Paid

During

Period

12/1/20–5/31/21

1,2

a

Net

Annualized

Expense

Ratio

2

A

$1,000

$1,032.63

$3.99

$1,021.00

$3.97

0.79%

A1

$1,000

$1,033.46

$3.26

$1,021.73

$3.24

0.64%

C

$1,000

$1,031.32

$6.01

$1,019.02

$5.97

1.19%

R6

$1,000

$1,034.90

$2.57

$1,022.41

$2.55

0.51%

Advisor

$1,000

$1,034.79

$2.73

$1,022.24

$2.72

0.54%

11

franklintempleton.com

Annual

Report

Franklin

Tennessee

Municipal

Bond

Fund

This

annual

report

for

Franklin

Tennessee

Municipal

Bond

Fund

covers

the

fiscal

year

ended

May

31,

2021

.

Your

Fund’s

Goal

and

Main

Investments

The

Fund

seeks

to

maximize

income

exempt

from

federal

income

taxes

and

from

the

personal

income

taxes

for

resident

shareholders

of

Tennessee

to

the

extent

consistent

with

prudent

investing

and

the

preservation

of

shareholders’

capital,

by

normally

investing

at

least

80%

of

its

net

assets

in

investment-grade

municipal

securities

that

pay

interest

free

from

such

taxes.

1

Performance

Overview

The

Fund’s

Class

A

share

price,

as

measured

by

net

asset

value,

increased

from

$10.96

on

May

31,

2020,

to

$11.18

on

May

31,

2021.

2

The

Fund’s

Class

A

shares

paid

dividends

totaling

25.5829

cents

per

share

for

the

reporting

period.

The

Performance

Summary

beginning

on

page

13

shows

that

at

the

end

of

this

reporting

period

the

Fund’s

Class

A

shares’

distribution

rate

was

1.83%,

based

on

an

annualization

of

May’s

1.7765

cents

per

share

monthly

dividend

and

the

maximum

offering

price

of

$11.62

on

May

31,

2021.

An

investor

in

the

2021

maximum

combined

effective

federal

and

Tennessee

personal

income

tax

bracket

of

40.80%

(including

3.80%

Medicare

tax)

would

need

to

earn

a

distribution

rate

of

3.09%

from

a

taxable

investment

to

match

the

Fund’s

Class

A

tax-free

distribution

rate.

For

other

performance

data,

please

see

the

Performance

Summary

beginning

on

page

13

.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236

.

State

Update

During

the

12-month

period,

Tennessee’s

economy

was

negatively

impacted

by

the

novel

coronavirus

(COVID-19)

pandemic

and

state

measures

to

control

its

spread,

but

the

economy

began

to

recover.

Tennessee’s

unemployment

rate

began

the

period

at

9.6%

and

ended

at

5.0%,

compared

with

the

5.8%

national

rate.

3

Given

the

pandemic

and

related

slowdown

in

tax

revenue,

lawmakers

revised

the

fiscal

year

(FY)

2021

budget.

The

revised

budget

called

for

bolstering

reserves

and

increasing

infrastructure

funding

that

would

allow

cities

and

counties

to

address

COVID-19

needs.

The

revised

budget

also

reduced

education

and

mental

health

funding.

In

November

2020,

the

governor

asked

state

departments

to

further

cut

expenditures

for

FY

2021.

By

period-end,

however,

the

state

experienced

a

budget

surplus

as

revenues

were

more

than

expected.

In

May

2021,

the

state

passed

a

FY

2022

budget

that

included

substantial

deposits

into

both

the

state’s

pension

and

rainy-day

funds.

Tennessee’s

net

tax-supported

debt

was

relatively

low

at

$266

per

capita

and

0.5%

of

personal

income,

compared

with

the

$1,039

and

1.9%

national

medians,

respectively.

4

Independent

credit

rating

agency

Moody's

Investors

Service

maintained

the

state’s

general

obligations

bonds’

Aaa

rating

with

a

stable

outlook.

5

The

rating

reflected

Moody’s

view

of

the

state’s

conservative

fiscal

management,

low

debt

levels,

well-funded

pension

system,

a

growing

and

diversifying

economy,

and

flexibility

to

adjust

retiree

health

care

benefits.

Investment

Strategy

We

select

securities

that

we

believe

will

provide

the

best

balance

between

risk

and

return

within

the

Fund’s

range

of

allowable

investments

and

typically

use

a

buy-and-hold

strategy.

This

means

we

generally

hold

securities

in

the

Fund’s

portfolio

for

income

purposes,

rather

than

trading

securities

for

capital

gains,

although

we

may

sell

a

security

at

any

time

if

we

believe

it

could

help

the

Fund

meet

its

goal.

1.

The

Fund

may

invest

up

to

100%

of

its

assets

in

bonds

whose

interest

payments

are

subject

to

federal

alternative

minimum

tax.

All

or

a

significant

portion

of

the

income

on

these

obligations

may

be

subject

to

such

tax.

Distributions

of

capital

gains

are

generally

taxable.

To

avoid

imposition

of

28%

backup

withholding

on

all

Fund

distributions

and

redemption

proceeds,

U.S.

investors

must

be

properly

certified

on

Form

W-9

and

non-U.S.

investors

on

Form

W-8BEN.

2.

The

distribution

amount

is

the

sum

of

all

net

investment

income

distributions

for

the

period

shown.

Assumes

shares

were

purchased

and

held

for

the

entire

accrual

period.

Since

dividends

accrue

daily,

your

actual

distributions

will

vary

depending

on

the

date

you

purchased

your

shares

and

any

account

activity.

All

Fund

distributions

will

vary

depending

upon

current

market

conditions,

and

past

distributions

are

not

indicative

of

future

trends.

3.

Source:

Bureau

of

Labor

Statistics

4.

Source:

Moody’s

Investors

Service,

State

government

–

U.S.:

Medians

–

State

debt

rose

2.5%

in

2020,

spurred

by

pandemic-linked

borrowing,

6/14/21.

5.

This

does

not

indicate

Moody’s

rating

of

the

Fund.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

The

dollar

value,

number

of

shares

or

principal

amount,

and

names

of

all

portfolio

holdings

are

listed

in

the

Fund’s

Statement

of

Investments

(SOI).

The

SOI

begins

on

page

45

.

Franklin

Tennessee

Municipal

Bond

Fund

12

franklintempleton.com

Annual

Report

Manager’s

Discussion

Consistent

with

our

strategy,

we

sought

to

remain

invested

in

bonds

that

have

an

average

weighted

maturity

of

15

to

30

years

with

good

call

features.

Based

on

the

combination

of

our

value-oriented

philosophy

of

investing

primarily

for

income

and

a

positively

sloping

municipal

yield

curve,

in

which

interest

rates

for

longer-term

bonds

are

higher

than

those

for

shorter-term

bonds,

we

favored

the

use

of

longer-

term

bonds.

We

believe

our

conservative,

buy-and-hold

investment

strategy

can

help

us

achieve

high,

current,

tax-

free

income

for

shareholders.

Thank

you

for

your

continued

participation

in

Franklin

Tennessee

Municipal

Bond

Fund.

We

look

forward

to

serving

your

future

investment

needs.

The

foregoing

information

reflects

our

analysis,

opinions

and

portfolio

holdings

as

of

May

31,

2021

,

the

end

of

the

reporting

period.

The

way

we

implement

our

main

investment

strategies

and

the

resulting

portfolio

holdings

may

change

depending

on

factors

such

as

market

and

economic

conditions.

These

opinions

may

not

be

relied

upon

as

investment

advice

or

an

offer

for

a

particular

security.

The

information

is

not

a

complete

analysis

of

every

aspect

of

any

market,

state,

industry,

security

or

the

Fund.

Statements

of

fact

are

from

sources

considered

reliable,

but

the

investment

manager

makes

no

representation

or

warranty

as

to

their

completeness

or

accuracy.

Although

historical

performance

is

no

guarantee

of

future

results,

these

insights

may

help

you

understand

our

investment

management

philosophy.

Portfolio

Composition

5/31/21

%

of

Total

Investments*

Utilities

29.78%

Health

Care

19.68%

Local

18.88%

Refunded

12.04%

Transportation

8.26%

Housing

6.55%

Education

2.77%

State

General

Obligation

0.72%

Other

Revenue

Bonds

0.67%

Lease

0.65%

*Does

not

include

cash

and

cash

equivalents.

Performance

Summary

as

of

May

31,

2021

Franklin

Tennessee

Municipal

Bond

Fund

13

franklintempleton.com

Annual

Report

The

performance

tables

and

graphs

do

not

reflect

any

taxes

that

a

shareholder

would

pay

on

Fund

dividends,

capital

gain

distributions,

if

any,

or

any

realized

gains

on

the

sale

of

Fund

shares.

Total

return

reflects

reinvestment

of

the

Fund’s

dividends

and

capital

gain

distributions,

if

any,

and

any

unrealized

gains

or

losses.

Your

dividend

income

will

vary

depending

on

dividends

or

interest

paid

by

securities

in

the

Fund’s

portfolio,

adjusted

for

operating

expenses

of

each

class.

Capital

gain

distributions

are

net

profits

realized

from

the

sale

of

portfolio

securities.

Performance

as

of

5/31/21

Cumulative

total

return

excludes

sales

charges.

Average

annual

total

return

includes

maximum

sales

charges.

Sales

charges

will

vary

depending

on

the

size

of

the

investment

and

the

class

of

share

purchased.

The

maximum

is

3.75%

and

the

minimum

is

0%.

Class

A

:

3.75%

maximum

initial

sales

charge;

Advisor

Class:

no

sales

charges.

For

other

share

classes,

visit

franklintempleton.com.

Performance

data

represent

past

performance,

which

does

not

guarantee

future

results.

Investment

return

and

principal

value

will

fluctuate,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

Current

performance

may

differ

from

figures

shown.

For

most

recent

month-end

performance,

go

to

franklintempleton.com

or

call

(800)

342-5236

.

Share

Class

Cumulative

Total

Return

1

Average

Annual

Total

Return

2

–

A

3,4

1-Year

+4.39%

+0.47%

5-Year

+12.97%

+1.69%

10-Year

+38.44%

+2.91%

Advisor

5

1-Year

+4.65%

+4.65%

5-Year

+13.97%

+2.65%

10-Year

+39.55%

+3.39%

Share

Class

Distribution

Rate

6

Taxable

Equivalent

Distribution

Rate

7

30-Day

Standardized

Yield

8

Taxable

Equivalent

30-Day

Standardized

Yield

7

A

1.83%

3.09%

0.99%

1.67%

Advisor

2.14%

3.61%

1.27%

2.15%

See

page

15

for

Performance

Summary

footnotes.

Franklin

Tennessee

Municipal

Bond

Fund

Performance

Summary

14

franklintempleton.com

Annual

Report

See

page

15

for

Performance

Summary

footnotes.

Total

Return

Index

Comparison

for

a

Hypothetical

$10,000

Investment

Total

return

represents

the

change

in

value

of

an

investment

over

the

periods

shown.

It

includes

any

applicable

maximum

sales

charge,

Fund

expenses,

account

fees

and

reinvested

distributions.

The

unmanaged

index

includes

reinvestment

of

any

income

or

distributions.

It

differs

from

the

Fund

in

composition

and

does

not

pay

management

fees

or

expenses.

One

cannot

invest

directly

in

an

index.

Class

A

(6/1/11–5/31/21)

Advisor

Class

(6/1/11–5/31/21)

Franklin

Tennessee

Municipal

Bond

Fund

Performance

Summary

15

franklintempleton.com

Annual

Report

Each

class

of

shares

is

available

to

certain

eligible

investors

and

has

different

annual

fees

and

expenses,

as

described

in

the

prospectus.

All

investments

involve

risks,

including

loss

of

principal.

Because

municipal

bonds

are

sensitive

to

interest-rate

movements,

the

Fund’s

yield

and

share

price

will

fluctuate

with

market

conditions.

Bond

prices

generally

move

in

the

opposite

direction

of

interest

rates.

Thus,

as

prices

of

bonds

in

the

Fund

adjust

to

a

rise

in

interest

rates,

the

Fund’s

share

price

may

decline.

Because

the

Fund

invests

principally

in

a

single

state,

it

is

subject

to

greater

risk

of

adverse

economic

and

regulatory

changes

in

that

state

than

a

geographically

diversified

fund.

Puerto

Rico

municipal

bonds

have

been

impacted

by

recent

adverse

economic

and

market

changes,

which

may

cause

the

Fund’s

share

price

to

decline.

Changes

in

the

credit

rating

of

a

bond,

or

in

the

credit

rating

or

financial

strength

of

a

bond’s

issuer,

insurer

or

guarantor,

may

affect

the

bond’s

value.

The

Fund

may

invest

a

significant

part

of

its

assets

in

municipal

securities

that

finance

similar

types

of

projects,

such

as

utilities,

hospitals,

higher

education

and

transportation.

A

change

that

affects

one

project

would

likely

affect

all

similar

projects,

thereby

increasing

market

risk.

Events

such

as

the

spread

of

deadly

diseases,

disasters,

and

financial,

political

or

social

disruptions,

may

heighten

risks

and

adversely

affect

performance.

The

Fund’s

prospectus

also

includes

a

description

of

the

main

investment

risks.

1.

Cumulative

total

return

represents

the

change

in

value

of

an

investment

over

the

periods

indicated.

2.

Average

annual

total

return

represents

the

average

annual

change

in

value

of

an

investment

over

the

periods

indicated.

Return

for

less

than

one

year,

if

any,

has

not

been

annualized.

3.

Effective

9/10/18,

Class

A

shares

closed

to

new

investors,

were

renamed

Class

A1

shares,

and

a

new

Class

A

share

with

a

different

expense

structure

became

available.

Class

A

performance

shown

has

been

calculated

as

follows:

(a)

for

periods

prior

to

9/10/18,

a

restated

figure

is

used

based

on

the

Fund’s

Class

A1

performance

that

includes

any

Rule

12b-1

rate

differential

that

exists

between

Class

A1

and

Class

A;

and

(b)

for

periods

after

9/10/18,

actual

Class

A

performance

is

used,

reflecting

all

charges

and

fees

applicable

to

that

class.

4.

Prior

to

3/1/19,

these

shares

were

offered

at

a

higher

initial

sales

charge

of

4.25%,

thus

actual

returns

(with

sales

charges)

would

have

differed.

Average

annual

total

returns

(with

sales

charges)

have

been

restated

to

reflect

the

current

maximum

initial

sales

charge

of

3.75%.

5.

Effective

9/15/16,

the

Fund

began

offering

Advisor

class

shares,

which

do

not

have

sales

charges

or

a

Rule

12b-1

plan.

Performance

quotations

for

this

class

reflect

the

following

methods

of

calculation:

(a)

For

periods

prior

to

9/15/16,

a

restated

figure

is

used

based

upon

the

Fund’s

Class

A

performance,

excluding

the

effect

of

Class

A’s

maximum

initial

sales

charge,

but

reflecting

the

effect

of

the

Class

A

Rule

12b-1

fees;

and

(b)

for

periods

after

9/15/16,

actual

Advisor

Class

performance

is

used

reflecting

all

charges

and

fees

applicable

to

that

class.

6.

Distribution

rate

is

based

on

an

annualization

of

the

respective

class’s

May

dividend

and

the

maximum

offering

price

(NAV

for

Advisor

Class)

per

share

on

5/31/21.

7.

Taxable

equivalent

distribution

rate

and

yield

assume

the

published

rates

as

of

12/17/20

for

the

maximum

combined

effective

federal

and

Tennessee

state

personal

income

tax

rate

of

40.80%,

based

on

the

federal

income

tax

rate

of

37.00%

plus

3.80%

Medicare

tax.

8.

The

Fund’s

30-day

standardized

yield

is

calculated

over

a

trailing

30-day

period

using

the

yield

to

maturity

on

bonds

and/or

the

dividends

accrued

on

stocks.

It

may

not

equal

the

Fund’s

actual

income

distribution

rate,

which

reflects

the

Fund’s

past

dividends

paid

to

shareholders.

9.

Source:

Morningstar.

The

Bloomberg

Barclays

Municipal

Bond

Index

is

a

market

value

weighted

index

engineered

for

the

long-term

tax-exempt

bond

market.

To

be

included

in

the

index,

bonds

must

be

fixed

rate,

have

at

least

one

year

to

final

maturity

and

be

rated

investment

grade

(Baa3/BBB-

or

higher)

by

at

least

two

of

the

following

agencies:

Moody’s,

S&P

and

Fitch.

10.

Figures

are

as

stated

in

the

Fund’s

current

prospectus

and

may

differ

from

the

expense

ratios

disclosed

in

the

Your

Fund’s

Expenses

and

Financial

Highlights

sections

in

this

report.

In

periods

of

market

volatility,

assets

may

decline

significantly,

causing

total

annual

Fund

operating

expenses

to

become

higher

than

the

figures

shown.

See

www.franklintempletondatasources.com

for

additional

data

provider

information.

Distributions

(6/1/20–5/31/21)

Share

Class

Net

Investment

Income

A

$0.255829

A1

$0.272359

R6

$0.286942

Advisor

$0.283416

Total

Annual

Operating

Expenses

10

Share

Class

A

0.93%

Advisor

0.68%

Your

Fund’s

Expenses

Franklin

Tennessee

Municipal

Bond

Fund

16

franklintempleton.com

Annual

Report

As

a

Fund

shareholder,

you

can

incur

two

types

of

costs:

(1)

transaction

costs,

including

sales

charges

(loads)

on

Fund

purchases

and

redemptions;

and

(2)

ongoing

Fund

costs,

including

management

fees,

distribution

and

service

(12b-1)

fees,

and

other

Fund

expenses.

All

mutual

funds

have

ongoing

costs,

sometimes

referred

to

as

operating

expenses.

The

table

below

shows

ongoing

costs

of

investing

in

the

Fund

and

can

help

you

understand

these

costs

and

compare

them

with

those

of

other

mutual

funds.

The

table

assumes

a

$1,000

investment

held

for

the

six

months

indicated.

Actual

Fund

Expenses

The

table

below

provides

information

about

actual

account

values

and

actual

expenses

in

the

columns

under

the

heading

“Actual.”

In

these

columns

the

Fund’s

actual

return,

which

includes

the

effect

of

Fund

expenses,

is

used

to

calculate

the

“Ending

Account

Value”

for

each

class

of

shares.

You

can

estimate

the

expenses

you

paid

during

the

period

by

following

these

steps

(

of

course,

your

account

value

and

expenses

will

differ

from

those

in

this

illustration

):

Divide

your

account

value

by

$1,000

(

if

your

account

had

an

$8,600

value,

then

$8,600

÷

$1,000

=

8.6

).

Then

multiply

the

result

by

the

number

in

the

row

for

your

class

of

shares

under

the

headings

“Actual”

and

“Expenses

Paid

During

Period”

(

if

Actual

Expenses

Paid

During

Period

were

$7.50,

then

8.6

x

$7.50

=$64.50

).

In

this

illustration,

the

actual

expenses

paid

this

period

are

$64.50.

Hypothetical

Example

for

Comparison

with

Other

Funds

Under

the

heading

“Hypothetical”

in

the

table,

information

is

provided

about

hypothetical

account

values

and

hypothetical

expenses

based

on

the

Fund’s

actual

expense

ratio

and

an

assumed

rate

of

return

of

5%

per

year

before

expenses,

which

is

not

the

Fund’s

actual

return.

This

information

may

not

be

used

to

estimate

the

actual

ending

account

balance

or

expenses

you

paid

for

the

period,

but

it

can

help

you

compare

ongoing

costs

of

investing

in

the

Fund

with

those

of

other

funds.

To

do

so,

compare

this

5%

hypothetical

example

for

the

class

of

shares

you

hold

with

the

5%

hypothetical

examples

that

appear

in

the

shareholder

reports

of

other

funds.

Please

note

that

expenses

shown

in

the

table

are

meant

to

highlight

ongoing

costs

and

do

not

reflect

any

transactional

costs.

Therefore,

information

under

the

heading

“Hypothetical”

is

useful

in

comparing

ongoing

costs

only,

and

will

not

help

you

compare

total

costs

of

owning

different

funds.

In

addition,

if

transactional

costs

were

included,

your

total

costs

would

have

been

higher.

1.

Expenses

are

equal

to

the

annualized

expense

ratio

for

the

six-month

period

as

indicated

above—in

the

far

right

column—multiplied

by

the

simple

average

account

value

over

the

period

indicated,

and

then

multiplied

by

182/365

to

reflect

the

one-half

year

period.

2.

Reflects

expenses

after

fee

waivers

and

expense

reimbursements.

Does

not

include

acquired

fund

fees

and

expenses.

Actual

(actual

return

after

expenses)

Hypothetical

(5%

annual

return

before

expenses)

Share

Class

Beginning

Account

Value

12/1/20

Ending

Account

Value

5/31/21

Expenses

Paid

During

Period

12/1/20–5/31/21

1,2

Ending

Account

Value

5/31/21

Expenses

Paid

During

Period

12/1/20–5/31/21

1,2

a

Net

Annualized

Expense

Ratio

2

A

$1,000

$1,017.25

$4.82

$1,020.15

$4.83

0.96%

A1

$1,000

$1,018.00

$4.08

$1,020.89

$4.09

0.81%

R6

$1,000

$1,018.65

$3.44

$1,021.53

$3.44

0.68%

Advisor

$1,000

$1,017.58

$3.58

$1,021.38

$3.59

0.71%

Franklin

Municipal

Securities

Trust

Financial

Highlights

Franklin

California

High

Yield

Municipal

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

17

a

Year

Ended

May

31,

Year

Ended

May

31,

2019

a

2021

2020

Class

A

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

............................................

$10.81

$11.10

$10.70

Income

from

investment

operations

b

:

Net

investment

income

c

..................................................

0.35

0.34

0.27

Net

realized

and

unrealized

gains

(losses)

....................................

0.67

(0.29)

0.41

Total

from

investment

operations

.............................................

1.02

0.05

0.68

Less

distributions

from:

Net

investment

income

...................................................

(0.34)

(0.34)

(0.28)

Net

asset

value,

end

of

year

................................................

$11.49

$10.81

$11.10

Total

return

d

............................................................

9.57%

0.43%

6.56%

Ratios

to

average

net

assets

e

Expenses

f

..............................................................

0.79%

0.80%

0.83%

Net

investment

income

....................................................

3.10%

3.10%

3.55%

Supplemental

data

Net

assets,

end

of

year

(000’s)

..............................................

$618,967

$425,757

$244,196

Portfolio

turnover

rate

.....................................................

9.20%

23.29%

13.91%

a

For

the

period

September

10,

2018

(effective

date)

to

May

31,

2019.

b

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

c

Based

on

average

daily

shares

outstanding.

d

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable,

and

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Municipal

Securities

Trust

Financial

Highlights

Franklin

California

High

Yield

Municipal

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

18

a

Year

Ended

May

31,

2021

2020

2019

2018

2017

Class

A1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$10.79

$11.08

$10.70

$10.89

$11.10

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.37

0.36

0.40

0.39

0.40

Net

realized

and

unrealized

gains

(losses)

...........

0.67

(0.29)

0.39

(0.19)

(0.22)

Total

from

investment

operations

....................

1.04

0.07

0.79

0.20

0.18

Less

distributions

from:

Net

investment

income

..........................

(0.36)

(0.36)

(0.41)

(0.39)

(0.39)

Net

asset

value,

end

of

year

.......................

$11.47

$10.79

$11.08

$10.70

$10.89

Total

return

c

...................................

9.76%

0.58%

7.56%

1.92%

1.71%

Ratios

to

average

net

assets

Expenses

.....................................

0.64%

d

0.65%

d

0.68%

d

0.66%

0.63%

Net

investment

income

...........................

3.27%

3.25%

3.70%

3.63%

3.66%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$1,254,701

$1,282,022

$1,386,291

$1,378,169

$1,377,514

Portfolio

turnover

rate

............................

9.20%

23.29%

13.91%

11.08%

19.73%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Municipal

Securities

Trust

Financial

Highlights

Franklin

California

High

Yield

Municipal

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

19

a

Year

Ended

May

31,

2021

2020

2019

2018

2017

Class

C

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$10.87

$11.17

$10.78

$10.97

$11.17

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.30

0.30

0.34

0.33

0.34

Net

realized

and

unrealized

gains

(losses)

...........

0.69

(0.30)

0.40

(0.19)

(0.21)

Total

from

investment

operations

....................

0.99

—

0.74

0.14

0.13

Less

distributions

from:

Net

investment

income

..........................

(0.30)

(0.30)

(0.35)

(0.33)

(0.33)

Net

asset

value,

end

of

year

.......................

$11.56

$10.87

$11.17

$10.78

$10.97

Total

return

c

...................................

9.18%

(0.04)%

7.01%

1.34%

1.22%

Ratios

to

average

net

assets

Expenses

.....................................

1.19%

d

1.20%

d

1.23%

d

1.21%

1.18%

Net

investment

income

...........................

2.69%

2.70%

3.15%

3.08%

3.11%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$223,652

$253,579

$272,186

$327,022

$358,308

Portfolio

turnover

rate

............................

9.20%

23.29%

13.91%

11.08%

19.73%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Municipal

Securities

Trust

Financial

Highlights

Franklin

California

High

Yield

Municipal

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

20

a

Year

Ended

May

31,

Year

Ended

May

31,

2018

a

2021

2020

2019

Class

R6

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

................................

$10.82

$11.12

$10.74

$10.88

Income

from

investment

operations

b

:

Net

investment

income

c

......................................

0.38

0.38

0.41

0.35

Net

realized

and

unrealized

gains

(losses)

........................

0.68

(0.30)

0.39

(0.15)

Total

from

investment

operations

.................................

1.06

0.08

0.80

0.20

Less

distributions

from:

Net

investment

income

.......................................

(0.37)

(0.38)

(0.42)

(0.34)

Net

asset

value,

end

of

year

....................................

$11.51

$10.82

$11.12

$10.74

Total

return

d

................................................

9.97%

0.63%

7.66%

1.84%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

...................

0.52%

0.52%

0.57%

0.55%

Expenses

net

of

waiver

and

payments

by

affiliates

....................

0.51%

f

0.51%

f

0.55%

f

0.53%

Net

investment

income

........................................

3.37%

3.39%

3.83%

3.76%

Supplemental

data

Net

assets,

end

of

year

(000’s)

..................................

$45,216

$26,741

$21,214

$13,004

Portfolio

turnover

rate

.........................................

9.20%

23.29%

13.91%

11.08%

a

For

the

period

August

1,

2017

(effective

date)

to

May

31,

2018.

b

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

c

Based

on

average

daily

shares

outstanding.

d

Total

return

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Municipal

Securities

Trust

Financial

Highlights

Franklin

California

High

Yield

Municipal

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

21

a

Year

Ended

May

31,

2021

2020

2019

2018

2017

Advisor

Class

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$10.82

$11.11

$10.73

$10.91

$11.12

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.38

0.37

0.41

0.40

0.41

Net

realized

and

unrealized

gains

(losses)

...........

0.67

(0.29)

0.39

(0.18)

(0.22)

Total

from

investment

operations

....................

1.05

0.08

0.80

0.22

0.19

Less

distributions

from:

Net

investment

income

..........................

(0.37)

(0.37)

(0.42)

(0.40)

(0.40)

Net

asset

value,

end

of

year

.......................

$11.50

$10.82

$11.11

$10.73

$10.91

Total

return

....................................

9.84%

0.68%

7.64%

2.10%

1.80%

Ratios

to

average

net

assets

Expenses

.....................................

0.54%

c

0.55%

c

0.58%

c

0.56%

0.53%

Net

investment

income

...........................

3.35%

3.35%

3.80%

3.73%

3.76%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$1,113,278

$903,694

$889,990

$748,355

$720,890

Portfolio

turnover

rate

............................

9.20%

23.29%

13.91%

11.08%

19.73%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Municipal

Securities

Trust

Statement

of

Investments,

May

31,

2021

Franklin

California

High

Yield

Municipal

Fund

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

22

a

a

Principal

Amount

a

Value

a

a

a

a

a

Municipal

Bonds

97.6%

California

91.0%

ABAG

Finance

Authority

for

Nonprofit

Corp.

,

Covia

Communities

Obligated

Group

,

Revenue

,

2011

,

Refunding

,

6.125

%

,

7/01/41

.............................

$

7,500,000

$

7,526,628

Alameda

Community

Facilities

District

,

City

of

Alameda

Community

Facilities

District

No.

13-1

,

Special

Tax

,

2016

,

5

%

,

9/01/46

................................

1,400,000

1,557,686

Artesia

Redevelopment

Agency

Successor

Agency

,

Tax

Allocation,

2007,

5.5%,

6/01/42

....................................

6,355,000

6,370,440

Tax

Allocation,

2007,

5.7%,

6/01/42

....................................

2,695,000

2,701,933

Tax

Allocation,

2009,

7.7%,

6/01/46

....................................

3,075,000

3,087,736

Baldwin

Park

Unified

School

District

,

GO

,

2013

,

Pre-Refunded

,

BAM

Insured

,

Zero

Cpn.,

8/01/42

.....................................................

10,000,000

2,755,450

Bay

Area

Toll

Authority

,

Revenue

,

2013

S-4

,

Pre-Refunded

,

5.25

%

,

4/01/53

........

15,000,000

16,418,256

Beaumont

Unified

School

District

,

GO

,

2011

C

,

Pre-Refunded

,

AGMC

Insured

,

6

%

,

8/01/41

.........................................................

1,925,000

1,943,734

California

Community

College

Financing

Authority

,

NCCD-Orange

Coast

Properties

LLC

,

Revenue

,

2018

,

5.25

%

,

5/01/53

...................................

6,250,000

6,960,966

a

California

Community

Housing

Agency

,

Annadel

Apartments,

Revenue,

144A,

2019

A,

5%,

4/01/49

..................

27,050,000

30,914,103

Arbors

Apartments,

Revenue,

144A,

2020

A,

5%,

8/01/50

....................

7,500,000

8,732,950

Brio

Apartments

&

Next

on

Lex

Apartments,

Revenue,

144A,

2021

A-2,

4%,

8/01/47

12,500,000

13,601,525

Mira

Vista

Hills

Apartments,

Revenue,

144A,

2021

A,

4%,

2/01/56

.............

13,000,000

13,768,377

Serenity

at

Larkspur

Apartments,

Revenue,

144A,

2020

A,

5%,

2/01/50

.........

14,525,000

16,798,315

Verdant

at

Green

Valley

Apartments,

Revenue,

144A,

2019

A,

5%,

8/01/49

.......

23,000,000

26,505,920

California

County

Tobacco

Securitization

Agency

,

Revenue,

2020

B-1,

Refunding,

1.75%,

6/01/30

...........................

1,000,000

1,004,382

Revenue,

2020

B-2,

Refunding,

Zero

Cpn.,

6/01/55

........................

83,010,000

16,490,459

Gold

Country

Settlement

Funding

Corp.,

Revenue,

2020

B-2,

Refunding,

Zero

Cpn.,

6/01/55

........................................................

13,420,000

3,503,188

Merced

County

Tobacco

Funding

Corp.,

Revenue,

2020

B,

Refunding,

5%,

6/01/50

3,000,000

3,566,336

Sonoma

County

Securitization

Corp.,

Revenue,

2020

B-2,

Refunding,

Zero

Cpn.,

6/01/55

........................................................

10,000,000

2,483,576

California

Educational

Facilities

Authority

,

Art

Center

College

of

Design,

Revenue,

2018

A,

Refunding,

5%,

12/01/37

.......

1,265,000

1,561,839

Art

Center

College

of

Design,

Revenue,

2018

A,

Refunding,

5%,

12/01/38

.......

1,125,000

1,386,073

Art

Center

College

of

Design,

Revenue,

2018

A,

Refunding,

5%,

12/01/44

.......

1,610,000

1,957,864

Art

Center

College

of

Design,

Revenue,

2018

A,

Refunding,

5%,

12/01/48

.......

9,000,000

10,906,291

Chapman

University,

Revenue,

2015,

5%,

4/01/40

.........................

5,000,000

5,750,271

Leland

Stanford

Junior

University

(The),

Revenue,

V-1,

5%,

5/01/49

............

10,000,000

15,825,063

Loma

Linda

University,

Revenue,

2017

A,

Refunding,

5%,

4/01/42

.............

8,500,000

10,109,860

University

of

San

Francisco,

Revenue,

2011,

Pre-Refunded,

6.125%,

10/01/36

....

2,000,000

2,039,237

University

of

the

Pacific,

Revenue,

2015,

Refunding,

5%,

11/01/36

.............

3,000,000

3,532,599

California

Health

Facilities

Financing

Authority

,

Adventist

Health

System/West

Obligated

Group,

Revenue,

2016

A,

Refunding,

4%,

3/01/39

........................................................

8,190,000

9,144,762

California-Nevada

Methodist

Homes,

Revenue,

2015,

Refunding,

California

Mortgage

Insured,

5%,

7/01/45

..............................................

4,500,000

5,111,136

Children's

Hospital

Los

Angeles

Obligated

Group,

Revenue,

2017

A,

Refunding,

4%,

8/15/49

........................................................

3,375,000

3,735,299

El

Camino

Hospital,

Revenue,

2017,

4%,

2/01/42

..........................

6,500,000

7,345,187

El

Camino

Hospital,

Revenue,

2017,

5%,

2/01/42

..........................

5,000,000

5,982,803

Lucile

Salter

Packard

Children's

Hospital

at

Stanford

Obligated

Group,

Revenue,

2014

A,

5%,

8/15/43

..............................................

7,160,000

7,979,159

Sutter

Health

Obligated

Group,

Revenue,

2016

B,

Pre-Refunded,

5%,

11/15/46

...

10,985,000

13,594,010

Sutter

Health

Obligated

Group,

Revenue,

2016

B,

5%,

11/15/46

...............

15,940,000

19,242,025

California

Housing

Finance

,

Revenue,

2019-2,

A,

4%,

3/20/33

......................................

54,788

64,725

Revenue,

2021-1,

A,

3.5%,

11/20/35

...................................

4,988,226

5,848,666

Franklin

Municipal

Securities

Trust

Statement

of

Investments

Franklin

California

High

Yield

Municipal

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

23

a

a

Principal

Amount

a

Value

a

a

a

a

a

Municipal

Bonds

(continued)

California

(continued)

a

California

Infrastructure

&

Economic

Development

Bank

,

Goodwill

Industries

of

Sacramento

Valley

and

Northern

Nevada,

Inc.,

Revenue,

144A,

2016

A,

5%,

1/01/47

.........................................

$

10,360,000

$

9,935,013

WFCS

Holdings

LLC,

Revenue,

144A,

2020

A-1,

5%,

1/01/55

.................

2,300,000

2,659,263

California

Municipal

Finance

Authority

,

a,b

Revenue,

144A,

2021

B,

Refunding,

4%,

10/01/37

.........................

8,150,000

7,267,479

Special

Tax,

2020

B,

4%,

9/01/43

......................................

1,140,000

1,269,243

Special

Tax,

2020

B,

4%,

9/01/50

......................................

1,600,000

1,770,458

b

Special

Tax,

2021

A,

4%,

9/01/36

......................................

535,000

602,096

b

Special

Tax,

2021

A,

4%,

9/01/46

......................................

1,095,000

1,214,092

b

Special

Tax,

2021

A,

4%,

9/01/51

......................................

1,505,000

1,663,433

1717

University

Associates

LLC,

Revenue,

2020

A-S,

5%,

9/01/57

.............

1,175,000

1,175,924

ACI

Royal

York,

Inc.,

Revenue,

2020

A,

4%,

2/15/55

........................

2,375,000

2,370,517

American

Heritage

Education

Foundation,

Revenue,

2016

A,

Refunding,

5%,

6/01/36

3,000,000

3,440,964

Biola

University,

Inc.,

Revenue,

2017,

Refunding,

5%,

10/01/36

...............

1,100,000

1,320,188

Biola

University,

Inc.,

Revenue,

2017,

Refunding,

5%,

10/01/39

...............

1,000,000

1,192,236

Bowles

Hall

Foundation,

Revenue,

2015

A,

5%,

6/01/35

.....................

600,000

673,978

Bowles

Hall

Foundation,

Revenue,

2015

A,

5%,

6/01/50

.....................

3,250,000

3,593,765

a

California

Baptist

University,

Revenue,

144A,

2015

A,

5.375%,

11/01/40

.........

5,000,000

5,707,158

a

California

Baptist

University,

Revenue,

144A,

2015

A,

5.5%,

11/01/45

...........

10,000,000

11,385,181

a

California

Baptist

University,

Revenue,

144A,

2016

A,

5%,

11/01/36

............

2,500,000

2,889,923

a,b

Capital

Christian

Center,

Revenue,

144A,

2021

A,

5%,

10/01/51

...............

8,425,000

9,152,782

Caritas

Affordable

Housing,

Inc.,

Revenue,

Senior

Lien,

2014

A,

5%,

8/15/30

.....

1,000,000

1,107,271

Caritas

Affordable

Housing,

Inc.,

Revenue,

Senior

Lien,

2014

A,

5.25%,

8/15/39

...

1,200,000

1,321,052

Caritas

Affordable

Housing,

Inc.,

Revenue,

Senior

Lien,

2014

A,

5.25%,

8/15/49

...

3,500,000

3,831,473

CHF-Davis

I

LLC,

Revenue,

2018,

5%,

5/15/51

...........................

5,000,000

5,953,659

CHF-Davis

II

LLC,

Revenue,

2021,

BAM

Insured,

4%,

5/15/46

................

4,965,000

5,919,033

CHF-Davis

II

LLC,

Revenue,

2021,

BAM

Insured,

3%,

5/15/51

................

8,050,000

8,603,806

CHF-Davis

II

LLC,

Revenue,

2021,

BAM

Insured,

3%,

5/15/54

................

6,400,000

6,810,798

CHF-Riverside

I

LLC,

Revenue,

2018,

5%,

5/15/43

.........................

1,500,000

1,796,304

CHF-Riverside

II

LLC,

Revenue,

2019,

5%,

5/15/49

........................

9,575,000

11,624,332

a

Claremont

Graduate

University,

Revenue,

144A,

2020

B,

Refunding,

5%,

10/01/39

.

1,120,000

1,329,145

a

Claremont

Graduate

University,

Revenue,

144A,

2020

B,

Refunding,

5%,

10/01/49

.

4,250,000

4,951,053

a

Claremont

Graduate

University,

Revenue,

144A,

2020

B,

Refunding,

5%,

10/01/54

.

1,875,000

2,176,492

a

Community

Health

Centers

of

The

Central

Coast,

Inc.,

Revenue,

144A,

2021

A,

3%,

12/01/23

.......................................................

100,000

102,428

a

Community

Health

Centers

of

The

Central

Coast,

Inc.,

Revenue,

144A,

2021

A,

4%,

12/01/26

.......................................................

200,000

217,003

a

Community

Health

Centers

of

The

Central

Coast,

Inc.,

Revenue,

144A,

2021

A,

5%,

12/01/27

.......................................................

100,000

114,839

a

Community

Health

Centers

of

The

Central

Coast,

Inc.,

Revenue,

144A,

2021

A,

5%,

12/01/29

.......................................................

50,000

58,452

a

Community

Health

Centers

of

The

Central

Coast,

Inc.,

Revenue,

144A,

2021

A,

5%,

12/01/31

.......................................................

130,000

153,224

a

Community

Health

Centers

of

The

Central

Coast,

Inc.,

Revenue,

144A,

2021

A,

5%,

12/01/36

.......................................................

350,000

406,766

a

Community

Health

Centers

of

The

Central

Coast,

Inc.,

Revenue,

144A,

2021

A,

5%,

12/01/46

.......................................................

1,000,000

1,138,341

a

Community

Health

Centers

of

The

Central

Coast,

Inc.,

Revenue,

144A,

2021

A,

5%,

12/01/54

.......................................................

1,000,000

1,125,391

Community

Hospitals

of

Central

California

Obligated

Group,

Revenue,

2015

A,

Refunding,

5%,

2/01/40

............................................

5,000,000

5,612,520

Community

Hospitals

of

Central

California

Obligated

Group,

Revenue,

2017

A,

Refunding,

4%,

2/01/42

............................................

10,000,000

11,242,567

Congregational

Home

Obligated

Group

(The),

Revenue,

2019,

Refunding,

5%,

11/15/39

.......................................................

2,670,000

3,139,938

Franklin

Municipal

Securities

Trust

Statement

of

Investments

Franklin

California

High

Yield

Municipal

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

24

a

a

Principal

Amount

a

Value

a

a

a

a

a

Municipal

Bonds

(continued)

California

(continued)

California

Municipal

Finance

Authority,

(continued)

Congregational

Home

Obligated

Group

(The),

Revenue,

2019,

Refunding,

5%,

11/15/49

.......................................................

$

480,000

$

557,415

a

Creative

Center

of

Los

Altos

(The),

Revenue,

144A,

2016

B,

4%,

11/01/36

.......

1,395,000

1,439,524

a

Creative

Center

of

Los

Altos

(The),

Revenue,

144A,

2016

B,

4.5%,

11/01/46

......

1,600,000

1,662,233

Del

Harbor

Foundation,

Revenue,

2015,

Refunding,

5%,

11/01/32

.............

3,020,000

3,578,570

Del

Harbor

Foundation,

Revenue,

2015,

Refunding,

5%,

11/01/39

.............

6,525,000

7,651,133

Developmental

Services

Support

Foundation

for

Kern

Inyo

and

Mono

Counties,

Revenue,

2019

A,

Refunding,

5%,

5/01/49

.............................

3,895,000

4,769,555

Eisenhower

Medical

Center,

Revenue,

2017

A,

Refunding,

5%,

7/01/37

.........

2,625,000

3,110,832

HumanGood

California

Obligated

Group,

Revenue,

2019

A,

Refunding,

5%,

10/01/44

12,885,000

15,064,697

Inland

Counties

Regional

Center,

Inc.,

Revenue,

2015,

Refunding,

5%,

6/15/37

...

9,965,000

11,574,669

a

King/Chavez

Facilities

LLC,

Revenue,

144A,

2016

A,

Refunding,

5%,

5/01/36

.....

2,275,000

2,508,722

a

King/Chavez

Facilities

LLC,

Revenue,

144A,

2016

A,

Refunding,

5%,

5/01/46

.....

2,775,000

3,020,133

LAX

Integrated

Express

Solutions

LLC,

Revenue,

Senior

Lien,

2018

A,

5%,

12/31/43

20,665,000

25,153,622

LAX

Integrated

Express

Solutions

LLC,

Revenue,

Senior

Lien,

2018

A,

4%,

12/31/47

6,085,000

6,847,775

LAX

Integrated

Express

Solutions

LLC,

Revenue,

Senior

Lien,

2018

A,

5%,

12/31/47

15,500,000

18,810,130

Literacy

First

Charter

School

Issuer

LLC,

Revenue,

2019

A,

5%,

12/01/39

.......

1,145,000

1,363,926

Literacy

First

Charter

School

Issuer

LLC,

Revenue,

2019

A,

5%,

12/01/49

.......

2,775,000

3,262,165

Northbay

Healthcare

Group

Obligated

Group,

Revenue,

2015,

5%,

11/01/35

......

1,100,000

1,220,234

Northbay

Healthcare

Group

Obligated

Group,

Revenue,

2015,

5%,

11/01/44

......

1,050,000

1,154,080

Northbay

Healthcare

Group

Obligated

Group,

Revenue,

2017

A,

5.25%,

11/01/47

..

3,000,000

3,500,621

a

P3

Claremont

Holdings

LLC,

Revenue,

144A,

2020

A,

5%,

7/01/30

.............

520,000

620,896

a

Palmdale

Aerospace

Academy,

Inc.

(The),

Revenue,

144A,

2016

A,

5%,

7/01/31

..

1,000,000

1,136,457

a

Palmdale

Aerospace

Academy,

Inc.

(The),

Revenue,

144A,

2016

A,

5%,

7/01/36

..

2,750,000

3,083,024

a

Palmdale

Aerospace

Academy,

Inc.

(The),

Revenue,

144A,

2016

A,

5%,

7/01/41

..

1,750,000

1,944,244

a

Palmdale

Aerospace

Academy,

Inc.

(The),

Revenue,

144A,

2018

A,

3.875%,

7/01/28

1,345,000

1,438,824

a

Palmdale

Aerospace

Academy,

Inc.

(The),

Revenue,

144A,

2018

A,

5%,

7/01/38

..

1,100,000

1,275,099

a

Palmdale

Aerospace

Academy,

Inc.

(The),

Revenue,

144A,

2018

A,

5%,

7/01/49

..

3,600,000

4,097,977

ROP

WMCC

LLC,

Revenue,

2013

A,

Pre-Refunded,

5.625%,

11/15/33

..........

1,000,000

1,131,350

ROP

WMCC

LLC,

Revenue,

2013

A,

Pre-Refunded,

6%,

11/15/48

.............

4,000,000

4,558,876

a

Santa

Rosa

Academy,

Revenue,

144A,

2015,

5.125%,

7/01/35

................

450,000

494,444

a

Santa

Rosa

Academy,

Revenue,

144A,

2015,

5.375%,

7/01/45

................

1,400,000

1,531,842

South

Central

Los

Angeles

Regional

Center

for

Developmentally

Disabled

Persons,

Revenue,

2013,

5.5%,

12/01/33

.....................................

3,115,000

3,390,958

South

Central

Los

Angeles

Regional

Center

for

Developmentally

Disabled

Persons,

Revenue,

2013,

5.75%,

12/01/43

....................................

7,000,000

7,621,309

a

STREAM

Charter

School,

Revenue,

144A,

2020

A,

5%,

6/15/41

...............

925,000

1,031,680

a

STREAM

Charter

School,

Revenue,

144A,

2020

A,

5%,

6/15/51

...............

1,385,000

1,522,204

a

STREAM

Charter

School,

Revenue,

144A,

2020

B,

6.4%,

6/15/32

.............

865,000

891,129

University

of

La

Verne,

Revenue,

2017

A,

Refunding,

5%,

6/01/43

.............

5,000,000

6,032,248

a

California

Pollution

Control

Financing

Authority

,

c

CalPlant

I

LLC,

Revenue,

144A,

2017,

7%,

7/01/22

........................

3,500,000

2,275,000

c

CalPlant

I

LLC,

Revenue,

144A,

2017,

7.5%,

7/01/32

.......................

13,000,000

8,450,000

c

CalPlant

I

LLC,

Revenue,

144A,

2017,

8%,

7/01/39

........................

11,500,000

7,475,000

CalPlant

I

LLC,

Revenue,

144A,

2020,

7.5%,

7/01/32

.......................

4,500,000

4,199,163

Poseidon

Resources

Channelside

LP,

Revenue,

144A,

2012,

5%,

11/21/45

......

19,965,000

21,096,728

Rialto

Bioenergy

Facility

LLC,

Revenue,

144A,

2018,

7.5%,

12/01/40

...........

3,750,000

3,906,651

California

Public

Finance

Authority

,

a

Crossroads

Christian

Schools

Obligated

Group,

Revenue,

144A,

2020,

5%,

1/01/56

4,015,000

4,177,987

Henry

Mayo

Newhall

Hospital

Obligated

Group,

Revenue,

2017,

Refunding,

5%,

10/15/37

.......................................................

1,100,000

1,280,316

Henry

Mayo

Newhall

Hospital

Obligated

Group,

Revenue,

2017,

Refunding,

5%,

10/15/47

.......................................................

5,000,000

5,726,213

a

Keck

Graduate

Institute

of

Applied

Life

Sciences,

Revenue,

144A,

2017

A,

Refunding,

5%,

7/01/27

............................................

1,685,000

1,415,400

Franklin

Municipal

Securities

Trust

Statement

of

Investments

Franklin

California

High

Yield

Municipal

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

25

a

a

Principal

Amount

a

Value

a

a

a

a

a

Municipal

Bonds

(continued)

California

(continued)

California

Public

Finance

Authority,

(continued)

a

Keck

Graduate

Institute

of

Applied

Life

Sciences,

Revenue,

144A,

2017

A,

Refunding,

5%,

7/01/32

............................................

$

4,030,000

$

3,385,200

a

Keck

Graduate

Institute

of

Applied

Life

Sciences,

Revenue,

144A,

2017

A,

Refunding,

5%,

7/01/37

............................................

5,370,000

4,510,800

a

Keck

Graduate

Institute

of

Applied

Life

Sciences,

Revenue,

144A,

2017

A,

Refunding,

5%,

7/01/47

............................................

16,110,000

13,532,400

a,b

Kendal

at

Sonoma

Obligated

Group,

Revenue,

144A,

2021

A,

Refunding,

5%,

11/15/36

.......................................................

1,000,000

1,147,403

a,b

Kendal

at

Sonoma

Obligated

Group,

Revenue,

144A,

2021

A,

Refunding,

5%,

11/15/51

.......................................................

1,000,000

1,114,278

a,b

Kendal

at

Sonoma

Obligated

Group,

Revenue,

144A,

2021

A,

Refunding,

5%,

11/15/56

.......................................................

1,000,000

1,108,097

a,b

Kendal

at

Sonoma

Obligated

Group,

Revenue,

144A,

2021

B-1,

Refunding,

3.125%,

5/15/29

........................................................

2,510,000

2,535,521

California

School

Finance

Authority

,

a

Revenue,

144A,

2016,

Pre-Refunded,

5%,

8/01/41

.........................

190,000

225,534

a

Revenue,

144A,

2016,

5%,

8/01/41

....................................

2,010,000

2,271,027

Alliance

for

College

Ready

Public

Schools

Obligated

Group,

Revenue,

2016

C,

5%,

7/01/46

........................................................

10,000,000

11,339,438

a

Aspire

Public

Schools

Obligated

Group,

Revenue,

144A,

2015,

Refunding,

5%,

8/01/35

........................................................

1,000,000

1,137,634

a

Aspire

Public

Schools

Obligated

Group,

Revenue,

144A,

2015,

Refunding,

5%,

8/01/45

........................................................

1,100,000

1,251,323

a

Classical

Academy

Obligated

Group,

Revenue,

144A,

2017

A,

Refunding,

5%,

10/01/37

.......................................................

1,485,000

1,756,067

a

Classical

Academy

Obligated

Group,

Revenue,

144A,

2017

A,

Refunding,

5%,

10/01/44

.......................................................

5,610,000

6,547,979

a

Classical

Academy

Obligated

Group,

Revenue,

144A,

2020

A,

5%,

10/01/40

.....

500,000

600,932

a

Classical

Academy

Obligated

Group,

Revenue,

144A,

2020

A,

5%,

10/01/50

.....

3,570,000

4,230,434

a

Ednovate

Obligated

Group,

Revenue,

144A,

2018,

5%,

6/01/48

...............

1,000,000

1,107,870

a

Ednovate

Obligated

Group,

Revenue,

144A,

2018,

5%,

6/01/56

...............

1,710,000

1,886,566

a

Fenton

Charter

Public

Schools,

Revenue,

144A,

2020

A,

5%,

7/01/40

...........

225,000

255,728

a

Fenton

Charter

Public

Schools,

Revenue,

144A,

2020

A,

5%,

7/01/50

...........

1,275,000

1,433,837

a

Fenton

Charter

Public

Schools,

Revenue,

144A,

2020

A,

5%,

7/01/58

...........

1,000,000

1,118,639

a

Granada

Hills

Charter

High

School

Obligated

Group,

Revenue,

144A,

2019,

5%,

7/01/43

........................................................

4,000,000

4,537,255

a

Granada

Hills

Charter

High

School

Obligated

Group,

Revenue,

144A,

2019,

5%,

7/01/49

........................................................

3,800,000

4,291,209

a

Green

Dot

Public

Schools

Obligated

Group,

Revenue,

144A,

2015

A,

5%,

8/01/35

.

2,525,000

2,855,086

a

Green

Dot

Public

Schools

Obligated

Group,

Revenue,

144A,

2015

A,

5%,

8/01/45

.

3,500,000

3,906,522

a

Green

Dot

Public

Schools

Obligated

Group,

Revenue,

144A,

2018

A,

5%,

8/01/38

.

1,000,000

1,200,751

a

Green

Dot

Public

Schools

Obligated

Group,

Revenue,

144A,

2018

A,

5%,

8/01/48

.

1,750,000

2,064,996

a

iLEAD

Lancaster,

Revenue,

144A,

2021

A,

4%,

6/01/31

.....................

250,000

272,860

a

iLEAD

Lancaster,

Revenue,

144A,

2021

A,

5%,

6/01/41

.....................

435,000

494,795

a

iLEAD

Lancaster,

Revenue,

144A,

2021

A,

5%,

6/01/51

.....................

600,000

674,772

a

iLEAD

Lancaster,

Revenue,

144A,

2021

A,

5%,

6/01/61

.....................

1,320,000

1,468,756

a

Kipp

SoCal

Public

Schools

Obligated

Group,

Revenue,

144A,

2015

A,

5%,

7/01/35

1,200,000

1,362,635

a

Kipp

SoCal

Public

Schools

Obligated

Group,

Revenue,

144A,

2015

A,

5%,

7/01/45

1,675,000

1,879,880

a

Kipp

SoCal

Public

Schools

Obligated

Group,

Revenue,

144A,

2017

A,

5%,

7/01/47

1,500,000

1,758,321

a

Kipp

SoCal

Public

Schools

Obligated

Group,

Revenue,

144A,

2019

A,

5%,

7/01/39

1,000,000

1,240,502

a

Kipp

SoCal

Public

Schools

Obligated

Group,

Revenue,

144A,

2019

A,

5%,

7/01/54

3,300,000

4,016,873

a

Larchmont

Schools,

Revenue,

144A,

2018

A,

5%,

6/01/55

...................

2,050,000

2,264,033

a

Lifeline

Education

Charter

School,

Inc.,

Revenue,

144A,

2020

A,

3%,

7/01/30

.....

365,000

379,904

a

Lifeline

Education

Charter

School,

Inc.,

Revenue,

144A,

2020

A,

5%,

7/01/45

.....

825,000

941,962

a

Lifeline

Education

Charter

School,

Inc.,

Revenue,

144A,

2020

A,

5%,

7/01/55

.....

1,235,000

1,397,370

a

River

Springs

Charter

School,

Inc.,

Revenue,

144A,

2017

A,

5%,

7/01/30

........

2,000,000

2,265,827

Franklin

Municipal

Securities

Trust

Statement

of

Investments

Franklin

California

High

Yield

Municipal

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

26

a

a

Principal

Amount

a

Value

a

a

a

a

a

Municipal

Bonds

(continued)

California

(continued)

California

School

Finance

Authority,

(continued)

a

River

Springs

Charter

School,

Inc.,

Revenue,

144A,

2017

A,

5%,

7/01/37

........

$

2,000,000

$

2,231,366

a

River

Springs

Charter

School,

Inc.,

Revenue,

144A,

2017

A,

5%,

7/01/47

........

1,975,000

2,167,682

a

River

Springs

Charter

School,

Inc.,

Revenue,

144A,

2017

A,

5%,

7/01/52

........

1,340,000

1,467,229

a

Rocketship

Education

Obligated

Group,

Revenue,

144A,

2017

A,

5%,

6/01/34

....

750,000

845,457

a

Rocketship

Education

Obligated

Group,

Revenue,

144A,

2017

A,

5.125%,

6/01/47

.

845,000

938,939

a

Rocketship

Education

Obligated

Group,

Revenue,

144A,

2017

A,

5.25%,

6/01/52

..

980,000

1,092,210

a

Rocketship

Education

Obligated

Group,

Revenue,

144A,

2017

G,

5%,

6/01/30

....

315,000

367,382

a

Rocketship

Education

Obligated

Group,

Revenue,

144A,

2017

G,

5%,

6/01/37

....

360,000

411,559

a

Rocketship

Education

Obligated

Group,

Revenue,

144A,

2017

G,

5%,

6/01/47

....

1,720,000

1,934,645

a

Summit

Public

Schools

Obligated

Group,

Revenue,

144A,

2017,

5%,

6/01/47

.....

1,500,000

1,727,608

California

State

Public

Works

Board

,

Revenue,

2011

A,

Refunding,

5.125%,

10/01/31

...........................

3,605,000

3,664,362

State

of

California

Department

of

Corrections

&

Rehabilitation,

Revenue,

2011

C,

Refunding,

5.75%,

10/01/31

........................................

4,640,000

4,725,984

California

State

University

,

Revenue

,

2015

A

,

Refunding

,

5

%

,

11/01/47

...........

14,980,000

17,629,241

California

Statewide

Communities

Development

Authority

,

Revenue,

2015,

Refunding,

5%,

9/02/40

.................................

2,230,000

2,479,064

Special

Assessment,

2016

A,

5%,

9/02/36

...............................

1,035,000

1,193,290

Special

Assessment,

2016

A,

5%,

9/02/45

...............................

2,250,000

2,560,132

Special

Assessment,

2017

A,

4%,

9/02/27

...............................

1,775,000

1,923,544

Special

Assessment,

2017

A,

5%,

9/02/37

...............................

1,975,000

2,309,938

Special

Assessment,

2017

A,

5%,

9/02/46

...............................

2,460,000

2,838,546

Special

Assessment,

2017

B,

5%,

9/02/37

...............................

3,260,000

3,837,943

Special

Assessment,

2017

B,

5%,

9/02/47

...............................

2,520,000

2,926,375

Special

Assessment,

2017

C,

5%,

9/02/37

...............................

4,790,000

5,633,024

Special

Assessment,

2018

A,

5%,

9/02/38

...............................

2,150,000

2,589,176

Special

Assessment,

2018

A,

5%,

9/02/47

...............................

3,750,000

4,441,226

Special

Assessment,

2018

B,

5%,

9/02/38

...............................

2,760,000

3,319,645

Special

Assessment,

2018

B,

5%,

9/02/43

...............................

4,690,000

5,587,359

Special

Assessment,

2018

B,

5%,

9/02/48

...............................

4,605,000

5,449,261

Special

Assessment,

2018

C,

5%,

9/02/38

...............................

6,000,000

7,198,683

Special

Assessment,

2018

C,

5%,

9/02/48

...............................

6,605,000

7,791,727

Special

Assessment,

2019

A,

5%,

9/02/39

...............................

1,600,000

1,953,292

Special

Assessment,

2019

A,

5%,

9/02/44

...............................

940,000

1,137,790

Special

Assessment,

2019

A,

5%,

9/02/48

...............................

945,000

1,138,448

Special

Assessment,

2019

B,

5%,

9/02/39

...............................

1,060,000

1,289,571

Special

Assessment,

2019

C,

5%,

9/02/39

...............................

850,000

1,034,808

Special

Assessment,

2020

A,

5%,

9/02/40

...............................

1,250,000

1,535,566

Special

Assessment,

2020

A,

4%,

9/02/50

...............................

900,000

1,007,120

Special

Assessment,

2020

A,

5%,

9/02/50

...............................

1,000,000

1,209,212

Special

Assessment,

2020

B,

4%,

9/02/40

...............................

1,125,000

1,283,498

Special

Assessment,

2020

B,

4%,

9/02/50

...............................

1,370,000

1,537,863

Special

Assessment,

2021

A,

4%,

9/02/41

...............................

2,000,000

2,236,127

Special

Assessment,

2021

A,

4%,

9/02/51

...............................

2,000,000

2,201,524

Aldersly

Obligated

Group,

Revenue,

2015

A,

Refunding,

5%,

5/15/32

...........

750,000

836,004

Aldersly

Obligated

Group,

Revenue,

2015

A,

Refunding,

5%,

5/15/40

...........

1,010,000

1,109,655

Assessment

District

No.

14-01,

Special

Assessment,

2015,

5%,

9/02/35

.........

2,000,000

2,267,250

Assessment

District

No.

14-01,

Special

Assessment,

2015,

5%,

9/02/45

.........

3,810,000

4,270,962

California

Baptist

University,

Revenue,

2011

A,

Pre-Refunded,

7.25%,

11/01/31

...

1,250,000

1,286,598

California

Baptist

University,

Revenue,

2011

A,

Pre-Refunded,

7.5%,

11/01/41

....

2,750,000

2,833,359

California

Baptist

University,

Revenue,

2014

A,

5.125%,

11/01/23

..............

410,000

434,345

California

Baptist

University,

Revenue,

2014

A,

6.125%,

11/01/33

..............

1,565,000

1,743,455

California

Baptist

University,

Revenue,

2014

A,

6.375%,

11/01/43

..............

4,035,000

4,478,192

a

California

Baptist

University,

Revenue,

144A,

2017

A,

Refunding,

5%,

11/01/32

...

1,135,000

1,355,579

a

California

Baptist

University,

Revenue,

144A,

2017

A,

Refunding,

5%,

11/01/41

...

1,875,000

2,193,530

Franklin

Municipal

Securities

Trust

Statement

of

Investments

Franklin

California

High

Yield

Municipal

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

27

a

a

Principal

Amount

a

Value

a

a

a

a

a

Municipal

Bonds

(continued)

California

(continued)

California

Statewide

Communities

Development

Authority,

(continued)

CHF-Irvine

LLC,

Revenue,

2016,

Refunding,

5%,

5/15/40

....................

$

1,500,000

$

1,740,350

CHF-Irvine

LLC,

Revenue,

2017,

5%,

5/15/42

............................

710,000

842,109

Collis

P

and

Howard

Huntington

Memorial

Hospital

Obligated

Group,

Revenue,

2014

B,

Refunding,

5%,

7/01/44

.........................................

4,450,000

4,911,123

Collis

P

and

Howard

Huntington

Memorial

Hospital

Obligated

Group,

Revenue,

2018,

5%,

7/01/43

....................................................

1,000,000

1,199,205

Collis

P

and

Howard

Huntington

Memorial

Hospital

Obligated

Group,

Revenue,

2018,

4%,

7/01/48

....................................................

6,000,000

6,695,251

Community

Facilities

District

No.

2015-01,

Special

Tax,

2015-1,

4%,

9/01/50

......

1,725,000

1,969,961

Community

Facilities

District

No.

2015-01,

Special

Tax,

2020,

4%,

9/01/40

.......

700,000

797,355

Community

Facilities

District

No.

2015-01,

Special

Tax,

2020,

4%,

9/01/50

.......

1,335,000

1,496,198

Community

Facilities

District

No.

2015-01

Improvement

Area

No.

1,

Special

Tax,

2016

A,

Refunding,

5%,

9/01/36

.....................................

1,000,000

1,129,266

Community

Facilities

District

No.

2015-01

Improvement

Area

No.

1,

Special

Tax,

2016

A,

Refunding,

5%,

9/01/45

.....................................

1,500,000

1,676,830

Community

Facilities

District

No.

2015-01

Improvement

Area

No.

1,

Special

Tax,

2017,

5%,

9/01/37

................................................

1,225,000

1,445,252

Community

Facilities

District

No.

2015-01

Improvement

Area

No.

1,

Special

Tax,

2017,

5%,

9/01/47

................................................

2,000,000

2,323,661

Community

Facilities

District

No.

2016-02,

Special

Tax,

2016

A,

5%,

9/01/46

......

11,020,000

12,465,806

Community

Facilities

District

No.

2016-02,

Special

Tax,

2019,

5%,

9/01/39

.......

1,230,000

1,495,283

Community

Facilities

District

No.

2016-02,

Special

Tax,

2019,

5%,

9/01/49

.......

3,000,000

3,589,667

Community

Facilities

District

No.

2016-02,

Special

Tax,

2020,

4%,

9/01/40

.......

3,845,000

4,369,473

Community

Facilities

District

No.

2016-02,

Special

Tax,

2020,

4%,

9/01/50

.......

3,845,000

4,305,906

Community

Facilities

District

No.

2018-01,

Special

Tax,

2019,

5%,

9/01/39

.......

1,750,000

2,095,494

Community

Facilities

District

No.

2018-01,

Special

Tax,

2019,

5%,

9/01/48

.......

2,000,000

2,359,230

Community

Facilities

District

No.

2020-01,

Special

Tax,

2021,

4%,

9/01/41

.......

560,000

647,293

Community

Facilities

District

No.

2020-01,

Special

Tax,

2021,

4%,

9/01/51

.......

700,000

801,977

Community

Facilities

District

No.

2020-02,

Special

Tax,

2021,

4%,

9/01/41

.......

730,000

838,757

Community

Facilities

District

No.

2020-02,

Special

Tax,

2021,

4%,

9/01/51

.......

1,350,000

1,526,999

Covenant

Living

Communities

and

Services

Obligated

Group,

Revenue,

2013

C,

Pre-

Refunded,

5.625%,

12/01/36

........................................

8,000,000

9,065,494

Enloe

Medical

Center,

Revenue,

2015,

Refunding,

California

Mortgage

Insured,

5%,

8/15/38

........................................................

6,000,000

7,093,276

Eskaton

Properties,

Inc.

Obligated

Group,

Revenue,

2012,

5.25%,

11/15/34

......

4,350,000

4,527,180

a

Lancer

Educational

Housing

LLC,

Revenue,

144A,

2016

A,

Refunding,

5%,

6/01/46

12,735,000

14,362,276

a

Lancer

Educational

Housing

LLC,

Revenue,

144A,

2019

A,

5%,

6/01/34

.........

375,000

457,761

a

Lancer

Educational

Housing

LLC,

Revenue,

144A,

2019

A,

5%,

6/01/39

.........

950,000

1,145,635

a

Loma

Linda

University

Medical

Center

Obligated

Group,

Revenue,

144A,

2016

A,

5%,

12/01/41

...................................................

1,245,000

1,406,983

a

Loma

Linda

University

Medical

Center

Obligated

Group,

Revenue,

144A,

2016

A,

5.25%,

12/01/56

.................................................

52,005,000

58,694,809

Los

Angeles

Jewish

Home

for

the

Aging

Obligated

Group,

Revenue,

2014

A,

Pre-

Refunded,

California

Mortgage

Insured,

5%,

8/01/44

......................

2,450,000

2,639,456

Marin

General

Hospital

Obligated

Group,

Revenue,

2018

A,

4%,

8/01/45

........

1,500,000

1,561,138

Methodist

Hospital

of

Southern

California

Obligated

Group,

Revenue,

2018,

Refunding,

5%,

1/01/48

............................................

5,000,000

5,894,983

a

NCCD-Hooper

Street

LLC,

Revenue,

144A,

2019,

5.25%,

7/01/39

.............

4,325,000

4,757,691

a

NCCD-Hooper

Street

LLC,

Revenue,

144A,

2019,

5.25%,

7/01/49

.............

8,000,000

8,655,702

a

NCCD-Hooper

Street

LLC,

Revenue,

144A,

2019,

5.25%,

7/01/52

.............

2,635,000

2,845,318

Capistrano

Unified

School

District

,

Community

Facilities

District

No.

2005-1

,

Special

Tax

,

2013

,

5.5

%

,

9/01/43

............................................

4,955,000

5,372,119

Casitas

Municipal

Water

District

,

Community

Facilities

District

No.

2013-1

OJAI,

Special

Tax,

2017

B,

BAM

Insured,

5%,

9/01/42

....................................................

8,000,000

9,755,004

Franklin

Municipal

Securities

Trust

Statement

of

Investments

Franklin

California

High

Yield

Municipal

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

28

a

a

Principal

Amount

a

Value

a

a

a

a

a

Municipal

Bonds

(continued)

California

(continued)

Casitas

Municipal

Water

District,

(continued)

Community

Facilities

District

No.

2013-1

OJAI,

Special

Tax,

2017

B,

BAM

Insured,

5.25%,

9/01/47

..................................................

$

5,000,000

$

6,241,952

Centinela

Valley

Union

High

School

District

,

GO,

2012

B,

Refunding,

AGMC

Insured,

Zero

Cpn.,

8/01/45

..................

42,000,000

10,722,654

GO,

2014

C,

Pre-Refunded,

5%,

8/01/35

................................

4,195,000

4,813,943

Central

School

District

,

GO,

A,

5%,

8/01/44

................................................

7,375,000

8,615,390

GO,

C,

5%,

8/01/44

................................................

3,615,000

4,223,002

Chino

Community

Facilities

District

,

City

of

Chino

Community

Facilities

District

No.

2019-1,

Special

Tax,

2019-1,

4%,

9/01/40

........................................................

500,000

560,315

City

of

Chino

Community

Facilities

District

No.

2019-1,

Special

Tax,

2019-1,

4%,

9/01/51

........................................................

1,000,000

1,107,684

City

&

County

of

San

Francisco

,

Community

Facilities

District

No.

2016-1,

Special

Tax,

2020,

4%,

9/01/42

........

775,000

865,646

Community

Facilities

District

No.

2016-1,

Special

Tax,

2020,

4%,

9/01/50

........

1,450,000

1,607,158

a

District

No.

2020-1,

Special

Tax,

144A,

2021

A,

3%,

9/01/21

..................

250,000

251,708

a

District

No.

2020-1,

Special

Tax,

144A,

2021

A,

4%,

9/01/31

..................

400,000

467,450

a

District

No.

2020-1,

Special

Tax,

144A,

2021

A,

4%,

9/01/36

..................

700,000

811,064

a

District

No.

2020-1,

Special

Tax,

144A,

2021

A,

4%,

9/01/51

..................

1,700,000

1,936,790

City

of

Beaumont

,

Community

Facilities

District

No.

2016-1,

Special

Tax,

2019,

5%,

9/01/44

........

300,000

343,177

Community

Facilities

District

No.

2016-1,

Special

Tax,

2019,

5%,

9/01/49

........

400,000

455,878

Community

Facilities

District

No.

2019-1,

Special

Tax,

2019-1,

3.25%,

9/01/50

....

450,000

469,970

City

of

Calimesa

,

Community

Facilities

District

No.

2018-1,

Special

Tax,

2020,

4%,

9/01/45

........

865,000

968,557

Community

Facilities

District

No.

2018-1,

Special

Tax,

2020,

4%,

9/01/50

........

825,000

921,060

City

of

Chino

,

Community

Facilities

District

No.

2003-3,

Special

Tax,

2015,

5%,

9/01/45

........

1,665,000

1,869,212

Community

Facilities

District

No.

2016-2,

Special

Tax,

2017,

5%,

9/01/42

........

1,535,000

1,720,193

City

of

Chula

Vista

,

Community

Facilities

District

No.

06-1,

Special

Tax,

2018,

5%,

9/01/43

..........

1,000,000

1,144,380

Community

Facilities

District

No.

06-1,

Special

Tax,

2018,

5%,

9/01/48

..........

1,185,000

1,349,361

City

of

Corona

,

Community

Facilities

District

No.

2018-1

Improvement

Area

No.

1,

Special

Tax,

2018

A,

5%,

9/01/38

..................................................

1,200,000

1,347,864

Community

Facilities

District

No.

2018-1

Improvement

Area

No.

1,

Special

Tax,

2018

A,

5%,

9/01/48

..................................................

1,000,000

1,114,016

City

of

Dana

Point

,

Community

Facilities

District

No.

2006-1,

Special

Tax,

2014,

Pre-Refunded,

5%,

9/01/38

........................................................

1,000,000

1,106,374

Community

Facilities

District

No.

2006-1,

Special

Tax,

2014,

Pre-Refunded,

5%,

9/01/45

........................................................

2,500,000

2,765,934

City

of

Dixon

,

Community

Facilities

District

No.

2013-1

Parklane,

Special

Tax,

2019,

5%,

9/01/44

.

2,645,000

3,155,891

Community

Facilities

District

No.

2019-1

Homestead,

Special

Tax,

2020,

4%,

9/01/36

200,000

229,921

Community

Facilities

District

No.

2019-1

Homestead,

Special

Tax,

2020,

4%,

9/01/40

400,000

456,705

Community

Facilities

District

No.

2019-1

Homestead,

Special

Tax,

2020,

4%,

9/01/50

1,000,000

1,126,900

City

of

Dublin

,

Community

Facilities

District

No.

2015-1

,

Special

Tax

,

2019

,

5

%

,

9/01/49

2,300,000

2,658,638

City

of

Fairfield

,

Community

Facilities

District

No.

2016-1,

Special

Tax,

2019

A,

5%,

9/01/44

......

2,000,000

2,402,351

a

Community

Facilities

District

No.

2019-1,

Special

Tax,

144A,

2020

A,

5%,

9/01/35

..

1,000,000

1,234,525

a

Community

Facilities

District

No.

2019-1,

Special

Tax,

144A,

2020

A,

5%,

9/01/50

..

3,255,000

3,920,883

Franklin

Municipal

Securities

Trust

Statement

of

Investments

Franklin

California

High

Yield

Municipal

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

29

a

a

Principal

Amount

a

Value

a

a

a

a

a

Municipal

Bonds

(continued)

California

(continued)

City

of

Fillmore

,

Community

Facilities

District

No.

5,

Special

Tax,

2015,

5%,

9/01/40

............

$

1,500,000

$

1,628,792

Community

Facilities

District

No.

5,

Special

Tax,

2015,

5%,

9/01/45

............

2,630,000

2,847,608

City

of

Fontana

,

Community

Facilities

District

No.

80,

Special

Tax,

2017,

5%,

9/01/46

...........

1,000,000

1,167,744

Community

Facilities

District

No.

81,

Special

Tax,

2018,

4%,

9/01/43

...........

1,000,000

1,101,797

City

of

Fullerton

,

Community

Facilities

District

No.

2,

Special

Tax,

2014,

5%,

9/01/34

............

1,075,000

1,157,098

Community

Facilities

District

No.

2,

Special

Tax,

2014,

5%,

9/01/44

............

2,450,000

2,623,703

City

of

Irvine

,

Community

Facilities

District

No.

2013-3,

Special

Tax,

2014,

5%,

9/01/39

........

1,000,000

1,120,863

Community

Facilities

District

No.

2013-3,

Special

Tax,

2014,

5%,

9/01/44

........

1,500,000

1,674,011

Community

Facilities

District

No.

2013-3,

Special

Tax,

2014,

5%,

9/01/49

........

2,750,000

3,060,132

Community

Facilities

District

No.

2013-3,

Special

Tax,

2018,

5%,

9/01/43

........

2,500,000

2,918,103

Community

Facilities

District

No.

2013-3,

Special

Tax,

2018,

5%,

9/01/48

........

3,250,000

3,776,106

Community

Facilities

District

No.

2013-3,

Special

Tax,

2018,

AGMC

Insured,

5%,

9/01/51

........................................................

1,250,000

1,488,904

City

of

La

Verne

,

Brethren

Hillcrest

Homes

Obligated

Group,

COP,

2014,

Pre-Refunded,

5%,

5/15/36

1,430,000

1,510,286

Copacabana

Mobilehome

Park,

Revenue,

2014,

Refunding,

5%,

6/15/49

........

1,765,000

1,969,027

City

of

Lake

Elsinore

,

Community

Facilities

District

No.

2006-1

Summerly,

Special

Tax,

2020,

4%,

9/01/36

350,000

395,015

Community

Facilities

District

No.

2006-1

Summerly,

Special

Tax,

2020,

4%,

9/01/40

385,000

432,406

Community

Facilities

District

No.

2006-1

Summerly,

Special

Tax,

2020,

4%,

9/01/50

1,000,000

1,110,855

City

of

Long

Beach

,

Marina

System,

Revenue,

2015,

5%,

5/15/34

.............................

1,300,000

1,457,941

Marina

System,

Revenue,

2015,

5%,

5/15/40

.............................

3,500,000

3,894,269

Marina

System,

Revenue,

2015,

5%,

5/15/45

.............................

2,500,000

2,764,630

City

of

Los

Angeles

,

Department

of

Airports

,

Revenue

,

2019

D

,

4

%

,

5/15/44

.......

5,525,000

6,324,608

City

of

Murrieta

,

Community

Facilities

District

No.

2005-5

Golden

City

,

Special

Tax

,

2018

,

5

%

,

9/01/48

.................................................

3,740,000

4,258,742

City

of

Ontario

,

Community

Facilities

District

No.

28,

Special

Tax,

2017,

5%,

9/01/42

...........

1,000,000

1,118,278

Community

Facilities

District

No.

28,

Special

Tax,

2017,

5%,

9/01/47

...........

500,000

557,908

Community

Facilities

District

No.

31,

Special

Tax,

2017,

5%,

9/01/47

...........

1,100,000

1,283,603

City

of

Oroville

,

Oroville

Hospital,

Revenue,

2019,

5.25%,

4/01/49

.........................

3,500,000

3,976,323

Oroville

Hospital,

Revenue,

2019,

5.25%,

4/01/54

.........................

3,500,000

3,948,286

City

of

Rancho

Cordova

,

Grantline

208

Community

Facilities

District

No.

2018-1,

Special

Tax,

2018-1,

5%,

9/01/44

........................................................

415,000

481,864

Grantline

208

Community

Facilities

District

No.

2018-1,

Special

Tax,

2021,

4%,

9/01/34

........................................................

175,000

197,089

Grantline

208

Community

Facilities

District

No.

2018-1,

Special

Tax,

2021,

4%,

9/01/35

........................................................

180,000

202,468

Grantline

208

Community

Facilities

District

No.

2018-1,

Special

Tax,

2021,

4%,

9/01/36

........................................................

185,000

207,816

Grantline

208

Community

Facilities

District

No.

2018-1,

Special

Tax,

2021,

4%,

9/01/37

........................................................

195,000

218,653

Grantline

208

Community

Facilities

District

No.

2018-1,

Special

Tax,

2021,

4%,

9/01/38

........................................................

200,000

223,915

Grantline

208

Community

Facilities

District

No.

2018-1,

Special

Tax,

2021,

4%,

9/01/39

........................................................

210,000

234,877

Grantline

208

Community

Facilities

District

No.

2018-1,

Special

Tax,

2021,

4%,

9/01/40

........................................................

220,000

245,754

Franklin

Municipal

Securities

Trust

Statement

of

Investments

Franklin

California

High

Yield

Municipal

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

30

a

a

Principal

Amount

a

Value

a

a

a

a

a

Municipal

Bonds

(continued)

California

(continued)

City

of

Rancho

Cordova,

(continued)

Grantline

208

Community

Facilities

District

No.

2018-1,

Special

Tax,

2021,

4%,

9/01/46

........................................................

$

175,000

$

193,829

Sunridge

North

Douglas

Community

Facilities

District

No.

2005-1,

Special

Tax,

2015,

5%,

9/01/40

....................................................

1,200,000

1,356,311

Sunridge

North

Douglas

Community

Facilities

District

No.

2005-1,

Special

Tax,

2015,

5%,

9/01/45

....................................................

1,250,000

1,401,144

City

of

Rocklin

,

Community

Facilities

District

No.

10

Whitney

Ranch

,

Special

Tax

,

2019

,

5

%

,

9/01/40

......................................................

2,000,000

2,240,495

City

of

Roseville

,

b

Special

Tax,

2021,

4%,

9/01/41

.......................................

750,000

856,363

b

Special

Tax,

2021,

4%,

9/01/50

.......................................

2,000,000

2,264,287

Creekview

Community

Facilities

District

No.

1,

Special

Tax,

2020,

5%,

9/01/40

....

630,000

746,863

Creekview

Community

Facilities

District

No.

1,

Special

Tax,

2020,

5%,

9/01/50

....

1,745,000

2,058,850

a

Fiddyment

Ranch

Community

Facilities

District

No.

5,

Special

Tax,

144A,

2017,

Refunding,

5%,

9/01/32

............................................

1,265,000

1,509,676

a

Fiddyment

Ranch

Community

Facilities

District

No.

5,

Special

Tax,

144A,

2017,

Refunding,

5%,

9/01/47

............................................

6,500,000

7,562,421

HP

Campus

Oaks

Community

Facilities

District

No.

1,

Special

Tax,

2016,

5%,

9/01/36

........................................................

2,180,000

2,515,617

HP

Campus

Oaks

Community

Facilities

District

No.

1,

Special

Tax,

2016,

5.5%,

9/01/46

........................................................

7,160,000

8,317,474

Ranch

at

Sierra

Vista

Community

Facilities

District

No.

1,

Special

Tax,

2020,

4%,

9/01/40

........................................................

575,000

644,003

Ranch

at

Sierra

Vista

Community

Facilities

District

No.

1,

Special

Tax,

2020,

4%,

9/01/45

........................................................

450,000

500,237

Ranch

at

Sierra

Vista

Community

Facilities

District

No.

1,

Special

Tax,

2020,

4%,

9/01/50

........................................................

1,000,000

1,108,385

SVSP

Westpark-Federico

Community

Facilities

District

No.

1,

Special

Tax,

2019,

5%,

9/01/39

........................................................

440,000

510,249

SVSP

Westpark-Federico

Community

Facilities

District

No.

1,

Special

Tax,

2019,

5%,

9/01/44

........................................................

500,000

576,498

SVSP

Westpark-Federico

Community

Facilities

District

No.

1,

Special

Tax,

2019,

5%,

9/01/49

........................................................

575,000

660,631

SVSP

Westpark-Federico

Community

Facilities

District

No.

1,

Special

Tax,

2021,

4%,

9/01/37

........................................................

350,000

394,600

SVSP

Westpark-Federico

Community

Facilities

District

No.

1,

Special

Tax,

2021,

4%,

9/01/41

........................................................

400,000

446,575

SVSP

Westpark-Federico

Community

Facilities

District

No.

1,

Special

Tax,

2021,

4%,

9/01/46

........................................................

650,000

724,133

SVSP

Westpark-Federico

Community

Facilities

District

No.

1,

Special

Tax,

2021,

4%,

9/01/51

........................................................

1,295,000

1,437,221

Villages

at

Sierra

Vista

Community

Facilities

District

No.

1,

Special

Tax,

2019,

5%,

9/01/44

........................................................

3,230,000

3,743,392

Villages

at

Sierra

Vista

Community

Facilities

District

No.

1,

Special

Tax,

2020,

4%,

9/01/45

........................................................

490,000

544,703

Villages

at

Sierra

Vista

Community

Facilities

District

No.

1,

Special

Tax,

2020,

4%,

9/01/50

........................................................

650,000

720,450

Westbrook

Community

Facilities

District

No.

1,

Special

Tax,

2014,

5%,

9/01/29

....

500,000

561,392

Westbrook

Community

Facilities

District

No.

1,

Special

Tax,

2014,

5%,

9/01/34

....

1,100,000

1,220,857

Westbrook

Community

Facilities

District

No.

1,

Special

Tax,

2014,

5%,

9/01/39

....

1,885,000

2,081,059

Westbrook

Community

Facilities

District

No.

1,

Special

Tax,

2014,

5%,

9/01/44

....

1,650,000

1,817,592

Westbrook

Community

Facilities

District

No.

1,

Special

Tax,

2019,

5%,

9/01/49

....

3,800,000

4,386,373

Westpark

Community

Facilities

District

No.

1,

Special

Tax,

2015,

Refunding,

5%,

9/01/32

........................................................

1,120,000

1,283,638

Westpark

Community

Facilities

District

No.

1,

Special

Tax,

2015,

Refunding,

5%,

9/01/33

........................................................

1,000,000

1,144,216

Franklin

Municipal

Securities

Trust

Statement

of

Investments

Franklin

California

High

Yield

Municipal

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

31

a

a

Principal

Amount

a

Value

a

a

a

a

a

Municipal

Bonds

(continued)

California

(continued)

City

of

Roseville,

(continued)

Westpark

Community

Facilities

District

No.

1,

Special

Tax,

2015,

Refunding,

5%,

9/01/37

........................................................

$

1,250,000

$

1,420,470

City

of

Sacramento

,

Greenbriar

Community

Facilities

District

No.

2018-03,

Special

Tax,

2021,

4%,

9/01/46

1,450,000

1,635,034

Greenbriar

Community

Facilities

District

No.

2018-03,

Special

Tax,

2021,

4%,

9/01/50

1,000,000

1,123,930

Natomas

Central

Community

Facilities

District

No.

2006-2,

Special

Tax,

2016,

5%,

9/01/46

........................................................

1,815,000

2,081,138

a

Natomas

Meadows

Community

Facilities

District

No.

2007-1,

Special

Tax,

144A,

2017,

5%,

9/01/32

................................................

300,000

339,651

a

Natomas

Meadows

Community

Facilities

District

No.

2007-1,

Special

Tax,

144A,

2017,

5%,

9/01/37

................................................

710,000

798,991

a

Natomas

Meadows

Community

Facilities

District

No.

2007-1,

Special

Tax,

144A,

2017,

5%,

9/01/47

................................................

1,900,000

2,120,050

Natomas

Meadows

Community

Facilities

District

No.

2007-1,

Special

Tax,

2019,

5%,

9/01/44

........................................................

500,000

571,962

Natomas

Meadows

Community

Facilities

District

No.

2007-1,

Special

Tax,

2019,

5%,

9/01/49

........................................................

1,000,000

1,138,374

North

Natomas

Community

Facilities

District

No.

4,

Special

Tax,

2013

E,

Refunding,

5.25%,

9/01/33

..................................................

3,000,000

3,284,462

City

of

San

Buenaventura

,

Community

Memorial

Health

System,

Revenue,

2011,

Pre-Refunded,

8%,

12/01/31

10,000,000

10,380,741

Community

Memorial

Health

System,

Revenue,

2011,

Pre-Refunded,

7.5%,

12/01/41

5,000,000

5,179,246

City

of

San

Clemente

,

Community

Facilities

District

No.

2006-1,

Special

Tax,

2015,

5%,

9/01/40

........

1,760,000

1,993,884

Community

Facilities

District

No.

2006-1,

Special

Tax,

2015,

5%,

9/01/46

........

2,455,000

2,762,073

City

of

San

Diego

,

Tobacco

Settlement

Revenue

Funding

Corp.

,

Revenue

,

2018

C

,

Refunding

,

4

%

,

6/01/32

.............................................

830,000

919,018

b

City

of

San

Luis

Obispo

,

Community

Facilities

District

No.

2019-1,

Special

Tax,

2021,

4%,

9/01/41

........

175,000

200,507

Community

Facilities

District

No.

2019-1,

Special

Tax,

2021,

4%,

9/01/46

........

740,000

840,189

Community

Facilities

District

No.

2019-1,

Special

Tax,

2021,

4%,

9/01/51

........

925,000

1,046,925

City

of

San

Mateo

,

Community

Facilities

District

No.

2008-1,

Special

Tax,

2012,

5.875%,

9/01/32

.....

1,500,000

1,582,846

Community

Facilities

District

No.

2008-1,

Special

Tax,

2012,

6%,

9/01/42

........

5,000,000

5,246,317

Community

Facilities

District

No.

2008-1,

Special

Tax,

2014,

5.375%,

9/01/38

.....

2,500,000

2,614,017

Community

Facilities

District

No.

2008-1,

Special

Tax,

2014,

5.5%,

9/01/44

.......

3,300,000

3,451,630

City

of

Santa

Paula

,

Harvest

Community

Facilities

District

No.

1,

Special

Tax,

2020,

5%,

9/01/35

......

600,000

725,130

Harvest

Community

Facilities

District

No.

1,

Special

Tax,

2020,

5%,

9/01/40

......

1,000,000

1,196,209

Harvest

Community

Facilities

District

No.

1,

Special

Tax,

2020,

4%,

9/01/45

......

1,100,000

1,222,085

Harvest

Community

Facilities

District

No.

1,

Special

Tax,

2020,

4%,

9/01/50

......

1,375,000

1,522,513

City

of

Simi

Valley

,

Assessment

District

No.

98-1

,

1915

Act,

Special

Assessment

,

1999

,

7.3

%

,

9/02/24

....................................................

835,000

843,978

City

of

Tracy

,

Community

Facilities

District

No.

2016-01,

Special

Tax,

2018,

5%,

9/01/33

.......

1,610,000

1,859,901

Community

Facilities

District

No.

2016-01,

Special

Tax,

2018,

5%,

9/01/38

.......

2,385,000

2,731,850

Community

Facilities

District

No.

2016-01,

Special

Tax,

2018,

5%,

9/01/43

.......

5,750,000

6,539,576

Community

Facilities

District

No.

2016-01,

Special

Tax,

2018,

5%,

9/01/48

.......

6,240,000

7,067,139

Community

Facilities

District

No.

2016-01,

Special

Tax,

2019,

5%,

9/01/44

.......

2,600,000

2,952,420

Community

Facilities

District

No.

2016-02,

Special

Tax,

2019,

5%,

9/01/44

.......

1,500,000

1,753,957

City

of

Tustin

,

Community

Facilities

District

No.

06-1,

Special

Tax,

2015

A,

Refunding,

5%,

9/01/37

1,000,000

1,166,793

Community

Facilities

District

No.

07-1,

Special

Tax,

2015

A,

Refunding,

5%,

9/01/37

2,330,000

2,650,836

Community

Facilities

District

No.

14-1,

Special

Tax,

2015

A,

5%,

9/01/40

........

750,000

853,296

Franklin

Municipal

Securities

Trust

Statement

of

Investments

Franklin

California

High

Yield

Municipal

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

32

a

a

Principal

Amount

a

Value

a

a

a

a

a

Municipal

Bonds

(continued)

California

(continued)

City

of

Tustin,

(continued)

Community

Facilities

District

No.

14-1,

Special

Tax,

2015

A,

5%,

9/01/45

........

$

1,000,000

$

1,130,934

City

of

Upland

,

Community

Facilities

District

No.

2015-1

,

Special

Tax

,

2019

A

,

4

%

,

9/01/49

.........................................................

550,000

608,772

City

of

Vernon

,

Electric

System,

Revenue,

2012

A,

5.5%,

8/01/41

..........................

7,500,000

7,831,165

Electric

System,

Revenue,

2020

A,

Refunding,

5%,

8/01/35

..................

1,440,000

1,788,289

City

of

Woodland

,

Community

Facilities

District

No.

2004-1,

Special

Tax,

2019,

5%,

9/01/44

........

1,565,000

1,786,780

Community

Facilities

District

No.

2004-1,

Special

Tax,

2019,

5%,

9/01/48

........

1,740,000

1,980,573

City

of

Yucaipa

,

Community

Facilities

District

No.

98-1,

Special

Tax,

2011,

Refunding,

5%,

9/01/26

.

1,000,000

1,011,010

Community

Facilities

District

No.

98-1,

Special

Tax,

2011,

Refunding,

5.375%,

9/01/30

........................................................

1,800,000

1,819,835

Clovis

Unified

School

District

,

GO,

2004

A,

NATL

Insured,

ETM,

Zero

Cpn.,

8/01/27

.......................

1,205,000

1,131,753

GO,

2004

A,

NATL

Insured,

Zero

Cpn.,

8/01/27

...........................

6,295,000

5,923,046

GO,

2004

A,

NATL

Insured,

Zero

Cpn.,

8/01/28

...........................

3,000,000

2,761,376

a

CMFA

Special

Finance

Agency

I

,

Revenue

,

144A,

2021

A-T

,

5

%

,

4/01/41

..........

7,875,000

7,940,727

Coachella

Valley

Unified

School

District

,

GO,

2012

D,

AGMC

Insured,

Zero

Cpn.,

8/01/42

..........................

8,500,000

5,264,621

GO,

2012

D,

AGMC

Insured,

Zero

Cpn.,

8/01/43

..........................

3,000,000

1,805,550

Compton

Community

Redevelopment

Agency

,

Tax

Allocation,

Second

Lien,

2010

B,

5.7%,

8/01/30

........................

2,255,000

2,262,324

Tax

Allocation,

Second

Lien,

2010

B,

6%,

8/01/42

..........................

3,460,000

3,470,555

Corona-Norco

Unified

School

District

,

Community

Facilities

District

No.

05-1

,

Special

Tax

,

2016

,

Refunding

,

5

%

,

9/01/36

.....................................

500,000

581,865

Cotati-Rohnert

Park

Unified

School

District

,

GO

,

A

,

BAM

Insured

,

5

%

,

8/01/45

......

4,000,000

4,624,773

County

of

El

Dorado

,

Community

Facilities

District

No.

2014-1

,

Special

Tax

,

2018

,

5

%

,

9/01/48

.........................................................

2,850,000

3,177,823

County

of

Imperial

,

Community

Facilities

District

No.

1998-1

,

Special

Tax

,

1999

,

LOC

BNP

Paribas

SA

,

6.5

%

,

9/01/31

.......................................

5,200,000

5,234,882

County

of

Orange

,

Community

Facilities

District

No.

2015-1,

Special

Tax,

2015

A,

5%,

8/15/34

......

1,495,000

1,704,183

Community

Facilities

District

No.

2015-1,

Special

Tax,

2015

A,

5.25%,

8/15/45

....

4,880,000

5,557,585

Community

Facilities

District

No.

2017-1,

Special

Tax,

2018

A,

5%,

8/15/42

......

6,230,000

7,469,653

Community

Facilities

District

No.

2017-1,

Special

Tax,

2018

A,

5%,

8/15/47

......

10,000,000

11,898,563

County

of

Riverside

,

Community

Facilities

District

No.

03-1

,

Special

Tax

,

2014

,

Refunding

,

5

%

,

9/01/30

.............................................

1,500,000

1,681,706

County

of

San

Bernardino

,

Community

Facilities

District

No.

2006-1,

Special

Tax,

2015,

Refunding,

5%,

9/01/40

1,000,000

1,130,260

Community

Facilities

District

No.

2006-1,

Special

Tax,

2015,

Refunding,

5%,

9/01/45

1,000,000

1,119,616

County

of

Stockton

,

Community

Facilities

District

No.

2018-2,

Special

Tax,

2020,

4%,

9/01/40

........

1,580,000

1,766,652

Community

Facilities

District

No.

2018-2,

Special

Tax,

2020,

4%,

9/01/45

........

1,115,000

1,236,032

Community

Facilities

District

No.

2018-2,

Special

Tax,

2020,

4%,

9/01/50

........

1,565,000

1,732,693

a

CSCDA

Community

Improvement

Authority

,

Revenue,

144A,

2020

A,

5%,

1/01/54

...................................

10,000,000

11,782,050

Revenue,

144A,

2021

A,

4%,

8/01/56

...................................

8,000,000

8,707,686

Revenue,

144A,

2021

A-1,

3.4%,

10/01/46

...............................

5,000,000

5,167,327

b

Union

South

Bay,

Revenue,

144A,

2021

A-2,

4%,

7/01/56

....................

12,500,000

13,477,014

Franklin

Municipal

Securities

Trust

Statement

of

Investments

Franklin

California

High

Yield

Municipal

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

33

a

a

Principal

Amount

a

Value

a

a

a

a

a

Municipal

Bonds

(continued)

California

(continued)

Cudahy

Community

Development

Commission

Successor

Agency

,

Tax

Allocation

,

2011

B

,

Pre-Refunded

,

7.75

%

,

10/01/27

.....................................

$

3,795,000

$

3,890,658

Daly

City

Housing

Development

Finance

Agency

,

Franciscan

Park

LLC

,

Revenue

,

2007

B

,

Refunding

,

5.85

%

,

12/15/47

........................................

4,525,000

4,535,204

Del

Mar

Race

Track

Authority

,

Revenue

,

2015

,

Refunding

,

5

%

,

10/01/35

..........

2,000,000

2,086,154

Del

Mar

Union

School

District

,

Community

Facilities

District

No.

99-1

,

Special

Tax

,

2019

,

Refunding

,

BAM

Insured

,

4

%

,

9/01/49

.............................

2,000,000

2,290,813

Duarte

Redevelopment

Agency

,

Tax

Allocation

,

1999

,

ETM,

Zero

Cpn.,

12/01/28

....

18,150,000

13,142,774

Dublin

Community

Facilities

District

No.

2015-1

,

Special

Tax,

2017,

5%,

9/01/37

.......................................

1,550,000

1,837,709

Special

Tax,

2017,

5%,

9/01/47

.......................................

4,500,000

5,262,579

Special

Tax,

2019,

5%,

9/01/39

.......................................

3,665,000

4,294,177

Special

Tax,

2019,

5%,

9/01/44

.......................................

6,625,000

7,692,400

Eastern

Municipal

Water

District

,

Community

Facilities

District

No.

2004-35,

Special

Tax,

2021,

4%,

9/01/46

.......

220,000

248,697

Community

Facilities

District

No.

2004-35,

Special

Tax,

2021,

4%,

9/01/50

.......

200,000

225,535

El

Rancho

Unified

School

District

,

GO

,

2004

,

NATL

Insured

,

Zero

Cpn.,

8/01/29

....

2,400,000

2,080,433

d,e

FHLMC,

Multi-family

ML

Pass-Through

Certificates

,

FRN,

2019-ML06,

XCA,

1.096%,

7/25/35

................................

138,764,073

13,025,784

a

144A,

FRN,

2020-ML07,

XCA,

2.132%,

1/25/37

...........................

124,202,281

24,243,043

Folsom

Ranch

Financing

Authority

,

City

of

Folsom

Community

Facilities

District

No.

19,

Special

Tax,

2017,

5%,

9/01/47

3,280,000

3,817,044

City

of

Folsom

Community

Facilities

District

No.

19,

Special

Tax,

2019,

5%,

9/01/49

1,825,000

2,119,468

City

of

Folsom

Community

Facilities

District

No.

20,

Special

Tax,

2018,

5%,

9/01/28

600,000

707,910

City

of

Folsom

Community

Facilities

District

No.

20,

Special

Tax,

2018,

5%,

9/01/33

530,000

615,123

City

of

Folsom

Community

Facilities

District

No.

20,

Special

Tax,

2018,

5%,

9/01/38

850,000

978,152

City

of

Folsom

Community

Facilities

District

No.

20,

Special

Tax,

2018,

5%,

9/01/48

1,675,000

1,908,800

City

of

Folsom

Community

Facilities

District

No.

21,

Special

Tax,

2019,

5%,

9/01/49

2,000,000

2,321,617

City

of

Folsom

Community

Facilities

District

No.

21,

Special

Tax,

2021,

4%,

9/01/50

800,000

881,299

City

of

Folsom

Community

Facilities

District

No.

23,

Special

Tax,

2020,

4%,

9/01/40

1,245,000

1,393,629

City

of

Folsom

Community

Facilities

District

No.

23,

Special

Tax,

2020,

4%,

9/01/45

1,075,000

1,193,018

City

of

Folsom

Community

Facilities

District

No.

23,

Special

Tax,

2020,

4%,

9/01/50

1,140,000

1,262,153

Foothill-Eastern

Transportation

Corridor

Agency

,

Revenue,

2013

A,

Refunding,

Zero

Cpn.,

1/15/42

..........................

75,000,000

44,403,450

Revenue,

2013

B-1,

Refunding,

3.95%,

1/15/53

...........................

25,000,000

28,236,710

Revenue,

2013

B-2,

Refunding,

3.5%,

1/15/53

............................

17,500,000

19,692,332

Revenue,

2015

A,

Refunding,

Zero

Cpn.,

1/15/33

..........................

19,000,000

14,672,332

Revenue,

Junior

Lien,

2021

C,

Refunding,

4%,

1/15/43

.....................

41,979,000

49,457,479

Fremont

Community

Facilities

District

No.

1

,

Special

Tax,

2015,

Refunding,

5%,

9/01/40

...............................

4,655,000

5,241,035

Special

Tax,

2015,

Refunding,

5%,

9/01/45

...............................

3,255,000

3,642,941

Golden

State

Tobacco

Securitization

Corp.

,

Revenue,

2007

A-2,

5.3%,

6/01/37

.....................................

5,000,000

5,212,096

Revenue,

2007

C,

Refunding,

Zero

Cpn.,

6/01/47

..........................

50,000,000

10,859,695

Revenue,

2015

A,

Refunding,

5%,

6/01/45

...............................

37,630,000

43,785,391

Revenue,

2018

A-1,

Refunding,

5.25%,

6/01/47

...........................

63,500,000

65,983,574

Revenue,

2018

A-2,

Refunding,

5%,

6/01/47

.............................

12,750,000

13,204,258

Hanford

Joint

Union

High

School

District

,

GO,

B,

AGMC

Insured,

Zero

Cpn.,

8/01/32

...............................

3,635,000

2,889,323

GO,

B,

AGMC

Insured,

Zero

Cpn.,

8/01/33

...............................

3,705,000

2,856,414

GO,

B,

AGMC

Insured,

Zero

Cpn.,

8/01/35

...............................

4,120,000

2,996,066

Franklin

Municipal

Securities

Trust

Statement

of

Investments

Franklin

California

High

Yield

Municipal

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

34

a

a

Principal

Amount

a

Value

a

a

a

a

a

Municipal

Bonds

(continued)

California

(continued)

Hartnell

Community

College

District

,

GO

,

2009

D

,

Zero

Cpn.,

8/01/49

............

$

10,000,000

$

4,829,349

Imperial

Community

College

District

,

GO

,

2011

A

,

Pre-Refunded

,

AGMC

Insured

,

6.75

%

,

8/01/40

...................................................

3,500,000

4,392,048

Independent

Cities

Finance

Authority

,

COACH

of

San

Diego

LLC,

Revenue,

2014

A,

Refunding,

5.25%,

5/15/44

.......

2,015,000

2,202,604

COACH

of

San

Diego

LLC,

Revenue,

2014

A,

Refunding,

5.25%,

5/15/49

.......

4,800,000

5,238,179

Millennium

Housing

LLC,

Revenue,

2021,

Refunding,

3%,

5/15/56

.............

4,000,000

4,153,739

Millennium

Housing

of

California,

Revenue,

2019,

Refunding,

5%,

5/15/48

.......

3,000,000

3,663,590

San

Juan

Mobile

Estates,

Revenue,

2015,

Refunding,

5%,

8/15/45

.............

5,000,000

5,509,461

San

Juan

Mobile

Estates,

Revenue,

2015,

Refunding,

5%,

8/15/50

.............

4,900,000

5,388,406

Indio

Community

Facilities

District

No.

2004-3

,

Special

Tax

,

2015

,

Refunding

,

5

%

,

9/01/35

.........................................................

1,190,000

1,354,686

Inland

Valley

Development

Agency

,

Tax

Allocation,

2014

A,

Refunding,

5.25%,

9/01/37

.........................

7,500,000

8,281,672

Tax

Allocation,

2014

A,

Refunding,

5%,

9/01/44

...........................

9,000,000

9,835,094

Irvine

Unified

School

District

,

Community

Facilities

District

No.

09-1,

Special

Tax,

2017

A,

5%,

9/01/42

........

700,000

841,002

Community

Facilities

District

No.

09-1,

Special

Tax,

2017

B,

5%,

9/01/42

........

1,000,000

1,201,432

Community

Facilities

District

No.

09-1,

Special

Tax,

2017

B,

5%,

9/01/51

........

2,500,000

2,962,760

Community

Facilities

District

No.

09-1,

Special

Tax,

2017

C,

5%,

9/01/47

........

1,000,000

1,194,018

Community

Facilities

District

No.

09-1,

Special

Tax,

2017

D,

5%,

9/01/49

........

1,000,000

1,188,091

Community

Facilities

District

No.

09-1,

Special

Tax,

2018

A,

Refunding,

5%,

9/01/45

2,000,000

2,388,971

Community

Facilities

District

No.

09-1,

Special

Tax,

2018

A,

Refunding,

5%,

9/01/49

2,000,000

2,378,786

Jurupa

Community

Services

District

,

Community

Facilities

District

No.

53

,

Special

Tax

,

2020

A

,

4

%

,

9/01/43

................................................

300,000

340,215

Jurupa

Public

Financing

Authority

,

Special

Tax,

2014

A,

Refunding,

5%,

9/01/42

.............................

2,220,000

2,509,185

Special

Tax,

2015

A,

Refunding,

5%,

9/01/43

.............................

4,000,000

4,657,017

Special

Tax,

Sub.

Lien,

2015

B,

Refunding,

5%,

9/01/40

.....................

4,000,000

4,533,311

Kaweah

Delta

Health

Care

District

Guild

,

Revenue

,

2015

B

,

5

%

,

6/01/40

..........

3,250,000

3,677,573

Lake

Elsinore

Public

Financing

Authority

,

City

of

Lake

Elsinore

Assessment

District

No.

93-1,

Special

Tax,

2012

B,

Pre-

Refunded,

5.125%,

9/02/30

.........................................

4,980,000

5,287,977

City

of

Lake

Elsinore

Community

Facilities

District

No.

2003-2,

Special

Tax,

2014

A,

Pre-Refunded,

5.75%,

9/01/44

......................................

3,240,000

3,642,976

City

of

Lake

Elsinore

Community

Facilities

District

No.

98-1,

Special

Tax,

2013

C,

Pre-Refunded,

5.25%,

9/01/33

......................................

8,000,000

8,905,363

Lake

Tahoe

Unified

School

District

,

GO

,

2012

,

Zero

Cpn.,

8/01/40

...............

1,140,000

1,235,725

Lammersville

Joint

Unified

School

District

,

Community

Facilities

District

No.

2014-1,

Special

Tax,

2017,

5%,

9/01/47

........

4,000,000

4,639,727

Community

Facilities

District

No.

2014-1,

Special

Tax,

2019,

5%,

9/01/43

........

775,000

882,445

Community

Facilities

District

No.

2014-1,

Special

Tax,

2019,

5%,

9/01/48

........

2,500,000

2,834,670

Las

Virgenes

Unified

School

District

,

GO

,

2011

C

,

Zero

Cpn.,

8/01/33

............

8,050,000

9,604,373

Lathrop

Financing

Authority

,

Special

Tax,

2013

A,

Refunding,

6%,

9/02/28

.............................

1,010,000

1,097,695

Special

Tax,

2013

A,

Refunding,

6%,

9/02/29

.............................

1,070,000

1,159,775

Special

Tax,

2013

A,

Refunding,

6%,

9/02/30

.............................

1,075,000

1,160,801

Special

Tax,

2013

A,

Refunding,

5.5%,

9/02/35

............................

3,670,000

3,903,879

Lee

Lake

Public

Financing

Authority

,

Special

Tax,

Junior

Lien,

2013

B,

5.25%,

9/01/32

..........................

1,155,000

1,248,708

Special

Tax,

Junior

Lien,

2013

B,

5.375%,

9/01/35

.........................

805,000

870,588

Franklin

Municipal

Securities

Trust

Statement

of

Investments

Franklin

California

High

Yield

Municipal

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

35

a

a

Principal

Amount

a

Value

a

a

a

a

a

Municipal

Bonds

(continued)

California

(continued)

Lemon

Grove

Community

Development

Agency

Successor

Agency

,

Tax

Allocation

,

2014

,

Refunding

,

AGMC

Insured

,

4

%

,

8/01/34

............................

$

1,000,000

$

1,177,369

Lemon

Grove

School

District

,

GO

,

2010

B

,

AGMC

Insured

,

Zero

Cpn.,

8/01/45

.....

6,500,000

7,422,090

Long

Beach

Bond

Finance

Authority

,

Revenue

,

2007

A

,

5

%

,

11/15/29

............

4,630,000

5,945,648

Los

Alamitos

Unified

School

District

,

COP,

2012,

Zero

Cpn.,

8/01/34

.......................................

1,500,000

1,722,324

COP,

2012,

Zero

Cpn.,

8/01/42

.......................................

4,500,000

5,067,642

Mendocino-Lake

Community

College

District

,

GO,

2011

B,

AGMC

Insured,

Zero

Cpn.,

8/01/36

...........................

5,150,000

7,346,471

GO,

2011

B,

AGMC

Insured,

Zero

Cpn.,

8/01/40

...........................

7,500,000

9,620,342

Menifee

Union

School

District

,

Community

Facilities

District

No.

2011-1,

Special

Tax,

2018,

5%,

9/01/43

........

1,000,000

1,151,495

Community

Facilities

District

No.

2011-1,

Special

Tax,

2018,

5%,

9/01/48

........

1,500,000

1,719,327

Community

Facilities

District

No.

2011-1,

Special

Tax,

2019,

5%,

9/01/48

........

2,900,000

3,378,572

Merced

Union

High

School

District

,

GO

,

2011

C

,

Pre-Refunded

,

Zero

Cpn.,

8/01/41

..

10,000,000

2,491,429

Middle

Fork

Project

Finance

Authority

,

Revenue,

2020,

Refunding,

5%,

4/01/34

.................................

1,100,000

1,372,268

Revenue,

2020,

Refunding,

5%,

4/01/35

.................................

1,150,000

1,430,941

Moreland

School

District

,

GO

,

B

,

Refunding

,

5

%

,

8/01/41

.....................

4,045,000

4,725,322

Moreno

Valley

Unified

School

District

,

Community

Facilities

District

No.

2015-2,

Special

Tax,

2019,

5%,

9/01/44

........

870,000

987,925

Community

Facilities

District

No.

2015-3,

Special

Tax,

2019,

4.125%,

9/01/48

.....

1,160,000

1,270,009

M-S-R

Energy

Authority

,

Revenue

,

2009

B

,

6.5

%

,

11/01/39

....................

32,300,000

53,251,046

Norman

Y

Mineta

San

Jose

International

Airport

SJC

,

Revenue,

2017

A,

Refunding,

5%,

3/01/36

...............................

2,250,000

2,714,617

Revenue,

2017

A,

Refunding,

5%,

3/01/37

...............................

2,500,000

3,010,191

Revenue,

2017

A,

Refunding,

BAM

Insured,

4%,

3/01/42

....................

5,000,000

5,655,449

Revenue,

2017

B,

Refunding,

5%,

3/01/42

...............................

2,550,000

3,098,722

Oak

Park

Unified

School

District

,

GO

,

2011

A

,

Zero

Cpn.,

8/01/38

...............

6,600,000

9,659,033

Oakdale

Public

Financing

Authority

,

Special

Tax

,

2015

,

Refunding

,

5

%

,

9/01/35

.....

1,270,000

1,440,166

Oakland

Unified

School

District

,

GO

,

2013

,

Pre-Refunded

,

6.625

%

,

8/01/38

.......

5,000,000

5,053,273

Oakley

Public

Finance

Authority

,

Special

Assessment,

2012,

Refunding,

5.3%,

9/02/34

.......................

995,000

1,055,221

Special

Assessment,

2014,

Refunding,

BAM

Insured,

5%,

9/02/36

.............

1,500,000

1,707,694

Palomar

Health

,

Palomar

Health

Obligated

Group,

COP,

4%,

11/01/38

.......................

5,000,000

5,492,079

Palomar

Health

Obligated

Group,

COP,

4%,

11/01/47

.......................

6,000,000

6,502,936

Palomar

Health

Obligated

Group,

Revenue,

2016,

Refunding,

5%,

11/01/36

......

6,250,000

7,225,056

Palomar

Health

Obligated

Group,

Revenue,

2017,

Refunding,

5%,

11/01/42

......

5,000,000

5,812,578

Paramount

Unified

School

District

,

GO

,

2013

,

Pre-Refunded

,

BAM

Insured

,

Zero

Cpn.,

8/01/51

.........................................................

25,000,000

3,415,652

Paso

Robles

Joint

Unified

School

District

,

GO

,

2010

A

,

Zero

Cpn.,

9/01/45

........

15,000,000

7,203,985

Perris

Community

Facilities

District

,

Special

Tax

,

2014

A

,

Refunding

,

5.25

%

,

9/01/32

.

4,500,000

4,876,556

Perris

Joint

Powers

Authority

,

Community

Facilities

District

No.

2001-1,

Special

Tax,

2014

A,

Refunding,

5.375%,

9/01/33

........................................................

1,940,000

2,105,765

Community

Facilities

District

No.

2001-1,

Special

Tax,

2014

E,

Refunding,

4.25%,

9/01/38

........................................................

4,145,000

4,434,965

Community

Facilities

District

No.

2002-1,

Special

Tax,

2013

B,

Refunding,

5.25%,

9/01/33

........................................................

3,745,000

4,053,822

Community

Facilities

District

No.

2014-1,

Special

Tax,

2018

A,

4%,

9/01/48

......

2,530,000

2,615,606

Franklin

Municipal

Securities

Trust

Statement

of

Investments

Franklin

California

High

Yield

Municipal

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

36

a

a

Principal

Amount

a

Value

a

a

a

a

a

Municipal

Bonds

(continued)

California

(continued)

Pico

Rivera

Water

Authority

,

Revenue

,

2001

A

,

6.25

%

,

12/01/32

................

$

4,470,000

$

4,514,402

Pittsburg

Unified

School

District

,

GO,

2012

C,

Pre-Refunded,

Zero

Cpn.,

8/01/47

...........................

9,000,000

2,104,853

GO,

2012

C,

Pre-Refunded,

Zero

Cpn.,

8/01/52

...........................

15,000,000

2,526,795

Porterville

Public

Financing

Authority

,

Revenue

,

2011

A

,

Pre-Refunded

,

5.625

%

,

10/01/36

..................................................

5,000,000

5,092,289

Poway

Redevelopment

Agency

Successor

Agency

,

Tax

Allocation

,

A

,

Refunding

,

5

%

,

12/15/30

.....................................................

3,500,000

4,697,218

Poway

Unified

School

District

,

Community

Facilities

District

No.

15

,

Special

Tax

,

2016

,

5

%

,

9/01/46

......................................................

2,000,000

2,296,486

Redondo

Beach

Unified

School

District

,

GO

,

2011

E

,

Zero

Cpn.,

8/01/31

..........

2,750,000

3,642,054

Richland

School

District

,

GO

,

2009

C

,

AGMC

Insured

,

Zero

Cpn.,

8/01/49

.........

22,000,000

8,701,757

Rio

Elementary

School

District

,

Community

Facilities

District

No.

1

,

Special

Tax

,

2013

,

Pre-Refunded

,

5.5

%

,

9/01/39

.........................................

6,915,000

7,736,314

Rio

Hondo

Community

College

District

,

GO

,

2010

C

,

Zero

Cpn.,

8/01/42

..........

13,000,000

17,613,040

Rio

Vista

Community

Facilities

District

,

Special

Tax,

2018,

Refunding,

5%,

9/01/33

...............................

1,625,000

1,885,990

Special

Tax,

2018,

Refunding,

5%,

9/01/38

...............................

1,000,000

1,151,659

Special

Tax,

2018,

Refunding,

5%,

9/01/48

...............................

1,190,000

1,356,628

Riverbank

Unified

School

District

,

GO,

2008

B,

AGMC

Insured,

Zero

Cpn.,

8/01/38

...........................

6,690,000

4,332,135

GO,

2008

B,

AGMC

Insured,

Zero

Cpn.,

8/01/43

...........................

8,750,000

4,749,550

Riverside

County

Redevelopment

Successor

Agency

,

Tax

Allocation,

2011

A,

Pre-Refunded,

7.125%,

10/01/42

....................

1,750,000

1,789,899

Tax

Allocation,

2011

B,

6.75%,

10/01/30

.................................

1,200,000

1,226,283

Tax

Allocation,

Second

Lien,

2011

D,

Pre-Refunded,

7%,

12/01/31

.............

1,425,000

1,472,913

Tax

Allocation,

Second

Lien,

2011

D,

Pre-Refunded,

7.25%,

12/01/37

...........

2,505,000

2,592,337

Riverside

County

Transportation

Commission

,

Revenue,

Senior

Lien,

2013

A,

5.75%,

6/01/44

............................

5,000,000

5,443,615

Revenue,

Senior

Lien,

2013

B,

Zero

Cpn.,

6/01/43

.........................

7,500,000

4,007,880

Riverside

Public

Financing

Authority

,

COP

,

2013

,

AGMC

Insured

,

5

%

,

6/01/33

......

4,280,000

4,655,521

Riverside

Unified

School

District

,

Special

Tax,

2020,

4%,

9/01/45

.......................................

415,000

464,683

Special

Tax,

2020,

4%,

9/01/50

.......................................

875,000

977,427

RNR

School

Financing

Authority

,

Community

Facilities

District

No.

92-1

,

Special

Tax

,

2017

A

,

BAM

Insured

,

5

%

,

9/01/41

.....................................

3,000,000

3,580,562

Romoland

School

District

,

Community

Facilities

District

No.

2004-1,

Special

Tax,

2013,

5%,

9/01/36

........

1,500,000

1,614,424

Community

Facilities

District

No.

2004-1,

Special

Tax,

2015,

Refunding,

5%,

9/01/35

4,690,000

5,332,853

Community

Facilities

District

No.

2004-1,

Special

Tax,

2015,

Refunding,

5%,

9/01/38

3,000,000

3,398,276

Community

Facilities

District

No.

2006-1,

Special

Tax,

2017,

Refunding,

5%,

9/01/44

1,120,000

1,315,159

Community

Facilities

District

No.

91-1,

Special

Tax,

2017,

Refunding,

5%,

9/01/41

.

1,265,000

1,492,095

f

Root

Creek

Water

District

,

Community

Facilities

District

No.

2016-1

Improvement

Area

No.

2,

Special

Tax,

2021,

2.75%,

9/01/41

..................................................

450,000

450,996

Community

Facilities

District

No.

2016-1

Improvement

Area

No.

2,

Special

Tax,

2021,

4%,

9/01/50

....................................................

465,000

522,041

Rowland

Unified

School

District

,

GO,

2009

B,

Zero

Cpn.,

8/01/34

.......................................

5,000,000

3,593,810

GO,

2009

B,

Zero

Cpn.,

8/01/39

.......................................

15,000,000

9,175,375

GO,

2009

B,

Zero

Cpn.,

8/01/42

.......................................

10,750,000

6,506,729

Franklin

Municipal

Securities

Trust

Statement

of

Investments

Franklin

California

High

Yield

Municipal

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

37

a

a

Principal

Amount

a

Value

a

a

a

a

a

Municipal

Bonds

(continued)

California

(continued)

Sacramento

Area

Flood

Control

Agency

,

Natomas

Basin

Local

Assessment

District

,

Special

Assessment

,

2014

,

BAM

Insured

,

5

%

,

10/01/44

.....................

$

2,000,000

$

2,277,320

San

Bernardino

Community

College

District

,

GO,

2008

D,

Pre-Refunded,

5%,

8/01/45

................................

2,755,000

3,276,528

GO,

2008

D,

Pre-Refunded,

5%,

8/01/48

................................

3,760,000

4,471,777

GO,

2009

B,

Zero

Cpn.,

8/01/44

.......................................

12,495,000

6,601,753

San

Diego

Unified

School

District

,

GO,

2009-1,

Pre-Refunded,

6%,

7/01/33

................................

10,000,000

11,770,161

GO,

2010

C,

Zero

Cpn.,

7/01/47

.......................................

26,025,000

29,078,901

GO,

2012

E,

Zero

Cpn.,

7/01/42

.......................................

6,940,000

6,601,740

GO,

2012

E,

Zero

Cpn.,

7/01/47

.......................................

13,500,000

13,116,540

San

Francisco

City

&

County

Airport

Comm-San

Francisco

International

Airport

,

Revenue,

2019

A,

Refunding,

5%,

5/01/37

...............................

5,535,000

6,933,570

Revenue,

2019

A,

Refunding,

5%,

5/01/44

...............................

35,000,000

43,208,070

Revenue,

2019

A,

Refunding,

5%,

5/01/49

...............................

10,000,000

12,270,021

Revenue,

Second

Series,

2018

D,

5%,

5/01/48

...........................

10,000,000

12,231,850

San

Francisco

City

&

County

Redevelopment

Agency

Successor

Agency

,

a

Tax

Allocation,

144A,

2016

D,

Zero

Cpn.,

8/01/23

..........................

2,000,000

1,825,579

a

Tax

Allocation,

144A,

2016

D,

Zero

Cpn.,

8/01/26

..........................

3,000,000

2,365,567

a

Tax

Allocation,

144A,

2016

D,

Zero

Cpn.,

8/01/31

..........................

6,000,000

3,691,516

a

Tax

Allocation,

144A,

2016

D,

Zero

Cpn.,

8/01/43

..........................

16,500,000

5,541,966

Community

Facilities

District

No.

6,

Special

Tax,

2013

C,

Zero

Cpn.,

8/01/43

......

10,000,000

2,898,173

Mission

Bay

South

Redevelopment

Area

Tax

Increment

Financing

District,

Tax

Allocation,

2014

A,

5%,

8/01/43

......................................

2,500,000

2,769,006

San

Joaquin

Hills

Transportation

Corridor

Agency

,

Revenue,

1997

A,

Refunding,

NATL

Insured,

Zero

Cpn.,

1/15/26

...............

19,475,000

18,271,776

Revenue,

1997

A,

Refunding,

NATL

Insured,

Zero

Cpn.,

1/15/32

...............

50,225,000

40,082,955

Revenue,

Junior

Lien,

ETM,

Zero

Cpn.,

1/01/28

...........................

19,150,000

17,851,337

Revenue,

Junior

Lien,

2014

B,

Refunding,

5.25%,

1/15/44

...................

35,000,000

39,570,006

Revenue,

Junior

Lien,

2014

B,

Refunding,

5.25%,

1/15/49

...................

75,000,000

84,611,250

San

Rafael

City

Elementary

School

District

,

GO

,

2015

C

,

5

%

,

8/01/43

............

1,565,000

1,942,084

Santa

Barbara

Unified

School

District

,

GO

,

2011

A

,

Zero

Cpn.,

8/01/36

...........

8,000,000

11,711,892

Santa

Margarita

Water

District

,

Community

Facilities

District

No.

2013-1,

Special

Tax,

2013,

5.625%,

9/01/36

.....

2,875,000

3,133,848

Community

Facilities

District

No.

2013-1,

Special

Tax,

2013,

5.625%,

9/01/43

.....

9,600,000

10,434,496

Santa

Paula

Utility

Authority

,

Revenue

,

2015

A

,

Pre-Refunded

,

5

%

,

2/01/40

........

5,105,000

5,960,275

Saugus

Union

School

District

,

Community

Facilities

District

No.

2006-1

,

Special

Tax,

Senior

Lien

,

2014

,

4.25

%

,

9/01/44

.....................................

2,500,000

2,678,641

Saugus/Hart

School

Facilities

Financing

Authority

,

Community

Facilities

District

No.

2006-1,

Special

Tax,

2016,

Refunding,

5%,

9/01/41

1,250,000

1,425,388

Community

Facilities

District

No.

2006-1,

Special

Tax,

2016,

Refunding,

5%,

9/01/46

1,250,000

1,417,256

Saugus-Castaic

School

Facilities

Financing

Authority

,

Community

Facilities

District

No.

2006-1C,

Special

Tax,

2013,

5.875%,

9/01/33

...

1,370,000

1,504,381

Community

Facilities

District

No.

2006-1C,

Special

Tax,

2013,

6%,

9/01/43

.......

3,395,000

3,689,765

Siskiyou

Union

High

School

District

,

GO

,

2009

B

,

AGMC

Insured

,

Zero

Cpn.,

8/01/49

15,015,000

5,696,062

Sonoma

Community

Development

Agency

Successor

Agency

,

Tax

Allocation

,

2011

,

7

%

,

12/01/30

.....................................................

2,115,000

2,175,513

St.

Helena

Unified

School

District

,

GO

,

2011

B

,

Zero

Cpn.,

6/01/36

..............

10,000,000

13,033,189

State

of

California

,

GO

,

5

%

,

3/01/45

.....................................

3,900,000

4,492,828

Sulphur

Springs

Union

School

District

,

Community

Facilities

District

No.

2006-1,

Special

Tax,

2018,

5%,

9/01/43

........

1,410,000

1,587,884

Community

Facilities

District

No.

2006-1,

Special

Tax,

2018,

5%,

9/01/47

........

1,820,000

2,046,813

Community

Facilities

District

No.

2014-1,

Special

Tax,

2014-1,

4%,

9/01/50

......

1,225,000

1,363,072

Franklin

Municipal

Securities

Trust

Statement

of

Investments

Franklin

California

High

Yield

Municipal

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

38

a

a

Principal

Amount

a

Value

a

a

a

a

a

Municipal

Bonds

(continued)

California

(continued)

Susanville

School

District

,

GO

,

2010

,

AGMC

Insured

,

Zero

Cpn.,

8/01/49

.........

$

17,505,000

$

6,892,939

Temecula

Redevelopment

Agency

Successor

Agency

,

Tax

Allocation

,

2011

A

,

Pre-

Refunded

,

7

%

,

8/01/39

.............................................

2,100,000

2,123,664

Tobacco

Securitization

Authority

of

Northern

California

,

Sacramento

County

Tobacco

Securitization

Corp.

,

Revenue,

Senior

Lien

,

2021

B-2

,

2

,

Refunding

,

Zero

Cpn.,

6/01/60

.........................................................

24,900,000

6,092,607

Tobacco

Securitization

Authority

of

Southern

California

,

San

Diego

County

Tobacco

Asset

Securitization

Corp.,

Revenue,

2006

B,

Zero

Cpn.,

6/01/46

........................................................

10,000,000

2,147,979

San

Diego

County

Tobacco

Asset

Securitization

Corp.,

Revenue,

2006

C,

Zero

Cpn.,

6/01/46

........................................................

25,000,000

5,177,563

San

Diego

County

Tobacco

Asset

Securitization

Corp.,

Revenue,

2019

B-1,

Refunding,

5%,

6/01/48

............................................

11,750,000

14,409,659

Torrance

Unified

School

District

,

GO

,

2009

B-1

,

Zero

Cpn.,

8/01/34

..............

5,640,000

3,617,379

Tracy

Community

Facilities

District

,

City

of

Tracy

Community

Facilities

District

No.

2016-01,

Special

Tax,

2020,

4%,

9/01/45

........................................................

2,280,000

2,537,361

City

of

Tracy

Community

Facilities

District

No.

2016-01,

Special

Tax,

2020,

4%,

9/01/50

........................................................

3,000,000

3,327,005

Transbay

Joint

Powers

Authority

,

Transbay

Redevelopment

Project

Tax

Increment

Re-

Development

Project

,

Tax

Allocation

,

2020

B

,

5

%

,

10/01/38

..................

550,000

688,722

Truckee-Donner

Public

Utility

District

,

Community

Facilities

District

No.

04-1,

Special

Tax,

2004,

5.75%,

9/01/29

........

2,945,000

2,819,307

Community

Facilities

District

No.

04-1,

Special

Tax,

2004,

5.8%,

9/01/35

........

4,475,000

4,208,189

Community

Facilities

District

No.

04-1,

Special

Tax,

2005,

5.2%,

9/01/25

........

2,975,000

2,870,759

Community

Facilities

District

No.

04-1,

Special

Tax,

2005,

5.25%,

9/01/30

........

4,990,000

4,618,451

University

of

California

,

Revenue

,

2015

AO

,

Refunding

,

5

%

,

5/15/40

.............

5,000,000

5,814,517

Val

Verde

Unified

School

District

,

Special

Tax,

2015,

Refunding,

5%,

9/01/29

...............................

3,200,000

3,659,747

Special

Tax,

2015,

Refunding,

5%,

9/01/37

...............................

2,000,000

2,248,605

Vallejo

Redevelopment

Agency

,

Tax

Allocation

,

2001

A

,

7

%

,

10/01/31

............

2,630,000

2,640,264

Victor

Elementary

School

District

,

GO,

2015

B,

5%,

8/01/42

............................................

5,455,000

6,276,875

Community

Facilities

District

No.

2005-1,

Special

Tax,

2018,

Refunding,

BAM

Insured,

5%,

9/01/46

..............................................

1,385,000

1,627,219

Victor

Valley

Community

College

District

,

GO

,

2008

C

,

Zero

Cpn.,

6/01/49

.........

11,940,000

5,604,527

Washington

Township

Health

Care

District

,

Revenue,

2017

B,

Refunding,

4%,

7/01/35

...............................

2,000,000

2,200,385

Revenue,

2017

B,

Refunding,

4%,

7/01/36

...............................

1,900,000

2,074,844

West

Hollywood

Community

Development

Department

,

Tax

Allocation,

2011

A,

7.25%,

9/01/31

..................................

1,000,000

1,017,947

Tax

Allocation,

2011

A,

7.5%,

9/01/42

...................................

5,000,000

5,090,546

Westside

Union

School

District

,

Community

Facilities

District

No.

2018-1,

Special

Tax,

2021,

4%,

9/01/46

........

360,000

403,356

Community

Facilities

District

No.

2018-1,

Special

Tax,

2021,

4%,

9/01/51

........

500,000

559,507

Woodland

Finance

Authority

,

Revenue,

2011,

6%,

3/01/36

.........................................

1,000,000

1,004,064

Revenue,

2011,

6%,

3/01/41

.........................................

1,500,000

1,505,872

Yorba

Linda

Redevelopment

Agency

Successor

Agency

,

Tax

Allocation,

Sub.

Lien

,

2011

A

,

Pre-Refunded

,

6.5

%

,

9/01/32

.......................................

2,750,000

2,792,998

2,962,022,861

Franklin

Municipal

Securities

Trust

Statement

of

Investments

Franklin

California

High

Yield

Municipal

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

39

a

a

Principal

Amount

a

Value

a

a

a

a

a

Municipal

Bonds

(continued)

U.S.

Territories

6.6%

Guam

1.0%

Guam

Government

Waterworks

Authority

,

Revenue,

2014

A,

Refunding,

5%,

7/01/35

...............................

$

1,000,000

$

1,095,820

Revenue,

2016,

5%,

1/01/46

.........................................

5,250,000

5,931,508

Revenue,

2016,

5%,

7/01/36

.........................................

3,550,000

4,068,306

Revenue,

2017,

Refunding,

5%,

7/01/36

.................................

3,455,000

4,042,168

Revenue,

2017,

Refunding,

5%,

7/01/37

.................................

3,000,000

3,502,490

Guam

Power

Authority

,

Revenue

,

2017

A

,

Refunding

,

5

%

,

10/01/40

..............

4,750,000

5,497,527

Territory

of

Guam

,

b

Revenue,

2021

F,

Refunding,

4%,

1/01/42

...............................

2,125,000

2,422,608

b

Revenue,

2021

F,

Refunding,

4%,

1/01/36

...............................

1,250,000

1,453,248

Hotel

Occupancy

Tax,

Revenue,

2021

A,

Refunding,

5%,

11/01/40

.............

1,500,000

1,877,460

Hotel

Occupancy

Tax,

Revenue,

2021

A,

Refunding,

5%,

11/01/35

.............

1,500,000

1,910,422

31,801,557

Pacific

Islands

0.1%

Northern

Mariana

Island

Ports

Authority

,

Revenue

,

1998

A

,

6.6

%

,

3/15/28

.........

4,405,000

4,361,572

Puerto

Rico

5.5%

c

Commonwealth

of

Puerto

Rico

,

GO

,

2014

A

,

8

%

,

7/01/35

.....................

19,815,000

16,000,612

GDB

Debt

Recovery

Authority

of

Puerto

Rico

,

7.5

%

,

8/20/40

...................

17,644,017

15,570,845

c

Puerto

Rico

Electric

Power

Authority

,

Revenue,

2012

A

RSA-1

2012

A,

5%,

7/01/29

.............................

10,000,000

9,575,000

Revenue,

2012

A

RSA-1

2013

A,

7%,

7/01/33

.............................

25,000,000

24,593,750

Revenue,

2013

A

RSA-1,

6.75%,

7/01/36

................................

11,735,000

11,514,969

Revenue,

2013

A

RSA-1,

7%,

7/01/43

..................................

5,000,000

4,918,750

Revenue,

A-4-RSA-1

2016

A-4,

10%,

7/01/19

.............................

1,601,766

1,625,793

Revenue,

B-2-RSA-1

2016

B-4,

10%,

7/01/19

............................

1,601,765

1,625,791

Revenue,

E-1-RSA-1,

10%,

1/01/21

....................................

1,768,493

1,797,231

Revenue,

E-2-RSA-1,

10%,

7/01/21

....................................

1,768,493

1,801,652

Revenue,

E-3-RSA-1,

10%,

1/01/22

....................................

600,000

611,250

Revenue,

E-4-RSA-1,

10%,

7/01/22

....................................

600,000

611,250

Puerto

Rico

Highway

&

Transportation

Authority

,

Revenue,

2007

N,

Refunding,

AGMC

Insured,

5.25%,

7/01/36

................

330,000

359,851

Revenue,

L,

Refunding,

AMBAC

Insured,

5.25%,

7/01/38

....................

4,150,000

4,502,252

Revenue,

L,

Refunding,

AGMC

Insured,

5.25%,

7/01/41

.....................

3,300,000

3,581,604

Puerto

Rico

Industrial

Tourist

Educational

Medical

&

Environmental

Control

Facilities

Financing

Authority

,

AES

Puerto

Rico

LP

,

Revenue

,

2000

A

,

6.625

%

,

6/01/26

.....

4,500,000

4,657,500

Puerto

Rico

Infrastructure

Financing

Authority

,

Special

Tax

,

2005

C

,

Refunding

,

AMBAC

Insured

,

5.5

%

,

7/01/27

..............................................

12,750,000

13,978,441

Puerto

Rico

Sales

Tax

Financing

Corp.

,

Sales

Tax,

Revenue,

A-1,

4.55%,

7/01/40

................................

100,000

112,371

Sales

Tax,

Revenue,

A-1,

4.75%,

7/01/53

................................

8,695,000

9,774,606

Sales

Tax,

Revenue,

A-1,

5%,

7/01/58

..................................

11,850,000

13,518,544

Sales

Tax,

Revenue,

A-1,

Zero

Cpn.,

7/01/46

.............................

35,520,000

11,564,246

Sales

Tax,

Revenue,

A-1,

Zero

Cpn.,

7/01/51

.............................

20,445,000

4,834,899

Sales

Tax,

Revenue,

4.329%,

7/01/40

..................................

11,313,000

12,552,081

Sales

Tax,

Revenue,

A-2,

4.784%,

7/01/58

...............................

7,495,000

8,421,392

178,104,680

Total

U.S.

Territories

....................................................................

214,267,809

Total

Municipal

Bonds

(Cost

$2,775,230,983)

...................................

3,176,290,670

a

a

a

a

Franklin

Municipal

Securities

Trust

Statement

of

Investments

Franklin

California

High

Yield

Municipal

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

40

Short

Term

Investments

2.9%

a

a

Principal

Amount

a

Value

Municipal

Bonds

2.9%

California

2.9%

g

Metropolitan

Water

District

of

Southern

California

,

Revenue

,

2018

A-1

,

Refunding

,

SPA

Toronto

Dominion

Bank

(The)

,

Daily

VRDN

and

Put

,

0.01

%

,

7/01/37

............

$

7,100,000

$

7,100,000

g

Regents

of

the

University

of

California

,

Medical

Center

,

Revenue

,

2007

B-1

,

Refunding

,

Daily

VRDN

and

Put

,

0.01

%

,

5/15/32

...................................

4,100,000

4,100,000

g

Santa

Clara

Valley

Transportation

Authority

,

2000

Measure

A

Sales

Tax

,

Revenue

,

2008

D

,

Refunding

,

SPA

TD

Bank

NA

,

Daily

VRDN

and

Put

,

0.01

%

,

4/01/36

..........

16,000,000

16,000,000

g

Southern

California

Public

Power

Authority

,

Revenue

,

2020-3

,

Refunding

,

LOC

US

Bank

NA

,

Daily

VRDN

and

Put

,

0.01

%

,

7/01/36

...........................

4,300,000

4,300,000

g

State

of

California

,

GO

,

2004

A-3

,

LOC

State

Street

Bank

&

Trust

Co.

,

Daily

VRDN

and

Put

,

0.01

%

,

5/01/34

................................................

8,800,000

8,800,000

g

University

of

California

,

Revenue,

2013

AL-2,

Refunding,

Daily

VRDN

and

Put,

0.01%,

5/15/48

..........

10,400,000

10,400,000

Revenue,

2013

AL-3,

Refunding,

Daily

VRDN

and

Put,

0.01%,

5/15/48

..........

27,700,000

27,700,000

Revenue,

2013

AL-4,

Refunding,

Daily

VRDN

and

Put,

0.01%,

5/15/48

..........

16,000,000

16,000,000

94,400,000

Total

Municipal

Bonds

(Cost

$94,400,000)

......................................

94,400,000

Total

Short

Term

Investments

(Cost

$94,400,000

)

................................

94,400,000

a

Total

Investments

(Cost

$2,869,630,983)

100.5%

................................

$3,270,690,670

Other

Assets,

less

Liabilities

(0.5)%

...........................................

(14,877,141)

Net

Assets

100.0%

...........................................................

$3,255,813,529

See

Abbreviations

on

page

61

.

a

Security

was

purchased

pursuant

to

Rule

144A

or

Regulation

S

under

the

Securities

Act

of

1933.

144A

securities

may

be

sold

in

transactions

exempt

from

registration

only

to

qualified

institutional

buyers

or

in

a

public

offering

registered

under

the

Securities

Act

of

1933.

Regulation

S

securities

cannot

be

sold

in

the

United

States

without

either

an

effective

registration

statement

filed

pursuant

to

the

Securities

Act

of

1933,

or

pursuant

to

an

exemption

from

registration.

At

May

31,

2021,

the

aggregate

value

of

these

securities

was

$556,972,107,

representing

17.1%

of

net

assets.

b

Security

purchased

on

a

when-issued

basis.

See

Note

1(b).

c

See

Note

7

regarding

defaulted

securities.

d

Investment

in

an

interest-only

security

entitles

holders

to

receive

only

the

interest

payment

on

the

underlying

instruments.

The

principal

amount

shown

is

the

notional

amount

of

the

underlying

instruments.

e

The

coupon

rate

shown

represents

the

rate

at

period

end.

f

A

portion

or

all

of

the

security

purchased

on

a

delayed

delivery

basis.

See

Note

1(b).

g

Variable

rate

demand

notes

(VRDNs)

are

obligations

which

contain

a

floating

or

variable

interest

rate

adjustment

formula

and

an

unconditional

right

of

demand

to

receive

payment

of

the

principal

balance

plus

accrued

interest

at

specified

dates.

Unless

otherwise

noted,

the

coupon

rate

is

determined

based

on

factors

including

supply

and

demand,

underlying

credit,

tax

treatment,

and

current

short

term

rates.

The

coupon

rate

shown

represents

the

rate

at

period

end.

Franklin

Municipal

Securities

Trust

Financial

Highlights

Franklin

Tennessee

Municipal

Bond

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

41

a

Year

Ended

May

31,

Year

Ended

May

31,

2019

a

2021

2020

Class

A

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

............................................

$10.96

$10.97

$10.74

Income

from

investment

operations

b

:

Net

investment

income

c

..................................................

0.25

0.29

0.23

Net

realized

and

unrealized

gains

(losses)

....................................

0.23

(0.01)

0.25

Total

from

investment

operations

.............................................

0.48

0.28

0.48

Less

distributions

from:

Net

investment

income

...................................................

(0.26)

(0.29)

(0.25)

Net

asset

value,

end

of

year

................................................

$11.18

$10.96

$10.97

Total

return

d

............................................................

4.39%

2.54%

4.53%

Ratios

to

average

net

assets

e

Expenses

f

..............................................................

0.95%

0.93%

0.93%

Net

investment

income

....................................................

2.30%

2.63%

2.94%

Supplemental

data

Net

assets,

end

of

year

(000’s)

..............................................

$11,768

$8,350

$4,971

Portfolio

turnover

rate

.....................................................

32.17%

11.83%

3.46%

a

For

the

period

September

10,

2018

(effective

date)

to

May

31,

2019.

b

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

c

Based

on

average

daily

shares

outstanding.

d

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable,

and

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Municipal

Securities

Trust

Financial

Highlights

Franklin

Tennessee

Municipal

Bond

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

42

a

Year

Ended

May

31,

2021

2020

2019

2018

2017

Class

A1

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$10.95

$10.96

$10.79

$11.11

$11.44

Income

from

investment

operations

a

:

Net

investment

income

b

.........................

0.27

0.31

0.33

0.34

0.37

Net

realized

and

unrealized

gains

(losses)

...........

0.23

(0.02)

0.19

(0.32)

(0.32)

Total

from

investment

operations

....................

0.50

0.29

0.52

0.02

0.05

Less

distributions

from:

Net

investment

income

..........................

(0.27)

(0.30)

(0.35)

(0.34)

(0.38)

Net

asset

value,

end

of

year

.......................

$11.18

$10.95

$10.96

$10.79

$11.11

Total

return

c

...................................

4.64%

2.69%

4.92%

0.23%

0.40%

Ratios

to

average

net

assets

Expenses

.....................................

0.80%

d

0.78%

d

0.78%

d

0.77%

0.72%

Net

investment

income

...........................

2.47%

2.78%

3.09%

3.08%

3.27%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$154,085

$164,616

$190,548

$226,189

$267,442

Portfolio

turnover

rate

............................

32.17%

11.83%

3.46%

9.19%

18.95%

a

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

b

Based

on

average

daily

shares

outstanding.

c

Total

return

does

not

reflect

sales

commissions

or

contingent

deferred

sales

charges,

if

applicable.

d

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Municipal

Securities

Trust

Financial

Highlights

Franklin

Tennessee

Municipal

Bond

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

43

a

Year

Ended

May

31,

Year

Ended

May

31,

2018

a

2021

2020

2019

Class

R6

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

................................

$10.96

$10.97

$10.79

$11.06

Income

from

investment

operations

b

:

Net

investment

income

c

......................................

0.29

0.32

0.35

0.29

Net

realized

and

unrealized

gains

(losses)

........................

0.22

(0.01)

0.19

(0.26)

Total

from

investment

operations

.................................

0.51

0.31

0.54

0.03

Less

distributions

from:

Net

investment

income

.......................................

(0.29)

(0.32)

(0.36)

(0.30)

Net

asset

value,

end

of

year

....................................

$11.18

$10.96

$10.97

$10.79

Total

return

d

................................................

4.68%

2.83%

5.15%

0.25%

Ratios

to

average

net

assets

e

Expenses

before

waiver

and

payments

by

affiliates

...................

0.69%

0.66%

0.66%

0.66%

Expenses

net

of

waiver

and

payments

by

affiliates

....................

0.67%

f

0.65%

f

0.65%

f

0.64%

Net

investment

income

........................................

2.58%

2.91%

3.22%

3.21%

Supplemental

data

Net

assets,

end

of

year

(000’s)

..................................

$3,799

$2,803

$3,253

$3,547

Portfolio

turnover

rate

.........................................

32.17%

11.83%

3.46%

9.19%

a

For

the

period

August

1,

2017

(effective

date)

to

May

31,

2018.

b

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

c

Based

on

average

daily

shares

outstanding.

d

Total

return

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Municipal

Securities

Trust

Financial

Highlights

Franklin

Tennessee

Municipal

Bond

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

44

a

Year

Ended

May

31,

Year

Ended

May

31,

2017

a

2021

2020

2019

2018

Advisor

Class

Per

share

operating

performance

(for

a

share

outstanding

throughout

the

year)

Net

asset

value,

beginning

of

year

...................

$10.96

$10.97

$10.79

$11.12

$11.50

Income

from

investment

operations

b

:

Net

investment

income

c

.........................

0.28

0.32

0.34

0.35

0.27

Net

realized

and

unrealized

gains

(losses)

...........

0.22

(0.02)

0.20

(0.32)

(0.38)

Total

from

investment

operations

....................

0.50

0.30

0.54

0.03

(0.11)

Less

distributions

from:

Net

investment

income

..........................

(0.28)

(0.31)

(0.36)

(0.36)

(0.27)

Net

asset

value,

end

of

year

.......................

$11.18

$10.96

$10.97

$10.79

$11.12

Total

return

d

...................................

4.65%

2.79%

5.12%

0.24%

(0.91)%

Ratios

to

average

net

assets

e

Expenses

.....................................

0.70%

f

0.68%

f

0.68%

f

0.67%

0.62%

Net

investment

income

...........................

2.56%

2.88%

3.19%

3.18%

3.37%

Supplemental

data

Net

assets,

end

of

year

(000’s)

.....................

$26,603

$24,675

$23,252

$23,573

$23,916

Portfolio

turnover

rate

............................

32.17%

11.83%

3.46%

9.19%

18.95%

a

For

the

period

September

15,

2016

(effective

date)

to

May

31,

2017.

b

The

amount

shown

for

a

share

outstanding

throughout

the

period

may

not

correlate

with

the

Statement

of

Operations

for

the

period

due

to

the

timing

of

sales

and

repurchases

of

the

Fund’s

shares

in

relation

to

income

earned

and/or

fluctuating

fair

value

of

the

investments

of

the

Fund.

c

Based

on

average

daily

shares

outstanding.

d

Total

return

is

not

annualized

for

periods

less

than

one

year.

e

Ratios

are

annualized

for

periods

less

than

one

year.

f

Benefit

of

expense

reduction

rounds

to

less

than

0.01%.

Franklin

Municipal

Securities

Trust

Statement

of

Investments,

May

31,

2021

Franklin

Tennessee

Municipal

Bond

Fund

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

45

a

a

Principal

Amount

a

Value

a

a

a

a

a

Municipal

Bonds

99.6%

Illinois

0.7%

State

of

Illinois

,

GO,

2018

A,

Refunding,

5%,

10/01/33

..................................

$

215,000

$

261,927

GO,

2020

C,

4%,

10/01/42

...........................................

1,000,000

1,142,510

1,404,437

Tennessee

96.7%

Chattanooga

Health

Educational

&

Housing

Facility

Board

,

CDFI

Phase

I

LLC,

Revenue,

2015,

Refunding,

5%,

10/01/35

.................

1,000,000

1,124,272

CommonSpirit

Health

Obligated

Group,

Revenue,

2019

A-1,

Refunding,

4%,

8/01/44

3,000,000

3,412,465

City

of

Chattanooga

,

Electric

,

Revenue

,

2015

C

,

Refunding

,

5

%

,

9/01/40

..........

2,750,000

3,233,080

City

of

Gallatin

,

Water

&

Sewer

,

Revenue

,

2015

,

Refunding

,

5

%

,

1/01/32

..........

1,500,000

1,725,153

City

of

Germantown

,

GO,

2017,

4%,

8/01/43

.............................................

2,330,000

2,708,342

GO,

2017,

4%,

8/01/45

.............................................

2,525,000

2,925,381

City

of

Jackson

,

West

Tennessee

Healthcare

Obligated

Group,

Revenue,

2015,

Refunding,

5%,

4/01/36

........................................................

4,000,000

4,508,249

West

Tennessee

Healthcare

Obligated

Group,

Revenue,

2018

A,

Refunding,

5%,

4/01/41

........................................................

2,370,000

2,886,771

City

of

Knoxville

,

Wastewater

System,

Revenue,

2015

A,

Refunding,

4%,

4/01/42

...............

5,000,000

5,292,400

Wastewater

System,

Revenue,

2021

A,

Refunding,

4%,

4/01/33

...............

1,000,000

1,282,864

City

of

Memphis

,

GO,

2011,

Refunding,

5%,

5/01/36

.....................................

4,135,000

4,149,036

Electric

System,

Revenue,

2020

A,

3%,

12/01/42

..........................

2,470,000

2,730,988

Gas,

Revenue,

2017,

4%,

12/01/36

....................................

1,000,000

1,175,012

Gas,

Revenue,

2020,

3%,

12/01/42

....................................

1,000,000

1,105,663

Water,

Revenue,

2020,

3%,

12/01/45

...................................

3,000,000

3,294,267

City

of

Portland

,

Water

&

Sewer

,

Revenue

,

2020

,

AGMC

Insured

,

3

%

,

4/01/45

......

1,775,000

1,880,215

County

of

Coffee

,

GO

,

2019

,

Refunding

,

4

%

,

6/01/44

........................

2,760,000

3,237,581

County

of

Hamilton

,

GO

,

2020

A

,

Refunding

,

4

%

,

1/01/51

.....................

1,000,000

1,183,682

County

of

Maury

,

GO

,

2015

,

Refunding

,

4

%

,

4/01/34

.........................

1,775,000

1,992,652

County

of

Shelby

,

GO

,

2020

B

,

4

%

,

4/01/37

................................

2,500,000

3,041,364

County

of

Wilson

,

GO

,

2017

A

,

4

%

,

4/01/42

................................

5,000,000

5,688,878

Franklin

Special

School

District

,

GO,

2021,

4%,

6/01/41

.............................................

5,355,000

6,562,491

GO,

2021,

4%,

6/01/46

.............................................

2,000,000

2,426,357

Hallsdale

-Powell

Utility

District

,

Revenue,

2019,

Refunding,

4%,

4/01/39

.................................

1,380,000

1,620,342

a

Revenue,

2021,

Refunding,

5%,

10/01/31

................................

1,000,000

1,368,268

Harpeth

Valley

Utilities

District

of

Davidson

and

Williamson

Counties

,

Revenue,

2014,

5%,

9/01/44

.........................................

4,400,000

5,011,881

Revenue,

2020,

4%,

9/01/50

.........................................

500,000

589,941

Industrial

Development

Board

of

The

City

of

Kingsport

Tennessee

(The)

,

Model

City

II

LP

,

Revenue

,

2009

,

GNMA

Insured

,

5.5

%

,

7/20/39

.........................

2,995,000

2,997,599

Johnson

City

Health

&

Educational

Facilities

Board

,

Mountain

States

Health

Alliance

Obligated

Group

,

Revenue

,

1998

,

Pre-Refunded

,

NATL

Insured

,

5.125

%

,

7/01/25

.

40,000

40,631

Knox

Chapman

Utility

District

of

Knox

County

,

Revenue

,

2012

,

Refunding

,

4

%

,

1/01/40

4,000,000

4,207,010

Knox

County

Health

Educational

&

Housing

Facility

Board

,

Covenant

Health

Obligated

Group,

Revenue,

2016

A,

Refunding,

5%,

1/01/42

....

5,000,000

5,993,609

University

Health

System

Obligated

Group,

Revenue,

2016,

Refunding,

5%,

9/01/47

3,000,000

3,413,771

University

Health

System

Obligated

Group,

Revenue,

2017,

Refunding,

5%,

4/01/36

2,250,000

2,629,612

Franklin

Municipal

Securities

Trust

Statement

of

Investments

Franklin

Tennessee

Municipal

Bond

Fund

(continued)

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

46

a

a

Principal

Amount

a

Value

a

a

a

a

a

Municipal

Bonds

(continued)

Tennessee

(continued)

Lawrenceburg

Public

Building

Authority

,

GO

,

2002

,

Refunding

,

AMBAC

Insured

,

5

%

,

7/01/22

.........................................................

$

1,255,000

$

1,287,351

Madison

Suburban

Utility

District

,

Revenue

,

2021

,

3

%

,

2/01/45

.................

1,000,000

1,064,379

Memphis-Shelby

County

Airport

Authority

,

Revenue,

2021

A,

5%,

7/01/31

........................................

500,000

663,448

Revenue,

2021

A,

5%,

7/01/40

........................................

3,000,000

3,880,033

Metropolitan

Government

Nashville

&

Davidson

County

Health

&

Educational

Facilities

Board

,

Blakeford

at

Green

Hills

Obligated

Group,

Revenue,

2020

A,

4%,

11/01/45

.......

2,500,000

2,680,923

Blakeford

at

Green

Hills

Obligated

Group,

Revenue,

2020

A,

4%,

11/01/55

.......

2,015,000

2,152,089

Vanderbilt

University

Medical

Center

Obligated

Group,

Revenue,

2016

A,

5%,

7/01/40

........................................................

5,000,000

5,995,384

Metropolitan

Government

of

Nashville

&

Davidson

County

,

Electric,

Revenue,

2014

A,

5%,

5/15/39

.................................

4,000,000

4,508,439

Electric,

Revenue,

2021

A,

5%,

5/15/46

.................................

1,000,000

1,311,178

Sports

Authority,

Revenue,

2013

A,

Pre-Refunded,

5%,

8/01/38

...............

3,000,000

3,315,592

Sports

Authority,

Revenue,

2013

A,

Pre-Refunded,

5%,

8/01/43

...............

2,075,000

2,293,285

Water

&

Sewer,

Revenue,

2017

A,

5%,

7/01/46

...........................

6,855,000

8,474,887

Metropolitan

Nashville

Airport

Authority

(The)

,

Revenue,

2015

A,

5%,

7/01/45

........................................

4,000,000

4,669,839

Revenue,

2019

B,

4%,

7/01/49

........................................

3,000,000

3,450,259

Pigeon

Forge

Industrial

Development

Board

,

City

of

Pigeon

Forge

,

Revenue

,

2011

,

5

%

,

6/01/34

.........................................................

1,250,000

1,253,974

Shelby

County

Health

Educational

&

Housing

Facilities

Board

,

Methodist

Le

Bonheur

Healthcare

Obligated

Group,

Revenue,

2017

A,

5%,

5/01/36

4,000,000

4,794,543

Rhodes

College,

Revenue,

2015,

5%,

8/01/45

............................

1,700,000

1,974,117

Rhodes

College,

Revenue,

2017,

Refunding,

4%,

8/01/40

...................

3,000,000

3,421,356

South

Blount

County

Utility

District

,

Revenue

,

2019

,

Refunding

,

3

%

,

12/01/39

......

2,015,000

2,206,478

Tennessee

Housing

Development

Agency

,

Revenue,

2012

2C,

3.8%,

7/01/43

.....................................

1,105,000

1,122,395

Revenue,

2013

1C,

4%,

7/01/43

.......................................

1,030,000

1,061,040

Revenue,

2017-3,

3.65%,

7/01/47

.....................................

925,000

979,596

Revenue,

2018-2,

Refunding,

3.85%,

7/01/42

.............................

1,825,000

1,976,640

Revenue,

2018-4,

Refunding,

4%,

7/01/43

...............................

3,150,000

3,478,972

Tennessee

State

School

Bond

Authority

,

Revenue,

2015

B,

Pre-Refunded,

5%,

11/01/40

...........................

10,000,000

11,986,254

Revenue,

2015

B,

Pre-Refunded,

5%,

11/01/45

...........................

5,000,000

5,993,127

West

Knox

Utility

District

,

Revenue

,

2016

,

Refunding

,

5

%

,

6/01/41

..............

1,000,000

1,129,497

West

Wilson

Utility

District

of

Wilson

County

Tennessee

,

Revenue

,

2015

,

Refunding

,

5

%

,

6/01/40

......................................................

1,545,000

1,802,436

White

House

Utility

District

,

Revenue

,

2020

,

Refunding

,

3

%

,

1/01/34

.............

820,000

923,053

Williamson

County

HB

&

TS

Utility

District

,

Revenue

,

2020

,

Refunding

,

3

%

,

9/01/44

.

1,200,000

1,292,045

Wilson

County

Tenth

Special

School

District

,

GO

,

2019

,

5

%

,

4/01/44

.............

2,500,000

3,107,850

189,690,286

U.S.

Territories

2.2%

Puerto

Rico

2.2%

b

Puerto

Rico

Electric

Power

Authority

,

Revenue

,

XX-RSA-1

,

5.25

%

,

7/01/40

........

965,000

926,400

Puerto

Rico

Highway

&

Transportation

Authority

,

Revenue,

2007

N,

Refunding,

AGMC

Insured,

5.25%,

7/01/36

................

1,425,000

1,553,901

Revenue,

CC,

Refunding,

AGMC

Insured,

5.25%,

7/01/34

...................

600,000

673,699

Revenue,

L,

Refunding,

NATL

Insured,

5.25%,

7/01/35

......................

100,000

108,998

Franklin

Municipal

Securities

Trust

Statement

of

Investments

Franklin

Tennessee

Municipal

Bond

Fund

(continued)

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

47

a

a

Principal

Amount

a

Value

a

a

a

a

a

Municipal

Bonds

(continued)

U.S.

Territories

(continued)

Puerto

Rico

(continued)

Puerto

Rico

Highway

&

Transportation

Authority,

(continued)

Revenue,

L,

Refunding,

AGMC

Insured,

5.25%,

7/01/41

.....................

$

1,000,000

$

1,085,334

4,348,332

Total

U.S.

Territories

....................................................................

4,348,332

Total

Municipal

Bonds

(Cost

$182,652,782)

.....................................

195,443,055

a

a

a

a

a

Total

Investments

(Cost

$182,652,782)

99.6%

...................................

$195,443,055

Other

Assets,

less

Liabilities

0.4%

.............................................

812,385

Net

Assets

100.0%

...........................................................

$196,255,440

See

Abbreviations

on

page

61

.

a

Security

purchased

on

a

when-issued

basis.

See

Note

1(b).

b

See

Note

7

regarding

defaulted

securities.

Franklin

Municipal

Securities

Trust

Financial

Statements

Statements

of

Assets

and

Liabilities

May

31,

2021

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

48

Franklin

California

High

Yield

Municipal

Fund

Franklin

Tennessee

Municipal

Bond

Fund

Assets:

Investments

in

securities:

Cost

-

Unaffiliated

issuers

..................................................

$2,869,630,983

$182,652,782

Value

-

Unaffiliated

issuers

.................................................

$3,270,690,670

$195,443,055

Cash

...................................................................

1,986,660

402,452

Receivables:

Capital

shares

sold

.......................................................

6,654,451

288,476

Interest

................................................................

33,368,745

1,984,169

Total

assets

.........................................................

3,312,700,526

198,118,152

Liabilities:

Payables:

Investment

securities

purchased

.............................................

48,905,428

1,366,430

Capital

shares

redeemed

..................................................

3,597,212

222,625

Management

fees

........................................................

1,252,168

93,870

Distribution

fees

.........................................................

357,976

15,564

Transfer

agent

fees

.......................................................

451,537

26,483

Distributions

to

shareholders

................................................

2,095,095

57,457

Accrued

expenses

and

other

liabilities

..........................................

227,581

80,283

Total

liabilities

........................................................

56,886,997

1,862,712

Net

assets,

at

value

................................................

$3,255,813,529

$196,255,440

Net

assets

consist

of:

Paid-in

capital

............................................................

$2,961,823,370

$198,975,376

Total

distributable

earnings

(losses)

............................................

293,990,159

(2,719,936)

Net

assets,

at

value

................................................

$3,255,813,529

$196,255,440

Franklin

Municipal

Securities

Trust

Financial

Statements

Statements

of

Assets

and

Liabilities

(continued)

May

31,

2021

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

49

Franklin

California

High

Yield

Municipal

Fund

Franklin

Tennessee

Municipal

Bond

Fund

Class

A:

Net

assets,

at

value

......................................................

$618,966,667

$11,768,051

Shares

outstanding

.......................................................

53,846,779

1,052,402

Net

asset

value

per

share

a

.................................................

$11.49

$11.18

Maximum

offering

price

per

share

(net

asset

value

per

share

÷

96.25%

and

96.25%,

respectively)

............................................................

$11.94

$11.62

Class

A1:

Net

assets,

at

value

......................................................

$1,254,701,446

$154,084,930

Shares

outstanding

.......................................................

109,365,121

13,787,112

Net

asset

value

per

share

a

.................................................

$11.47

$11.18

Maximum

offering

price

per

share

(net

asset

value

per

share

÷

96.25%

and

96.25%,

respectively)

............................................................

$11.92

$11.62

Class

C:

Net

assets,

at

value

......................................................

$223,651,587

$—

Shares

outstanding

.......................................................

19,344,279

—

Net

asset

value

and

maximum

offering

price

per

share

a

............................

$11.56

$—

Class

R6:

Net

assets,

at

value

......................................................

$45,216,237

$3,799,235

Shares

outstanding

.......................................................

3,927,995

339,882

Net

asset

value

and

maximum

offering

price

per

share

............................

$11.51

$11.18

Advisor

Class:

Net

assets,

at

value

......................................................

$1,113,277,592

$26,603,224

Shares

outstanding

.......................................................

96,815,595

2,378,627

Net

asset

value

and

maximum

offering

price

per

share

............................

$11.50

$11.18

a

Redemption

price

is

equal

to

net

asset

value

less

contingent

deferred

sales

charges,

if

applicable.

Franklin

Municipal

Securities

Trust

Financial

Statements

Statements

of

Operations

for

the

year

ended

May

31,

2021

franklintempleton.com

Annual

Report

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

50

Franklin

California

High

Yield

Municipal

Fund

Franklin

Tennessee

Municipal

Bond

Fund

Investment

income:

Interest:

Unaffiliated

issuers

.......................................................

$119,036,456

$6,464,283

Expenses:

Management

fees

(Note

3

a

)

..................................................

13,983,901

1,115,796

Distribution

fees:

(Note

3c

)

    Class

A

...............................................................

1,316,054

25,907

    Class

A1

..............................................................

1,258,847

158,318

    Class

C

...............................................................

1,518,205

—

Transfer

agent

fees:

(Note

3e

)

    Class

A

...............................................................

333,636

6,487

    Class

A1

..............................................................

806,176

99,540

    Class

C

...............................................................

149,969

—

    Class

R6

..............................................................

12,913

1,742

    Advisor

Class

...........................................................

635,562

16,289

Custodian

fees

(Note

4

)

.....................................................

6,962

1,059

Reports

to

shareholders

.....................................................

71,773

16,291

Registration

and

filing

fees

...................................................

84,624

11,866

Professional

fees

..........................................................

162,755

72,788

Trustees'

fees

and

expenses

.................................................

51,874

4,598

Other

...................................................................

279,732

36,599

Total

expenses

........................................................

20,672,983

1,567,280

Expense

reductions

(Note

4

)

..............................................

(18,611)

(1,042)

Expenses

waived/paid

by

affiliates

(Note

3f)

..................................

(3,027)

(766)

Net

expenses

........................................................

20,651,345

1,565,472

Net

investment

income

...............................................

98,385,111

4,898,811

Realized

and

unrealized

gains

(losses):

Net

realized

gain

(loss)

from:

Investments:

Unaffiliated

issuers

.....................................................

4,488,516

(462,626)

Net

change

in

unrealized

appreciation

(depreciation)

on:

Investments:

Unaffiliated

issuers

.....................................................

180,246,844

4,487,705

Net

realized

and

unrealized

gain

(loss)

...........................................

184,735,360

4,025,079

Net

increase

(decrease)

in

net

assets

resulting

from

operations

.........................

$283,120,471

$8,923,890

Franklin

Municipal

Securities

Trust

Financial

Statements

Statements

of

Changes

in

Net

Assets

franklintempleton.com

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Annual

Report

51

Franklin

California

High

Yield

Municipal

Fund

Franklin

Tennessee

Municipal

Bond

Fund

Year

Ended

May

31,

2021

Year

Ended

May

31,

2020

Year

Ended

May

31,

2021

Year

Ended

May

31,

2020

Increase

(decrease)

in

net

assets:

Operations:

Net

investment

income

............

$98,385,111

$97,900,505

$4,898,811

$6,003,370

Net

realized

gain

(loss)

............

4,488,516

(41,775,849)

(462,626)

465,088

Net

change

in

unrealized

appreciation

(depreciation)

.................

180,246,844

(59,782,094)

4,487,705

(704,713)

Net

increase

(decrease)

in

net

assets

resulting

from

operations

.

283,120,471

(3,657,438)

8,923,890

5,763,745

Distributions

to

shareholders:

Class

A

........................

(16,106,026)

(12,490,587)

(239,690)

(183,564)

Class

A1

.......................

(40,737,185)

(44,347,479)

(3,932,316)

(4,998,244)

Class

C

........................

(6,218,059)

(7,340,097)

—

—

Class

R6

.......................

(1,074,605)

(889,558)

(84,429)

(92,627)

Advisor

Class

...................

(33,172,717)

(32,207,561)

(668,374)

(698,518)

Total

distributions

to

shareholders

.....

(97,308,592)

(97,275,282)

(4,924,809)

(5,972,953)

Capital

share

transactions:

(Note

2

)

Class

A

........................

162,703,393

201,861,524

3,212,937

3,392,035

Class

A1

.......................

(106,323,113)

(65,993,268)

(13,740,269)

(25,773,020)

Class

C

........................

(44,827,945)

(10,484,112)

—

—

Class

R6

.......................

16,640,109

6,463,302

929,196

(441,753)

Advisor

Class

...................

150,016,195

47,001,789

1,410,323

1,451,989

Total

capital

share

transactions

.......

178,208,639

178,849,235

(8,187,813)

(21,370,749)

Net

increase

(decrease)

in

net

assets

.....................

364,020,518

77,916,515

(4,188,732)

(21,579,957)

Net

assets:

Beginning

of

year

..................

2,891,793,011

2,813,876,496

200,444,172

222,024,129

End

of

year

......................

$3,255,813,529

$2,891,793,011

$196,255,440

$200,444,172

Franklin

Municipal

Securities

Trust

Notes

to

Financial

Statements

52

franklintempleton.com

Annual

Report

1.

Organization

and

Significant

Accounting

Policies

Franklin

Municipal

Securities

Trust (Trust)

is

registered

under

the

Investment

Company

Act

of

1940

(1940

Act)

as

an

open-

end

management

investment

company,

consisting

of

two

separate

funds

and

applies

the

specialized

accounting

and

reporting

guidance

in

U.S.

Generally

Accepted

Accounting

Principles

(U.S.

GAAP).

The

classes

of

shares

offered

within

each

of

the

Funds

are

indicated

below.

Class

C

shares

automatically

convert

to

Class

A

shares

after

they

have

been

held

for

10

years.

Each

class

of

shares

may

differ

by

its initial

sales

load,

contingent

deferred

sales

charges,

voting

rights

on

matters

affecting

a

single

class,

its

exchange

privilege

and

fees

due

to

differing

arrangements

for

distribution

and

transfer

agent

fees.

Class

A,

Class

A1,

Class

R6

&

Advisor

Class

Franklin

Tennessee

Municipal

Bond

Fund

Class

A,

Class

A1,

Class

C,

Class

R6

&

Advisor

Class

Franklin

California

High

Yield

Municipal

Fund

The

following

summarizes

the Funds'

significant

accounting

policies. 

a.

Financial

Instrument

Valuation 

The Funds'

investments

in

financial

instruments

are

carried

at

fair

value

daily.

Fair

value

is

the

price

that

would

be

received

to

sell

an

asset

or

paid

to

transfer

a

liability

in

an

orderly

transaction

between

market

participants

on

the

measurement

date.

The Funds calculate the

net

asset

value

(NAV)

per

share

each

business

day

as

of

4

p.m.

Eastern

time

or

the

regularly

scheduled

close

of

the

New

York

Stock

Exchange

(NYSE),

whichever

is

earlier.

Under

compliance

policies

and

procedures

approved

by

the

Trust's

Board

of

Trustees

(the

Board),

the

Funds' administrator

has

responsibility

for

oversight

of

valuation,

including

leading

the

cross-functional

Valuation

Committee

(VC).

The

Funds

may

utilize

independent

pricing

services,

quotations

from

securities

and

financial

instrument

dealers,

and

other

market

sources

to

determine

fair

value. 

Debt

securities

generally

trade

in

the

over-the-counter

market

rather

than

on

a

securities

exchange.

The

Funds'

pricing

services

use

multiple

valuation

techniques

to

determine

fair

value.

In

instances

where

sufficient

market

activity

exists,

the

pricing

services

may

utilize

a

market-

based

approach

through

which

quotes

from

market

makers

are

used

to

determine

fair

value.

In

instances

where

sufficient

market

activity

may

not

exist

or

is

limited,

the

pricing

services

also

utilize

proprietary

valuation

models

which

may

consider

market

characteristics

such

as

benchmark

yield

curves,

credit

spreads,

estimated

default

rates,

anticipated

market

interest

rate

volatility,

coupon

rates,

anticipated

timing

of

principal

repayments,

underlying

collateral,

and

other

unique

security

features

in

order

to

estimate

the

relevant

cash

flows,

which

are

then

discounted

to

calculate

the

fair

value.

The

Funds

have

procedures

to

determine

the

fair

value

of

financial

instruments

for

which

market

prices

are

not

reliable

or

readily

available.

Under

these

procedures,

the

Funds

primarily

employ

a

market-based

approach

which

may

use

related

or

comparable

assets

or

liabilities,

recent

transactions,

market

multiples,

book

values,

and

other

relevant

information

for

the

investment

to

determine

the

fair

value

of

the

investment.

An

income-based

valuation

approach

may

also

be

used

in

which

the

anticipated

future

cash

flows

of

the

investment

are

discounted

to

calculate

fair

value.

Discounts

may

also

be

applied

due

to

the

nature

or

duration

of

any

restrictions

on

the

disposition

of

the

investments.

Due

to

the

inherent

uncertainty

of

valuations

of

such

investments,

the

fair

values

may

differ

significantly

from

the

values

that

would

have

been

used

had

an

active

market

existed.

b.

Securities

Purchased

on

a

When-Issued

or

Delayed

Delivery

Basis

Certain

or

all

Funds

purchase

securities

on

a

when-issued

or

delayed

delivery

basis,

with

payment

and

delivery

scheduled

for

a

future

date.

These

transactions

are

subject

to

market

fluctuations

and

are

subject

to

the

risk

that

the

value

at

delivery

may

be

more

or

less

than

the

trade

date

purchase

price.

Although

the

Funds

will

generally

purchase

these

securities

with

the

intention

of

holding

the

securities,

they

may

sell

the

securities

before

the

settlement

date.

c.

Income

Taxes

It

is each

Fund's

policy

to

qualify

as

a

regulated

investment

company

under

the

Internal

Revenue

Code. Each

Fund

intends

to

distribute

to

shareholders

substantially

all

of

its

income

and

net

realized

gains

to

relieve

it

from

federal

income

and

excise

taxes.

As

a

result,

no

provision

for

U.S.

federal

income

taxes

is

required.

Franklin

Municipal

Securities

Trust

Notes

to

Financial

Statements

53

franklintempleton.com

Annual

Report

Each

Fund

may

recognize

an

income

tax

liability

related

to

its

uncertain

tax

positions

under

U.S.

GAAP

when

the

uncertain

tax

position

has

a

less

than

50%

probability

that

it

will

be

sustained

upon

examination

by

the

tax

authorities

based

on

its

technical

merits.

As

of

May

31,

2021, each

Fund

has

determined

that

no

tax

liability

is

required

in

its

financial

statements

related

to

uncertain

tax

positions

for

any

open

tax

years

(or

expected

to

be

taken

in

future

tax

years).

Open

tax

years

are

those

that

remain

subject

to

examination

and

are

based

on

the

statute

of

limitations

in

each

jurisdiction

in

which

the

Fund

invests. 

d.

Security

Transactions,

Investment

Income,

Expenses

and

Distributions

Security

transactions

are

accounted

for

on

trade

date.

Realized

gains

and

losses

on

security

transactions

are

determined

on

a

specific

identification

basis.

Interest

income

and

estimated

expenses

are

accrued

daily.

Amortization

of

premium

and

accretion

of

discount

on

debt

securities

are

included

in

interest

income.

Dividends

from

net

investment

income

are

normally

declared

daily;

these

dividends

may

be

reinvested

or

paid

monthly

to

shareholders.

Distributions

from

realized

capital

gains

and

other

distributions,

if

any,

are

recorded

on

the

ex-dividend

date.

Distributable

earnings

are

determined

according

to

income

tax

regulations

(tax

basis)

and

may

differ

from

earnings

recorded

in

accordance

with

U.S.

GAAP.

These

differences

may

be

permanent

or

temporary.

Permanent

differences

are

reclassified

among

capital

accounts

to

reflect

their

tax

character.

These

reclassifications

have

no

impact

on

net

assets

or

the

results

of

operations.

Temporary

differences

are

not

reclassified,

as

they

may

reverse

in

subsequent

periods.

Common

expenses

incurred

by

the

Trust

are

allocated

among

the

Funds

based

on

the

ratio

of

net

assets

of

each

Fund

to

the

combined

net

assets

of

the

Trust

or

based

on

the

ratio

of

number

of

shareholders

of

each

Fund

to

the

combined

number

of

shareholders

of

the

Trust.

Fund

specific

expenses

are

charged

directly

to

the

Fund

that

incurred

the

expense.

Realized

and

unrealized

gains

and

losses

and

net

investment

income,

excluding

class

specific

expenses,

are

allocated

daily

to

each

class

of

shares

based

upon

the

relative

proportion

of

net

assets

of

each

class.

Differences

in

per

share

distributions

by

class

are

generally

due

to

differences

in

class

specific

expenses.

e.

Insurance

The

scheduled

payments

of

interest

and

principal

for

each

insured

municipal

security

in

the

Trust

are

insured

by

either

a

new

issue

insurance

policy

or

a

secondary

insurance

policy.

Some

municipal

securities

in

the

Funds

are

secured

by

collateral

guaranteed

by

an

agency

of

the

U.S.

government.

Depending

on

the

type

of

coverage,

premiums

for

insurance

are

either

added

to

the

cost

basis

of

the

security

or

paid

by

a

third

party.

Insurance

companies

typically

insure

municipal

bonds

that

tend

to

be

of

very

high

quality,

with

the

majority

of

underlying

municipal

bonds

rated

A

or

better.

However,

an

event

involving

an

insurer

could

have

an

adverse

effect

on

the

value

of

the

securities

insured

by

that

insurance

company.

There

can

be

no

assurance

the

insurer

will

be

able

to

fulfill

its

obligations

under

the

terms

of

the

policy.

f.

Accounting

Estimates

The

preparation

of

financial

statements

in

accordance

with

U.S.

GAAP

requires

management

to

make

estimates

and

assumptions

that

affect

the

reported

amounts

of

assets

and

liabilities

at

the

date

of

the

financial

statements

and

the

amounts

of

income

and

expenses

during

the

reporting

period.

Actual

results

could

differ

from

those

estimates.

g.

Guarantees

and

Indemnifications

Under

the

Trust's

organizational

documents,

its

officers

and

trustees

are

indemnified

by

the

Trust

against

certain

liabilities

arising

out

of

the

performance

of

their

duties

to

the

Trust.

Additionally,

in

the

normal

course

of

business,

the

Trust,

on

behalf

of

the

Funds,

enters

into

contracts

with

service

providers

that

contain

general

indemnification

clauses.

The

Trust's

maximum

exposure

under

these

arrangements

is

unknown

as

this

would

involve

future

claims

that

may

be

made

against

the

Trust

that

have

not

yet

occurred.

Currently,

the

Trust

expects

the

risk

of

loss

to

be

remote.

1.

Organization

and

Significant

Accounting

Policies

(continued)

c.

Income

Taxes

(continued)

Franklin

Municipal

Securities

Trust

Notes

to

Financial

Statements

54

franklintempleton.com

Annual

Report

2.

Shares

of

Beneficial

Interest

At

May

31,

2021,

there

were

an

unlimited

number

of

shares

authorized

(without

par

value).

Transactions

in

the

Funds'

shares

were

as

follows:

Franklin

California

High

Yield

Municipal

Fund

Franklin

Tennessee

Municipal

Bond

Fund

Shares

Amount

Shares

Amount

Class

A

Class

A

Shares:

Year

ended

May

31,

2021

Shares

sold

a

...................................

21,760,785

$244,893,970

431,459

$4,777,435

Shares

issued

in

reinvestment

of

distributions

..........

1,202,763

13,544,506

19,646

217,848

Shares

redeemed

...............................

(8,507,539)

(95,735,083)

(160,653)

(1,782,346)

Net

increase

(decrease)

..........................

14,456,009

$162,703,393

290,452

$3,212,937

Year

ended

May

31,

2020

Shares

sold

a

...................................

31,096,565

$347,089,109

422,392

$4,640,650

Shares

issued

in

reinvestment

of

distributions

..........

1,004,920

11,168,678

15,918

175,312

Shares

redeemed

...............................

(14,706,484)

(156,396,263)

(129,472)

(1,423,927)

Net

increase

(decrease)

..........................

17,395,001

$201,861,524

308,838

$3,392,035

Class

A1

Class

A1

Shares:

Year

ended

May

31,

2021

Shares

sold

...................................

9,548,284

$107,177,683

210,377

$2,328,311

Shares

issued

in

reinvestment

of

distributions

..........

3,056,285

34,312,254

329,893

3,654,571

Shares

redeemed

...............................

(22,083,505)

(247,813,050)

(1,782,465)

(19,723,151)

Net

increase

(decrease)

..........................

(9,478,936)

$(106,323,113)

(1,242,195)

$(13,740,269)

Year

ended

May

31,

2020

Shares

sold

...................................

9,480,324

$104,735,142

519,815

$5,705,758

Shares

issued

in

reinvestment

of

distributions

..........

3,389,451

37,671,175

425,353

4,681,959

Shares

redeemed

...............................

(19,138,207)

(208,399,585)

(3,296,729)

(36,160,737)

Net

increase

(decrease)

..........................

(6,268,432)

$(65,993,268)

(2,351,561)

$(25,773,020)

Class

C

Class

C

Shares:

Year

ended

May

31,

2021

Shares

sold

...................................

2,578,272

$29,197,094

—

$—

Shares

issued

in

reinvestment

of

distributions

..........

496,008

5,610,813

—

—

Shares

redeemed

a

..............................

(7,055,461)

(79,635,852)

—

—

Net

increase

(decrease)

..........................

(3,981,181)

$(44,827,945)

—

$—

Year

ended

May

31,

2020

Shares

sold

...................................

5,632,486

$63,514,850

—

$—

Shares

issued

in

reinvestment

of

distributions

..........

550,824

6,167,625

—

—

Shares

redeemed

a

..............................

(7,232,118)

(80,166,587)

—

—

Net

increase

(decrease)

..........................

(1,048,808)

$(10,484,112)

—

$—

Class

R6

Franklin

Municipal

Securities

Trust

Notes

to

Financial

Statements

55

franklintempleton.com

Annual

Report

3.

Transactions

with

Affiliates

Franklin

Resources,

Inc.

is

the

holding

company

for

various

subsidiaries

that

together

are

referred

to

as

Franklin

Templeton.

Certain

officers

and

trustees

of

the

Trust

are

also

officers

and/or

directors

of

the

following

subsidiaries:

Franklin

California

High

Yield

Municipal

Fund

Franklin

Tennessee

Municipal

Bond

Fund

Shares

Amount

Shares

Amount

Class

R6

Shares:

Year

ended

May

31,

2021

Shares

sold

...................................

2,372,612

$26,871,853

122,413

$1,354,354

Shares

issued

in

reinvestment

of

distributions

..........

81,476

918,581

7,357

81,545

Shares

redeemed

...............................

(996,498)

(11,150,325)

(45,753)

(506,703)

Net

increase

(decrease)

..........................

1,457,590

$16,640,109

84,017

$929,196

Year

ended

May

31,

2020

Shares

sold

...................................

1,431,024

$16,034,824

68,971

$755,785

Shares

issued

in

reinvestment

of

distributions

..........

67,313

749,737

8,414

92,627

Shares

redeemed

...............................

(935,907)

(10,321,259)

(118,152)

(1,290,165)

Net

increase

(decrease)

..........................

562,430

$6,463,302

(40,767)

$(441,753)

Advisor

Class

Advisor

Class

Shares:

Year

ended

May

31,

2021

Shares

sold

...................................

31,248,775

$352,380,497

593,588

$6,578,741

Shares

issued

in

reinvestment

of

distributions

..........

2,232,963

25,149,727

54,367

602,777

Shares

redeemed

...............................

(20,224,098)

(227,514,029)

(520,409)

(5,771,195)

Net

increase

(decrease)

..........................

13,257,640

$150,016,195

127,546

$1,410,323

Year

ended

May

31,

2020

Shares

sold

...................................

29,033,470

$323,384,128

495,722

$5,462,282

Shares

issued

in

reinvestment

of

distributions

..........

2,198,640

24,498,557

56,097

617,946

Shares

redeemed

...............................

(27,789,030)

(300,880,896)

(420,104)

(4,628,239)

Net

increase

(decrease)

..........................

3,443,080

$47,001,789

131,715

$1,451,989

a

May

include

a

portion

of

Class

C

shares

that

were

automatically

converted

to

Class

A.

Subsidiary

Affiliation

Franklin

Advisers,

Inc.

(Advisers)

Investment

manager

Franklin

Templeton

Services,

LLC

(FT

Services)

Administrative

manager

Franklin

Templeton

Distributors,

Inc.

(Distributors)

Principal

underwriter

Franklin

Templeton

Investor

Services,

LLC

(Investor

Services)

Transfer

agent

2.

Shares

of

Beneficial

Interest

(continued)

Franklin

Municipal

Securities

Trust

Notes

to

Financial

Statements

56

franklintempleton.com

Annual

Report

a.

Management

Fees

The

Funds

pay

an

investment

management

fee

to

Advisers

based

on

the

average

daily

net

assets

of

each

of

the

Funds

as

follows:

For

the

year

ended

May

31,

2021,

each

Fund’s

gross

effective

investment

management

fee

rate

based

on

average

daily

net

assets

was

as

follows:

b.

Administrative

Fees

Under

an

agreement

with

Advisers,

FT

Services

provides

administrative

services

to

the

Funds.

The

fee

is

paid

by

Advisers

based

on

each

of

the

Funds'

average

daily

net

assets,

and

is

not

an

additional

expense

of

the

Funds.

c.

Distribution

Fees

The

Board

has

adopted

distribution

plans

for

each

share

class,

with

the

exception

of

Class

R6

and

Advisor

Class

shares,

pursuant

to

Rule

12b-1

under

the

1940

Act.

Under

the

Funds’

Class

A

and

A1

reimbursement

distribution

plans,

the

Funds

reimburse

Distributors

for

costs

incurred

in

connection

with

the

servicing,

sale

and

distribution

of each

Fund's

shares

up

to

the

maximum

annual

plan

rate.

Under

the

Class

A

and

A1

reimbursement

distribution

plans,

costs

exceeding

the

maximum

for

the

current

plan

year

cannot

be

reimbursed

in

subsequent

periods.

In

addition,

under

the

Funds’

Class

C

compensation

distribution

plans,

Franklin

California

High

Yield

Municipal

Fund

pays

Distributors

for

costs

incurred

in

connection

with

the

servicing,

sale

and

distribution

of

each

Fund's

shares

up

to

the

maximum

annual

plan

rate.

The

plan

year,

for

purposes

of

monitoring

compliance

with

the

maximum

annual

plan

rates,

is

February

1

through

January

31

for

each

Fund.

 The

maximum

annual

plan

rates,

based

on

the

average

daily

net

assets,

for

each

class,

are

as

follows:

Annualized

Fee

Rate

Net

Assets

0.625%

Up

to

and

including

$100

million

0.500%

Over

$100

million,

up

to

and

including

$250

million

0.450%

Over

$250

million,

up

to

and

including

$7.5

billion

0.440%

Over

$7.5

billion,

up

to

and

including

$10

billion

0.430%

Over

$10

billion,

up

to

and

including

$12.5

billion

0.420%

Over

$12.5

billion,

up

to

and

including

$15

billion

0.400%

Over

$15

billion,

up

to

and

including

$17.5

billion

0.380%

Over

$17.5

billion,

up

to

and

including

$20

billion

0.360%

In

excess

of

$20

billion

Franklin

California

High

Yield

Municipal

Fund

Franklin

Tennessee

Municipal

Bond

Fund

Gross

effective

investment

management

fee

rate

........

0.458%

0.563%

3.

Transactions

with

Affiliates

(continued)

Franklin

Municipal

Securities

Trust

Notes

to

Financial

Statements

57

franklintempleton.com

Annual

Report

Distributors

has

agreed

to

limit

the

current

rate

to

0.10%

per

year

for

Class

A1.

d.

Sales

Charges/Underwriting

Agreements

Front-end

sales

charges

and

contingent

deferred

sales

charges

(CDSC)

do

not

represent

expenses

of

the

Funds.

These

charges

are

deducted

from

the

proceeds

of

sales

of

fund

shares

prior

to

investment

or

from

redemption

proceeds

prior

to

remittance,

as

applicable.

Distributors

has

advised

the

Funds

of

the

following

commission

transactions

related

to

the

sales

and

redemptions

of

the

Funds'

shares

for

the

year:

e.

Transfer

Agent

Fees

Each

class

of

shares

pays

transfer

agent

fees

to

Investor

Services

for

its

performance

of

shareholder

servicing

obligations.

The

fees

are

based

on

an

annualized

asset

based

fee

of

0.02%

plus

a

transaction

based

fee.

In

addition,

each

class

reimburses

Investor

Services

for

out

of

pocket

expenses

incurred

and,

except

for

Class

R6,

reimburses

shareholder

servicing

fees

paid

to

third

parties.

These

fees

are

allocated

daily

based

upon

their

relative

proportion

of

such

classes'

aggregate

net

assets.

Class

R6

pays

Investor

Services

transfer

agent

fees

specific

to

that

class.

For

the

year

ended

May

31,

2021,

the

Funds

paid

transfer

agent

fees

as

noted

in

the

Statements

of

Operations

of

which

the

following

amounts

were

retained

by

Investor

Services:

Franklin

California

High

Yield

Municipal

Fund

Franklin

Tennessee

Municipal

Bond

Fund

Reimbursement

Plans:

Class

A

...............................

0.25%

0.25%

Class

A1

..............................

0.15%

0.15%

Compensation

Plans:

Class

C

...............................

0.65%

—%

Franklin

California

High

Yield

Municipal

Fund

Franklin

Tennessee

Municipal

Bond

Fund

Sales

charges

retained

net

of

commissions

paid

to

unaffiliated

brokers/dealers

..................

$36,037

$4,048

CDSC

retained

...........................

$145,736

$25

Franklin

California

High

Yield

Municipal

Fund

Franklin

Tennessee

Municipal

Bond

Fund

Transfer

agent

fees

........................

$793,201

$53,701

3.

Transactions

with

Affiliates

(continued)

c.

Distribution

Fees

(continued)

Franklin

Municipal

Securities

Trust

Notes

to

Financial

Statements

58

franklintempleton.com

Annual

Report

f.

Waiver

and

Expense

Reimbursements

Investor

Services

has

contractually

agreed

in

advance

to

waive

or

limit

its

fees

so

that

the

Class

R6

transfer

agent

fees

do

not

exceed

0.03%

based

on

the

average

net

assets

of

the

class

until

September

30,

2021.

Investor

Services

may

discontinue

this

waiver

in

the

future.

g.

Interfund

Transactions

Certain

or

all

Funds

engaged

in

purchases

and

sales

of

investments

with

funds

or

other

accounts

that

have

common

investment

managers

(or

affiliated

investment

managers),

directors,

trustees

or

officers.

These

purchases

and

sales

for

the

year

ended

May

31,

2021,

were

as

follows:

4.

Expense

Offset

Arrangement

The

Funds

have entered

into

an

arrangement

with

their

custodian

whereby

credits

realized

as

a

result

of

uninvested

cash

balances

are

used

to

reduce

a

portion

of

the

Funds'

custodian

expenses.

During

the

year

ended

May

31,

2021,

the

custodian

fees

were

reduced

as

noted

in

the

Statements

of

Operations.

5.

Income

Taxes

For

tax

purposes,

capital

losses

may

be

carried

over

to

offset

future

capital

gains. 

At

May

31,

2021,

the

capital

loss

carryforwards

were

as

follows:

During

the

year

ended

May

31,

2021,

the

Franklin

California

High

Yield

Municipal

Fund

utilized

$4,817,006

of

capital

loss

carryforwards.

The

tax

character

of

distributions

paid

during

the

years

ended

May

31,

2021

and

2020,

was

as

follows:

Franklin

California

High

Yield

Municipal

Fund

Franklin

Tennessee

Municipal

Bond

Fund

Purchases

..............................

$155,920,000

$25,500,000

Sales

..................................

$155,675,000

$9,400,000

Franklin

California

High

Yield

Municipal

Fund

Franklin

Tennessee

Municipal

Bond

Fund

1

1

1

Capital

loss

carryforwards

not

subject

to

expiration:

Short

term

.............................

$

86,832,162

$

4,902,119

Long

term

.............................

19,114,020

10,774,275

Total

capital

loss

carryforwards

............

$105,946,182

$15,676,394

Franklin

California

High

Yield

Municipal

Fund

Franklin

Tennessee

Municipal

Bond

Fund

2021

2020

2021

2020

Distributions

paid

from:

Tax

exempt

income

......................

$97,308,592

$97,275,282

$4,924,809

$5,972,953

3.

Transactions

with

Affiliates

(continued)

Franklin

Municipal

Securities

Trust

Notes

to

Financial

Statements

59

franklintempleton.com

Annual

Report

At

May

31,

2021,

the

cost

of

investments,

net

unrealized

appreciation

(depreciation),

undistributed

tax

exempt

income

for

income

tax

purposes

were

as

follows:

Differences

between

income

and/or

capital

gains

as

determined

on

a

book

basis

and

a

tax

basis

are

primarily

due

to

differing

treatments

of

defaulted

securities,

bond

discounts

and

premiums

and

wash

sales

.

6.

Investment

Transactions

Purchases

and

sales

of

investments

(excluding

short

term

securities)

for

the

year

ended

May

31,

2021,

were

as

follows:

7.

Credit Risk

and

Defaulted

Securities

At

May

31,

2021,

Franklin

California

High

Yield

Municipal

Fund

had

33.2%

of

its

portfolio

invested

in

high

yield

securities,

senior

secured

floating

rate

loans,

or

other

securities

rated

below

investment

grade

as

determined

by

Nationally

Recognized

Statistical

Credit

Ratings

Organizations

and/or

internally,

by

investment

management

and

unrated

securities.

These

securities

may

be

more

sensitive

to

economic

conditions

causing

greater

price

volatility

and

are

potentially

subject

to

a

greater

risk

of

loss

due

to

default

than

higher

rated

securities.

Certain

or

all

Funds

held

defaulted

securities

and/or

other

securities

for

which

the

income

has

been

deemed

uncollectible.

At

May

31,

2021,

the

aggregate

value

of

these

securities

for

Franklin

California

High

Yield

Municipal

Fund

and

Franklin

Tennessee

Municipal

Bond

Fund

was

$92,876,048

and

$926,400,

representing

2.9%

and

0.5%

respectively,

of

each

Fund's

net

assets.

The

Funds

discontinue

accruing

income

on

securities

for

which

income

has

been

deemed

uncollectible

and

provide

an

estimate

for

losses

on

interest

receivable.

The

securities

have

been

identified

in

the

accompanying

Statements

of

Investments.

Franklin

California

High

Yield

Municipal

Fund

Franklin

Tennessee

Municipal

Bond

Fund

a

a

a

Cost

of

investments

.......................

$2,876,314,659

$182,681,742

Unrealized

appreciation

.....................

$419,624,382

$13,266,865

Unrealized

depreciation

.....................

(25,248,371)

(505,552)

Net

unrealized

appreciation

(depreciation)

.......

$394,376,011

$12,761,313

Distributable

earnings:

Undistributed

ordinary

income

................

$424,663

$—

Undistributed

tax

exempt

income

..............

$7,320,643

$252,607

Total

distributable

earnings

..................

$7,745,306

$252,607

Franklin

California

High

Yield

Municipal

Fund

Franklin

Tennessee

Municipal

Bond

Fund

Purchases

..............................

$559,539,226

$62,993,268

Sales

..................................

$271,464,629

$67,156,301

5.

Income

Taxes

(continued)

Franklin

Municipal

Securities

Trust

Notes

to

Financial

Statements

60

franklintempleton.com

Annual

Report

8.

Concentration

of

Risk

Certain

or

all

Funds

invest

a

large

percentage

of

their

total

assets

in

obligations

of

issuers

within

their respective

state

and

U.S.

territories.

Such

concentration

may

subject

the

Funds

to

risks

associated

with

industrial

or

regional

matters,

and

economic,

political

or

legal

developments

occurring

within

those

states

and

U.S.

territories.

Investing

in

Puerto

Rico

securities

may

expose

the

Funds

to

heightened

risks

due

to

recent

adverse

economic

and

market

changes,

credit

downgrades

and

ongoing

restructuring

discussions.

In

addition,

investments

in

these

securities

are

sensitive

to

interest

rate

changes

and

credit

risk

of

the

issuer

and

may

subject

the

Funds

to

increased

market

volatility.

The

market

for

these

investments

may

be

limited,

which

may

make

them

difficult

to

buy

or

sell.

9.

Novel

Coronavirus

Pandemic 

The

global

outbreak

of

the

novel

coronavirus

disease,

known

as

COVID-19, has

caused

adverse

effects

on

many

companies,

sectors,

nations,

regions

and

the

markets

in

general, and

may

continue for

an unpredictable duration.

The

effects

of

this

pandemic

may

materially

impact

the

value

and

performance

of

the

Funds, their ability

to

buy

and

sell

fund

investments

at

appropriate

valuations

and their ability

to

achieve their investment

objectives.

10.

Credit

Facility

The

Funds,

together

with

other

U.S.

registered

and

foreign

investment

funds

(collectively,

Borrowers),

managed

by

Franklin

Templeton,

are

borrowers

in

a

joint

syndicated

senior

unsecured

credit

facility

totaling

$2.675

billion

(Global

Credit

Facility)

which

matures

on

February

4,

2022.

This

Global

Credit

Facility

provides

a

source

of

funds

to

the

Borrowers

for

temporary

and

emergency

purposes,

including

the

ability

to

meet

future

unanticipated

or

unusually

large

redemption

requests.

 Under

the

terms

of

the

Global

Credit

Facility,

the

Funds

shall,

in

addition

to

interest

charged

on

any

borrowings

made

by

the

Funds

and

other

costs

incurred

by

the

Funds,

pay

their

share

of

fees

and

expenses

incurred

in

connection

with

the

implementation

and

maintenance

of

the

Global

Credit

Facility,

based

upon

their

relative

share

of

the

aggregate

net

assets

of

all

of

the

Borrowers,

including

an

annual

commitment

fee

of

0.15%

based

upon

the

unused

portion

of

the

Global

Credit

Facility.

These

fees

are

reflected

in

other

expenses

in

the

Statements

of

Operations.

During

the

year

ended

May

31,

2021,

the

Funds

did

not

use

the

Global

Credit

Facility.

11.

Fair

Value

Measurements

The Funds

follow

a

fair

value

hierarchy

that

distinguishes

between

market

data

obtained

from

independent

sources

(observable

inputs)

and

the Funds'

own

market

assumptions

(unobservable

inputs).

These

inputs

are

used

in

determining

the

value

of

the Funds' financial

instruments

and

are

summarized

in

the

following

fair

value

hierarchy:

Level

1

–

quoted

prices

in

active

markets

for

identical

financial

instruments

Level

2

–

other

significant

observable

inputs

(including

quoted

prices

for

similar

financial

instruments,

interest

rates,

prepayment

speed,

credit

risk,

etc.)

Level

3

–

significant

unobservable

inputs

(including

the Funds'

own

assumptions

in

determining

the

fair

value

of

financial

instruments)

The

input

levels

are

not

necessarily

an

indication

of

the

risk

or

liquidity

associated

with

financial

instruments

at

that

level.

At

May

31,

2021,

all

of

the

Funds'

investments

in

financial

instruments

carried

at

fair

value

were

valued

using

Level

2

inputs.

Franklin

Municipal

Securities

Trust

Notes

to

Financial

Statements

61

franklintempleton.com

Annual

Report

12.

New

Accounting

Pronouncements

In

March

2020,

the

Financial

Accounting

Standards

Board

(FASB)

issued

Accounting

Standards

Update

(ASU)

No.

2020-

04,

Reference

Rate

Reform

(Topic

848)

–

Facilitation

of

the

Effects

of

Reference

Rate

Reform

on

Financial

Reporting.

The

amendments

in

the

ASU

provides

optional

temporary

financial

reporting

relief

from

the

effect

of

certain

types

of

contract

modifications

due

to

the

planned

discontinuation

of

the

London

Interbank

Offered

Rate

(LIBOR)

and

other

interbank-offered

based

reference

rates

as

of

the

end

of

2021.

The

ASU

is

effective

for

certain

reference

rate-related

contract

modifications

that

occur

during

the

period

March

12,

2020

through

December

31,

2022. Management

has

reviewed

the

requirements

and

believes

the

adoption

of

this

ASU

will

not

have

a

material

impact

on

the

financial

statements.

13.

Subsequent

Events

The

Funds

have

evaluated

subsequent

events

through

the

issuance

of

the

financial

statements

and

determined

that

no

events

have

occurred

that

require

disclosure,

except

for

the

following:

On

July

14,

2021,

the

Board

approved

a

proposal

to

reorganize

Franklin

Tennessee

Municipal

Bond

Fund

with

and

into

Franklin

Federal

Tax-Free

Income

Fund,

subject

to

approval

by

the

shareholders

of

Franklin

Tennessee

Municipal

Bond

Fund.

On

July

14,

2021,

the

Board

approved

an

a

change

to

the

automatic

conversion

feature

for

Class

C

that

will

convert

shareholders’

Class

C

shares

into

Class

A

shares

after

they

have

been

held

for

8

years.

The

change

will

become

effective

August

2,

2021.

Further

details

are

disclosed

in

the

Funds'

Prospectus.

Abbreviations

Selected

Portfolio

1915

Act

Improvement

Bond

Act

of

1915

ABAG

Association

of

Bay

Area

Governments

AGMC

Assured

Guaranty

Municipal

Corp.

AMBAC

American

Municipal

Bond

Assurance

Corp.

BAM

Build

America

Mutual

Assurance

Co.

COP

Certificate

of

Participation

ETM

Escrowed

to

Maturity

FHLMC

Federal

Home

Loan

Mortgage

Corp.

FRN

Floating

Rate

Note

GNMA

Government

National

Mortgage

Association

GO

General

Obligation

LOC

Letter

of

Credit

NATL

National

Reinsurance

Corp.

SPA

Standby

Purchase

Agreement

Franklin

Municipal

Securities

Trust

Report

of

Independent

Registered

Public

Accounting

Firm

62

franklintempleton.com

Annual

Report

To

the

Board

of

Trustees

of

Franklin

Municipal

Securities

Trust

and

Shareholders

of

Franklin

California

High

Yield

Municipal

Fund

and

Franklin

Tennessee

Municipal

Bond

Fund

Opinions

on

the

Financial

Statements

We

have

audited

the

accompanying

statements

of

assets

and

liabilities,

including

the

schedules

of

investments,

of

Franklin

California

High

Yield

Municipal

Fund

and

Franklin

Tennessee

Municipal

Bond

Fund

(constituting

Franklin

Municipal

Securities

Trust,

hereafter

collectively

referred

to

as

the

"Funds")

as

of

May

31,

2021,

the

related

statements

of

operations

for

the

year

ended

May

31,

2021,

the

statements

of

changes

in

net

assets

for

each

of

the

two

years

in

the

period

ended

May

31,

2021,

including

the

related

notes,

and

the

financial

highlights

for

each

of

the

periods

indicated

therein

(collectively

referred

to

as

the

“financial

statements”).

In

our

opinion,

the

financial

statements

present

fairly,

in

all

material

respects,

the

financial

position

of

each

of

the

Funds

as

of

May

31,

2021,

the

results

of

each

of

their

operations

for

the

year

then

ended,

the

changes

in

each

of

their

net

assets

for

each

of

the

two

years

in

the

period

ended

May

31,

2021

and

each

of

the

financial

highlights

for

each

of

the

periods

indicated

therein

in

conformity

with

accounting

principles

generally

accepted

in

the

United

States

of

America.

Basis

for

Opinions

These

financial

statements

are

the

responsibility

of

the

Funds’

management.

Our

responsibility

is

to

express

an

opinion

on

the

Funds’

financial

statements

based

on

our

audits.

We

are

a

public

accounting

firm

registered

with

the

Public

Company

Accounting

Oversight

Board

(United

States)

(PCAOB)

and

are

required

to

be

independent

with

respect

to

the

Funds

in

accordance

with

the

U.S.

federal

securities

laws

and

the

applicable

rules

and

regulations

of

the

Securities

and

Exchange

Commission

and

the

PCAOB.

We

conducted

our

audits

of

these

financial

statements

in

accordance

with

the

standards

of

the

PCAOB.

Those

standards

require

that

we

plan

and

perform

the

audit

to

obtain

reasonable

assurance

about

whether

the

financial

statements

are

free

of

material

misstatement,

whether

due

to

error

or

fraud.

Our

audits

included

performing

procedures

to

assess

the

risks

of

material

misstatement

of

the

financial

statements,

whether

due

to

error

or

fraud,

and

performing

procedures

that

respond

to

those

risks.

Such

procedures

included

examining,

on

a

test

basis,

evidence

regarding

the

amounts

and

disclosures

in

the

financial

statements.

Our

audits

also

included

evaluating

the

accounting

principles

used

and

significant

estimates

made

by

management,

as

well

as

evaluating

the

overall

presentation

of

the

financial

statements.

Our

procedures

included

confirmation

of

securities

owned

as

of

May

31,

2021

by

correspondence

with

the

custodian

and

brokers;

when

replies

were

not

received

from

brokers,

we

performed

other

auditing

procedures.

We

believe

that

our

audits

provide

a

reasonable

basis

for

our

opinions.

PricewaterhouseCoopers

LLP

San

Francisco,

California

July

22,

2021

We

have

served

as

the

auditor

of

one

or

more

investment

companies

in

the

Franklin

Templeton

Group

of

Funds

since

1948.

Franklin

Municipal

Securities

Trust

Tax

Information

(unaudited)

63

franklintempleton.com

Annual

Report

Under

Section

852(b)(5)(A)

of

the

Internal

Revenue

Code,

the

Funds

hereby

report

100%

of

the

distributions

paid

from

net

investment

income

as

exempt-interest

dividends

for

the

fiscal

year

ended

May

31,

2021.

A

portion

of

the

Funds'

exempt-

interest

dividends

may

be

subject

to

the

federal

alternative

minimum

tax.

By

mid-February

2022,

shareholders

will

be

notified

of

amounts

for

use

in

preparing

their

2021

income

tax

returns.

Franklin

Municipal

Securities

Trust

Board

Members

and

Officers

64

franklintempleton.com

Annual

Report

The

name,

year

of

birth

and

address

of

the

officers

and

board

members,

as

well

as

their

affiliations,

positions

held

with

the

Trust,

principal

occupations

during

at

least

the

past

five

years

and

number

of

U.S.

registered

portfolios

overseen

in

the

Franklin

Templeton

fund

complex,

are

shown

below.

Generally,

each

board

member

serves

until

that

person’s

successor

is

elected

and

qualified.

Independent

Board

Members

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

Harris

J.

Ashton

(1932)

Trustee

Since

1991

125

Bar-S

Foods

(meat

packing

company)

(1981-2010).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

of

various

companies;

and

formerly

,

Director,

RBC

Holdings,

Inc.

(bank

holding

company)

(until

2002);

and

President,

Chief

Executive

Officer

and

Chairman

of

the

Board,

General

Host

Corporation

(nursery

and

craft

centers)

(until

1998).

Terrence

J.

Checki

(1945)

Trustee

Since

2017

107

Hess

Corporation

(exploration

of

oil

and

gas)

(2014-present).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Member

of

the

Council

on

Foreign

Relations

(1996-present);

Member

of

the

National

Committee

on

U.S.-China

Relations

(1999-present);

member

of

the

board

of

trustees

of

the

Economic

Club

of

New

York

(2013-present);

member

of

the

board

of

trustees

of

the

Foreign

Policy

Association

(2005-present);

member

of

the

board

of

directors

of

Council

of

the

Americas

(2007-present)

and

the

Tallberg

Foundation

(2018-present);

and

formerly

,

Executive

Vice

President

of

the

Federal

Reserve

Bank

of

New

York

and

Head

of

its

Emerging

Markets

and

Internal

Affairs

Group

and

Member

of

Management

Committee

(1995-2014);

and

Visiting

Fellow

at

the

Council

on

Foreign

Relations

(2014).

Mary

C.

Choksi

(1950)

Trustee

Since

2014

126

Omnicom

Group

Inc.

(advertising

and

marketing

communications

services)

(2011-present)

and

White

Mountains

Insurance

Group,

Ltd.

(holding

company)

(2017-present);

and

formerly

,

Avis

Budget

Group

Inc.

(car

rental)

(2007-2020).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

of

various

companies;

and

formerly

,

Founder

and

Senior

Advisor,

Strategic

Investment

Group

(investment

management

group)

(2015-2017);

Founding

Partner

and

Senior

Managing

Director,

Strategic

Investment

Group

(1987-2015);

Founding

Partner

and

Managing

Director,

Emerging

Markets

Management

LLC

(investment

management

firm)

(1987-2011);

and

Loan

Officer/Senior

Loan

Officer/Senior

Pension

Investment

Officer,

World

Bank

Group

(international

financial

institution)

(1977-1987).

Franklin

Municipal

Securities

Trust

65

franklintempleton.com

Annual

Report

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

Edith

E.

Holiday

(1952)

Lead

Independent

Trustee

Trustee

since

1998

and

Lead

Independent

Trustee

since

2019

126

Hess

Corporation

(exploration

of

oil

and

gas)

(1993-present),

Santander

Consumer

USA

Holdings,

Inc.

(consumer

finance)

(2016-present);

Santander

Holdings

USA

(holding

company)

(2019-present);

and

formerly

,

Canadian

National

Railway

(railroad)

(2001-April

2021),

White

Mountains

Insurance

Group,

Ltd.

(holding

company)

(2004-May

2021),

RTI

International

Metals,

Inc.

(manufacture

and

distribution

of

titanium)

(1999-2015)

and

H.J.

Heinz

Company

(processed

foods

and

allied

products)

(1994-2013).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

or

Trustee

of

various

companies

and

trusts;

and

formerly

,

Assistant

to

the

President

of

the

United

States

and

Secretary

of

the

Cabinet

(1990-1993);

General

Counsel

to

the

United

States

Treasury

Department

(1989-1990);

and

Counselor

to

the

Secretary

and

Assistant

Secretary

for

Public

Affairs

and

Public

Liaison-United

States

Treasury

Department

(1988-1989).

J.

Michael

Luttig

(1954)

Trustee

Since

2009

126

Boeing

Capital

Corporation

(aircraft

financing)

(2006-2010).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Private

investor;

and

formerly

,

Counselor

and

Senior

Advisor

to

the

Chairman,

CEO,

and

Board

of

Directors,

of

The

Boeing

Company

(aerospace

company),

and

member

of

the

Executive

Council

(May

2019-January

1,

2020);

Executive

Vice

President,

General

Counsel

and

member

of

the

Executive

Council,

The

Boeing

Company

(2006-2019);

and

Federal

Appeals

Court

Judge,

United

States

Court

of

Appeals

for

the

Fourth

Circuit

(1991-2006).

Larry

D.

Thompson

(1945)

Trustee

Since

2007

126

Graham

Holdings

Company

(education

and

media

organization)

(2011-present);

and

formerly

,

The

Southern

Company

(energy

company)

(2014-2020;

previously

2010-2012)

and

Cbeyond,

Inc.

(business

communications

provider)

(2010-2012).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

of

various

companies;

Counsel,

Finch

McCranie,

LLP

(law

firm)

(2015-present);

John

A.

Sibley

Professor

of

Corporate

and

Business

Law,

University

of

Georgia

School

of

Law

(2015-present;

previously

2011-2012);

and

formerly

,

Independent

Compliance

Monitor

and

Auditor,

Volkswagen

AG

(manufacturer

of

automobiles

and

commercial

vehicles)

(2017-2020);

Executive

Vice

President

-

Government

Affairs,

General

Counsel

and

Corporate

Secretary,

PepsiCo,

Inc.

(consumer

products)

(2012-2014);

Senior

Vice

President

-

Government

Affairs,

General

Counsel

and

Secretary,

PepsiCo,

Inc.

(2004-2011);

Senior

Fellow

of

The

Brookings

Institution

(2003-2004);

Visiting

Professor,

University

of

Georgia

School

of

Law

(2004);

and

Deputy

Attorney

General,

U.S.

Department

of

Justice

(2001-2003).

Independent

Board

Members

(continued)

Franklin

Municipal

Securities

Trust

66

franklintempleton.com

Annual

Report

Interested

Board

Members

and

Officers

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

Valerie

M.

Williams

(1956)

Trustee

Since

May

2021

107

Omnicom

Group,

Inc.

(advertising

and

marketing

communications

services)

(2016-present),

DTE

Energy

Co.

(gas

and

electric

utility)

(2018-present),

Devon

Energy

Corporation

(exploration

and

production

of

oil

and

gas)

(January

2021-present);

and

formerly

,

WPX

Energy,

Inc.

(exploration

and

production

of

oil

and

gas)

(2018-

2021).

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

of

various

companies;

and

formerly

,

Regional

Assurance

Managing

Partner,

Ernst

&

Young

LLP

(public

accounting)

(2005-2016),

various

roles

of

increasing

responsibility

at

Ernst

&

Young

(1981-2005).

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

**Gregory

E.

Johnson

(1961)

Trustee

Since

2007

137

None

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Executive

Chairman,

Chairman

of

the

Board

and

Director,

Franklin

Resources,

Inc.;

officer

and/or

director

or

trustee,

as

the

case

may

be,

of

some

of

the

other

subsidiaries

of

Franklin

Resources,

Inc.

and

of

39

of

the

investment

companies

in

Franklin

Templeton;

Vice

Chairman,

Investment

Company

Institute;

and

formerly

,

Chief

Executive

Officer

(2013-2020)

and

President

(1994-2015),

Franklin

Resources,

Inc.

**Rupert

H.

Johnson,

Jr.

(1940)

Chairman

of

the

Board

and

Trustee

Since

2013

126

None

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

(Vice

Chairman),

Franklin

Resources,

Inc.;

Director,

Franklin

Advisers,

Inc.;

and

officer

and/or

director

or

trustee,

as

the

case

may

be,

of

some

of

the

other

subsidiaries

of

Franklin

Resources,

Inc.

and

of

37

of

the

investment

companies

in

Franklin

Templeton.

Ben

Barber

(1969)

Vice

President

Since

July

2020

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Vice

President,

Franklin

Advisers,

Inc.;

Director,

Municipal

Bonds;

officer

of

seven

of

the

investment

companies

in

Franklin

Templeton;

and

formerly

,

Co-Head

of

Municipal

Bonds,

Goldman

Sachs

Asset

Management

(1999-2020).

Alison

E.

Baur

(1964)

Vice

President

Since

2012

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Deputy

General

Counsel,

Franklin

Templeton;

and

officer

of

some

of

the

other

subsidiaries

of

Franklin

Resources,

Inc.

and

of

44

of

the

investment

companies

in

Franklin

Templeton.

Independent

Board

Members

(continued)

Franklin

Municipal

Securities

Trust

67

franklintempleton.com

Annual

Report

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

Breda

M.

Beckerle

(1958)

Chief

Compliance

Officer

Since

October

2020

Not

Applicable

Not

Applicable

280

Park

Avenue

New

York,

NY

10017

Principal

Occupation

During

at

Least

the

Past

5

Years:

Chief

Compliance

Officer,

Fiduciary

Investment

Management

International,

Inc.,

Franklin

Advisers,

Inc.,

Franklin

Advisory

Services,

LLC,

Franklin

Mutual

Advisers,

LLC,

Franklin

Templeton

Institutional,

LLC;

and

officer

of

40

of

the

investment

companies

in

Franklin

Templeton.

Sonal

Desai,

Ph.D.

(1963)

President

and

Chief

Executive

Officer

–

Investment

Management

Since

2018

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Director

and

Executive

Vice

President,

Franklin

Advisers,

Inc.;

Executive

Vice

President,

Franklin

Templeton

Institutional,

LLC;

and

officer

of

17

of

the

investment

companies

in

Franklin

Templeton.

Steven

J.

Gray

(1955)

Vice

President

and

Co-Secretary

Vice

President

since

2009

and

Co-Secretary

since

2019

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Associate

General

Counsel,

Franklin

Templeton;

Vice

President,

Franklin

Templeton

Distributors,

Inc.

and

FASA,

LLC;

and

officer

of

44

of

the

investment

companies

in

Franklin

Templeton.

Matthew

T.

Hinkle

(1971)

Chief

Executive

Officer

–

Finance

and

Administration

Since

2017

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Vice

President,

Franklin

Templeton

Services,

LLC;

officer

of

44

of

the

investment

companies

in

Franklin

Templeton;

and

formerly

,

Vice

President,

Global

Tax

(2012-April

2017)

and

Treasurer/Assistant

Treasurer,

Franklin

Templeton

(2009-2017).

Robert

G.

Kubilis

(1973)

Chief

Financial

Officer,

Chief

Accounting

Officer

and

Treasurer

Since

December

2020

Not

Applicable

Not

Applicable

300

S.E.

2nd

Street

Fort

Lauderdale,

FL

33301-

1923

Principal

Occupation

During

at

Least

the

Past

5

Years:

Treasurer,

U.S.

Fund

Administration

&

Reporting

and

officer

of

39

of

the

investment

companies

in

Franklin

Templeton.

Robert

Lim

(1948)

Vice

President

–

AML

Compliance

Since

2016

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Vice

President,

Franklin

Templeton

Companies,

LLC;

Chief

Compliance

Officer,

Franklin

Templeton

Distributors,

Inc.

and

Franklin

Templeton

Investor

Services,

LLC;

and

officer

of

44

of

the

investment

companies

in

Franklin

Templeton.

Navid

J.

Tofigh

(1972)

Vice

President

Since

2015

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

Associate

General

Counsel

and

officer

of

44

of

the

investment

companies

in

Franklin

Templeton.

Interested

Board

Members

and

Officers

(continued)

Franklin

Municipal

Securities

Trust

68

franklintempleton.com

Annual

Report

*We

base

the

number

of

portfolios

on

each

separate

series

of

the

U.S.

registered

investment

companies

within

the

Franklin

Templeton

fund

complex.

These

portfolios

have

a

common

investment

manager

or

affiliated

investment

managers.

**Gregory

E.

Johnson

is

considered

to

be

an

interested

person

of

the

Fund

under

the

federal

securities

laws

due

to

his

position

as

an

officer

and

director

of

Franklin

Resources,

Inc.

(Resources),

which

is

the

parent

company

of

the

Fund’s

investment

manager

and

distributor.

Rupert

H.

Johnson,

Jr.

is

considered

to

be

an

interested

person

of

the

Fund

under

the

federal

securities

laws

due

to

his

position

as

an

officer

and

director

and

major

shareholder

of

Resources.

Note

1:

Rupert

H.

Johnson,

Jr.

is

the

uncle

of

Gregory

E.

Johnson.

Note

2:

Officer

information

is

current

as

of

the

date

of

this

report.

It

is

possible

that

after

this

date,

information

about

officers

may

change.

The

Sarbanes-Oxley

Act

of

2002

and

Rules

adopted

by

the

Securities

and

Exchange

Commission

require

the

Fund

to

disclose

whether

the

Fund’s

Audit

Committee

includes

at

least

one

member

who

is

an

audit

committee

financial

expert

within

the

meaning

of

such

Act

and

Rules.

The

Fund’s

Board

has

determined

that

there

is

at

least

one

such

financial

expert

on

the

Audit

Committee

and

has

designated

Mary

C.

Choksi

as

its

audit

committee

financial

expert.

The

Board

believes

that

Ms.

Choksi

qualifies

as

such

an

expert

in

view

of

her

extensive

business

background

and

experience.

She

served

as

a

director

of

Avis

Budget

Group,

Inc.

(2007-May

2020)

and

formerly,

Founder

and

Senior

Advisor,

Strategic

Investment

Group

(1987

to

2017).

Ms.

Choksi

has

been

a

Member

of

the

Fund’s

Audit

Committee

since

2014.

As

a

result

of

such

background

and

experience,

the

Board

believes

that

Ms.

Choksi

has

acquired

an

understanding

of

generally

accepted

accounting

principles

and

financial

statements,

the

general

application

of

such

principles

in

connection

with

the

accounting

estimates,

accruals

and

reserves,

and

analyzing

and

evaluating

financial

statements

that

present

a

breadth

and

level

of

complexity

of

accounting

issues

generally

comparable

to

those

of

the

Fund,

as

well

as

an

understanding

of

internal

controls

and

procedures

for

financial

reporting

and

an

understanding

of

audit

committee

functions.

Ms.

Choksi

is

an

independent

Board

member

as

that

term

is

defined

under

the

relevant

Securities

and

Exchange

Commission

Rules

and

Releases.

The

Statement

of

Additional

Information

(SAI)

includes

additional

information

about

the

board

members

and

is

available,

without

charge,

upon

request.

Shareholders

may

call

(800)

DIAL

BEN/342-5236

to

request

the

SAI.

Name,

Year

of

Birth

and

Address

Position

Length

of

Time

Served

Number

of

Portfolios

in

Fund

Complex

Overseen

by

Board

Member*

Other

Directorships

Held

During

at

Least

the

Past

5

Years

Craig

S.

Tyle

(1960)

Vice

President

Since

2005

Not

Applicable

Not

Applicable

One

Franklin

Parkway

San

Mateo,

CA

94403-1906

Principal

Occupation

During

at

Least

the

Past

5

Years:

General

Counsel

and

Executive

Vice

President,

Franklin

Resources,

Inc.;

and

officer

of

some

of

the

other

subsidiaries

of

Franklin

Resources,

Inc.

and

of

44

of

the

investment

companies

in

Franklin

Templeton.

Lori

A.

Weber

(1964)

Vice

President

and

Co-Secretary

Vice

President

since

2011

and

Co-Secretary

since

2019

Not

Applicable

Not

Applicable

300

S.E.

2nd

Street

Fort

Lauderdale,

FL

33301-

1923

Principal

Occupation

During

at

Least

the

Past

5

Years:

Senior

Associate

General

Counsel,

Franklin

Templeton;

Assistant

Secretary,

Franklin

Resources,

Inc.;

Vice

President

and

Secretary,

Templeton

Investment

Counsel,

LLC;

and

officer

of

44

of

the

investment

companies

in

Franklin

Templeton.

Interested

Board

Members

and

Officers

(continued)

Franklin

Municipal

Securities

Trust

Shareholder

Information

69

franklintempleton.com

Annual

Report

Board

Approval

of

Investment

Management

Agreements

FRANKLIN

MUNICIPAL

SECURITIES

TRUST

Franklin

California

High

Yield

Municipal

Fund

Franklin

Tennessee

Municipal

Bond

Fund

(each

a

Fund)

At

a

meeting

held

on

February

23,

2021

(Meeting),

the

Board

of

Trustees

(Board)

of

Franklin

Municipal

Securities

Trust

(Trust),

including

a

majority

of

the

trustees

who

are

not

“interested

persons”

as

defined

in

the

Investment

Company

Act

of

1940

(Independent

Trustees),

reviewed

and

approved

the

continuance

of

the

investment

management

agreement

between

Franklin

Advisers,

Inc.

(Manager)

and

the

Trust,

on

behalf

of

each

Fund

(each

a

Management

Agreement)

for

an

additional

one-year

period.

The

Independent

Trustees

received

advice

from

and

met

separately

with

Independent

Trustee

counsel

in

considering

whether

to

approve

the

continuation

of

each

Management

Agreement.

Although

the

Management

Agreements

for

the

Funds

were

considered

at

the

same

Board

meeting,

the

Board

considered

the

information

provided

to

it

about

the

Funds

together

and

with

respect

to

each

Fund

separately

as

the

Board

deemed

appropriate.

In

considering

the

continuation

of

each

Management

Agreement,

the

Board

reviewed

and

considered

information

provided

by

the

Manager

at

the

Meeting

and

throughout

the

year

at

meetings

of

the

Board

and

its

committees.

The

Board

also

reviewed

and

considered

information

provided

in

response

to

a

detailed

set

of

requests

for

information

submitted

to

the

Manager

by

Independent

Trustee

counsel

on

behalf

of

the

Independent

Trustees

in

connection

with

the

annual

contract

renewal

process.

In

addition,

prior

to

the

Meeting,

the

Independent

Trustees

held

a

telephonic

contract

renewal

meeting

at

which

the

Independent

Trustees

conferred

amongst

themselves

and

Independent

Trustee

counsel

about

contract

renewal

matters

and,

in

some

cases,

requested

additional

information

from

the

Manager

relating

to

the

contract.

The

Board

reviewed

and

considered

all

of

the

factors

it

deemed

relevant

in

approving

the

continuance

of

each

Management

Agreement,

including,

but

not

limited

to:

(i)

the

nature,

extent

and

quality

of

the

services

provided

by

the

Manager;

(ii)

the

investment

performance

of

each

Fund;

(iii)

the

costs

of

the

services

provided

and

profits

realized

by

the

Manager

and

its

affiliates

from

the

relationship

with

each

Fund;

(iv)

the

extent

to

which

economies

of

scale

are

realized

as

each

Fund

grows;

and

(v)

whether

fee

levels

reflect

these

economies

of

scale

for

the

benefit

of

Fund

investors.

In

approving

the

continuance

of

each

Management

Agreement,

the

Board,

including

a

majority

of

the

Independent

Trustees,

determined

that

the

terms

of

the

Management

Agreement

are

fair

and

reasonable

and

that

the

continuance

of

such

Management

Agreement

is

in

the

best

interests

of

the

applicable

Fund

and

its

shareholders.

While

attention

was

given

to

all

information

furnished,

the

following

discusses

some

primary

factors

relevant

to

the

Board’s

determination.

Nature,

Extent

and

Quality

of

Services

The

Board

reviewed

and

considered

information

regarding

the

nature,

extent

and

quality

of

investment

management

services

provided

by

the

Manager

and

its

affiliates

to

the

Funds

and

their

shareholders.

This

information

included,

among

other

things,

the

qualifications,

background

and

experience

of

the

senior

management

and

investment

personnel

of

the

Manager,

as

well

as

information

on

succession

planning

where

appropriate;

the

structure

of

investment

personnel

compensation;

oversight

of

third-

party

service

providers;

investment

performance

reports

and

related

financial

information

for

each

Fund;

reports

on

expenses

and

shareholder

services;

legal

and

compliance

matters;

risk

controls;

pricing

and

other

services

provided

by

the

Manager

and

its

affiliates;

and

management

fees

charged

by

the

Manager

and

its

affiliates

to

US

funds

and

other

accounts,

including

management’s

explanation

of

differences

among

accounts

where

relevant.

The

Board

also

reviewed

and

considered

an

annual

report

on

payments

made

by

Franklin

Templeton

(FT)

or

the

Funds

to

financial

intermediaries,

as

well

as

a

memorandum

relating

to

third-

party

servicing

arrangements,

which

included

discussion

of

the

changing

distribution

landscape

for

the

Funds.

The

Board

noted

management’s

continuing

efforts

and

expenditures

in

establishing

effective

business

continuity

plans

and

developing

strategies

to

address

areas

of

heightened

concern

in

the

mutual

fund

industry,

such

as

cybersecurity

in

the

current

work-from-home

environment

and

liquidity

risk

management.

The

Board

also

reviewed

and

considered

the

benefits

provided

to

Fund

shareholders

of

investing

in

a

fund

that

is

part

of

the

FT

family

of

funds.

The

Board

noted

the

financial

position

of

Franklin

Resources,

Inc.

(FRI),

the

Manager’s

parent,

and

its

commitment

to

the

mutual

fund

Franklin

Municipal

Securities

Trust

Shareholder

Information

70

franklintempleton.com

Annual

Report

business

as

evidenced

by

its

reassessment

of

the

fund

offerings

in

response

to

the

market

environment

and

project

initiatives

and

capital

investments

relating

to

the

services

provided

to

the

Funds

by

the

FT

organization.

The

Board

specifically

noted

FT’s

commitment

to

enhancing

services

and

controlling

costs,

as

reflected

in

its

outsourcing

of

certain

administrative

functions,

and

growth

opportunities,

as

evidenced

by

its

recent

acquisition

of

the

Legg

Mason

companies.

The

Board

also

noted

FT’s

attention

focused

on

expanding

the

distribution

opportunities

for

all

funds

in

the

FT

family

of

funds.

Following

consideration

of

such

information,

the

Board

was

satisfied

with

the

nature,

extent

and

quality

of

services

provided

by

the

Manager

and

its

affiliates

to

the

Funds

and

their

shareholders.

Fund

Performance

The

Board

reviewed

and

considered

the

performance

results

of

each

Fund

over

various

time

periods

ended

November

30,

2020.

The

Board

considered

the

performance

returns

for

each

Fund

in

comparison

to

the

performance

returns

of

mutual

funds

deemed

comparable

to

the

Fund

included

in

a

universe

(Performance

Universe)

selected

by

Broadridge

Financial

Solutions,

Inc.

(Broadridge),

an

independent

provider

of

investment

company

data.

The

Board

received

a

description

of

the

methodology

used

by

Broadridge

to

select

the

mutual

funds

included

in

a

Performance

Universe.

The

Board

also

reviewed

and

considered

Fund

performance

reports

provided

and

discussions

that

occurred

with

portfolio

managers

at

Board

meetings

throughout

the

year.

A

summary

of

each

Fund’s

performance

results

is

below.

Franklin

California

High

Yield

Municipal

Fund

-

The

Performance

Universe

for

the

Fund

included

the

Fund

and

all

retail

and

institutional

California

municipal

debt

funds.

The

Board

noted

that

the

Fund’s

annualized

income

return

for

the

one-,

three-,

five-

and

10-year

periods

was

above

the

median

and

in

the

first

quintile

(best)

of

its

Performance

Universe.

The

Board

also

noted

that

the

Fund’s

annualized

total

return

for

the

one-year

period

was

0.10%

below

the

median

of

its

Performance

Universe,

but

for

the

three-,

five-

and

10-year

periods

was

above

the

median

of

its

Performance

Universe.

The

Board

considered

that

the

income-oriented

investment

objective

of

the

Fund

is

the

primary

focus

for

the

Fund’s

portfolio

management

team

and

that

the

evaluation

of

the

Fund’s

performance

relative

to

the

Fund’s

peers

on

an

annualized

income

return

basis

is

consistent

with

investor

expectations

and

the

Fund’s

investment

goals.

Given

the

Fund’s

income-oriented

investment

objective,

the

Board

concluded

that

the

Fund’s

performance

was

satisfactory.

Franklin

Tennessee

Municipal

Bond

Fund

-

The

Performance

Universe

for

the

Fund

included

the

Fund

and

all

retail

and

institutional

“other

states”

municipal

debt

funds.

The

Board

noted

that

the

Fund’s

annualized

income

return

for

the

one-,

three-,

five-

and

10-year

periods

was

above

the

median

of

its

Performance

Universe.

The

Board

also

noted

that

the

Fund’s

annualized

total

return

for

the

one-,

three-,

five-

and

10-year

periods

was

below

the

median

of

its

Performance

Universe.

The

Board

considered

that

the

income-oriented

investment

objective

of

the

Fund

is

the

primary

focus

for

the

Fund’s

portfolio

management

team

and

that

the

evaluation

of

the

Fund’s

performance

relative

to

the

Fund’s

peers

on

an

annualized

income

return

basis

is

consistent

with

investor

expectations

and

the

Fund’s

investment

goals.

Given

the

Fund’s

income-oriented

investment

objective,

the

Board

concluded

that

the

Fund’s

performance

was

satisfactory.

Comparative

Fees

and

Expenses

The

Board

reviewed

and

considered

information

regarding

each

Fund’s

actual

total

expense

ratio

and

its

various

components,

including,

as

applicable,

management

fees;

transfer

agent

expenses;

underlying

fund

expenses;

Rule

12b-1

and

non-Rule

12b-1

service

fees;

and

other

non-

management

fees.

The

Board

also

noted

the

quarterly

and

annual

reports

it

receives

on

all

marketing

support

payments

made

by

FT

to

financial

intermediaries.

The

Board

considered

the

actual

total

expense

ratio

and,

separately,

the

contractual

management

fee

rate,

without

the

effect

of

fee

waivers,

if

any

(Management

Rate)

of

each

Fund

in

comparison

to

the

median

expense

ratio

and

median

Management

Rate,

respectively,

of

other

mutual

funds

deemed

comparable

to

and

with

a

similar

expense

structure

to

the

Fund

selected

by

Broadridge

(Expense

Group).

Broadridge

fee

and

expense

data

is

based

upon

information

taken

from

each

fund’s

most

recent

annual

report,

which

reflects

historical

asset

levels

that

may

be

quite

different

from

those

currently

existing,

particularly

in

a

period

of

market

volatility.

While

recognizing

such

inherent

limitation

and

the

fact

that

expense

ratios

and

Management

Rates

generally

increase

as

assets

decline

and

decrease

as

assets

grow,

the

Board

believed

the

independent

analysis

conducted

by

Broadridge

to

be

an

appropriate

measure

of

comparative

fees

and

expenses.

The

Broadridge

Management

Rate

includes

administrative

charges,

and

the

actual

total

expense

ratio,

for

comparative

consistency,

was

shown

for

Class

A1

shares

for

the

Funds

and

for

Class

A

shares

and

Class

M

shares

for

the

other

funds

in

the

Franklin

California

High

Yield

Municipal

Fund’s

Expense

Group

and

for

Class

A

shares

for

the

other

funds

in

the

Franklin

Tennessee

Municipal

Bond

Fund’s

Expense

Group.

The

Board

received

a

description

of

the

methodology

used

by

Broadridge

to

select

the

mutual

funds

included

in

an

Expense

Group.

Franklin

Municipal

Securities

Trust

Shareholder

Information

71

franklintempleton.com

Annual

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The

Expense

Group

for

the

Franklin

California

High

Yield

Municipal

Fund

included

the

Fund

and

nine

other

California

municipal

debt

funds.

The

Expense

Group

for

the

Franklin

Tennessee

Municipal

Bond

Fund

included

the

Fund

and

nine

other

“other

states”

municipal

debt

funds.

The

Board

noted

that

the

Management

Rate

for

each

Fund

was

above

the

median

of

its

respective

Expense

Group.

The

Board

also

noted

that

the

actual

total

expense

ratio

for

each

Fund

was

below

the

median

of

its

respective

Expense

Group.

The

Board

further

noted

that

the

Management

Rate

for

the

Franklin

California

High

Yield

Municipal

Fund

was

only

2.3

basis

points

higher

than

the

median

Management

Rate

of

the

Fund’s

Expense

Group

and

the

Management

Rate

for

the

Franklin

Tennessee

Municipal

Bond

Fund

was

only

1.3

basis

points

higher

than

the

median

Management

Rate

of

the

Fund’s

Expense

Group.

The

Board

concluded

that

the

Management

Rate

charged

to

each

Fund

is

reasonable.

Profitability

The

Board

reviewed

and

considered

information

regarding

the

profits

realized

by

the

Manager

and

its

affiliates

in

connection

with

the

operation

of

each

Fund.

In

this

respect,

the

Board

considered

the

Fund

profitability

analysis

provided

by

the

Manager

that

addresses

the

overall

profitability

of

FT’s

US

fund

business,

as

well

as

its

profits

in

providing

investment

management

and

other

services

to

each

of

the

individual

funds

during

the

12-month

period

ended

September

30,

2020,

being

the

most

recent

fiscal

year-

end

for

FRI.

The

Board

noted

that

although

management

continually

makes

refinements

to

its

methodologies

used

in

calculating

profitability

in

response

to

organizational

and

product-related

changes,

the

overall

methodology

has

remained

consistent

with

that

used

in

the

Funds’

profitability

report

presentations

from

prior

years.

The

Board

further

noted

management’s

representation

that

the

profitability

analysis

excluded

the

impact

of

the

recent

acquisition

of

the

Legg

Mason

companies

and

that

management

expects

to

incorporate

the

legacy

Legg

Mason

companies

into

the

profitability

analysis

beginning

next

year.

The

Board

also

noted

that

PricewaterhouseCoopers

LLP,

auditor

to

FRI

and

certain

FT

funds,

has

been

engaged

by

the

Manager

to

periodically

review

and

assess

the

allocation

methodologies

to

be

used

solely

by

the

Funds’

Board

with

respect

to

the

profitability

analysis.

The

Board

noted

management’s

belief

that

costs

incurred

in

establishing

the

infrastructure

necessary

for

the

type

of

mutual

fund

operations

conducted

by

the

Manager

and

its

affiliates

may

not

be

fully

reflected

in

the

expenses

allocated

to

each

Fund

in

determining

its

profitability,

as

well

as

the

fact

that

the

level

of

profits,

to

a

certain

extent,

reflected

operational

cost

savings

and

efficiencies

initiated

by

management.

As

part

of

this

evaluation,

the

Board

considered

management’s

outsourcing

of

certain

operations,

which

effort

has

required

considerable

up

front

expenditures

by

the

Manager

but,

over

the

long

run

is

expected

to

result

in

greater

efficiencies.

The

Board

also

noted

management’s

expenditures

in

improving

shareholder

services

provided

to

the

Funds,

as

well

as

the

need

to

implement

systems

and

meet

additional

regulatory

and

compliance

requirements

resulting

from

recent

US

Securities

and

Exchange

Commission

and

other

regulatory

requirements.

The

Board

also

considered

the

extent

to

which

the

Manager

and

its

affiliates

might

derive

ancillary

benefits

from

fund

operations,

including

revenues

generated

from

transfer

agent

services,

potential

benefits

resulting

from

personnel

and

systems

enhancements

necessitated

by

fund

growth,

as

well

as

increased

leverage

with

service

providers

and

counterparties.

Based

upon

its

consideration

of

all

these

factors,

the

Board

concluded

that

the

level

of

profits

realized

by

the

Manager

and

its

affiliates

from

providing

services

to

each

Fund

was

not

excessive

in

view

of

the

nature,

extent

and

quality

of

services

provided

to

each

Fund.

Economies

of

Scale

The

Board

reviewed

and

considered

the

extent

to

which

the

Manager

may

realize

economies

of

scale,

if

any,

as

each

Fund

grows

larger

and

whether

each

Fund’s

management

fee

structure

reflects

any

economies

of

scale

for

the

benefit

of

shareholders.

With

respect

to

possible

economies

of

scale,

the

Board

noted

the

existence

of

management

fee

breakpoints,

which

operate

generally

to

share

any

economies

of

scale

with

a

Fund’s

shareholders

by

reducing

the

Fund’s

effective

management

fees

as

the

Fund

grows

in

size.

The

Board

considered

the

Manager’s

view

that

any

analyses

of

potential

economies

of

scale

in

managing

a

particular

fund

are

inherently

limited

in

light

of

the

joint

and

common

costs

and

investments

the

Manager

incurs

across

the

FT

family

of

funds

as

a

whole.

The

Board

noted

that

the

Franklin

Tennessee

Municipal

Bond

Fund

does

not

have

an

asset

size

that

would

likely

enable

the

Fund

to

achieve

economies

of

scale,

but

concluded

that

to

the

extent

economies

of

scale

may

be

realized

by

the

Manager

and

its

affiliates,

each

Fund’s

management

fee

structure

provided

a

sharing

of

benefits

with

the

Fund

and

its

shareholders

as

the

Fund

grows.

Conclusion

Based

on

its

review,

consideration

and

evaluation

of

all

factors

it

believed

relevant,

including

the

above-described

factors

and

conclusions,

the

Board

unanimously

approved

the

continuation

of

each

Management

Agreement

for

an

additional

one-year

period.

Franklin

Municipal

Securities

Trust

Shareholder

Information

72

franklintempleton.com

Annual

Report

Liquidity

Risk

Management

Program-

Funds

no

HLIM

Each

Fund

has

adopted

and

implemented

a

written

Liquidity

Risk

Management

Program

(the

“LRMP”)

as

required

by

Rule

22e-4

under

the

Investment

Company

Act

of

1940

(the

“Liquidity

Rule”).

The

LRMP

is

designed

to

assess

and

manage

each

Fund’s

liquidity

risk,

which

is

defined

as

the

risk

that

the

Fund

could

not

meet

requests

to

redeem

shares

issued

by

the

Fund

without

significant

dilution

of

remaining

investors’

interests

in

the

Fund.

In

accordance

with

the

Liquidity

Rule,

the

LRMP

includes

policies

and

procedures

that

provide

for:

(1)

assessment,

management,

and

review

(no

less

frequently

than

annually)

of

each

Fund’s

liquidity

risk;

(2)

classification

of

each

Fund’s

portfolio

holdings

into

one

of

four

liquidity

categories

(Highly

Liquid,

Moderately

Liquid,

Less

Liquid,

and

Illiquid);

(3)

for

Funds

that

do

not

primarily

hold

assets

that

are

Highly

Liquid,

establishing

and

maintaining

a

minimum

percentage

of

the

Fund’s

net

assets

in

Highly

Liquid

investments

(called

a

“Highly

Liquid

Investment

Minimum”

or

“HLIM”);

and

(4)

prohibiting

the

Fund’s

acquisition

of

Illiquid

investments

that

would

result

in

the

Fund

holding

more

than

15%

of

its

net

assets

in

Illiquid

assets.

The

LRMP

also

requires

reporting

to

the

Securities

and

Exchange

Commission

(“SEC”)

(on

a

non-public

basis)

and

to

the

Board

if

the

Fund’s

holdings

of

Illiquid

assets

exceed

15%

of

the

Fund’s

net

assets.

Funds

with

HLIMs

must

have

procedures

for

addressing

HLIM

shortfalls,

including

reporting

to

the

Board

and,

with

respect

to

HLIM

shortfalls

lasting

more

than

seven

consecutive

calendar

days,

reporting

to

the

SEC

(on

a

non-public

basis).

The

Director

of

Liquidity

Risk

within

the

Investment

Risk

Management

Group

(the

“IRMG”)

is

the

appointed

Administrator

of

the

LRMP.

The

IRMG

maintains

the

Investment

Liquidity

Committee

(the

“ILC”)

to

provide

oversight

and

administration

of

policies

and

procedures

governing

liquidity

risk

management

for

FT

products

and

portfolios.

The

ILC

includes

representatives

from

Franklin

Templeton’s

Risk,

Trading,

Global

Compliance,

Investment

Compliance,

Investment

Operations,

Valuation

Committee,

Product

Management

and

Global

Product

Strategy.

In

assessing

and

managing

each

Fund’s

liquidity

risk,

the

ILC

considers,

as

relevant,

a

variety

of

factors,

including

the

Fund’s

investment

strategy

and

the

liquidity

of

its

portfolio

investments

during

both

normal

and

reasonably

foreseeable

stressed

conditions;

its

short

and

long-term

cash

flow

projections;

and

its

cash

holdings

and

access

to

other

funding

sources

including

the

Funds’

interfund

lending

facility

and

line

of

credit.

Classification

of

the

Fund’s

portfolio

holdings

in

the

four

liquidity

categories

is

based

on

the

number

of

days

it

is

reasonably

expected

to

take

to

convert

the

investment

to

cash

(for

Highly

Liquid

and

Moderately

Liquid

holdings)

or

sell

or

dispose

of

the

investment

(for

Less

Liquid

and

Illiquid

investments),

in

current

market

conditions

without

significantly

changing

the

investment’s

market

value.

Each

Fund

primarily

holds

liquid

assets

that

are

defined

under

the

Liquidity

Rule

as

"Highly

Liquid

Investments,"

and

therefore

is

not

required

to

establish

an

HLIM.

Highly

Liquid

Investments

are

defined

as

cash

and

any

investment

reasonably

expected

to

be

convertible

to

cash

in

current

market

conditions

in

three

business

days

or

less

without

the

conversion

to

cash

significantly

changing

the

market

value

of

the

investment.

At

meetings

of

the

Funds’

Board

of

Trustees

held

in

May

2021,

the

Program

Administrator

provided

a

written

report

to

the

Board

addressing

the

adequacy

and

effectiveness

of

the

program

for

the

year

ended

December

31,

2020.

The

Program

Administrator

report

concluded

that

(i.)

the

LRMP,

as

adopted

and

implemented,

remains

reasonably

designed

to

assess

and

manage

each

Fund’s

liquidity

risk;

(ii.)

the

LRMP,

including

the

Highly

Liquid

Investment

Minimum

(“HLIM”)

where

applicable,

was

implemented

and

operated

effectively

to

achieve

the

goal

of

assessing

and

managing

each

Fund’s

liquidity

risk;

and

(iii.)

each

Fund

was

able

to

meet

requests

for

redemption

without

significant

dilution

of

remaining

investors’

interests

in

the

Fund.

Proxy

Voting

Policies

and

Procedures

The

Trust’s

investment

manager

has

established

Proxy

Voting

Policies

and

Procedures

(Policies)

that

the

Trust

uses

to

determine

how

to

vote

proxies

relating

to

portfolio

securities.

Shareholders

may

view

the

Trust’s

complete

Policies

online

at

franklintempleton.com.

Alternatively,

shareholders

may

request

copies

of

the

Policies

free

of

charge

by

calling

the

Proxy

Group

collect

at

(954)

527-

7678

or

by

sending

a

written

request

to:

Franklin

Templeton

Companies,

LLC,

300

S.E.

2nd

Street,

Fort

Lauderdale,

FL

33301,

Attention:

Proxy

Group.

Copies

of

the

Trust’s

proxy

voting

records

are

also

made

available

online

at

franklintempleton.com

and

posted

on

the

U.S.

Securities

and

Exchange

Commission’s

website

at

sec.gov

and

reflect

the

most

recent

12-month

period

ended

June

30.

Quarterly

Statement

of

Investments

The

Trust

files

a

complete

statement

of

investments

with

the

U.S.

Securities

and

Exchange

Commission

for

the

first

and

third

quarters

for

each

fiscal

year

as

an

exhibit

to

its

report

on

Form

N-PORT.

Shareholders

may

view

the

filed

Form

N-PORT

by

visiting

the

Commission’s

website

at

sec.

Franklin

Municipal

Securities

Trust

Shareholder

Information

73

franklintempleton.com

Annual

Report

gov.

The

filed

form

may

also

be

viewed

and

copied

at

the

Commission’s

Public

Reference

Room

in

Washington,

DC.

Information

regarding

the

operations

of

the

Public

Reference

Room

may

be

obtained

by

calling

(800)

SEC-0330.

Householding

of

Reports

and

Prospectuses

You

will

receive,

or

receive

notice

of

the

availability

of,

each

Fund’s

financial

reports

every

six

months.

In

addition,

you

will

receive

an

annual

updated

summary

prospectus

(detail

prospectus

available

upon

request).

To

reduce

Fund

expenses,

we

try

to

identify

related

shareholders

in

a

household

and

send

only

one

copy

of

the

financial

reports

(to

the

extent

received

by

mail)

and

summary

prospectus.

This

process,

called

“householding,”

will

continue

indefinitely

unless

you

instruct

us

otherwise.

If

you

prefer

not

to

have

these

documents

householded,

please

call

us

at

(800)

632-2301.

At

any

time

you

may

view

current

prospectuses/

summary

prospectuses

and

financial

reports

on

our

website.

If

you

choose,

you

may

receive

these

documents

through

electronic

delivery.

MUN

A

07/21

©

2021

Franklin

Templeton

Investments.

All

rights

reserved.

Authorized

for

distribution

only

when

accompanied

or

preceded

by

a

summary

prospectus

and/or

prospectus.

Investors

should

carefully

consider

a

fund’s

investment

goals,

risks,

charges

and

expenses

before

investing.

A

prospectus

contains

this

and

other

information;

please

read

it

carefully

before

investing.

To

help

ensure

we

provide

you

with

quality

service,

all

calls

to

and

from

our

service

areas

are

monitored

and/or

recorded.

Annual

Report

and

Shareholder

Letter

Franklin

Municipal

Securities

Trust

Investment

Manager

Distributor

Shareholder

Services

Franklin

Advisers,

Inc.

Franklin

Templeton

Distributors,

Inc.

(800)

DIAL

BEN

®

/

342-5236

franklintempleton.com

(800)

632-2301

Item 2. Code of Ethics.

(a) The Registrant has adopted a code of ethics that applies to its principal executive officers and principal financial and accounting officer.

(c) N/A

(d) N/A

(f) Pursuant to Item 13(a)(1), the Registrant is attaching as an exhibit a copy of its code of ethics that applies to its principal executive officers and principal financial and accounting officer.

Item 3. Audit Committee Financial Expert.

(a)(1) The Registrant has an audit committee financial expert serving on its audit committee.

(2) The audit committee financial expert is Mary C. Choksi and she is "independent" as defined under the relevant Securities and Exchange Commission Rules and Releases.

Item 4. Principal Accountant Fees and Services.

(a)      Audit Fees

The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or for services that are normally provided by the principal accountant in connection with statutory and regulatory filings or engagements were $69,915 for the fiscal year ended May 31, 2021 and $89,840 for the fiscal year ended May 31, 2020.

(b)      Audit-Related Fees

There were no fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph (a) of Item 4.

There were no fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant's investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant that are reasonably related to the performance of the audit of their financial statements.  

(c)      Tax Fees

There were no fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant for tax compliance, tax advice and tax planning.

There were no fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant for tax compliance, tax advice and tax planning.

(d)      All Other Fees

The aggregate fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant not reported in paragraphs (a)-(c) of Item 4 were $0 for the fiscal year ended May 31, 2021 and $1,329 for the fiscal year ended May 31, 2020. The services for which these fees were paid included review of materials provided to the fund Board in connection with the investment management contract renewal process.

The aggregate fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant not reported in paragraphs (a)-(c) of Item 4 were $29,000 for the fiscal year ended May 31, 2021 and $197,944 for the fiscal year ended May 31, 2020. The services for which these fees were paid included the issuance of an Auditor’s Certificate for South Korean regulatory shareholders disclosures, valuation services related to a fair value engagement, professional fees in connection with determining the feasibility of a U.S. direct lending structure, benchmarking services in connection with the ICI TA survey, and assets under management certification.

(e) (1) The registrant’s audit committee is directly responsible for approving the services to be provided by the auditors, including:

      (i)   pre-approval of all audit and audit related services;

      (ii)  pre-approval of all non-audit related services to be provided to the Fund by the auditors;

      (iii) pre-approval of all non-audit related services to be provided to the registrant by the auditors to the registrant’s investment adviser or to any entity that controls, is controlled by or is under common control with the registrant’s investment adviser and that provides ongoing services to the registrant where the non-audit services relate directly to the operations or financial reporting of the registrant; and

      (iv)  establishment by the audit committee, if deemed necessary or appropriate, as an alternative to committee pre-approval of services to be provided by the auditors, as required by paragraphs (ii) and (iii) above, of policies and procedures to permit such services to be pre-approved by other means, such as through establishment of guidelines or by action of a designated member or members of the committee; provided the policies and procedures are detailed as to the particular service and the committee is informed of each service and such policies and procedures do not include delegation of audit committee responsibilities, as contemplated under the Securities Exchange Act of 1934, to management; subject, in the case of (ii) through (iv), to any waivers, exceptions or exemptions that may be available under applicable law or rules.

(e) (2) None of the services provided to the registrant described in paragraphs (b)-(d) of Item 4 were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of regulation S-X.

(f) No disclosures are required by this Item 4(f).

(g) The aggregate non-audit fees paid to the principal accountant for services rendered by the principal accountant to the registrant and the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant were $29,000 for the fiscal year ended May 31, 2021 and $199,273 for the fiscal year ended May 31, 2020.

(h) The registrant’s audit committee of the board has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.

Item 5.  Audit Committee of Listed Registrants.      N/A

Item 6. Schedule of Investments.                      N/A

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.               N/A

Item 8.  Portfolio Managers of Closed-End Management Investment Companies.                                              N/A

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and

Affiliated Purchasers.        N/A

Item 10. Submission of Matters to a Vote of Security Holders.

There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant's Board of Trustees that would require disclosure herein.

Item 11. Controls and Procedures.

(a)

  Evaluation of Disclosure Controls and Procedures. 

The Registrant maintains disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the Registrant’s filings under the Securities Exchange Act of 1934, as amended, and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant’s management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Within 90 days prior to the filing date of this Shareholder Report on Form N-CSR, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant’s management, including the Registrant’s principal executive officer and the Registrant’s principal financial officer, of the effectiveness of the design and operation of the Registrant’s disclosure controls and procedures. Based on such evaluation, the Registrant’s principal executive officer and principal financial officer concluded that the Registrant’s disclosure controls and procedures are effective.

(b)   Changes in Internal Controls

. 

There have been no changes in the Registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect the internal control over financial reporting.

Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Company.                       N/A

Item 13. Exhibits.

(a)(1) Code of Ethics

codeofethics

(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of

Matthew T. Hinkle

, Chief Executive Officer - Finance and Administration, and

Robert G. Kubilis

, Chief Financial Officer and Chief Accounting Officer

section302

(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of

Matthew T. Hinkle

, Chief Executive Officer - Finance and Administration, and

Robert G. Kubilis

, Chief Financial Officer and Chief Accounting Officer

section906

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

FRANKLIN

MUNICIPAL SECURITIES TRUST

By S\MATTHEW T. HINKLE______________________

      Matthew T. Hinkle

      Chief Executive Officer - Finance and Administration

Date  July 27, 2021

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By S\MATTHEW T. HINKLE______________________

Matthew T. Hinkle

      Chief Executive Officer - Finance and Administration

Date  July 27, 2021

By S\Robert G. Kubilis______________________

Robert G. Kubilis

      Chief Financial Officer and Chief Accounting Officer

Date  July 27, 2021