(a)
The Registrant has adopted a code of ethics that applies to its principal
executive officers and principal financial and accounting officer.
(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
(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
(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
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______________________
Chief
Executive Officer - Finance and Administration
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______________________
Chief
Executive Officer - Finance and Administration
By S\Robert
G. Kubilis______________________
Chief
Financial Officer and Chief Accounting Officer