UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-07038
The Money Market Portfolios
(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: 6/30
Date of reporting period: 12/31/14
Item 1. Reports to Stockholders.
THE MONEY MARKET PORTFOLIOS | ||||||||||||||||||
Financial Highlights | ||||||||||||||||||
The Money Market Portfolio | ||||||||||||||||||
Six Months Ended | ||||||||||||||||||
December 31, 2014 | Year Ended June 30, | |||||||||||||||||
(unaudited) | 2014 | 2013 | 2012 | 2011 | 2010 | |||||||||||||
Per share operating performance | ||||||||||||||||||
(for a share outstanding throughout the period) | ||||||||||||||||||
Net asset value, beginning of period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | ||||||
Income from investment operations: | ||||||||||||||||||
Net investment income (loss) | — | — | — | (—)a | —a | 0.001 | ||||||||||||
Net realized and unrealized gains | ||||||||||||||||||
(losses)a | — | — | — | — | — | — | ||||||||||||
Total from investment operations | —a | —a | —a | —a | —a | 0.001 | ||||||||||||
Less distributions from net investment | ||||||||||||||||||
income | — | — | — | — | (—)a | (0.001 | ) | |||||||||||
Net asset value, end of period | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | ||||||
Total returnb | —% | —% | —% | —% | 0.04 | % | 0.06 | % | ||||||||||
Ratios to average net assetsc | ||||||||||||||||||
Expenses before waiver and payments by | ||||||||||||||||||
affiliates | 0.15 | % | 0.15 | % | 0.15 | % | 0.15 | % | 0.15 | % | 0.15 | % | ||||||
Expenses net of waiver and payments by | ||||||||||||||||||
affiliatesd | 0.08 | % | 0.08 | % | 0.13 | % | 0.13 | % | 0.15 | %e | 0.15 | % | ||||||
Net investment income (loss) | —% | —% | —% | (—)%f | 0.04 | % | 0.06 | % | ||||||||||
Supplemental data | ||||||||||||||||||
Net assets, end of period (000’s) | $ | 18,974,688 | $ | 23,491,469 | $ | 18,744,530 | $ | 14,065,932 | $ | 12,092,511 | $ | 8,924,640 |
aAmount rounds to less than $0.001 per share.
bTotal return is not annualized for periods less than one year.
cRatios are annualized for periods less than one year.
dBenefit of expense reduction rounds to less than 0.01%.
eBenefit of waiver and payments by affiliates rounds to less than 0.01%.
fRounds to less than 0.01%.
12 | Semiannual Report | The accompanying notes are an integral part of these financial statements. ftinstitutional.com
THE MONEY MARKET PORTFOLIOS | |||
Statement of Investments, December 31, 2014 (unaudited) | |||
The Money Market Portfolio | |||
Principal | |||
Amount* | Value | ||
Investments 92.4% | |||
Certificates of Deposit 22.1% | |||
Bank of Montreal, Chicago Branch, 0.12%, 1/05/15 | 240,000,000 | $ | 240,000,000 |
Bank of Montreal, Chicago Branch, 0.11%, 1/06/15 | 275,000,000 | 275,000,000 | |
Bank of Montreal, Chicago Branch, 0.08%, 1/13/15 | 90,000,000 | 90,000,000 | |
Bank of Montreal, Chicago Branch, 0.14%, 2/02/15 | 250,000,000 | 250,000,000 | |
Bank of Montreal, Chicago Branch, 0.13%, 2/09/15 | 275,000,000 | 275,000,000 | |
Bank of Nova Scotia, Houston Branch, 0.10%, 1/07/15 | 230,000,000 | 230,000,000 | |
Bank of Nova Scotia, Houston Branch, 0.11%, 2/04/15 | 320,000,000 | 320,001,511 | |
Bank of Nova Scotia, Houston Branch, 0.08%, 2/23/15 | 225,000,000 | 225,000,000 | |
Bank of Nova Scotia, Houston Branch, 0.10% - 0.14%, 1/05/15 - 4/01/15 | 195,000,000 | 195,000,000 | |
The Toronto-Dominion Bank, New York Branch, 0.17%, 1/09/15 | 500,000,000 | 500,000,000 | |
The Toronto-Dominion Bank, New York Branch, 0.11%, 2/12/15 | 220,000,000 | 220,000,000 | |
The Toronto-Dominion Bank, New York Branch, 0.19%, 4/08/15 | 130,000,000 | 130,000,000 | |
The Toronto-Dominion Bank, New York Branch, 0.19%, 5/04/15 | 240,000,000 | 240,000,000 | |
Wells Fargo Bank NA, California Branch, 0.15%, 3/05/15 | 250,000,000 | 250,000,000 | |
Wells Fargo Bank NA, California Branch, 0.15%, 3/06/15 | 250,000,000 | 250,000,000 | |
Wells Fargo Bank NA, California Branch, 0.17%, 3/11/15 | 500,000,000 | 500,000,000 | |
Total Certificates of Deposit (Cost $4,190,001,511) | 4,190,001,511 | ||
aCommercial Paper 56.9% | |||
Chevron Corp., 2/10/15 | 200,000,000 | 199,980,000 | |
Chevron Corp., 1/06/15 - 4/20/15 | 887,997,000 | 887,902,475 | |
Coca-Cola Co., 1/09/15 - 1/15/15 | 75,000,000 | 74,997,861 | |
Eli Lilly & Co., 3/17/15 | 89,410,000 | 89,387,648 | |
Export Development Canada, 2/10/15 (Canada) | 200,000,000 | 199,982,222 | |
Export Development Canada, 2/02/15 - 5/04/15 (Canada) | 700,000,000 | 699,863,118 | |
Export Development Canada, 6/08/15 (Canada) | 225,000,000 | 224,871,625 | |
Exxon Mobil Corp., 1/08/15 | 270,000,000 | 269,995,800 | |
Exxon Mobil Corp., 1/09/15 | 100,000,000 | 99,998,445 | |
Exxon Mobil Corp., 2/04/15 | 190,000,000 | 189,987,439 | |
Google Inc., 2/18/15 | 70,000,000 | 69,992,533 | |
Merck & Co. Inc., 3/10/15 | 300,000,000 | 299,932,000 | |
Merck & Co. Inc., 3/11/15 | 300,000,000 | 299,931,000 | |
Merck & Co. Inc., 3/12/15 | 450,000,000 | 449,895,000 | |
Microsoft Corp., 1/02/15 - 1/13/15 | 61,500,000 | 61,498,811 | |
Microsoft Corp., 1/14/15 | 230,000,000 | 229,993,735 | |
Microsoft Corp., 2/18/15 | 410,000,000 | 409,948,000 | |
Microsoft Corp., 2/25/15 | 275,000,000 | 274,957,986 | |
Procter & Gamble Co., 2/10/15 | 250,000,000 | 249,977,778 | |
Procter & Gamble Co., 3/11/15 | 290,000,000 | 289,938,858 | |
Procter & Gamble Co., 1/08/15 - 3/16/15 | 588,860,000 | 588,797,695 | |
Province of British Columbia, 3/20/15 - 6/19/15 | 135,800,000 | 135,750,964 | |
Province of Ontario, 1/05/15 (Canada) | 445,000,000 | 444,994,939 | |
Province of Ontario, 3/02/15 (Canada) | 315,000,000 | 314,947,500 | |
Province of Ontario, 1/02/15 - 3/03/15 (Canada) | 355,455,000 | 355,427,431 | |
Quebec Treasury Bill, 1/05/15 (Canada) | 820,000,000 | 819,992,889 | |
Quebec Treasury Bill, 2/02/15 (Canada) | 160,000,000 | 159,987,200 | |
Royal Bank of Canada, 1/02/15 (Canada) | 250,000,000 | 249,999,722 | |
Royal Bank of Canada, 1/05/15 (Canada) | 200,000,000 | 199,998,667 | |
Royal Bank of Canada, 1/30/15 (Canada) | 120,000,000 | 119,993,233 | |
Royal Bank of Canada, 3/12/15 (Canada) | 200,000,000 | 199,926,111 | |
Royal Bank of Canada, 5/11/15 (Canada) | 200,000,000 | 199,870,000 | |
ftinstitutional.com | Semiannual Report | 13 |
THE MONEY MARKET PORTFOLIOS
STATEMENT OF INVESTMENTS (UNAUDITED)
The Money Market Portfolio (continued) | |||
Principal | |||
Amount* | Value | ||
Investments (continued) | |||
aCommercial Paper (continued) | |||
Total Capital Canada Ltd., 1/05/15 (France) | 225,000,000 | $ | 224,998,000 |
Total Capital Canada Ltd., 2/24/15 (France) | 264,000,000 | 263,960,400 | |
Total Capital Canada Ltd., 2/26/15 (France) | 338,000,000 | 337,947,422 | |
Total Capital Canada Ltd., 3/02/15 (France) | 206,500,000 | 206,465,583 | |
United Parcel Service Inc., 2/02/15 | 300,000,000 | 299,968,000 | |
United Parcel Service Inc., 2/03/15 | 100,000,000 | 99,990,833 | |
Total Commercial Paper (Cost $10,796,048,923) | 10,796,048,923 | ||
U.S. Government and Agency Securities 11.1% | |||
aFHLB, | |||
1/07/15 | 100,000,000 | 99,998,983 | |
1/09/15 | 284,500,000 | 284,496,523 | |
2/04/15 | 642,100,000 | 642,053,872 | |
a,bInternational Bank for Reconstruction and Development, | |||
1/12/15 (Supranational) | 200,000,000 | 199,998,167 | |
1/20/15 (Supranational) | 200,000,000 | 199,994,986 | |
2/03/15 (Supranational) | 300,000,000 | 299,986,250 | |
1/06/15 - 2/04/15 (Supranational) | 250,000,000 | 249,994,542 | |
aU.S. Treasury Bill, 1/02/15 | 133,000,000 | 133,000,000 | |
Total U.S. Government and Agency Securities (Cost $2,109,523,323) | 2,109,523,323 | ||
Total Investments before Repurchase Agreements (Cost $17,095,573,757) | 17,095,573,757 | ||
cRepurchase Agreements 2.3% | |||
Barclays Capital Inc., 0.02%, 1/02/15 (Maturity Value $150,000,167) | |||
Collateralized by U.S. Treasury Notes, 0.875%, 7/31/19 (valued at $153,781,989) | 150,000,000 | 150,000,000 | |
Goldman, Sachs & Co., 0.07%, 1/02/15 (Maturity Value $75,000,292) | |||
Collateralized by U.S. Government and Agency Securities, 1.88%, 9/10/19 | |||
(valued at $76,978,946) | 75,000,000 | 75,000,000 | |
HSBC Securities (USA) Inc., 0.06%, 1/02/15 (Maturity Value $205,000,683) | |||
Collateralized by U.S. Government and Agency Securities, 0.00% - 5.50%, 1/08/15 - 11/26/19 | |||
(valued at $209,101,992) | 205,000,000 | 205,000,000 | |
Merrill Lynch, Pierce, Fenner & Smith Inc., 0.05%, 1/02/15 (Maturity Value $5,000,014) | |||
Collateralized by U.S. Treasury Notes, 2.00%, 7/31/20 (valued at $5,100,037) | 5,000,000 | 5,000,000 | |
Total Repurchase Agreements (Cost $435,000,000) | 435,000,000 | ||
Total Investments (Cost $17,530,573,757) 92.4% | 17,530,573,757 | ||
Other Assets, less Liabilities 7.6% | 1,444,113,806 | ||
Net Assets 100.0% | $ | 18,974,687,563 |
See Abbreviations on page 21.
*The principal amount is stated in U.S. dollars unless otherwise indicated.
aThe security is traded on a discount basis with no stated coupon rate.
bA supranational organization is an entity formed by two or more central governments through international treaties.
cSee Note 1(b) regarding repurchase agreements.
14 | Semiannual Report | The accompanying notes are an integral part of these financial statements. ftinstitutional.com
THE MONEY MARKET PORTFOLIOS
Financial Statements | |||
Statement of Assets and Liabilities | |||
December 31, 2014 (unaudited) | |||
The Money Market Portfolio | |||
Assets: | |||
Investments in securities, at amortized cost | $ | 17,095,573,757 | |
Repurchase agreements, at value and cost | 435,000,000 | ||
Total investments | $ | 17,530,573,757 | |
Cash | 1,445,065,337 | ||
Interest receivable | 816,809 | ||
Total assets | 18,976,455,903 | ||
Liabilities: | |||
Payables: | |||
Management fees | 1,602,723 | ||
Professional fees | 98,394 | ||
Accrued expenses and other liabilities | 67,223 | ||
Total liabilities | 1,768,340 | ||
Net assets, at value | $ | 18,974,687,563 | |
Net assets consist of: | |||
Paid-in capital | $ | 18,977,310,247 | |
Accumulated net realized gain (loss) | (2,622,684 | ) | |
Net assets, at value | $ | 18,974,687,563 | |
Shares outstanding | 18,977,311,845 | ||
Net asset value per share | $ | 1.00 |
ftinstitutional.com The accompanying notes are an integral part of these financial statements. | Semiannual Report | 15
THE MONEY MARKET PORTFOLIOS
FINANCIAL STATEMENTS
Statement of Operations
for the six months ended December 31, 2014 (unaudited)
The Money Market Portfolio | |||
Investment income: | |||
Interest | $ | 9,047,819 | |
Expenses: | |||
Management fees (Note 3a) | 16,267,359 | ||
Custodian fees (Note 4) | 97,724 | ||
Reports to shareholders | 4,329 | ||
Professional fees | 105,079 | ||
Other | 20,300 | ||
Total expenses | 16,494,791 | ||
Expense reductions (Note 4) | (16,369 | ) | |
Expenses waived/paid by affiliates (Note 3c) | (7,430,603 | ) | |
Net expenses | 9,047,819 | ||
Net investment income | — | ||
Net realized gain (loss) from investments | 3,120 | ||
Net increase (decrease) in net assets resulting from operations | $ | 3,120 |
16 | Semiannual Report | The accompanying notes are an integral part of these financial statements. ftinstitutional.com
THE MONEY MARKET PORTFOLIOS | ||||||
FINANCIAL STATEMENTS | ||||||
Statements of Changes in Net Assets | ||||||
The Money Market Portfolio | ||||||
Six Months Ended | ||||||
December 31, 2014 | Year Ended | |||||
(unaudited) | June 30, 2014 | |||||
Increase (decrease) in net assets: | ||||||
Operations: | ||||||
Net investment income | $ | | $ | | ||
Net realized gain (loss) from investments | 3,120 | 1,371 | ||||
Net increase (decrease) in net assets resulting from operations | 3,120 | 1,371 | ||||
Capital share transactions (Note 2) | (4,516,784,634 | ) | 4,746,937,620 | |||
Net increase (decrease) in net assets | (4,516,781,514 | ) | 4,746,938,991 | |||
Net assets (there is no undistributed net investment income at beginning or end of period): | ||||||
Beginning of period | 23,491,469,077 | 18,744,530,086 | ||||
End of period | $ | 18,974,687,563 | $ | 23,491,469,077 |
ftinstitutional.com The accompanying notes are an integral part of these financial statements. | Semiannual Report | 17
THE MONEY MARKET PORTFOLIOS
Notes to Financial Statements (unaudited)
The Money Market Portfolio
1. Organization and Significant Accounting Policies
The Money Market Portfolios (Trust) is registered under the Investment Company Act of 1940, as amended, (1940 Act) as an open-end management investment company, consisting of one portfolio, The Money Market Portfolio (Portfolio) and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles (U.S. GAAP). The shares of the Portfolio are issued in private placements and are exempt from registration under the Securities Act of 1933.
The following summarizes the Portfolio’s significant accounting policies.
a. Financial Instrument Valuation
Securities are valued at amortized cost, which approximates fair value. Amortized cost is an income-based approach which involves valuing an instrument at its cost and thereafter assuming a constant amortization to maturity of any discount or premium. Under compliance policies and procedures approved by the Portfolio’s Board of Trustees (the Board), the Portfolio’s administrator has responsibility for oversight of valuation, including leading the cross-functional Valuation and Liquidity Oversight Committee (VLOC). The VLOC provides administration and oversight of the Portfolio’s valuation policies and procedures, which are approved annually by the Board.
b. Repurchase Agreements
The Portfolio enters into repurchase agreements, which are accounted for as a loan by the Portfolio to the seller, collateralized by securities which are delivered to the Portfolio’s custodian. The fair value, including accrued interest, of the initial collateralization is required to be at least 102% of the dollar amount invested by the Portfolio, with the value of the underlying securities marked to market daily to maintain coverage of at least 100%. Repurchase agreements are subject to the terms of Master Repurchase Agreements (MRAs) with approved counterparties (sellers). The MRAs contain various provisions, including but not limited to events of default and maintenance of collateral for repurchase agreements. In the event of default by either the seller or the Portfolio, certain MRAs may permit the non-defaulting party to net and close-out all transactions, if any, traded under such agreements. The Portfolio may sell securities it holds as collateral and apply the proceeds towards the repurchase price and any other amounts owed by the seller to the Portfolio, in the event of default by the seller. This could involve costs or delays in addition to a loss on the securities if their value falls below the repurchase price owed by the seller. All repurchase agreements held by the Portfolio at period end, as indicated in the Statement of Investments, had been entered into on December 31, 2014.
c. Income Taxes
It is the Portfolio’s policy to qualify as a regulated investment company under the Internal Revenue Code. The Portfolio intends to distribute to shareholders substantially all of its taxable 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.
The Portfolio recognizes the tax benefits of uncertain tax positions only when the position is “more likely than not” to be sustained upon examination by the tax authorities based on the technical merits of the tax position. As of December 31, 2014, and for all open tax years, the Portfolio has determined that no liability for unrecognized tax benefits is required in the Portfolio’s financial statements related to uncertain tax positions taken on a tax return (or expected to be taken on future tax returns). Open tax years are those that remain subject to examination and are based on each tax jurisdiction statute of limitation.
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 to shareholders are determined according to income tax regulations (tax basis). Distributable earnings determined on a tax basis 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.
18 | Semiannual Report ftinstitutional.com
THE MONEY MARKET PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
The Money Market Portfolio (continued)
e. 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.
f. Guarantees and Indemnifications
Under the Trusts 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 Portfolio, enters into contracts with service providers that contain general indemnification clauses. The Trusts 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.
2. Shares of Beneficial Interest
At December 31, 2014, there were an unlimited number of shares authorized (without par value). Transactions in the Portfolios shares at $1.00 per share were as follows:
Six Months Ended | Year Ended | |||||
December 31, 2014 | June 30, 2014 | |||||
Shares sold | $ | 14,325,273,613 | $ | 27,269,023,426 | ||
Shares redeemed | (18,842,058,247 | ) | (22,522,085,806 | ) | ||
Net increase (decrease) | $ | (4,516,784,634 | ) | $ | 4,746,937,620 |
3. Transactions with Affiliates
Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton Investments. Certain officers and trustees of the Trust are also officers, directors, and/or trustees of the Franklin Money Fund, the Franklin Templeton Money Fund Trust, the Institutional Fiduciary Trust, and of the following subsidiaries:
Subsidiary | Affiliation |
Franklin Advisers, Inc. (Advisers) | Investment manager |
Franklin Templeton Investor Services, LLC (Investor Services) | Transfer agent |
a. Management Fees
The Portfolio pays an investment management fee to Advisers of 0.15% per year of the average daily net assets of the Portfolio.
b. TransferAgent Fees
Investor Services, under terms of an agreement, performs shareholder servicing for the Portfolio and is not paid by the Portfolio for the services.
c. Waiver and Expense Reimbursements
In efforts to prevent a negative yield, Advisers has voluntarily agreed to waive or limit its fees, assume as its own expense certain expenses otherwise payable by the Portfolio and if necessary, make a capital infusion into the Portfolio. These waivers, expense reimbursements and capital infusions are voluntary and may be modified or discontinued by Advisers at any time, and without further notice. There is no guarantee that the Portfolio will be able to avoid a negative yield.
ftinstitutional.com Semiannual Report | 19
THE MONEY MARKET PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
The Money Market Portfolio (continued)
3. | Transactions with Affiliates (continued) |
d. | OtherAffiliated Transactions |
At December 31, 2014, the shares of the Portfolio were owned by the following entities: | |||
Percentage of | |||
Shares | Outstanding Shares | ||
Institutional Fiduciary Trust Money Market Portfolio | 16,974,842,685 | 89.45 | % |
Franklin Money Fund | 1,749,049,705 | 9.22 | % |
Franklin Templeton Money Fund Trust Franklin Templeton Money Fund | 253,419,455 | 1.33 | % |
4. Expense Offset Arrangement
The Portfolio has entered into an arrangement with its custodian whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Portfolios custodian expenses. During the period ended December 31, 2014, the custodian fees were reduced as noted in the Statement of Operations.
5. Income Taxes
For tax purposes, capital losses may be carried over to offset future capital gains. Capital loss carryforwards with no expiration, if any, must be fully utilized before those losses with expiration dates. At June 30, 2014, the Portfolio had capital loss carryfor-wards of $2,625,804 expiring in 2017.
At December 31, 2014, the cost of investments for book and income tax purposes was the same.
6. Fair Value Measurements
The Portfolio follows a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Portfolios own market assumptions (unobservable inputs). These inputs are used in determining the value of the Portfolios financial instruments and are summarized in the following fair value hierarchy:
The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level. Money market securities may be valued using amortized cost, in accordance with the 1940 Act. Generally, amortized cost reflects the current fair value of a security, but since the value is not obtained from a quoted price in an active market, such securities are reflected as Level 2 inputs.
For movements between the levels within the fair value hierarchy, the Portfolio has adopted a policy of recognizing the transfers as of the date of the underlying event which caused the movement.
At December 31, 2014, all of the Portfolios investments in financial instruments carried at fair value were valued using Level 2 inputs.
20 | Semiannual Report
ftinstitutional.com
THE MONEY MARKET PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
The Money Market Portfolio (continued)
7. Money Fund Reform
In July 2014, the Securities and Exchange Commission (SEC) adopted amendments to the rules that govern money market mutual funds under the 1940 Act, to reform the structure and operations of these funds. The amendments will require certain money market funds to sell and redeem shares at prices based on their market value (a floating net asset value). It will also allow money market funds to impose liquidity fees and suspend redemptions temporarily, and will impose new requirements related to diversification, stress testing and disclosure. Management is currently evaluating the impact of these rule amendments. Compliance dates for the various amendments range from nine months to two years.
8. Subsequent Events
The Portfolio has evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure.
Abbreviations |
Selected Portfolio |
FHLB Federal Home Loan Bank |
ftinstitutional.com
Semiannual Report | 21
INSTITUTIONAL FIDUCIARY TRUST MONEY MARKET PORTFOLIO
Shareholder Information
Proxy Voting Policies and Procedures
The Trusts 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 Trusts 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 Trusts proxy voting records are also made available online at franklintempleton.com and posted on the U.S. Securities and Exchange Commissions 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 on Form N-Q. Shareholders may view the filed Form N-Q by visiting the Commissions website at sec.gov. The filed form may also be viewed and copied at the Commissions Public Reference Room in Washington, DC. Information regarding the operations of the Public Reference Room may be obtained by calling (800) SEC-0330.
22 | Semiannual Report ftinstitutional.com
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 12(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 John B. Wilson and he is "independent" as defined under the relevant Securities and Exchange Commission Rules and Releases.
Item 4. Principal Accountant Fees and Services. N/A
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 ensure that information required to be disclosed in the Registrant’s filings under the Securities Exchange Act of 1934 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 controls or in other factors that could materially affect the internal controls over financial reporting subsequent to the date of their evaluation in connection with the preparation of this Shareholder Report on Form N-CSR.
Item 12. Exhibits.
(a)(1) Code of Ethics
(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Laura F. Fergerson, Chief Executive Officer - Finance and Administration, and Gaston Gardey, Chief Financial Officer and Chief Accounting Officer
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Laura F. Fergerson, Chief Executive Officer - Finance and Administration, and Gaston Gardey, Chief Financial Officer and Chief Accounting Officer
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.
THE MONEY MARKET PORTFOLIOS
By /s/Laura F. Fergerson
Laura F. Fergerson
Chief Executive Officer - Finance and Administration
Date February 26, 2015
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/Laura F. Fergerson
Laura F. Fergerson
Chief Executive Officer - Finance and Administration
Date February 26, 2015
By /s/Gaston Gardey
Gaston Gardey
Chief Financial Officer and Chief Accounting Officer
Date February 26, 2015
Exhibit 12(a)(2)
I, Laura F. Fergerson, certify that:
1. I have reviewed this report on Form N-CSR of The Money Market Portfolios;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
2/26/2015
S\LAURA F. FERGERSON
Laura F. Fergerson
Chief Executive Officer - Finance and Administration
Exhibit 12(a)(2)
I, Gaston Gardey, certify that:
1. I have reviewed this report on Form N-CSR of The Money Market Portfolios;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
2/26/2015
S\GASTON GARDEY
Gaston Gardey
Chief Financial Officer and Chief Accounting Officer
Exhibit 12(b)
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
I, Laura F. Fergerson, Chief Executive Officer of the The Money Market Portfolios (the “Registrant”), certify, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
1. The periodic report on Form N-CSR of the Registrant for the period ended 12/31/2014 (the “Form N-CSR”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
Dated: 2/26/2015
S\LAURA F. FERGERSON
Laura F. Fergerson
Chief Executive Officer - Finance and Administration
Exhibit 12(b)
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
I, Gaston Gardey, Chief Financial Officer of the The Money Market Portfolios (the “Registrant”), certify, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
1. The periodic report on Form N-CSR of the Registrant for the period ended 12/31/2014 (the “Form N-CSR”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
Dated: 2/26/2015
S\GASTON GARDEY
Gaston Gardey
Chief Financial Officer and Chief Accounting Officer