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 811-07038
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)
Registrants telephone number, including area code: 650 312-2000
Date of fiscal year end: 6/30
Date of reporting period: 6/30/19
Item 1. | Reports to Stockholders. |
THE U.S. GOVERNMENT MONEY MARKET PORTFOLIO
Your Funds Expenses
Actual (actual return after expenses) |
Hypothetical (5% annual return before expenses) |
|||||||||||
Beginning Account Value 1/1/19 |
Ending Account Value 6/30/19 |
Paid During Period 1/1/196/30/191 |
Ending Account Value 6/30/19 |
Paid During Period 1/1/196/30/191 |
Annualized Expense Ratio | |||||||
|
|
|
| |||||||||
$1,000 | $1,011.20 | $0.75 | $1,024.05 | $0.75 | 0.15% |
1. Expenses are equal to the annualized expense ratio for the six-month period as indicated abovein the far right columnmultiplied by the simple average account value over the period indicated, and then multiplied by 181/365 to reflect the one-half year period.
franklintempleton.com | Annual Report | 1 |
THE MONEY MARKET PORTFOLIOS
Financial Highlights
The U.S. Government Money Market Portfolio
Year Ended June 30,
|
||||||||||||||||||||
2019
|
2018
|
2017
|
2016
|
2015
|
||||||||||||||||
Per share operating performance |
||||||||||||||||||||
(for a share outstanding throughout the year) |
||||||||||||||||||||
Net asset value, beginning of year |
$ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $1.00 | |||||||||||||||
Income from investment operations: |
||||||||||||||||||||
Net investment income |
0.021 | 0.011 | 0.003 | 0.001 | | |||||||||||||||
Net realized and unrealized gains (losses)a |
| ( | ) | | | | ||||||||||||||
Total from investment operations |
0.021 | 0.011 | 0.003 | 0.001 | | a | ||||||||||||||
Less distributions from: |
||||||||||||||||||||
Net investment income |
(0.021 | ) | (0.011 | ) | (0.003 | ) | (0.001 | ) | | |||||||||||
Net asset value, end of year |
$ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $1.00 | |||||||||||||||
Total return |
2.10% | 1.15% | 0.35% | 0.07% | % | |||||||||||||||
Ratios to average net assets |
||||||||||||||||||||
Expenses before waiver and payments by affiliates |
0.15% | 0.15% | 0.15% | 0.15% | 0.15% | |||||||||||||||
Expenses net of waiver and payments by affiliatesb |
0.15% | 0.15% | 0.15% | 0.13% | 0.09% | |||||||||||||||
Net investment income |
2.09% | 1.15% | 0.35% | 0.06% | % | |||||||||||||||
Supplemental data |
||||||||||||||||||||
Net assets, end of year (000s) |
$23,218,541 | $23,700,037 | $21,564,546 | $22,324,993 | $27,390,400 |
aAmount rounds to less than $0.001 per share.
bBenefit of expense reduction rounds to less than 0.01%.
2 |
Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
THE MONEY MARKET PORTFOLIOS
STATEMENT OF INVESTMENTS
Statement of Investments, June 30, 2019
The U.S. Government Money Market Portfolio
Principal Amount | Value | |||||||
Investments 103.4% |
||||||||
U.S. Government and Agency Securities 97.7% |
||||||||
a FFCB, |
||||||||
7/01/19 |
$119,300,000 | $ 119,300,000 | ||||||
7/05/19 |
212,000,000 | 211,945,351 | ||||||
7/09/19 |
80,000,000 | 79,959,111 | ||||||
7/10/19 |
96,000,000 | 95,946,300 | ||||||
7/18/19 |
10,000,000 | 9,989,800 | ||||||
7/19/19 |
90,000,000 | 89,901,000 | ||||||
7/22/19 |
60,000,000 | 59,923,000 | ||||||
FHLB, |
||||||||
a 7/03/19 |
150,000,000 | 149,980,025 | ||||||
a 7/05/19 |
150,000,000 | 149,960,133 | ||||||
a 7/10/19 |
225,000,000 | 224,866,237 | ||||||
a 7/12/19 |
200,000,000 | 199,855,044 | ||||||
a 7/17/19 |
237,000,000 | 236,757,636 | ||||||
a 7/19/19 |
400,000,000 | 399,538,050 | ||||||
a 7/24/19 |
296,000,000 | 295,559,371 | ||||||
a 7/26/19 |
310,000,000 | 309,497,431 | ||||||
a 7/31/19 |
525,500,000 | 524,485,473 | ||||||
a 8/07/19 |
407,000,000 | 406,054,629 | ||||||
a 8/09/19 |
238,000,000 | 237,430,188 | ||||||
a 8/14/19 |
400,000,000 | 398,914,667 | ||||||
a 8/16/19 |
400,000,000 | 398,875,556 | ||||||
a 8/21/19 |
400,000,000 | 398,744,833 | ||||||
a 8/23/19 |
355,000,000 | 353,847,581 | ||||||
b FRN, 2.44%, (SOFR + 0.02%), 7/17/19 |
75,000,000 | 75,000,000 | ||||||
b FRN, 2.44%, (SOFR + 0.02%), 8/27/19 |
112,000,000 | 112,000,000 | ||||||
b FRN, 2.43%, (SOFR + 0.01%), 8/30/19 |
150,000,000 | 150,000,000 | ||||||
b FRN, 2.48%, (SOFR + 0.06%), 9/10/19 |
50,000,000 | 50,000,000 | ||||||
b FRN, 2.445%, (SOFR + 0.025%), 9/20/19 |
150,000,000 | 150,000,000 | ||||||
b FRN, 2.45%, (SOFR + 0.03%), 10/09/19 |
153,000,000 | 153,000,000 | ||||||
b FRN, 2.43%, (SOFR + 0.01%), 11/13/19 |
100,000,000 | 100,000,000 | ||||||
b FRN, 2.45%, (SOFR + 0.03%), 12/06/19 |
165,000,000 | 164,999,901 | ||||||
b FRN, 2.43%, (SOFR + 0.01%), 12/20/19 |
150,000,000 | 150,000,000 | ||||||
b FRN, 2.425%, (SOFR + 0.005%), 1/17/20 |
150,000,000 | 150,000,000 | ||||||
b FRN, 2.47%, (SOFR + 0.05%), 1/17/20 |
50,000,000 | 50,000,000 | ||||||
b FRN, 2.44%, (SOFR + 0.02%), 2/21/20 |
118,000,000 | 118,000,000 | ||||||
b FRN, 2.455%, (SOFR + 0.035%), 2/21/20 |
35,000,000 | 35,000,000 | ||||||
b FRN, 2.45%, (SOFR + 0.03%), 3/27/20 |
56,000,000 | 56,000,000 | ||||||
b FRN, 2.455%, (SOFR + 0.035%), 5/08/20 |
200,000,000 | 200,000,000 | ||||||
b FRN, 2.455%, (SOFR + 0.035%), 6/19/20 |
150,000,000 | 150,000,000 | ||||||
FHLM, |
||||||||
a 8/02/19 |
400,000,000 | 399,181,867 | ||||||
b FRN, 2.42%, (SOFR), 12/11/19 |
200,000,000 | 200,000,000 | ||||||
b FRN, 2.445%, (SOFR + 0.025%), 5/22/20 |
250,000,000 | 250,000,000 |
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 3 |
THE MONEY MARKET PORTFOLIOS
STATEMENT OF INVESTMENTS
The U.S. Government Money Market Portfolio (continued)
Principal Amount | Value | |||||||
Investments (continued) |
||||||||
U.S. Government and Agency Securities (continued) |
||||||||
FHLMC, |
||||||||
a 7/01/19 |
$793,250,000 | $ 793,250,000 | ||||||
b FRN, 2.43%, (SOFR + 0.01%), 7/09/19 |
100,000,000 | 100,000,000 | ||||||
b FRN, 2.41%, (SOFR + 0.02%), 8/05/19 |
200,000,000 | 200,000,000 | ||||||
b FRN, 2.425%, (SOFR + 0.005%), 9/05/19 |
100,000,000 | 100,000,000 | ||||||
b FRN, 2.43%, (SOFR + 0.01%), 2/21/20 |
200,000,000 | 200,000,000 | ||||||
b FRN, 2.44%, (SOFR + 0.02%), 2/28/20 |
250,000,000 | 250,000,000 | ||||||
b FRN, 2.46%, (SOFR + 0.04%), 5/06/20 |
250,000,000 | 250,000,000 | ||||||
a FNMA, |
||||||||
7/01/19 |
700,000,000 | 700,000,000 | ||||||
7/02/19 |
800,000,000 | 799,950,889 | ||||||
7/03/19 |
225,000,000 | 224,971,440 | ||||||
7/10/19 |
112,820,000 | 112,757,424 | ||||||
7/17/19 |
236,071,000 | 235,841,749 | ||||||
7/24/19 |
147,025,000 | 146,821,166 | ||||||
a U.S. Treasury Bill, |
||||||||
7/02/19 |
750,000,000 | 749,951,458 | ||||||
7/05/19 |
250,000,000 | 249,933,944 | ||||||
7/09/19 |
600,000,000 | 599,694,667 | ||||||
7/11/19 |
150,000,000 | 149,897,083 | ||||||
7/16/19 |
587,000,000 | 586,449,877 | ||||||
7/18/19 |
270,000,000 | 269,702,901 | ||||||
7/23/19 |
850,000,000 | 848,842,556 | ||||||
7/25/19 |
450,000,000 | 449,265,000 | ||||||
8/01/19 |
200,000,000 | 199,604,750 | ||||||
8/06/19 |
600,000,000 | 598,620,000 | ||||||
8/08/19 |
150,000,000 | 149,613,667 | ||||||
8/13/19 |
244,440,000 | 243,797,666 | ||||||
8/15/19 |
300,000,000 | 299,081,250 | ||||||
10/03/19 |
150,000,000 | 149,067,833 | ||||||
10/10/19 |
300,000,000 | 297,984,208 | ||||||
10/17/19 |
450,000,000 | 446,773,500 | ||||||
10/24/19 |
450,000,000 | 446,550,000 | ||||||
10/31/19 |
450,000,000 | 446,347,625 | ||||||
11/07/19 |
450,000,000 | 446,162,250 | ||||||
11/14/19 |
300,000,000 | 297,336,667 | ||||||
11/21/19 |
450,000,000 | 445,817,250 | ||||||
11/29/19 |
300,000,000 | 297,080,667 | ||||||
12/05/19 |
450,000,000 | 445,574,562 | ||||||
12/19/19 |
300,000,000 | 296,964,750 | ||||||
12/26/19 |
300,000,000 | 296,988,833 | ||||||
U.S. Treasury Note, |
||||||||
0.875%, 9/15/19 |
300,000,000 | 299,016,750 | ||||||
1.50%, 10/31/19 |
250,000,000 | 249,235,147 | ||||||
1.75%, 11/30/19 |
250,000,000 | 249,285,558 | ||||||
|
|
|||||||
Total U.S. Government and Agency Securities (Cost $22,682,746,271) |
22,682,746,271 | |||||||
|
|
4 |
Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
THE MONEY MARKET PORTFOLIOS
STATEMENT OF INVESTMENTS
The U.S. Government Money Market Portfolio (continued)
Principal Amount | Value | |||||||
Investments (continued) |
||||||||
c Repurchase Agreements 5.7% |
||||||||
Barclays Capital Inc., 2.40%, 7/01/19
(Maturity Value $50,010,000) |
$ 50,000,000 | $ 50,000,000 | ||||||
Deutsche Bank Securities Inc., 2.45%,
7/01/19 (Maturity Value $71,014,496) |
71,000,000 | 71,000,000 | ||||||
Federal Reserve Bank of New York, 2.25%,
7/01/19 (Maturity Value $650,121,875) |
650,000,000 | 650,000,000 | ||||||
Goldman Sachs & Co., 2.50%,
7/01/19 (Maturity Value $125,026,042) |
125,000,000 | 125,000,000 | ||||||
HSBC Securities Inc., 2.49%, 7/01/19
(Maturity Value $420,087,150) |
420,000,000 | 420,000,000 | ||||||
|
|
|||||||
Total Repurchase Agreements (Cost $1,316,000,000) |
1,316,000,000 | |||||||
|
|
|||||||
Total Investments (Cost $23,998,746,271) 103.4% |
23,998,746,271 | |||||||
Other Assets, less Liabilities (3.4)% |
(780,205,111 | ) | ||||||
|
|
|||||||
Net Assets 100.0% |
$23,218,541,160 | |||||||
|
|
See Abbreviations on page 79.
aThe security was issued on a discount basis with no stated coupon rate.
bThe coupon rate shown represents the rate at period end.
cSee Note 1(b) regarding repurchase agreement.
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 5 |
THE MONEY MARKET PORTFOLIOS
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
June 30, 2019
The U.S. Government Money Market Portfolio
Assets: |
||||
Investments in unaffiliated securities, at amortized cost |
$22,682,746,271 | |||
Unaffiliated repurchase agreements, at value and cost |
1,316,000,000 | |||
Cash |
11,771,732 | |||
Receivables: |
||||
Interest |
10,993,292 | |||
|
|
|||
Total assets |
24,021,511,295 | |||
|
|
|||
Liabilities: |
||||
Payables: |
||||
Investment securities purchased |
799,950,889 | |||
Management fees |
2,766,736 | |||
Distributions to shareholders |
10,752 | |||
Accrued expenses and other liabilities |
241,758 | |||
|
|
|||
Total liabilities |
802,970,135 | |||
|
|
|||
Net assets, at value |
$23,218,541,160 | |||
|
|
|||
Net assets consist of: |
||||
Paid-in capital |
$23,218,546,529 | |||
Total distributable earnings (loss) |
(5,369 | ) | ||
|
|
|||
Net assets, at value |
$23,218,541,160 | |||
|
|
|||
Shares outstanding |
23,218,548,128 | |||
|
|
|||
Net asset value per share |
$1.00 | |||
|
|
6 |
Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
THE MONEY MARKET PORTFOLIOS
FINANCIAL STATEMENTS
Statement of Operations
for the year ended June 30, 2019
The U.S. Government Money Market Portfolio
Investment income: |
||||
Interest: |
||||
Unaffiliated issuers |
$ | 513,031,940 | ||
|
|
|||
Expenses: |
||||
Management fees (Note 3a) |
34,370,929 | |||
Custodian fees (Note 4) |
182,233 | |||
Reports to shareholders |
5,953 | |||
Registration and filing fees |
351 | |||
Professional fees |
128,860 | |||
Other |
148,358 | |||
|
|
|||
Total expenses |
|
34,836,684 |
| |
Expense reductions (Note 4) |
(188,154 | ) | ||
|
|
|||
Net expenses |
|
34,648,530 |
| |
|
|
|||
Net investment income |
|
478,383,410 |
| |
|
|
|||
Net realized gain (loss) from: |
||||
Investments: |
||||
Unaffiliated issuers |
11,348 | |||
|
|
|||
Net increase (decrease) in net assets resulting from operations |
$ |
478,394,758 |
| |
|
|
franklintempleton.com | The accompanying notes are an integral part of these financial statements. | Annual Report | 7 |
THE MONEY MARKET PORTFOLIOS
FINANCIAL STATEMENTS
Statements of Changes in Net Assets
The U.S. Government Money Market Portfolio
Year Ended June 30,
|
||||||||
|
|
|||||||
2019
|
2018
|
|||||||
|
||||||||
Increase (decrease) in net assets: |
||||||||
Operations: |
||||||||
Net investment income |
$ | 478,383,410 | $ | 257,998,905 | ||||
Net realized gain (loss) |
11,348 | (16,717 | ) | |||||
|
|
|||||||
Net increase (decrease) in net assets resulting from operations |
478,394,758 |
|
257,982,188 |
| ||||
|
|
|||||||
Distributions to shareholders (Note 1d) |
(478,383,410 | ) |
|
(258,003,624 |
) | |||
|
|
|||||||
Capital share transactions (Note 2) |
(481,506,776 | ) |
|
2,135,511,767 |
| |||
|
|
|||||||
Net increase (decrease) in net assets |
(481,495,428 | ) |
|
2,135,490,331 |
| |||
Net assets: |
||||||||
Beginning of year |
23,700,036,588 | 21,564,546,257 | ||||||
|
|
|||||||
End of year (Note 1d) |
$ | 23,218,541,160 |
$ |
23,700,036,588 |
| |||
|
|
8 |
Annual Report | The accompanying notes are an integral part of these financial statements. | franklintempleton.com |
THE MONEY MARKET PORTFOLIOS
Notes to Financial Statements
The U.S. Government Money Market Portfolio
franklintempleton.com | Annual Report | 9 |
THE MONEY MARKET PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS
The U.S. Government Money Market Portfolio (continued)
*Effective during the current reporting period, it is no longer required to present certain line items in the Statements of Changes in Net Assets. The below prior period amounts affected by this change are shown as they were in the prior year Statements of Changes in Net Assets.
For the year ended June 30, 2018, distributions to shareholders were as follows:
Distributions from net investment income |
$ | (258,003,624 | ) |
For the year ended June 30, 2018, undistributed net investment income included in net assets was $0.
2. Shares of Beneficial Interest
At June 30, 2019, there were an unlimited number of shares authorized (without par value). Transactions in the Portfolios shares at $1.00 per share were as follows:
Year Ended June 30, | ||||||||
|
|
|||||||
2019 |
2018 |
|||||||
|
||||||||
Shares sold |
$ | 28,749,969,710 | $ | 40,301,565,232 | ||||
Shares issued in reinvestment of distributions |
478,384,571 | 258,008,814 | ||||||
Shares redeemed |
(29,709,861,057 | ) | (38,424,062,279) | |||||
|
|
|||||||
Net increase (decrease) |
$ | (481,506,776 | ) | $ | 2,135,511,767 | |||
|
|
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, directors, and/or trustees of Franklin Templeton U.S. Government Money Fund, Franklin U.S. Government Money Fund, 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 |
10 |
Annual Report | franklintempleton.com |
THE MONEY MARKET PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS
The U.S. Government Money Market Portfolio (continued)
3. Transactions with Affiliates (continued)
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. Transfer Agent 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. Other Affiliated Transactions
At June 30, 2019, the shares of the Portfolio were owned by the following investment companies:
Shares | Percentage of Outstanding Shares | |||||
Institutional Fiduciary Trust Money Market Portfolio |
20,284,602,001 | 87.4% | ||||
Franklin U.S. Government Money Fund |
2,736,674,308 | 11.8% | ||||
Franklin Templeton Money Fund Trust Franklin Templeton U.S. Government Money Fund |
197,271,819 | 0.8% | ||||
|
23,218,548,128 |
|
100.0% |
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 year ended June 30, 2019, 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.
At June 30, 2019, the capital loss carryforwards were as follows:
Capital loss carryforwards not subject to expiration: |
||||
Short term |
$ | 5,369 |
During the year ended June 30, 2019, the Fund utilized $11,348 of capital loss carryforwards.
The tax character of distributions paid during the years ended June 30, 2019 and 2018, was as follows:
2019 | 2018 | |||||||
|
|
|||||||
Distributions paid from ordinary income |
$ | 478,383,410 | $ | 258,003,624 | ||||
|
|
franklintempleton.com | Annual Report | 11 |
THE MONEY MARKET PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS
The U.S. Government Money Market Portfolio (continued)
At June 30, 2019, the cost of investments and undistributed ordinary income for income tax purposes were as follows:
Cost of investments |
$ | 23,998,746,271 | ||
|
|
| ||
Distributable earnings-undistributed ordinary income |
$ | 10,750 | ||
|
|
|
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:
| 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 Portfolios 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. 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 were valued using Level 2 inputs.
At June 30, 2019, all of the Portfolios investments in financial instruments carried at fair value were valued using Level 2 inputs.
7. 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 | ||||
FFCB | Federal Farm Credit Bank | |||
FHLB | Federal Home Loan Bank | |||
FHLM | Federal Home Loan Mortgage | |||
FHLMC | Federal Home Loan Mortgage Corp. | |||
FNMA | Federal National Mortgage Association | |||
FRN | Floating Rate Note | |||
SOFR | Secured Overnight Financing Rate |
12 |
Annual Report | franklintempleton.com |
THE MONEY MARKET PORTFOLIOS
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of The Money Market Portfolios and Shareholders of The U.S. Government Money Market Portfolio
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the statement of investments, of The U.S. Government Money Market Portfolio (the Fund) as of June 30, 2019, the related statement of operations for the year ended June 30, 2019, the statement of changes in net assets for each of the two years in the period ended June 30, 2019, including the related notes, and the financial highlights for each of the five years in the period ended June 30, 2019 (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of June 30, 2019, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended June 30, 2019 and the financial highlights for each of the five years in the period ended June 30, 2019 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
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 Fund 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 June 30, 2019 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 opinion.
PricewaterhouseCoopers LLP
San Francisco, California
August 15, 2019
We have served as the auditor of one or more investment companies in the Franklin Templeton Group of Funds since 1948.
franklintempleton.com | Annual Report | 13 |
THE MONEY MARKET PORTFOLIOS
Tax Information (unaudited)
Under Section 871(k)(1)(C) of the Internal Revenue Code, the Fund hereby reports the maximum amount allowable but no less than $477,424,088 as interest related dividends for purposes of the tax imposed under Section 871(a)(1)(A) of the Internal Revenue Code for the fiscal year ended June 30, 2019.
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THE MONEY MARKET PORTFOLIOS
Board Members and Officers
The name, year of birth and address of the officers and board members, as well as their affiliations, positions held with the Fund, 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 persons 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) One Franklin Parkway San Mateo, CA 94403-1906 |
Trustee | Since 1992 | 137 | Bar-S Foods (meat packing company) (1981-2010). | ||||
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) One Franklin Parkway San Mateo, CA 94403-1906 |
Trustee | Since 2017 | 113 | Hess Corporation (exploration of oil and gas) (2014-present). | ||||
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) and member of various other boards of trustees and advisory boards; 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) One Franklin Parkway San Mateo, CA 94403-1906 |
Trustee | Since 2014 | 137 | Avis Budget Group Inc. (car rental) (2007-present), Omnicom Group Inc. (advertising and marketing communications services) (2011-present) and White Mountains Insurance Group, Ltd. (holding company) (2017-present). | ||||
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). | ||||||||
Edith E. Holiday (1952) One Franklin Parkway San Mateo, CA 94403-1906 |
Lead Independent Trustee | Trustee Since 2005 and Lead Independent Trustee since March 2019 | 137 | Hess Corporation (exploration of oil and gas) (1993-present), Canadian National Railway (railroad) (2001-present), White Mountains Insurance Group, Ltd. (holding company) (2004-present), Santander Consumer USA Holdings, Inc. (consumer finance) (2016-present), RTI International Metals, Inc. (manufacture and distribution of titanium) (1999-2015) and H.J. Heinz Company (processed foods and allied products) (1994-2013). | ||||
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). |
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THE MONEY MARKET PORTFOLIOS
Independent Board Members (continued)
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 | ||||
J. Michael Luttig (1954) One Franklin Parkway San Mateo, CA 94403-1906 |
Trustee | Since 2009 | 137 | Boeing Capital Corporation (aircraft financing) (2006-2013). | ||||
Principal Occupation During at Least the Past 5 Years: | ||||||||
Executive Vice President, Counselor and Senior Advisor to Boeing Chairman and Board of Directors, The Boeing Company (aerospace company) (May 2019); and formerly, General Counsel and member of the Executive Council, The Boeing Company (2006-2019) and Federal Appeals Court Judge, U.S. Court of Appeals for the Fourth Circuit (1991-2006). | ||||||||
Larry D. Thompson (1945) One Franklin Parkway San Mateo, CA 94403-1906 |
Trustee | Since 2007 | 137 | The Southern Company (energy company) (2014-present; previously 2010-2012), Graham Holdings Company (education and media organization) (2011-present) and Cbeyond, Inc. (business communications provider) (2010-2012). | ||||
Principal Occupation During at Least the Past 5 Years: | ||||||||
Director of various companies; Counsel, Finch McCranie, LLP (law firm) (2015-present); Independent Compliance Monitor and Auditor, Volkswagen AG (manufacturer of automobiles and commercial vehicles) (2017-present); John A. Sibley Professor of Corporate and Business Law, University of Georgia School of Law (2015-present; previously 2011-2012); and formerly, 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). | ||||||||
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 | ||||
**Gregory E. Johnson (1961) One Franklin Parkway San Mateo, CA 94403-1906 |
Trustee | Since 2007 | 151 | None | ||||
Principal Occupation During at Least the Past 5 Years: | ||||||||
Chairman of the Board, Member - Office of the Chairman, Director and Chief Executive Officer, 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 42 of the investment companies in Franklin Templeton; Vice Chairman, Investment Company Institute; and formerly, President, Franklin Resources, Inc. (1994-2015). | ||||||||
**Rupert H. Johnson, Jr. (1940) One Franklin Parkway San Mateo, CA 94403-1906 |
Chairman of the Board and Trustee | Since 2013 | 137 | None | ||||
Principal Occupation During at Least the Past 5 Years: | ||||||||
Vice Chairman, Member - Office of the Chairman and Director, 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 40 of the investment companies in Franklin Templeton. | ||||||||
Alison E. Baur (1964) One Franklin Parkway San Mateo, CA 94403-1906 |
Vice President | Since 2012 | Not Applicable | Not Applicable | ||||
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. |
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THE MONEY MARKET PORTFOLIOS
Interested Board Members and Officers (continued)
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 | ||||
Sonal Desai, Ph.D. (1963) One Franklin Parkway San Mateo, CA 94403-1906 |
President and Chief Executive Officer Investment Management | Since December 2018 | Not Applicable | Not Applicable | ||||
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 18 of the investment companies in Franklin Templeton. | ||||||||
Gaston Gardey (1967) One Franklin Parkway San Mateo, CA 94403-1906 |
Treasurer, Chief Financial Officer and Chief Accounting Officer | Since 2009 | Not Applicable | Not Applicable | ||||
Principal Occupation During at Least the Past 5 Years: | ||||||||
Treasurer, U.S. Fund Administration & Reporting and officer of 26 of the investment companies in Franklin Templeton. | ||||||||
Aliya S. Gordon (1973) One Franklin Parkway San Mateo, CA 94403-1906 |
Vice President | Since 2009 | Not Applicable | Not Applicable | ||||
Principal Occupation During at Least the Past 5 Years: | ||||||||
Senior Associate General Counsel, Franklin Templeton; Vice President and Secretary, Franklin Resources, Inc.; and officer of 44 of the investment companies in Franklin Templeton. | ||||||||
Steven J. Gray (1955) One Franklin Parkway San Mateo, CA 94403-1906 |
Vice President and Co- Secretary | Vice President since 2009 and Co-Secretary since January 2019 | Not Applicable | Not Applicable | ||||
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) One Franklin Parkway San Mateo, CA 94403-1906 |
Chief Executive Officer Finance and Administration | Since 2017 | Not Applicable | Not Applicable | ||||
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 Lim (1948) One Franklin Parkway San Mateo, CA 94403-1906 |
Vice President AML Compliance | Since 2016 | Not Applicable | Not Applicable | ||||
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. |
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THE MONEY MARKET PORTFOLIOS
Interested Board Members and Officers (continued)
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 | ||||
Kimberly H. Novotny (1972) 300 S.E. 2nd Street Fort Lauderdale, FL 33301-1923 |
Vice President | Since 2013 | Not Applicable | Not Applicable | ||||
Principal Occupation During at Least the Past 5 Years: | ||||||||
Senior Associate General Counsel, Franklin Templeton; Vice President and Corporate Secretary, Fiduciary Trust International of the South; Vice President, Templeton Investment Counsel, LLC; Assistant Secretary, Franklin Resources, Inc.; and officer of 44 of the investment companies in Franklin Templeton. | ||||||||
Robert C. Rosselot (1960) 300 S.E. 2nd Street Fort Lauderdale, FL 33301-1923 |
Chief Compliance Officer | Since 2013 | Not Applicable | Not Applicable | ||||
Principal Occupation During at Least the Past 5 Years: | ||||||||
Director, Global Compliance, Franklin Templeton; Vice President, Franklin Templeton Companies, LLC; officer of 44 of the investment companies in Franklin Templeton; and formerly, Senior Associate General Counsel, Franklin Templeton (2007-2013); and Secretary and Vice President, Templeton Group of Funds (2004-2013). | ||||||||
Navid J. Tofigh (1972) One Franklin Parkway San Mateo, CA 94403-1906 |
Vice President | Since 2015 | Not Applicable | Not Applicable | ||||
Principal Occupation During at Least the Past 5 Years: | ||||||||
Associate General Counsel and officer of 44 of the investment companies in Franklin Templeton. | ||||||||
Craig S. Tyle (1960) One Franklin Parkway San Mateo, CA 94403-1906 |
Vice President | Since 2005 | Not Applicable | Not Applicable | ||||
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) 300 S.E. 2nd Street Fort Lauderdale, FL 33301-1923 |
Vice President and Co- Secretary | Vice President since 2011 and Co-Secretary since January 2019 | Not Applicable | Not Applicable | ||||
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. |
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THE MONEY MARKET PORTFOLIOS
*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 Funds 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: Effective March 12, 2019, John B. Wilson ceased to be a trustee of the Trust.
Note 3: 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 Funds Audit Committee includes at least one member who is an audit committee financial expert within the meaning of such Act and Rules. The Funds 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 currently serves as a director of Avis Budget Group, Inc. (2007-present) and formerly, Founder and Senior Advisor, Strategic Investment Group (1987 to 2017). Ms. Choksi has been a Member of the Funds 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.
franklintempleton.com | Annual Report | 19 |
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 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. |
(a ) Audit Fees
The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant for the audit of the registrants annual financial statements or for services that are normally provided by the principal accountant in connection with statutory and regulatory filings or engagements were $99,971 for the fiscal year ended June 30, 2019 and $93,120 for the fiscal year ended June 30, 2018.
(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 registrants 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 registrants 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.
The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant to the registrants 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 were $5,000 for the fiscal year ended June 30, 2019 and $0 for the fiscal year ended June 30, 2018. The services for which these fees were paid included tax consulting services related to the operating agreement and term sheet for the launch of a new fund.
(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 June 30, 2019 and $8,502 for the fiscal year ended June 30, 2018. 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 registrants 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 $22,000 for the fiscal year ended June 30, 2019 and $23,000 for the fiscal year ended June 30, 2018. The services for which these fees were paid included benchmarking services in connection with the ICI TA survey, for the issuance of an Auditors Certificate for South Korean regulatory shareholder disclosures and assets under management certification.
(e) (1) The registrants 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 registrants investment adviser or to any entity that controls, is controlled by or is under common control with the registrants 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 registrants investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant were $27,000 for the fiscal year ended June 30, 2019 and $31,502 for the fiscal year ended June 30, 2018.
(h) The registrants audit committee of the board has considered whether the provision of non-audit services that were rendered to the registrants 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 accountants 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 Registrants 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 Registrants 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 Registrants management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrants 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 Registrants management, including the Registrants principal executive officer and the Registrants principal financial officer, of the effectiveness of the design and operation of the Registrants disclosure controls and procedures. Based on such evaluation, the Registrants principal executive officer and principal financial officer concluded that the Registrants disclosure controls and procedures are effective.
(b) Changes in Internal Controls. There have been no changes in the Registrants 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
(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 Gaston Gardey, 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 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\ MATTHEW T. HINKLE | |
Matthew T. Hinkle | ||
Chief Executive Officer - Finance and Administration | ||
Date | August 30, 2019 |
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 | August 30, 2019 | |
By | S\ GASTON GARDEY | |
Gaston Gardey | ||
Chief Financial Officer and Chief Accounting Officer | ||
Date | August 30, 2019 |
Exhibit 12(a)(1)
CODE OF ETHICS FOR PRINCIPAL EXECUTIVES & SENIOR FINANCIAL OFFICERS
PROCEDURES Revised December 18, 2009
FRANKLIN TEMPLETON FUNDS
CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND
SENIOR FINANCIAL OFFICERS
I. Covered Officers and Purpose of the Code
This code of ethics (the Code) applies to the Principal Executive Officers, Principal Financial Officer and Principal Accounting Officer (the Covered Officers, each of whom is set forth in Exhibit A) of each investment company advised by a Franklin Resources subsidiary and that is registered with the United States Securities & Exchange Commission (SEC) (collectively, FT Funds) for the purpose of promoting:
| Honest and ethical conduct, including the ethical resolution of actual or apparent conflicts of interest between personal and professional relationships; |
| Full, fair, accurate, timely and understandable disclosure in reports and documents that a registrant files with, or submits to, the SEC and in other public communications made by or on behalf of the FT Funds; |
| Compliance with applicable laws and governmental rules and regulations; |
| The prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and |
| Accountability for adherence to the Code. |
Each Covered Officer will be expected to adhere to a high standard of business ethics and must be sensitive to situations that may give rise to actual as well as apparent conflicts of interest.
II. Other Policies and Procedures
This Code shall be the sole code of ethics adopted by the Funds for purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to registered investment companies thereunder.
Franklin Resources, Inc. has separately adopted the CODE OF ETHICS AND BUSINESS CONDUCT (Business Conduct), which is applicable to all officers, directors and employees of Franklin Resources, Inc., including Covered Officers. It summarizes the values, principles and business practices that guide the employees business conduct and also provides a set of basic principles to guide officers, directors and employees regarding the minimum ethical requirements expected of them. It supplements the values, principles and business conduct identified in the Code and other existing employee policies.
Additionally, the Franklin Templeton Funds have separately adopted the CODE OF ETHICS AND POLICY STATEMENT ON INSIDER TRADING governing personal securities trading and other related matters. The Code for Insider Trading provides for separate requirements that apply to the Covered Officers and others, and therefore is not part of this Code.
Insofar as other policies or procedures of Franklin Resources, Inc., the Funds, the Funds adviser, principal underwriter, or other service providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they are superceded by this Code to the extent that they overlap or conflict with the provisions of this Code. Please review these other documents or consult with the Legal Department if have questions regarding the applicability of these policies to you.
III. Covered Officers Should Handle Ethically Actual and Apparent Conflicts of Interest
OVERVIEW. A conflict of interest occurs when a Covered Officers private interest interferes with the interests of, or his or her service to, the FT Funds. For example, a conflict of interest would arise if a Covered Officer, or a member of his family, receives improper personal benefits as a result of apposition with the FT Funds.
Certain conflicts of interest arise out of the relationships between Covered Officers and the FT Funds and already are subject to conflict of interest provisions in the Investment Company Act of 1940 (Investment Company Act) and the Investment Advisers Act of 1940 (Investment Advisers Act). For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with the FT Funds because of their status as affiliated persons of the FT Funds. The FT Funds and the investment advisers compliance programs and procedures are designed to prevent, or identify and correct, violations of these provisions. This Code does not, and is not intended to, repeat or replace these programs and procedures, and such conflicts fall outside of the parameters of this Code.
Although typically not presenting an opportunity for improper personal benefit, conflicts arise from, or as a result of, the contractual relationship between the FT Funds, the investment advisers and the fund administrator of which the Covered Officers are also officers or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for the FT Funds, for the adviser, the administrator, or for all three), be involved in establishing policies and implementing decisions that will have different effects on the adviser, administrator and the FT Funds. The participation of the Covered Officers in such activities is inherent in the contractual relationship between the FT Funds, the adviser, and the administrator and is consistent with the performance by the Covered Officers of their duties as officers of the FT Funds. Thus, if performed in conformity with the provisions of the Investment Company Act and the Investment Advisers Act, such activities will be deemed to have been handled ethically. In addition, it is recognized by the FT Funds Boards of Directors (Boards) that the Covered Officers may also be officers or employees of one or more other investment companies covered by this or other codes.
Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions in the Investment Company Act and the Investment Advisers Act. The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interest of the FT Funds.
Each Covered Officer must:
| Not use his or her personal influence or personal relationships improperly to influence investment decisions orfinancial reporting by the FT Funds whereby the Covered Officer would benefit personally to the detriment of the FT Funds; |
| Not cause the FT Funds to take action, or fail to take action, for the individual personal benefit of the Covered Officer rather than the benefit the FT Funds; |
| Not retaliate against any other Covered Officer or any employee of the FT Funds or their affiliated persons for reports of potential violations that are made in good faith; |
| Report at least annually the following affiliations or other relationships:/1 |
| all directorships for public companies and all companies that are required to file reports with the SEC; |
| any direct or indirect business relationship with any independent directors of the FT Funds; |
| any direct or indirect business relationship with any independent public accounting firm (which are not related to the routine issues related to the firms service as the Covered Persons accountant); and |
| any direct or indirect interest in any transaction with any FT Fund that will benefit the officer (not including benefits derived from the advisory, sub-advisory, distribution or service agreements with affiliates of Franklin Resources). |
These reports will be reviewed by the Legal Department for compliance with the Code.
There are some conflict of interest situations that should always be approved in writing by Franklin Resources General Counsel or Deputy General Counsel, if material. Examples of these include/2:
| Service as a director on the board of any public or private Company; |
| The receipt of any gifts in excess of $100 from any person, from any corporation or association |
| The receipt of any entertainment from any Company with which the FT Funds has current or prospective business dealings unless such entertainment is business related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety. Notwithstanding the foregoing, the Covered Officers must obtain prior approval from the Franklin Resources General Counsel for any entertainment with a value in excess of $1000. |
| Any ownership interest in, or any consulting or employment relationship with, any of the FT Funds service providers, other than an investment adviser, principal underwriter, administrator or any affiliated person thereof; |
| A direct or indirect financial interest in commissions, transaction charges or spreads paid by the FT Funds for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Covered Officers employment, such as compensation or equity ownership. |
Franklin Resources General Counsel or Deputy General Counsel will provide a report to the FT Funds Audit Committee of any approvals granted at the next regularly scheduled meeting.
IV. Disclosure and Compliance
| Each Covered Officer should familiarize himself with the disclosure requirements generally applicable to the FT Funds; |
| Each Covered Officer should not knowingly misrepresent, or cause others to misrepresent, facts about the FT Funds to others, whether within or outside the FT Funds, including to the FT Funds directors and auditors, and to governmental regulators and self-regulatory organizations; |
| Each Covered Officer should, to the extent appropriate within his or her area of responsibility, consult with other officers and employees of the FT Funds, the FT Funds adviser and the administrator with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the FT Funds file with, or submit to, the SEC and in other public communications made by the FT Funds; and |
| It is the responsibility of each Covered Officer to promote compliance with the standards and restrictions imposed by applicable laws, rules and regulations. |
V. Reporting and Accountability
Each Covered Officer must:
| Upon becoming a covered officer affirm in writing to the Board that he or she has received, read, and understands the Code (see Exhibit B); |
| Annually thereafter affirm to the Board that he has complied with the requirements of the Code; and |
| Notify Franklin Resources General Counsel or Deputy General Counsel promptly if he or she knows of any violation of this Code. Failure to do so is itself is a violation of this Code. |
Franklin Resources General Counsel and Deputy General Counsel are responsible for applying this Code to specific situations in which questions are presented under it and have the authority to interpret this Code in any particular situation./3 However, the Independent Directors of the respective FT Funds will consider any approvals or waivers/4 sought by any Chief Executive Officers of the Funds.
The FT Funds will follow these procedures in investigating and enforcing this Code:
| Franklin Resources General Counsel or Deputy General Counsel will take all appropriate action to investigate any potential violations reported to the Legal Department; |
| If, after such investigation, the General Counsel or Deputy General Counsel believes that no violation has occurred, The General Counsel is not required to take any further action; |
| Any matter that the General Counsel or Deputy General Counsel believes is a violation will be reported to the Independent Directors of the appropriate FT Fund; |
| If the Independent Directors concur that a violation has occurred, it will inform and make a recommendation to the Board of the appropriate FT Fund or Funds, which will consider appropriate action, which may include review of, and appropriate modifications to, applicable policies and procedures; notification to appropriate personnel of the investment adviser or its board; or a recommendation to dismiss the Covered Officer; |
| The Independent Directors will be responsible for granting waivers, as appropriate; and |
| Any changes to or waivers of this Code will, to the extent required, are disclosed as provided by SEC rules./5 |
VI. Other Policies and Procedures
This Code shall be the sole code of ethics adopted by the FT Funds for purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to registered investment companies thereunder. Insofar as other policies or procedures of the FT Funds, the FT Funds advisers, principal underwriter, or other service providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they are superseded by this Code to the extent that they overlap or conflict with the provisions of this Code. The FT Code of Ethics and Policy Statement On Insider Trading, adopted by the FT Funds, FT investment advisers and FT Funds principal underwriter pursuant to Rule 17j-1 under the Investment Company Act, the Code of Ethics and Business Conduct and more detailed policies and procedures set forth in FTs Employee Handbook are separate requirements applying to the Covered Officers and others, and are not part of this Code.
VII. Amendments
Any amendments to this Code, other than amendments to Exhibit A, must be approved or ratified by a majority vote of the FT Funds Board including a majority of independent directors.
VIII. Confidentiality
All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the FT Funds Board and their counsel.
IX. Internal Use
The Code is intended solely for the internal use by the FT Funds and does not constitute an admission, by or on behalf of any FT Funds, as to any fact, circumstance, or legal conclusion.
X. Disclosure on Form N-CSR
Item 2 of Form N-CSR requires a registered management investment company to disclose annually whether, as of the end of the period covered by the report, it has adopted a code of ethics that applies to the registrants principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these officers are employed by the registrant or a third party. If the registrant has not adopted such a code of ethics, it must explain why it has not done so.
The registrant must also: (1) file with the SEC a copy of the code as an exhibit to its annual report; (2) post the text of the code on its Internet website and disclose, in its most recent report on Form N-CSR, its Internet address and the fact that it has posted the code on its Internet website; or (3) undertake in its most recent report on Form N-CSR to provide to any person without charge, upon request, a copy of the code and explain the manner in which such request may be made. Disclosure is also required of amendments to, or waivers (including implicit waivers) from, a provision of the code in the registrants annual report on Form N-CSR or on its website. If the registrant intends to satisfy the requirement to disclose amendments and waivers by posting such information on its website, it will be required to disclose its Internet address and this intention.
The Legal Department shall be responsible for ensuring that:
| a copy of the Code is filed with the SEC as an exhibit to each Funds annual report; and |
| any amendments to, or waivers (including implicit waivers) from, a provision of the Code is disclosed in the registrants annual report on Form N-CSR. |
In the event that the foregoing disclosure is omitted or is determined to be incorrect, the Legal Department shall promptly file such information with the SEC as an amendment to Form N-CSR.
In such an event, the Fund Chief Compliance Officer shall review the Code and propose such changes to the Code as are necessary or appropriate to prevent reoccurrences.
EXHIBIT A
Persons Covered by the Franklin Templeton Funds
Code of Ethics
December 2013
FRANKLIN GROUP OF FUNDS | ||
Edward B. Jamieson | President and Chief Executive Officer - Investment Management | |
Rupert H. Johnson, Jr. | President and Chief Executive Officer - Investment Management | |
William J. Lippman | President and Chief Executive Officer - Investment Management | |
Christopher Molumphy | President and Chief Executive Officer - Investment Management | |
Laura Fergerson | Chief Executive Officer - Finance and Administration | |
Gaston R. Gardey | Chief Financial Officer and Chief Accounting Officer | |
FRANKLIN MUTUAL SERIES FUNDS | ||
Peter Langerman | Chief Executive Officer-Investment Management | |
Laura Fergerson | Chief Executive Officer - Finance and Administration | |
Robert G. Kubilis | Chief Financial Officer and Chief Accounting Officer | |
FRANKLIN ALTERNATIVE STRTEGIES FUNDS | ||
William Yun | Chief Executive Officer-Investment Management | |
Laura Fergerson | Chief Executive Officer - Finance and Administration | |
Robert G. Kubilis | Chief Financial Officer and Chief Accounting Officer | |
TEMPLETON GROUP OF FUNDS | ||
Mark Mobius | President and Chief Executive Officer - Investment Management | |
Christopher J. Molumphy | President and Chief Executive Officer - Investment Management | |
Norman Boersma | President and Chief Executive Officer - Investment Management | |
Donald F. Reed | President and Chief Executive Officer - Investment Management | |
Laura Fergerson | Chief Executive Officer - Finance and Administration | |
Mark H. Otani | Chief Financial Officer and Chief Accounting Officer |
EXHIBIT B
ACKNOWLEDGMENT FORM
DECEMBER
FRANKLIN TEMPLETON FUNDS CODE OF ETHICS
FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS
INSTRUCTIONS:
1. | Complete all sections of this form. |
2. | Print the completed form, sign, and date. |
3. | Submit completed form to FTs General Counsel c/o Code of Ethics Administration within 10 days of becoming a Covered Officer and by February 15th of each subsequent year. |
INTER-OFFICE MAIL: Fax: E-MAIL: |
Code of Ethics Administration, Global Compliance SM-920/2 (650) 312-5646 Preclear-Code of Ethics (internal address); lpreclear@frk.com (external address) |
COVERED OFFICERS NAME:
TITLE:
DEPARTMENT:
LOCATION:
CERTIFICATION FOR YEAR ENDING:
TO: Franklin Resources General Counsel, Legal Department
I acknowledge receiving, reading and understanding the Franklin Templeton Funds Code of Ethics for Principal Executive Officers and Senior Financial Officers (the Code). I will comply fully with all provisions of the Code to the extent they apply to me during the period of my employment. I further understand and acknowledge that any violation of the Code may subject me to disciplinary
action, including termination of employment.
|
| |||
Signature | Date signed |
1. | Reporting of these affiliations or other relationships shall be made by completing the annual Directors and Officers Questionnaire and returning the questionnaire to Franklin Resources Inc, General Counsel or Deputy General Counsel. |
2. | Any activity or relationship that would present a conflict for a Covered Officer may also present a conflict for the Covered Officer if a member of the Covered Officers immediate family engages in such an activity or has such a relationship. The Cover Person should also obtain written approval by FTs General Counsel in such situations. |
3. | Franklin Resources General Counsel and Deputy General Counsel are authorized to consult, as appropriate, with members of the Audit Committee, counsel to the FT Funds and counsel to the Independent Directors, and are encouraged to do so. |
4. | Item 2 of Form N-CSR defines waiver as the approval by the registrant of a material departure from a provision of the code of ethics and implicit waiver, which must also be disclosed, as the registrants failure to take action within a reasonable period of time regarding a material departure from a provision of the code of ethics that has been made known to an executive officer of the registrant. See Part X. |
5. | See Part X. |
Exhibit 13 (a) (2)
I, Matthew T. Hinkle, 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 registrants 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 registrants 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 registrants 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 registrants internal control over financial reporting; and
5. The registrants other certifying officer(s) and I have disclosed to the registrants auditors and the audit committee of the registrants 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 registrants 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 registrants internal control over financial reporting.
8/30/2019
S\ MATTHEW T. HINKLE |
Matthew T. Hinkle |
Chief Executive Officer - Finance and Administration |
Exhibit 13 (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 registrants 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 registrants 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 registrants 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 registrants internal control over financial reporting; and
5. The registrants other certifying officer(s) and I have disclosed to the registrants auditors and the audit committee of the registrants 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 registrants 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 registrants internal control over financial reporting.
8/30/2019
S\ GASTON GARDEY |
Gaston Gardey |
Chief Financial Officer and Chief Accounting Officer |
Exhibit 13 (b)
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
I, Matthew T. Hinkle, 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 6/30/2019 (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: 8/30/2019
S\ MATTHEW T. HINKLE |
Matthew T. Hinkle |
Chief Executive Officer - Finance and Administration |
Exhibit 13 (b)
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
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 6/30/2019 (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: 8/30/2019
S\ GASTON GARDEY |
Gaston Gardey |
Chief Financial Officer and Chief Accounting Officer |