<DOCUMENT>
<TYPE>EX-99.77E LEGAL
<SEQUENCE>4
<FILENAME>lgl77e.txt
<DESCRIPTION>LEGAL 77E
<TEXT>
1

NAME OF REGISTRANT:
Franklin Univeral Trust
File No. 811-5569

EXHIBIT ITEM No. 77I(e): Legal Proceedings


REGULATORY MATTERS

On February 4, 2004, the Securities Division of the Office of the
Secretary of the Commonwealth of
Massachusetts filed an administrative complaint against Franklin
Resources, Inc. and certain of its
subsidiaries (the "Company"), alleging violations of the
Massachusetts Uniform Securities Act. The
complaint arises from activity that occurred in 2001 during which
time an officer of a Company sub-
sidiary was negotiating an agreement with an investor relating to
investments in a mutual fund and
a hedge fund.

The Fund, in addition to other entities within Franklin Templeton
Investments, including the Company
and other funds, has been named in shareholder class actions
related to the matter described above.
The Fund's management believes that the claims made in the lawsuit
are without merit and it intends to
defend vigorously against the allegations. It is anticipated that
the Funds may be named in additional
similar civil actions related to the matter described above.

In addition, as part of ongoing investigations by the U.S.
Securities and Exchange Commission (the
"SEC"), the U.S. Attorney for the Northern District of California,
the New York Attorney General,
the California Attorney General, the U.S. Attorney for the District
of Massachusetts, the Florida
Department of Financial Services, and the Commissioner of
Securities and the Attorney General of
the State of West Virginia, relating to certain practices in the
mutual fund industry, including late
trading, market timing and sales compensation arrangements, the
Company and its subsidiaries, as
well as certain current or former executives and employees of the
Company, have received requests
for information and/or subpoenas to testify or produce documents.
The Company and its current
employees are providing documents and information in response to
these requests and subpoenas. In
addition, the Company has responded to requests for similar kinds
of information from regulatory
authorities in some of the foreign countries where the Company
conducts its global asset manage-
ment business.

The Staff of the SEC has informed the Company that it intends to
recommend that the Commission
authorize an action against the Fund's investment adviser and a
senior executive officer relating to the
frequent trading issues that are the subject of the SEC's
investigation. These issues were previously dis-
closed as being under investigation by government authorities and
the subject of an internal inquiry by
the Company in its Annual Report on Form 10-K and on its public
website. The Company currently is
in discussions with the SEC Staff in an effort to resolve the
issues raised in their investigation. Such
discussions are preliminary and the Fund's management has been
advised that the Company cannot
predict the likelihood of whether those discussions will result in
a settlement and, if so, the terms
of such settlement. The impact, if any, of these matters on the
Funds is uncertain at this time. If the
Company finds that it bears responsibility for any unlawful or
improper conduct, it has committed
to making the Funds or its shareholders whole, as appropriate.



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