<DOCUMENT>
<TYPE>EX-99.77E LEGAL
<SEQUENCE>3
<FILENAME>regmatters.txt
<DESCRIPTION>REG MATTERS
<TEXT>
REGULATORY AND LITIGATION MATTERS

On June 6, 2007, the SEC posted for public comment the proposed
plan of distribution for the market timing settlement. Once the
SEC approves the final plan of distribution, disbursements of
settlement monies will be made promptly to individuals who were
shareholders of the designated funds during the relevant period,
in accordance with the terms and conditions of the settlement and
plan.In addition, the Company, as well as most of the mutual funds
within Franklin Templeton Investments and certain current or former
officers, Company directors, fund directors, and employees, have
been named in private lawsuits (styled as shareholder class actions,
or as derivative actions on behalf of either the named funds or
Franklin Resources, Inc.). The lawsuits relate to the industry
practices referenced above. The Company and fund management believe
that the claims made in each of the private lawsuits referenced
above are without merit and intend to defend against them vigorously.
The Company cannot predict with certainty the eventual outcome of
these lawsuits, nor whether they will have a material negative impact
on the Company. If it is determined that the Company bears
responsibility for any unlawful or inappropriate conduct that caused
losses to the Trust, it is committed to making the Trust or their
shareholders whole, as appropriate.
</TEXT>
</DOCUMENT>
