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<FILENAME>legal77e061.txt
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Regulatory matters and litigation
Putnam High Income Opportunities Trust


Putnam Management has entered into agreements with the Securities
and Exchange Commission and the Massachusetts Securities Division
settling charges connected with excessive short-term trading by
Putnam employees and, in the case of the charges brought by the
Massachusetts Securities Division, by participants in some
Putnam-administered 401(k) plans.Pursuant to these settlement
agreements, Putnam Management will pay a total of $193.5 million
in penalties and restitution, with $153.5 million being paid to
shareholders and the funds. The restitution amount will be
allocated to shareholders pursuant to a plan developed by an
independent consultant, with payments to shareholders currently
expected by the end of the summer.

The SECs and Massachusetts Securities Divisions allegations and
related matters also serve as the general basis for numerous
lawsuits,including purported class action lawsuits filed against
Putnam Management and certain related parties, including certain
Putnam funds.Putnam Management will bear any costs incurred by
Putnam funds in connection with these lawsuits.  Putnam Management
believes that the likelihood that the pending private lawsuits and
purported class action lawsuits will have a material adverse
financial impact on the fund is remote, and the pending actions
are not likely to materially affect its ability to provide
investment management services to its clients,including the Putnam
funds.

On March 23, 2005, Putnam Management entered into a settlement
with the SEC resolving its inquiry into Putnam Managements
alleged failure to fully and effectively disclose a former
brokerage allocation practice to the Board of Trustees and
shareholders of the Putnam Funds.  This practice, which Putnam
Management ceased as of January 1, 2004, involved allocating a
portion of the brokerage on mutual fund portfolio transactions to
certain broker-dealers who sold shares of Putnam mutual funds.
Under the settlement order, Putnam Management has paid a civil
penalty of $40 million and disgorgement of $1 to the SEC.  These
amounts subsequently will be distributed to certain Putnam funds
pursuant to a plan to be approved by the SEC.  As part of the
settlement, Putnam Management neither admitted nor denied any
wrongdoing.

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