(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 experts are Ann Torre Bates and David W. Niemiec and they
are "independent" as defined under the relevant Securities and
Exchange Commission Rules and Releases.
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 registrant’s annual
financial statements or for services that are normally provided by the principal
accountant in connection with statutory and regulatory filings or engagements
were $43,293 for the fiscal year ended August 31, 2023 and $42,815 for the
fiscal year ended August 31, 2022.
(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 registrant's 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 registrant's 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 registrant’s 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 $70,000 for the fiscal year ended August 31, 2023, and $0 for the fiscal year ended August 31, 2022. The services for which these fees were paid included global access to tax platform International Tax View.
(d) All Other Fees
There were no 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.
The aggregate fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant’s 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 $5,500 for the fiscal year ended August 31, 2023 and $171,195 for the fiscal year ended August 31, 2022. The services for which these fees were paid included fees in connection with licenses for accounting and business knowledge platform Viewpoint, for the fiscal years ended August 31, 2023 and 2022, and fees in connection with licenses for employee development tool ProEdge, for the fiscal year ended August 31, 2022.
(e) (1) The registrant’s
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 registrant’s investment adviser or to any entity that controls, is
controlled by or is under common control with the registrant’s 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 registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant
were $75,500 for the fiscal year ended August 31, 2023 and $171,195 for the fiscal year ended August 31, 2022.
(h) The registrant’s audit committee of the board has considered whether the provision of non-audit services that were rendered to the registrant’s 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 accountant’s independence.
Members of the Audit Committee are:
Ann
Torre Bates,
J. Michael Luttig
, Terrence J. Checki, David W.
Niemiec and Constantine D. Tseretopoulos
.
Item
6. Schedule of Investments.
N/A
Item
7
. Disclosure of Proxy Voting
Policies and Procedures for Closed-End Management Investment Companies.
The board of trustees of the Fund has delegated the authority
to vote proxies related to the portfolio securities held by the Fund to the
Fund's investment manager, Templeton Asset Management Ltd. (Asset Management)in
accordance with the Proxy Voting Policies and Procedures (Policies) adopted by
the investment manager.
RESPONSIBILITY OF THE INVESTMENT MANAGER TO VOTE
PROXIES
Franklin Templeton Emerging Markets Equity Group, a
separate investment group within Franklin Templeton, comprised of investment
personnel from the SEC-registered investment advisers listed on Appendix A
(hereinafter individually an “Investment Manager” and collectively the
"Investment Managers") have delegated the administrative duties with
respect to voting proxies for securities to the Franklin Templeton Proxy Group
within Franklin Templeton Companies, LLC (the "Proxy Group"), a
wholly-owned subsidiary of Franklin Resources, Inc. Franklin Templeton
Companies, LLC provides a variety of general corporate services to its affiliates,
including, but not limited to, legal and compliance activities. Proxy duties
consist of disseminating proxy materials and analyses of issuers whose stock is
owned by any client (including both investment companies and any separate
accounts managed by the Investment Managers) that has either delegated proxy
voting administrative responsibility to the Investment Managers or has asked
for information and/or recommendations on the issues to be voted. The
Investment Managers will inform Advisory Clients that have not delegated the
voting responsibility but that have requested voting advice about the Investment
Managers’ views on such proxy votes. The Proxy Group also provides these
services to other advisory affiliates of the Investment Managers.
The Proxy Group will process proxy votes on behalf of,
and the Investment Managers vote proxies solely in the best interests of,
separate account clients, the Investment Managers’-managed investment company
shareholders, or shareholders of funds that have appointed Franklin Templeton
International Services S.à.r.l. (“FTIS S.à.r.l.”) as the Management Company, provided
such funds or clients have properly delegated such responsibility in writing,
or, where employee benefit plan assets subject to the Employee Retirement
Income Security Act of 1974, as amended, are involved (“ERISA accounts”), in
the best interests of the plan participants and beneficiaries (collectively,
"Advisory Clients"), unless (i) the power to vote has been
specifically retained by the named fiduciary in the documents in which the
named fiduciary appointed the Investment Managers or (ii) the documents
otherwise expressly prohibit the Investment Managers from voting proxies. The
Investment Managers recognize that the exercise of voting rights on securities
held by ERISA plans for which the Investment Managers have voting responsibility
is a fiduciary duty that must be exercised with care, skill, prudence and
diligence.
In certain circumstances, Advisory Clients are
permitted to direct their votes in a solicitation pursuant to the Investment
Management Agreement. An Advisory Client that wishes to direct its vote shall
give reasonable prior written notice to the Investment Managers indicating such
intention and provide written instructions directing the Investment Managers or
the Proxy Group to vote regarding the solicitation. Where such prior written
notice is received, the Proxy Group will vote proxies in accordance with such
written notification received from the Advisory Client.
The Investment Managers have adopted and implemented
Proxy Voting Policies and Procedures (“Proxy Policies”) that they believe are
reasonably designed to ensure that proxies are voted in the best interest of
Advisory Clients in accordance with their fiduciary duties and rule 206(4)-6
under the Investment Advisers Act of 1940. To the extent that the Investment
Managers have a subadvisory agreement with an affiliated investment manager
(the “Affiliated Subadviser”) with respect to a particular Advisory Client, the
Investment Managers may delegate proxy voting responsibility to the Affiliated
Subadviser. The Investment Managers may also delegate proxy voting
responsibility to a subadviser that is not an Affiliated Subadviser in certain
limited situations as disclosed to fund shareholders (e.g., where an Investment
Manager to a pooled investment vehicle has engaged a subadviser that is not an
Affiliated Subadviser to manage all or a portion of the assets).
HOW THE INVESTMENT MANAGERs VOTE PROXIES
All proxies received by the Proxy Group will be voted
based upon the Investment Managers’ instructions and/or policies. To assist it
in analyzing proxies of equity securities, the Investment Managers subscribe to
Institutional Shareholder Services Inc. ("ISS"), an unaffiliated third-party
corporate governance research service that provides in-depth analyses of
shareholder meeting agendas and vote recommendations. In addition, the
Investment Managers subscribe to ISS’s Proxy Voting Service and Vote Disclosure
Service. These services include receipt of proxy ballots, custodian bank
relations, account maintenance, vote execution, ballot reconciliation, vote
record maintenance, comprehensive reporting capabilities, and vote disclosure
services. Also, the Investment Managers subscribe to Glass, Lewis & Co.,
LLC ("Glass Lewis"), an unaffiliated third-party analytical research
firm, to receive analyses and vote recommendations on the shareholder meetings
of publicly held U.S. companies, as well as a limited subscription to its
international research.
For accounts managed by the Templeton Global Equity
Group (“TGEG”), in making voting decisions, the Investment Managers may
consider Glass Lewis’s Proxy Voting Guidelines, ISS’s Benchmark Policies, ISS’s
Sustainability Policy, and TGEG’s custom sustainability guidelines, which
reflect what TGEG believes to be good environmental, social, and governance
practices. Although analyses provided by ISS, Glass Lewis, and/or another
independent third-party proxy service provider (each a “Proxy Service”) are
thoroughly reviewed and considered in making a final voting decision, the
Investment Managers do not consider recommendations from a Proxy Service or any
third-party to be determinative of the Investment Managers’ ultimate decision.
Rather, the Investment Managers exercise their independent judgment in making
voting decisions. As a matter of policy, the officers, directors and employees
of the Investment Managers and the Proxy Group will not be influenced by
outside sources whose interests conflict with the interests of Advisory
Clients.
For ease of reference, the Proxy Policies often refer
to all Advisory Clients. However, our processes and practices seek to ensure
that proxy voting decisions are suitable for individual Advisory Clients. In
some cases, the Investment Managers’ evaluation may result in an individual
Advisory Client or Investment Manager voting differently, depending upon the
nature and objective of the fund or account, the composition of its portfolio,
whether the Investment Manager has adopted a specialty or custom voting policy,
and other factors.
Certain of the Investment Managers’ separate accounts
or funds (or a portion thereof) are included under Franklin Templeton
Investment Solutions (“FTIS”), a separate investment group within Franklin
Templeton, and employ a quantitative strategy.
For such accounts, FTIS’s proprietary methodologies
rely on a combination of quantitative, qualitative, and behavioral analysis
rather than fundamental security research and analyst coverage that an actively-managed
portfolio would ordinarily employ. Accordingly, absent client direction, in
light of the high number of positions held by such accounts and the
considerable time and effort that would be required to review proxy statements
and ISS or Glass Lewis recommendations, the Investment Manager may review ISS’s
non-US Benchmark guidelines, ISS’s specialty guidelines (in particular, ISS’s
Sustainability guidelines), or Glass Lewis’s US guidelines (the “the ISS and Glass
Lewis Proxy Voting Guidelines”) and determine, consistent with the best
interest of its clients, to provide standing instructions to the Proxy Group to
vote proxies according to the recommendations of ISS or Glass Lewis.
The Investment Manager, however, retains the ability
to vote a proxy differently than ISS or Glass Lewis recommends if the
Investment Manager determines that it would be in the best interests of
Advisory Clients (for example, where an issuer files additional solicitation
materials after a Proxy Service has issued its voting recommendations but
sufficiently before the vote submission deadline and these materials would
reasonably be expected to affect the Investment Manager’s voting
determination).
All conflicts of interest will be resolved in the best
interests of the Advisory Clients. The Investment Managers are affiliates of a
large, diverse financial services firm with many affiliates and makes its best
efforts to mitigate conflicts of interest. However, as a
general matter, the Investment Managers take the position that relationships
between certain affiliates that do not use the “Franklin Templeton” name (“Independent
Affiliates”) and an issuer (e.g., an investment management relationship between
an issuer and an Independent Affiliate) do not present a conflict of interest
for an Investment Manager in voting proxies with respect to such issuer
because: (i) the Investment Managers operate as an independent business unit
from the Independent Affiliate business units, and (ii) informational barriers
exist between the Investment Managers and the Independent Affiliate business
units.
Material conflicts of
interest could arise in a variety of situations, including as a result of the
Investment Managers’ or an affiliate’s (other than an Independent Affiliate as
described above): (i) material business relationship with an issuer or proponent,
(ii) direct or indirect pecuniary interest in an issuer or proponent; or (iii)
significant personal or family relationship with an issuer or proponent.
Material conflicts of
interest are identified by the Proxy Group based upon analyses of client, distributor,
broker dealer, and vendor lists, information periodically gathered from
directors and officers, and information derived from other sources, including
public filings. The Proxy Group gathers and analyzes this information on a
best-efforts basis, as much of this information is provided directly by
individuals and groups other than the Proxy Group, and the Proxy Group relies
on the accuracy of the information it receives from such parties.
Nonetheless, even though a potential conflict of
interest between the Investment Managers or an
affiliate (other than an Independent Affiliate as described above) and an
issuer may exist: (1) the Investment Managers may vote in opposition to the
recommendations of an issuer’s management even if contrary to the recommendations
of a third-party proxy voting research provider; (2) if management has made no
recommendations, the Proxy Group may defer to the voting instructions of the
Investment Managers; and (3) with respect to shares held by Franklin Resources,
Inc. or its affiliates for their own corporate accounts, such shares may be
voted without regard to these conflict procedures.
Otherwise, in
situations where a material conflict of interest is
identified between the Investment Managers or one of its affiliates (other than Independent Affiliates) and an issuer, the
Proxy Group may vote consistent with the voting recommendation of a Proxy
Service or send the proxy directly to the relevant Advisory Clients with the
Investment Managers’ recommendation regarding the vote for approval. To address
certain affiliate conflict situations, the Investment Managers will employ
pass-through voting or mirror voting when required pursuant to a fund’s governing
documents or applicable law.
Where the Proxy Group refers a matter to an Advisory
Client, it may rely upon the instructions of a representative of the Advisory
Client, such as the board of directors or trustees, a committee of the board,
or an appointed delegate in the case of a U.S. registered investment company, a
conducting officer in the case of a fund that has appointed FTIS S.à.r.l as its
Management Company, the Independent Review Committee for Canadian investment
funds, or a plan administrator in the case of an employee benefit plan. A
quorum of the board of directors or trustees or of a committee of the board can
be reached by a majority of members, or a majority of non-recused members. The
Proxy Group may determine to vote all shares held by Advisory Clients of the
Investment Managers and affiliated Investment Managers (other
than Independent Affiliates) in accordance with the instructions of one or
more of the Advisory Clients.
The Investment Managers may also decide whether to
vote proxies for securities deemed to present conflicts of interest that are
sold following a record date, but before a shareholder meeting date. The
Investment Managers may consider various factors in deciding whether to vote
such proxies, including the Investment Managers’ long-term view of the issuer’s
securities for investment, or it may defer the decision to vote to the
applicable Advisory Client. The Investment Managers also may be unable to vote,
or choose not to vote, a proxy for securities deemed to present a conflict of
interest for any of the reasons outlined in the first paragraph of the section
of these policies entitled “Proxy Procedures.”
Weight Given Management Recommendations
One of the primary factors the Investment Managers
consider when determining the desirability of investing in a particular company
is the quality and depth of that company's management. Accordingly, the
recommendation of management on any issue is a factor that the Investment
Managers consider in determining how proxies should be voted. However, the
Investment Managers do not consider recommendations from management to be
determinative of the Investment Managers’ ultimate decision. Each issue is
considered on its own merits, and the Investment Managers will not support the
position of a company's management in any situation where it determines that
the ratification of management's position would adversely affect the investment
merits of owning that company's shares.
The Investment Managers believe that engagement with
issuers is important to good corporate governance and to assist in making proxy
voting decisions. The Investment Managers may engage with issuers to discuss
specific ballot items to be voted on in advance of an annual or special meeting
to obtain further information or clarification on the proposals. The Investment
Managers may also engage with management on a range of environmental, social or
corporate governance issues throughout the year.
The Proxy Group is part of the Franklin Templeton
Companies, LLC Legal Department and is overseen by legal counsel. Full-time
staff members and support staff (which includes individuals that are employees
of affiliates of Franklin Templeton Companies, LLC) are devoted to proxy voting
administration and oversight and providing support and assistance where needed.
On a daily basis, the Proxy Group will review each proxy upon receipt as well
as any agendas, materials and recommendations that they receive from a Proxy
Service or other sources. The Proxy Group maintains a record of all shareholder
meetings that are scheduled for companies whose securities are held by the
Investment Managers’ managed funds and accounts. For each shareholder meeting,
a member of the Proxy Group will consult with the research analyst that follows
the security and provide the analyst with the agenda, analyses of one or more
Proxy Services, recommendations and any other information provided to the Proxy
Group. Except in situations identified as presenting material conflicts of
interest, the Investment Managers’ research analyst and relevant portfolio manager(s)
are responsible for making the final voting decision based on their review of
the agenda, analyses of one or more Proxy Services, proxy statements, their
knowledge of the company and any other information publicly available.
In situations where the Investment Managers have not
responded with vote recommendations to the Proxy Group by the deadline date, the
Proxy Group may vote consistent with the vote recommendations of a Proxy
Service. Except in cases where the Proxy Group is voting consistent with the
voting recommendation of a Proxy Service, the Proxy Group must obtain voting
instructions from the Investment Managers’ research analysts, relevant portfolio
manager(s), legal counsel and/or the Advisory Client prior to submitting the
vote. In the event that an account holds a security that an Investment Manager
did not purchase on its behalf, and the Investment Manager does not normally consider
the security as a potential investment for other accounts, the Proxy Group may
vote consistent with the voting recommendations of a Proxy Service or take no
action on the meeting.
The Proxy Group is fully cognizant of its responsibility
to process proxies and maintain proxy records as may be required by relevant
rules and regulations. In addition, the Investment Managers understand their
fiduciary duty to vote proxies and that proxy voting decisions may affect the
value of shareholdings. Therefore, the Investment Managers will generally
attempt to process every proxy it receives for all domestic and foreign
securities. However, there may be situations in which the Investment Managers
may be unable to successfully vote a proxy, or may choose not to vote a proxy,
such as where: (i) a proxy ballot was not received from the custodian bank;
(ii) a meeting notice was received too late; (iii) there are fees imposed upon
the exercise of a vote and it is determined that such fees outweigh the benefit
of voting; (iv) there are legal encumbrances to voting, including blocking
restrictions in certain markets that preclude the ability to dispose of a
security if an Investment Manager votes a proxy or where the Investment Manager
is prohibited from voting by applicable law, economic or other sanctions, or
other regulatory or market requirements, including but not limited to,
effective Powers of Attorney; (v) additional documentation or the disclosure of
beneficial owner details is required; (vi) the Investment Managers held shares
on the record date but has sold them prior to the meeting date; (vii) the
Advisory Client held shares on the record date, but the Advisory Client closed
the account prior to the meeting date; (viii) a proxy voting service is not
offered by the custodian in the market; (ix) due to either system error or
human error, the Investment Managers’ intended vote is not correctly submitted;
(x) the Investment Managers believe it is not in the best interest of the
Advisory Client to vote the proxy for any other reason not enumerated herein;
or (xi) a security is subject to a securities lending or similar program that
has transferred legal title to the security to another person.
Even if the Investment Managers use reasonable efforts
to vote a proxy on behalf of its Advisory Clients, such vote or proxy may be
rejected because of (a) operational or procedural issues experienced by one or
more third parties involved in voting proxies in such jurisdictions; (b)
changes in the process or agenda for the meeting by the issuer for which the
Investment Managers do not have sufficient notice; or (c) the exercise by the
issuer of its discretion to reject the vote of the Investment Managers. In
addition, despite the best efforts of the Proxy Group and its agents, there may
be situations where the Investment Managers’ votes are not received, or properly
tabulated, by an issuer or the issuer’s agent.
The Investment Managers or their affiliates may, on
behalf of one or more of the proprietary registered investment companies
advised by the Investment Managers or their affiliates, make efforts to recall
any security on loan where the Investment Manager or its affiliates (a) learn of
a vote on an event that may materially affect a security on loan and (b) determine
that it is in the best interests of such proprietary registered investment
companies to recall the security for voting purposes. The ability to timely
recall shares is not entirely within the control of the Investment Managers. Under
certain circumstances, the recall of shares in time for such shares to be voted
may not be possible due to applicable proxy voting record dates or other
administrative considerations.
There may be instances in certain non-U.S. markets where
split voting is not allowed. Split voting occurs when a position held within an
account is voted in accordance with two differing instructions. Some markets
and/or issuers only allow voting on an entire position and do not accept split
voting. In certain cases, when more than one Franklin Templeton investment manager
has accounts holding shares of an issuer that are held in an omnibus structure,
the Proxy Group will seek direction from an appropriate representative of the
Advisory Client with multiple Investment Managers (such as a conducting officer
of the Management Company in the case of a SICAV), or the Proxy Group will
submit the vote based on the voting instructions provided by the Investment
Manager with accounts holding the greatest number of shares of the security within
the omnibus structure.
If several issues are bundled together in a single
voting item, the Investment Managers will assess the total benefit to
shareholders and the extent that such issues should be subject to separate
voting proposals.
PROCEDURES FOR MEETINGS INVOLVING FIXED INCOME
SECURITIES & PRIVATELY HELD ISSUERS
From time to time, certain custodians may process
events for fixed income securities through their proxy voting channels rather
than corporate action channels for administrative convenience. In such cases,
the Proxy Group will receive ballots for such events on the ISS voting
platform. The Proxy Group will solicit voting instructions from the Investment
Managers for each account or fund involved. If the Proxy Group does not receive
voting instructions from the Investment Managers, the Proxy Group will take no
action on the event. The Investment Managers may be unable to vote a proxy for
a fixed income security, or may choose not to vote a proxy, for the reasons
described under the section entitled “Proxy Procedures.”
In the rare instance where there is a vote for a
privately held issuer, the decision will generally be made by the relevant
portfolio managers or research analysts.
The Proxy Group will monitor such meetings involving
fixed income securities or privately held issuers for conflicts of interest in
accordance with these procedures. If a fixed income or privately held issuer is
flagged as a potential conflict of interest, the Investment Managers may
nonetheless vote as it deems in the best interests of its Advisory Clients. The
Investment Managers will report such decisions on an annual basis to Advisory
Clients as may be required.
These Proxy Policies apply to accounts managed by
personnel within
Franklin Templeton
Emerging Markets Equity Group, which includes the following investment
managers:
Franklin Templeton Investment Management Limited
Templeton Asset Management Ltd.
Item 8. Portfolio Managers
of Closed-End Management Investment Companies.
(a)(1) As of October 30, 2023,
the portfolio manager of the Fund is as follows:
Chetan Sehgal CFA,
Director of Global Emerging Markets/Small Cap
Strategies of the Templeton Emerging Markets Group and portfolio manager of
Asset Management
Mr. Sehgal has been a
portfolio manager of the emerging markets equity portion of the Fund since March
2017. He joined Franklin Templeton Investments in 1995.
Andrew Ness, ASIP
, Portfolio Manager of FTIML
Mr. Ness has been portfolio
manager of the Fund since April 2021. He joined Franklin Templeton in 2018. Prior
to joining Franklin Templeton, he was a portfolio manager at Martin Currie
Investment Management Limited., an Edinburg based asset manager.
Messrs. Sehgal and Ness are
jointly and primarily responsible for the day-to-day management of the Fund.
Each manager has equal authority over all aspects of the Fund's investment
portfolio, including, but not limited to, purchases and sales of individual
securities, portfolio risk assessment, and the management of daily cash
balances in accordance with anticipated investment management requirements. The
degree to which each portfolio manager may perform these functions, and the
nature of these functions, may change from time to time.
CFA and Chartered Financial Analyst
are trademarks owned by CFA Institute.
ASIP stands for Associate
of the United Kingdom Society for Investment Professionals (now CFA Society of
the United Kingdom).
(a)(2) This section reflects
information about the portfolio manager as of the fiscal year ended August 31,
2023.
The following table shows the
number of other accounts managed by each portfolio manager and the total assets
in the accounts managed within each category:
|
|
Number of Other Registered
Investment Companies Managed1 |
Assets of Other Registered
Investment Companies Managed |
Number of Other Pooled
Investment Vehicles Managed1 |
Assets of Other Pooled
Investment Vehicles Managed |
Number of Other Accounts
Managed1 |
Assets of Other Accounts
Managed |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
various pooled investment vehicles and accounts listed are managed by a team of
investment professionals. Accordingly, the individual manager listed would not
be solely responsible for managing such listed amounts.
Portfolio managers that provide
investment services to the Fund may also provide services to a variety of other
investment products, including other funds, institutional accounts and private
accounts. The advisory fees for some of such other products and accounts may be
different than that charged to the Fund and may include performance based
compensation (as noted, in the chart above, if any). This may result in fees
that are higher (or lower) than the advisory fees paid by the Fund. As a matter
of policy, each fund or account is managed solely for the benefit of the
beneficial owners thereof. As discussed below, the separation of the trading
execution function from the portfolio management function and the application
of objectively based trade allocation procedures help to mitigate potential
conflicts of interest that may arise as a result of the portfolio managers
managing accounts with different advisory fees.
Conflicts.
The management of multiple funds, including
the Fund, and accounts may also give rise to potential conflicts of interest if
the funds and other accounts have different objectives, benchmarks, time
horizons, and fees as the portfolio manager must allocate his or her time and
investment ideas across multiple funds and accounts. The investment manager
seeks to manage such competing interests for the time and attention of
portfolio managers by having portfolio managers focus on a particular investment
discipline. Most other accounts managed by a portfolio manager are managed
using the same investment strategies that are used in connection with the
management of the Fund. Accordingly, portfolio holdings, position sizes, and
industry and sector exposures tend to be similar across similar portfolios, which
may minimize the potential for conflicts of interest. As noted above, the
separate management of the trade execution and valuation functions from the
portfolio management process also helps to reduce potential conflicts of
interest. However, securities selected for funds or accounts other than the Fund
may outperform the securities selected for the Fund. Moreover, if a portfolio
manager identifies a limited investment opportunity that may be suitable for
more than one fund or other account, the Fund may not be able to take full
advantage of that opportunity due to an allocation of that opportunity across
all eligible funds and other accounts. The investment manager seeks to manage
such potential conflicts by using procedures intended to provide a fair allocation
of buy and sell opportunities among funds and other accounts.
The structure of a portfolio manager’s compensation may
give rise to potential conflicts of interest. A portfolio manager’s base pay
and bonus tend to increase with additional and more complex responsibilities
that include increased assets under management. As such, there may be a
relationship between a portfolio manager’s marketing or sales efforts and his
or her bonus.
Finally, the management of personal accounts by a
portfolio manager may give rise to potential conflicts of interest. While the
funds and the manager have adopted a code of ethics which they believe contains
provisions reasonably necessary to prevent a wide range of prohibited
activities by portfolio managers and others with respect to their personal
trading activities, there can be no assurance that the code of ethics addresses
all individual conduct that could result in conflicts of interest.
The manager and the Fund have
adopted certain compliance procedures that are designed to address these, and
other, types of conflicts. However, there is no guarantee that such procedures
will detect each and every situation where a conflict arises.
Compensation.
The investment manager seeks
to maintain a compensation program that is competitively positioned to attract,
retain and motivate top-quality investment professionals. Portfolio managers
receive a base salary, a cash incentive bonus opportunity, an equity compensation
opportunity, and a benefits package. Portfolio manager compensation is reviewed
annually and the level of compensation is based on individual performance, the
salary range for a portfolio manager’s level of responsibility and Franklin
Templeton guidelines. Portfolio managers are provided no financial incentive to
favor one fund or account over another. Each portfolio manager’s compensation
consists of the following three elements:
Base salary
Each portfolio manager is paid a base salary.
Annual bonus
Annual bonuses are structured to align the interests
of the portfolio manager with those of the Fund’s shareholders. Each portfolio
manager is eligible to receive an annual bonus. Bonuses generally are split
between cash (50% to 65%) and restricted shares of Resources stock (17.5% to
25%) and mutual fund shares (17.5% to 25%). The deferred equity-based compensation
is intended to build a vested interest of the portfolio manager in the
financial performance of both Resources and mutual funds advised by the investment
manager. The bonus plan is intended to provide a competitive level of annual
bonus compensation that is tied to the portfolio manager achieving consistently
strong investment performance, which aligns the financial incentives of the
portfolio manager and Fund shareholders. The Chief Investment Officer of the
investment manager and/or other officers of the investment manager, with
responsibility for the Fund, have discretion in the granting of annual bonuses
to portfolio managers in accordance with Franklin Templeton guidelines. The
following factors are generally used in determining bonuses under the plan:
Investment performance.
Primary consideration is
given to the historic investment performance over the 1, 3 and 5 preceding
years of all accounts managed by the portfolio manager. The pre-tax
performance of each fund managed is measured relative to a relevant peer group
and/or applicable benchmark as appropriate
.
Non-investment performance.
The more qualitative
contributions of the portfolio manager to the investment manager’s
business and the investment management team, including professional knowledge,
productivity, responsiveness to client needs and communication, are evaluated
in determining the amount of any bonus award
.
Responsibilities.
The characteristics and
complexity of funds managed by the portfolio manager are factored in the
investment manager’s appraisal
.
Additional long-term equity-based compensation
Portfolio
managers may also be awarded restricted shares or units of Resources stock or
restricted shares or units of one or more mutual funds. Awards of such deferred
equity-based compensation typically vest over time, so as to create incentives
to retain key talent.
Benefits
Portfolio managers
also participate in benefit plans and programs available generally to all
employees of the investment manager.
Ownership
of Fund shares.
The
investment manager has a policy of encouraging portfolio managers to invest in
the funds they manage. Exceptions arise when, for example, a fund is closed to
new investors or when tax considerations or jurisdictional constraints cause
such an investment to be inappropriate for the portfolio manager. The
following is the dollar range of Fund shares beneficially owned by each
portfolio manager (such amounts may change from time to time):
|
|
Dollar Range of Fund Shares Beneficially Owned |
|
|
|
|
|
|
Note: Because the portfolio
managers are all foreign nationals, they do not hold shares in this U.S.
registered Fund; however they own shares in other similar Franklin Templeton
funds managed by them, registered offshore and appropriate for foreign
nationals.
Item 9. Purchases of Equity
Securities by Closed-End Management Investment Company and Affiliated Purchasers.
|
|
|
|
|
|
|
|
Total Number of Shares
Purchased |
Average Price Paid per Share |
Total Number of Shares Purchased
as Part of Publicly Announced Plans or Program |
Maximum Number (or
Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans
or Programs |
Month #1 (3/1/23 - 3/31/23) |
|
|
|
|
Month #2 (4/1/23 - 4/30/23) |
|
|
|
|
Month #3 (5/1/23 - 5/31/23) |
|
|
|
|
Month #4 (6/1/23 - 6/30/23) |
|
|
|
|
Month #5 (7/1/23 - 7/31/23) |
|
|
|
|
Month #6 (8/1/23 - 8/31/23) |
|
|
|
|
|
|
|
|
|
|
The Board previously
authorized an open-market share repurchase program pursuant to which the Fund
may purchase, from time to time, Fund shares in open-market transactions, at
the discretion of management. Effective December 13, 2018, the Board approved a
modification to its existing open-market share repurchase program to authorize
the Fund to repurchase an additional 10% of the Fund’s shares outstanding in
open market transactions, at the discretion of management. Since the inception
of the program, the Fund had repurchased a total of 2,422,079 shares.
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 provide reasonable assurance that information required to
be disclosed in the Registrant’s 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 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 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.
Securities
lending agent
The board of trustees
has approved the Fund’s participation in a securities lending program. Under the
securities lending program, JP Morgan Chase Bank serves as the Fund’s securities
lending agent.
For
the fiscal year ended August 31, 2023, the income earned by the Fund as well as
the fees and/or compensation paid by the Fund in dollars pursuant to a
securities lending agreement between the Trust with respect to the Fund and the
Securities Lending Agent were as follows (figures may differ from those shown in
shareholder reports due to time of availability and use of estimates):
Gross income
earned by the Fund from securities lending activities |
|
Fees and/or compensation
paid by the Fund for securities lending activities and related services |
|
Fees paid to Securities Lending Agent from revenue split |
|
Fees paid for any cash collateral management service (including
fees deducted from a pooled cash collateral reinvestment vehicle) not included
in a revenue split |
|
Administrative fees not included in a revenue split |
|
Indemnification fees not included in a revenue split |
|
Rebate (paid to borrower) |
|
Other fees not included above |
|
Aggregate
fees/compensation paid by the Fund for securities lending activities |
|
Net income
from securities lending activities |
|
(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 Christopher Kings,
Chief Financial Officer, Chief Accounting Officer and Treasurer
(a)(2)(1) There were no
written solicitations to purchase securities under Rule 23c-1 under the Act sent
or given during the period covered by the report by or on behalf of the
Registrant to 10 or more persons.
(a)(2)(2) There was no change
in the Registrant’s independent public accountant during the period covered by
the report.
(b) Certifications pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 of Matthew T. Hinkle, Chief
Executive Officer - Finance and Administration, and Christopher Kings, Chief
Financial Officer, Chief Accounting Officer and Treasurer
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.
TEMPLETON EMERGING MARKETS
FUND
By SMATTHEW
T. HINKLE______________________
Chief Executive Officer
- Finance and Administration
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 SMATTHEW T. HINKLE______________________
Chief Executive Officer
- Finance and Administration
By SCHRISTOPHER KINGS______________________
Chief Financial Officer,
Chief Accounting Officer and Treasurer