Franklin Slaps on Redemption Fees

April 2, 2004 ( - Franklin Resources Inc. plans to join a number of its mutual fund brethren by slapping redemption fees on short-term trades in almost all of its mutual funds to prevent market timing.

The San Mateo, California company will add 2% redemption fees on short-term trades on 112 U.S.-based open-ended funds, and other funds will charge a 1% fee, according to the Oakland Tribune.

The changes are effective June 1. Massachusetts regulators have accused Franklin of allowing a Las Vegas broker to make frequent trades in a mutual fund, conflicting with policies set out in the fund’s prospectus (See  Report: Franklin’s Trading Problems Worse than First Thought ) . Federal and state regulators have been pursuing a wide-ranging fund industry probe since last fall focusing on late trading, market timing and certain sales practices.