The SEC has approved a $20.7 million payment from Franklin Resources to the firm's Franklin-Templeton mutual funds. The payment includes repayment and fines levied by the SEC. The commission had alleged that Franklin Resources improperly used fund assets to pay for marketing and distribution expenses without notifying the shareholders of the funds.

Who pays for shelf space has caught the attention of regulators since 2003. Many executives in the industry believe that fund advisors have free rein to use the advisors assets to market and sell funds. However, the fund's assets cannot be used for that purpose without disclosure to the shareholders and board. That is a line that the SEC claims Franklin crossed in selling its funds.

Franklin settled the SEC's allegations in 2004.

It was not until this week, however, that the SEC signed off on Franklin's plans to distribute the monies to the mutual funds.

According to Reuters, the funds will receive payments based on the brokerage commissions that they would have received from 2001 to 2003. Among the funds receiving the payments will be Templeton Growth Fund Inc. (27 percent), Templeton World Fund (11 percent) and Templeton Foreign Fund (10.8 percent). 

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