will no longer recommend any type of disciplinary action against Franklin Resources
related to directed brokerage issues, the San Mateo-based fund firm announced with its quarterly earnings
on Thursday. NASD staff notified the fund firm verbally on January 21.
The regulators will "take no further action on this matter," officials stated in the release.
Regulators up North, however, are not being as forgiving. The company is still working with the Ontario Securities Commission as the agency investigates market timing in Franklin's Canadian funds. Franklin said a potential settlement could have a "material" financial impact on the company's results.
Meanwhile, in the fourth quarter, Franklin grew assets under management by 11 percent, from $361.9 billion at the end of September to $402.2 billion at the end of December. The bulk of the quarterly increase -- 81 percent -- came from asset appreciation. Sales were $28.4 million in the fourth quarter, but redemptions totaled $19.6 million.
Franklin maintained the same product-asset mix quarter-over-quarter, with approximately 62 percent of assets in domestic retail funds and 38 percent of assets in institutional and international assets.
The firm added more than 80 people to its workforce and anticipates adding employees at that rate each quarter, said executives in an earnings call. "We are adding people…we are investing for the future," said executives.
Some of the employees were added as a result of Sarbanes-Oxley, but were generally added across the company, said executives.
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