Franklin Resources Inc. (BEN) 2024年CSR報告「NYSE」.pdf

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1、10 FRANKLIN RESOURCES,INC.ANNUAL REPORT 2024Corporate social responsibility(CSR)is a key component of our effort to deliver better outcomes for our stakeholders and is embedded in our corporate values.As such,we are dedicated to making a positive impact in the world on behalf of our clients,sharehol

2、ders,employees and other stakeholders.Over the past several years,we have developed a robust CSR framework and continue to build upon that progress.Were pleased that Franklin Templeton was recognized in the 2023 Best Places to Work in Money Management program announced by Pensions&Investments.Our CS

3、R efforts are organized by six dimensions,all of which are interconnected and mutually supportive.Corporate social responsibilityDiversity,Equity&Inclusion People Practices Public CommitmentCommunity Engagement Charitable Foundation Corporate Giving Global Volunteerism RecognitionEnvironment Reporti

4、ng&Disclosure Operational Emissions&Target Reduction Initiatives Employee&Community EngagementResponsible Corporate Practices Risk Management Governance&Compliance Cybersecurity&Data PrivacyEmployee Experience Employee Engagement&Feedback Rewards&Wellness Learning&Development RecognitionStewardship

5、and Sustainable Investing Governance Fiduciary Duty Reporting&Disclosure Industry Partnerships&Thought Leadership FRANKLIN RESOURCES,INC.ANNUAL REPORT 2024 11Involved,our global volunteer programIn line with our focus on community engagement,we encourage our employees to make a difference in their c

6、ommunities,and our global volunteer program,known as Involved,amplifies their combined power.Involveds worldwide network of 30 chapters helps sustain our culture of community engagement and positive action.Every employee is offered one paid day off each year for volunteer work,encouraging Franklin T

7、empleton employee volunteers collectively to take part in hundreds of community service projects annually.Every June,our Involved program sponsors Impact Days,Franklin Templetons global month of service.In 2024,our Corporate Social Responsibility team invited colleagues around the world to participa

8、tein person or virtually in our firms tradition of service for the 18th year.Employees came together to support several worldwide projects:a global canned food drive with a structure build contest,a virtual mapping project to help map missing areas for humanitarian efforts and a company-wide exercis

9、e and wellness campaign to unlock a firm-sponsored donation to a selected charity.Locally based projects included fundraisers for multiple causes,clothing and food drives,tree planting,home repair and maintenance and community cleanups.During our June 2024 Impact Days,employees recorded over 4,700 v

10、olunteer hours and supported more than 120 charitable organizations across 56 locations worldwide.12 FRANKLIN RESOURCES,INC.ANNUAL REPORT 2024Fiscal Year-End Date201920202021202220232024Franklin Resources,Inc.$100.00$74.26$112.73$85.31$102.01$87.97 S&P 500 Index 100.00 115.15 149.70 126.54 153.89 20

11、9.83 S&P US BMI Asset Management&Custody Banks Index 100.00 103.54 174.66 126.01 155.96 237.47 Summary of Operations(in millions)20202021202220232024 Adjusted Operating Revenues$3,878$6,317$6,474$6,104$6,565 Adjusted Operating Income1,491 2,379 2,324 1,824 1,713 Adjusted Operating Margin38.5%37.7%35

12、.9%29.9%26.1%Adjusted Net Income1,311 1,915 1,856 1,332 1,277 Financial Data(in millions)20202021202220232024Cash and Cash Equivalents and Investments12$5,083$6,911$6,753$6,942$6,729Total Assets21,685 24,168 28,061 30,121 32,465 Debt3,017 3,399 3,376 3,053 2,780 Franklin Resources,Inc.Stockholders E

13、quity10,115 11,223 11,475 11,917 12,508 Assets Under Management(in billions)20202021202220232024Ending$1,419$1,530$1,297$1,374$1,679Average833 1,504 1,469 1,400 1,566 Per Common Share20202021202220232024Adjusted Diluted EPS$2.61$3.74$3.63$2.60$2.39 Cash Dividends Declared 1.08 1.12 1.16 1.20 1.24 Bo

14、ok Value 21.95 22.37 22.97 24.03 23.89 Employee Headcount11,771 10,300 9,767 9,166 10,178“Adjusted net income,”“adjusted diluted earnings per share,”“adjusted operating income”and “adjusted operating margin”are based on methodologies other than generally accepted accounting principles(“GAAP”).See“Su

15、pplemental Non-GAAP Financial Measures”in our Annual Report on Form 10-K for definitions and reconciliations of these measures.$0$100$200$30020192021202020222023202412.Includes direct investments of consolidated investment products of$785,$1,043,$967,$1,034 and$1,081.13.Data source:S&P Global Market

16、 Intelligence.14.STANDARD&POORS,S&P and S&P 500 are registered trademarks of Standard&Poors Financial Services LLC.15.In prior years,our performance graph reflected the cumulative total return of the SNL US Asset Manager Index,which was discontinued effective August 7,2021,and replaced with the S&P

17、US BMI Asset Management and Custody Banks Total Return Index.As of 9/30/24,the S&P US BMI Asset Management&Custody Banks Index comprised the following companies:Affiliated Managers Group Inc.,AlTi Global Inc.,Ameriprise Financial Inc.,Ares Management Corporation,Artisan Partners Asset Management Inc

18、.,BlackRock Inc.,Blackstone Inc.,Blue Owl Capital Inc.,Bridge Investment Group Holdings Inc.,BrightSphere Investment Group Inc.,Cohen&Steers Inc.,Diamond Hill Investment Group Inc.,DigitalBridge Group Inc.,Ellington Credit Company,Federated Hermes Inc.,Franklin Resources Inc.,Galaxy Digital Holdings

19、 Ltd.,GCM Grosvenor Inc.,GQG Partners Inc.,Hamilton Lane Incorporated,Invesco Ltd.,Janus Henderson Group PLC,KKR&Co.Inc.,Northern Trust Corporation,P10 Inc.,SEI Investments Company,Silvercrest Asset Management Group Inc.,State Street Corporation,StepStone Group Inc.,T.Rowe Price Group Inc.,The Bank

20、of New York Mellon Corporation,The Carlyle Group Inc.,TPG Inc.,Victory Capital Holdings Inc.,Virtus Investment Partner Inc.and WisdomTree Inc.The performance graph compares the cumulative total stockholder return of an investment in the common stock of Franklin Resources,Inc.for the last five years

21、to that of the S&P 500 Index14 and to the S&P US BMI Asset Management&Custody Bank Index.15 The S&P 500 Index,an index to which the company was added in 1998,consists of 500 stocks chosen for market size,liquidity and industry group representation,and is one of the most widely used benchmarks of US

22、equity performance.The S&P US BMI Asset Management&Custody Banks Index is a market-value weighted index of 36 asset management companies.The graph assumes that the value of the investment in the companys common stock and each index was$100 at the market close on September 30,2019,and that all divide

23、nds were reinvested.The following information has been obtained from sources believed to be reliable,but neither its accuracy nor its completeness is guaranteed.The performance graph is not necessarily indicative of future investment performance.Performance graphComparison of Five-Year Cumulative To

24、tal Return13Cumulative Value of$100Financial highlightsAs of and for the fiscal years ended September 30UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 10-K(MARK ONE)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended

25、September 30,2024 orTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from to Commission file number:001-09318 FRANKLIN RESOURCES,INC.(Exact name of registrant as specified in its charter)Delaware13-2670991(State or other jurisdiction of

26、 incorporation or organization)(I.R.S.Employer Identification No.)One Franklin Parkway,San Mateo,CA 94403(Address of principal executive offices)(Zip code)(650)312-2000(Registrants telephone number,including area code)Securities registered pursuant to Section 12(b)of the Act:Title of each classTradi

27、ng symbol(s)Name of each exchange on which registeredCommon Stock,par value$0.10 per shareBENNew York Stock ExchangeSecurities registered pursuant to Section 12(g)of the Act:None Indicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes

28、 NoIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d)of the Act.Yes NoIndicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the prece

29、ding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes NoIndicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitt

30、ed pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit such files).Yes NoIndicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated f

31、iler,a smaller reporting company,or an emerging growth company.See the definitions of“large accelerated filer,”“accelerated filer,”“smaller reporting company,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large Accelerated FilerAccelerated FilerNon-accelerated FilerSmaller Reporting

32、CompanyEmerging Growth CompanyIf an emerging growth company,indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark

33、 whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness of its internal control over financial reporting under Section 404(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accounting firm that prepared or issued its audit r

34、eport.If securities are registered pursuant to Section 12(b)of the Act,indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.Indicate by check mark whether any of those error corre

35、ctions are restatements that required a recovery analysis of incentive-based compensation received by any of the registrants executive officers during the relevant recovery period pursuant to 240.10D-1(b)Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the

36、 Act).Yes No The aggregate market value of the voting common equity(“common stock”)held by non-affiliates of the registrant,as of March 31,2024(the last business day of registrants second quarter of fiscal year 2024),was$8.7 billion based upon the last sale price reported for such date on the New Yo

37、rk Stock Exchange.Number of shares of the registrants common stock outstanding at October 31,2024:523,667,677.DOCUMENTS INCORPORATED BY REFERENCE:Certain portions of the registrants definitive proxy statement for its annual meeting of stockholders,to be filed with the Securities and Exchange Commiss

38、ion within 120 days after September 30,2024,are incorporated by reference into Part III of this report.INDEX TO ANNUAL REPORT ON FORM 10-KFORM 10-KITEM PAGENUMBERPART I ITEM 1.BUSINESS .3ITEM 1A.RISK FACTORS .16ITEM 1B.UNRESOLVED STAFF COMMENTS .26ITEM 1C.CYBERSECURITY .27ITEM 2.PROPERTIES .28ITEM 3

39、.LEGAL PROCEEDINGS .28ITEM 4.MINE SAFETY DISCLOSURES .28INFORMATION ABOUT OUR EXECUTIVE OFFICERS .29PART IIITEM 5.MARKET FOR REGISTRANTS COMMON EQUITY,RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES .31ITEM 6.RESERVED .31ITEM 7.MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL C

40、ONDITION AND RESULTS OF OPERATIONS .31ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK .54ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA .56ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE .99ITEM 9A.CONTROLS AND PROCEDURES .99ITEM 9B.

41、OTHER INFORMATION .99ITEM 9C.DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS .99PART IIIITEM 10.DIRECTORS,EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE .100ITEM 11.EXECUTIVE COMPENSATION .100ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOL

42、DER MATTERS .100ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,AND DIRECTOR INDEPENDENCE .101ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES .101PART IVITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES .102ITEM 16.FORM 10-K SUMMARY .102EXHIBIT INDEX .102SIGNATURES .1052PART I FORWARD-LOOKING

43、 STATEMENTS This Annual Report on Form 10-K(“Annual Report”)and the documents incorporated by reference herein may include forward-looking statements that reflect our current views with respect to future events and financial performance.Such statements are provided under the“safe harbor”protection o

44、f the Private Securities Litigation Reform Act of 1995.Forward-looking statements include all statements that do not relate solely to historical or current facts and generally can be identified by words or phrases written in the future tense and/or preceded by words such as“anticipate,”“believe,”“co

45、uld,”“depends,”“estimate,”“expect,”“intend,”“likely,”“may,”“plan,”“potential,”“seek,”“should,”“will,”“would,”or other similar words or variations thereof,or the negative thereof,but these terms are not the exclusive means of identifying such statements.Forward-looking statements involve a number of

46、known and unknown risks,uncertainties and other important factors that may cause actual results and outcomes to differ materially from any future results or outcomes expressed or implied by such forward-looking statements.The forward-looking statements contained in this Annual Report or that are inc

47、orporated by reference herein are qualified in their entirety by reference to the risks and uncertainties disclosed in this Annual Report,including those discussed under the headings“Risk Factors,”“Managements Discussion and Analysis of Financial Condition and Results of Operations,”and“Quantitative

48、 and Qualitative Disclosures About Market Risk.”While forward-looking statements are our best prediction at the time that they are made,you should not rely on them and are cautioned against doing so.Forward-looking statements are based on our current expectations and assumptions regarding our busine

49、ss,the economy and other possible future conditions.Because forward-looking statements relate to the future,they are subject to inherent uncertainties,risks and changes in circumstances that are difficult to predict.They are neither statements of historical fact nor guarantees or assurances of futur

50、e performance.Factors or events that could cause our actual results to differ may emerge from time to time,and it is not possible for us to predict all of them.The initiation or unfavorable resolution of legal proceedings or other claims and regulatory and other governmental investigations or inquir

51、ies,including the Western Asset Management investigations described under the heading“Risk Factors”and in“Note 16-Commitments and Contingencies”to our audited financial statements contained herein,may result in monetary judgments or settlements or other remedies,including fines,penalties,restitution

52、 and/or alterations in our business practices or those of our specialist investment managers.In addition,these matters may cause reputational harm to us or our specialist investment managers and could result in additional expenses and collateral costs,outflows or other financial impacts that could m

53、aterially affect our results of operations and the price of our common stock.If a circumstance occurs after the date of this Annual Report that causes any of our forward-looking statements to be inaccurate,whether as a result of new information,future developments or otherwise,we undertake no obliga

54、tion to announce publicly the change to our expectations,or to make any revision to our forward-looking statements,to reflect any change in assumptions,beliefs or expectations,or any change in events,conditions or circumstances upon which any forward-looking statement is based,unless required by law

55、.Item 1.Business.GENERAL Franklin Resources,Inc.(“Franklin”)is a holding company with subsidiaries operating under our Franklin Templeton and/or subsidiary brand names.Franklins common stock is traded on the New York Stock Exchange(the“NYSE”)under the ticker symbol“BEN”and is included in the Standar

56、d&Poors 500 Index.In this Annual Report,Franklin and its subsidiaries are collectively referred to as the“Company,”and words such as“we,”“us,”“our”and similar terms refer to the Company.We have one operating segment,investment management and related services.We offer our services and products under

57、our various distinct brand names,including,but not limited to,Alcentra,Benefit Street Partners,Brandywine Global Investment Management,Canvas,Clarion Partners,ClearBridge Investments,Fiduciary Trust International,Franklin,Franklin Mutual Series,K2,Legg Mason,Lexington Partners,Martin Currie,OShaughn

58、essy,Putnam,Royce,Templeton and Western Asset Management Company.Unless otherwise indicated,our“funds”means the funds offered under our various brand names.3We are a global investment management organization with over$1.6 trillion in assets under management(“AUM”)as of September 30,2024.Our mission

59、is to help clients achieve better outcomes through investment management expertise,wealth management and technology solutions.Through our specialist investment managers,we offer specialization on a global scale bringing extensive capabilities in equity,fixed income,alternatives and multi-asset solut

60、ions.For over 75 years,we have been committed to providing clients with exceptional investment management services and have developed a globally diversified business,including through strategic acquisitions.We provide our investment management and related services to retail,institutional and high-ne

61、t-worth investors in jurisdictions worldwide.We deliver our investment capabilities through a variety of products and vehicles and multiple points of access,including directly to investors and through financial intermediaries.Our investment products include our sponsored funds,as well as institution

62、al and high-net-worth separate accounts,retail separately managed account programs,sub-advised products,and other investment vehicles.Our funds include registered funds(including exchange-traded funds,or“ETFs”)and unregistered funds.Related services include fund administration,sales and distribution

63、,and shareholder servicing.We may perform services directly or through third parties.We also provide sub-advisory services to certain investment products sponsored by other companies that may be sold to investors under the brand names of those other companies or on a co-branded basis.We offer our cl

64、ients the combined experience of our investment professionals with expertise across asset classes and a sharp focus on managing risk.We are committed to delivering strong investment performance for our clients,and to offering a broad range of strategies and drawing on our diverse experiences and per

65、spectives gained through our long history in the investment management business.We know that success demands smart and effective business innovation,solutions and technologies,and we remain focused on investment excellence,innovating to meet evolving client goals,and building strong partnerships by

66、delivering superior client service.We continue to focus on the long-term investment performance of our investment products and on providing high quality service to our clients.The global business and regulatory environments in which we operate remain complex,uncertain and subject to change.We are su

67、bject to various laws,rules and regulations globally that impose restrictions,limitations,registration,reporting and disclosure requirements on our business,and add complexity to our global compliance operations.Incorporated herein by reference is certain financial information about our segment and

68、geographic areas contained in Note 19 Segment and Geographic Information in the notes to consolidated financial statements in Item 8 of Part II of this Annual Report.Company History Since 1947,the Company and its predecessors have been engaged in the investment management and related services busine

69、ss.Franklin was incorporated in the State of Delaware in November 1969,and originated our mutual fund business with the initial Franklin family of funds,known for its fixed income funds and growth and value-oriented equity funds.Over the years,we have expanded and developed our business to meet evol

70、ving investor needs,in part,by acquiring companies engaged in investment management and related services.We have added,among others:(i)the Templeton global investment firm in 1992,(ii)the Franklin Mutual Series investment firm in 1996,(iii)the Franklin Bissett Canadian investment firm in 2000,(iv)th

71、e Fiduciary Trust International investment and trust services firm in 2001,(v)the Benefit Street Partners alternative credit management firm in 2019,(vi)the Athena Capital Advisors investment and wealth management firm in March 2020,(vii)The Pennsylvania Trust Company investment and trust services f

72、irm in May 2020,(viii)the Legg Mason global investment firm in July 2020,(ix)the OShaughnessy Asset Management quantitative asset management firm in December 2021,(x)the Lexington Partners global alternatives investment firm in April 2022,(xi)the Alcentra alternative credit investment firm in Novemb

73、er 2022,and(xii)the Putnam global investment firm in January 2024.OUR BUSINESS STRUCTUREThrough our subsidiaries,we are committed to helping investors navigate global markets,as well as continuing to evolve and build on our strengths to meet the needs of our clients.We generally derive our revenues

74、and income from providing investment management and related services to our products and the products we sub-advise.Our investment management fees,which represent a majority of our revenues,depend to a large extent on the level and relative mix of our AUM and the types of services provided,which are

75、 subject to change.4Our business is conducted through our subsidiaries,including our specialist investment managers.Our specialist investment managers include subsidiaries registered with the United States(“U.S.”)Securities and Exchange Commission(the“SEC”)as investment advisers under the Investment

76、 Advisers Act of 1940(the“Advisers Act”),as well as subsidiaries registered as investment adviser equivalents in jurisdictions including Australia,Brazil,Canada,China,Commonwealth of The Bahamas,Hong Kong,Ireland,India,Japan,Luxembourg,Malaysia,Mexico,Saudi Arabia,Singapore,Switzerland,South Korea,t

77、he United Arab Emirates and the United Kingdom(“U.K.”).Our AUM by Asset Class and Product TypeWe offer a broad product mix under our equity,fixed income,alternative,multi-asset and cash management asset classes.Our equity capabilities include value,deep value,core value,blend,growth and growth at a

78、reasonable price,convertibles,sector,Shariah,smart beta and thematic investments.Our fixed income capabilities include government,municipals,corporate credit,bank loans,securitized,multi-sector,and other investments.Our alternative capabilities include private debt,hedge funds,private equity,real es

79、tate and infrastructure investments.Our multi-asset capabilities include income,real return,balanced/hybrid,total return,target date/risk,absolute return,tactical asset allocation and managed volatility investments.We believe,despite market risks,that we have a competitive advantage as a result of t

80、he economic and geographic diversity of our products available to our clients.Our U.S.funds include U.S.mutual funds,closed-end funds,ETFs,private funds,sub-advised funds and other products.Our non-U.S.funds include a variety of cross-border funds principally domiciled in Luxembourg or Ireland,regis

81、tered for sale to non-U.S.investors in certain other countries,and international locally domiciled funds and products for the particular local market.Our institutional separate account services are provided to various institutions globally for which we serve as an investment adviser.Our retail separ

82、ately managed accounts,commonly known as managed accounts or wrap programs,are sponsored by various financial institutions.We also offer and serve as investment adviser to various other products.Our fees for providing investment management services are generally based on a percentage of AUM in the a

83、ccounts that we advise,and vary based on the asset classes of the accounts,the types of services that we provide,and the market for those services.AUM by asset class and product type was as follows:(in billions)as of September 30,2024U.S.FundsNon-U.S.FundsInstitutional Separate AccountsRetail Separa

84、tely Managed AccountsOtherTotalPercentageof TotalAUMEquity .$359.1$101.9$60.7$94.4$16.0$632.1 38%Fixed Income .179.1 63.9 251.3 34.1 28.0 556.4 33%Alternative .145.9 79.8 23.9 0.2 0.1 249.9 15%Multi-Asset .99.9 10.9 4.6 16.6 44.2 176.2 10%Cash Management .33.0 30.0 1.0 64.0 4%Total .$817.0$286.5$341

85、.5$145.3$88.3$1,678.6 100%See“Assets under Management”under Item 7,Managements Discussion and Analysis of Financial Condition and Results of Operations,of Part II of this Annual Report for additional information about our AUM.Broadly speaking,other than AUM changes due to acquisitions,changes in our

86、 AUM depend primarily upon two factors:(i)the increase or decrease in the market value of the securities and instruments held in the portfolio of investments,and(ii)the level and direction of net flows.Changing market conditions,reputational harm and the evolving needs of our clients may cause asset

87、 volatility and a shift in our asset mix,which may result in an increase or decrease in our revenues and income.Our Investment Management Related Services and ProductsOur specialist investment managers offer diverse perspectives and specialized expertise across asset classes and strategies.Across ou

88、r business,our specialist investment managers generally focus on a portion of the asset management industry in terms of the types of assets managed and each may differ in the types of products and services offered,the investment styles utilized,and the types and geographic locations of its clients.E

89、ach typically markets its products and services under its own brand name,with certain distribution functions provided by our corporate distribution subsidiaries where applicable.We have in place revenue sharing arrangements with certain of our specialist investment managers.5Our specialist investmen

90、t managers include:Benefit Street Partners,Brandywine Global,Clarion Partners,ClearBridge Investments,Fiduciary Trust International,Franklin Equity Group,Franklin Income Investors,Franklin Mutual Series,Franklin Templeton Fixed Income,Franklin Templeton Investment Solutions,Lexington Partners,Martin

91、 Currie,OShaughnessy Asset Management,Putnam Investments,Royce Investment Partners,Templeton Global Investments,Templeton Global Macro and Western Asset Management.Through our specialist investment managers,our investment products are offered globally to retail,institutional and high-net-worth clien

92、ts,which may include,among others,individual investors,institutional investors,sovereign wealth funds,defined benefit and contribution plans,endowments and charitable foundations,healthcare systems and insurance companies.Our investment products include mutual funds,closed-end funds,collective inves

93、tment trusts,interval funds,private funds,institutional separate accounts,retail separately managed accounts,and other products.Our products and capabilities are designed to accommodate a variety of investment goals and preferences,from capital appreciation to capital preservation,as well as other i

94、nvestor preferences,which may include sustainable investing and other environmental,social and governance(“ESG”)preferences.We are committed to partnering closely with our clients to understand their challenges and aspirations,and drawing on our investment capabilities and resources to offer and/or

95、design the right investment solutions for them.We distribute and market globally our different capabilities under our brand names through various subsidiaries and multiple points of access,including directly to investors and through financial intermediaries.We primarily engage new institutional busi

96、ness through our relationships with pension,defined contribution and management consultants,direct sales efforts and additional mandates from our existing client relationships,as well as from our responses to requests for proposals.We also market and distribute our products through various subsidiar

97、ies to institutional investors with separate accounts.Our services also include management of our ETF platforms.Our specialist investment managers provide investment management services pursuant to agreements with each of our investment products and/or clients,including products for which we provide

98、 sub-advisory services.Our investment management services include fundamental investment research and valuation analyses,including original economic,political,industry and company research,and analyses of suppliers,customers and competitors.Our management fees vary with the types of services that we

99、 provide,and fees may at times be waived or voluntarily reduced by the parties,among other things.Our FundsOur specialist investment managers manage a funds portfolio of securities in accordance with the funds stated objectives.To support the funds operations,our subsidiaries either provide or arran

100、ge for the investment and other management,shareholder servicing and administrative services required by the funds.We outsource various administration,technology,transfer agency and other services for our funds to third-party providers.An investor may purchase shares of a mutual fund directly from u

101、s or through a broker-dealer,financial adviser,bank or other similar financial intermediary that provides investment advice to the investor,or an investor may purchase shares of a closed-end fund or ETF on the stock exchange where the fund is traded.Financial intermediaries may earn fees and commiss

102、ions and receive other compensation with respect to fund shares sold to investors.The applicable board of directors or trustees of our funds and our management personnel periodically review the investment management fee structures for the funds in light of fund performance,the level and range of ser

103、vices provided,industry conditions and other relevant factors.For our U.S.mutual funds,most of our investment management agreements between our subsidiaries and funds must be renewed each year,and must be approved annually by a vote of each funds board of directors or trustees as a whole and separat

104、ely by a majority of the independent fund directors or trustees under the Investment Company Act of 1940(the“Investment Company Act”),or by a vote of the holders of a majority of the funds outstanding voting securities,and such agreements generally may be terminated by either party without penalty a

105、fter prior written notice.Our non-U.S.mutual funds,private funds,institutional and high-net-worth separate accounts,and the products for which we provide sub-advisory services,are typically subject to various termination rights and/or renewal provisions,which often provide for termination upon relat

106、ively short notice with little or no penalty.Retail Separately Managed Account Programs Certain of our specialist investment managers provide investment management services to retail separately managed account programs sponsored by various financial institutions.These programs typically allow securi

107、ties brokers or other financial intermediaries to offer their clients the opportunity to choose from a number of investment management services 6pursuing different investment strategies provided by one or more investment managers,and generally charge an all-inclusive fee that can cover asset managem

108、ent,asset allocation and custodial and administrative services.Alternative Products and StrategiesCertain of our specialist investment managers manage alternative products and investment strategies which provide our clients with alternatives to traditional equity and fixed income products and servic

109、es.Our alternative products include private credit funds and structured products,business development companies,hedge funds(such as funds of funds and custom advisory solutions),private equity funds,secondary funds,venture capital funds and real estate funds.These products employ various investment

110、strategies and approaches,including loan origination,collateralized loan obligations,high-yield credit,hedge fund advisory,private equity and infrastructure transactions in emerging markets,global macro,consumer loans,direct real estate investments,and custom-tailored investment programs.High-Net-Wo

111、rth Investment Management,Trust and Custody ServicesThrough our Fiduciary Trust International related subsidiaries,we provide investment management and related services to,among others,high-net-worth individuals and families,family offices,foundations and institutional clients.Fiduciary Trust Intern

112、ational offers investment management and advisory services across different investment styles and asset classes.The majority of these client assets are actively managed by individual portfolio managers,while a significant number of clients also seek multi-manager,multi-asset class solutions.We also

113、may provide separately managed accounts,private funds,and trust,custody and related services,including administration,performance measurement,estate planning and tax planning.Sales and Distribution Our global distribution group is responsible for sales,marketing and business development and maintain

114、s a regional distribution model,with regional teams responsible for driving initiatives in collaboration with global teams.Our groups collaborate to meet the needs of our advisors,clients and investors.There are many sales channels across each region,which may include retail,institutional,private we

115、alth,retirement,insurance,and other specialty sales.Our global footprint and breadth of investment capabilities provide the opportunity for us to work with global financial institutions to add value through and beyond investing,including by providing thought leadership and building business relation

116、ships and global economic partnerships.In addition,certain of our specialist investment managers have their own sales and marketing teams that distribute their products and services,primarily to institutional investors,both directly and through consultants.Consultants play a large role in institutio

117、nal investment management by helping clients select and retain investment managers.Institutional investment management clients and their consultants tend to be highly sophisticated and investment performance driven.Our sales and distribution capabilities and related efforts are critical components o

118、f our business and may be impacted by global distribution trends and changes within the financial services industry.In the U.S.,our distribution subsidiaries generally serve as the principal underwriters and distributors of shares of most of our mutual funds.Outside the U.S.,certain of our non-U.S.s

119、ubsidiaries provide sales,distribution and marketing services to our non-U.S.mutual funds.Some of our non-U.S.mutual funds,particularly our Luxembourg and Irish domiciled funds,are distributed globally on a cross-border basis,while others are distributed exclusively in local markets.We earn sales an

120、d distribution fees primarily by distributing our mutual funds pursuant to distribution agreements with the funds.Under our distribution agreements with our U.S.mutual funds,we offer and sell the fund shares on a continuous basis and pay certain costs associated with selling,marketing and distributi

121、ng the fund shares,including the costs of developing and producing sales literature,shareholder reports and prospectuses.Our sales and distribution fees primarily consist of upfront sales commissions and ongoing distribution fees,which generally will change with the overall level of gross sales,the

122、size of individual transactions,and the relative mix of sales between different asset classes and types of investors.7The majority of our U.S.mutual funds,with the exception of certain money market funds and certain other funds specifically designed for purchase through separately managed account pr

123、ograms,have adopted distribution plans under Rule 12b-1(the“Rule 12b-1 Plans”)promulgated under the Investment Company Act.The Rule 12b-1 Plans permit the funds to pay us for marketing,marketing support,advertising,printing and sales promotion services relating to the distribution of their shares,su

124、bject to the Rule 12b-1 Plans limitations on amounts based on daily average AUM.Similar arrangements exist for the distribution of non-U.S.mutual funds.The Rule 12b-1 Plans are established for one-year terms and must be approved annually by a vote of each funds board of directors or trustees as a wh

125、ole and separately by a majority of the independent fund directors or trustees under the Investment Company Act,and such plans are subject to termination at any time by a majority vote of the independent fund directors or trustees or by the funds shareholders.We pay the sales and distribution fees e

126、arned as revenues to the financial advisers and other intermediaries that sell our funds on our behalf.The distribution agreements with our U.S.mutual funds generally provide for us to pay commission expenses for sales of fund shares to qualifying broker-dealers and other independent financial inter

127、mediaries.These financial intermediaries receive various sales commissions and other fees for services in matching investors with funds whose asset classes match such investors goals and risk profiles.The intermediaries also may receive fees for their assistance in explaining the operations of the f

128、unds,and for reporting and various other distribution services.Other compensation may be offered to the extent not prohibited by federal or state laws or any self-regulatory agency,such as the Financial Industry Regulatory Authority(“FINRA”),applicable to our business.We are heavily dependent upon t

129、hese third-party distribution and sales channels and business relationships.There is increasing competition for access to these channels,which has caused our distribution costs to rise and could cause further increases in the future as competition continues and service expectations increase.Similar

130、arrangements exist with the distribution of our non-U.S.mutual funds where,generally,our subsidiary that distributes the funds receives maintenance fees from the funds and pays certain fees to financial advisers,banks and other intermediaries.Shareholder Servicing We perform our shareholder servicin

131、g services directly or through third parties.Substantially all shareholder servicing fees are earned from our funds for providing transfer agency services,which include providing shareholder statements,transaction processing,client service and tax reporting.Shareholder servicing fees are primarily d

132、etermined based on a contractual margin,or a percentage of AUM and either the number of transactions in shareholder accounts or the number of shareholder accounts.We outsource various transfer agency and other services for our funds to third-party providers who serve as a sub-agent or delegate,depen

133、ding on the jurisdiction.Our fees and expenses are routinely benchmarked against applicable industry standards.COMPETITION The financial services industry is a highly competitive global industry.Competition is based on various factors,including,among others,business reputation,investment performance

134、,product mix and offerings,service quality and innovation,distribution relationships,and fees charged.We face strong competition from numerous investment management companies,securities brokerage and investment banking firms,insurance companies,banks,hedge fund firms and other financial management i

135、nstitutions,which offer a wide range of financial and investment management services and products to the same retail,institutional and high-net-worth investors and accounts that we are seeking to attract.We offer a broad product mix that meets a variety of investment goals and needs for different in

136、vestors,and we may periodically introduce new products to provide investors with additional investment options.We primarily derive our fund sales through third-party broker-dealers,banks,investment advisers and other financial intermediaries.Because we rely on third-party distribution and sales chan

137、nels to sell our products,we do not control the ultimate investment recommendations given by them to clients.Such financial intermediaries may recommend competing products.Due to our international presence and varied product mix,it is difficult to assess our market position relative to other investm

138、ent managers on a worldwide basis,but we believe that we are one of the more widely diversified investment managers based in the U.S.We believe that our equity,fixed income,alternative and multi-asset asset mix,coupled with our global presence,will serve our competitive needs well over the long term

139、.We continue to focus on the long-term performance of our investment products,service to clients and extensive marketing activities through our strong broker-dealer and other financial institution distribution network as well as with high-net-worth and institutional clients.8The establishment of new

140、 investment management firms and continuous development of investment products increases the competition that we face.Many of our competitors have long-standing and established relationships with broker-dealers,investment advisers and their clients,and some have affiliated brokerage businesses.Other

141、s have focused on,offer and market specific product lines that provide strong competition to certain of our asset classes.In addition,consolidation in the financial services industry has created stronger competitors,some with greater financial resources and broader distribution channels than our own

142、.REGULATION GeneralWe are subject to extensive regulation.Virtually all aspects of our business are subject to various U.S.federal and state,and/or international regulation and supervision.Our regulators have broad authority with respect to the regulation of investment management and other financial

143、 services,including among other things,the authority to grant or cancel required licenses or registrations,impose net capital and other financial or operational requirements on us,and other enforcement powers described below.The regulations to which we are subject continue to change and evolve over

144、time.Consequently,there is uncertainty associated with the regulatory environments in which we operate.The rules and regulations applicable to investment management organizations are very detailed and technical.Accordingly,the discussion below is general in nature and does not purport to be complete

145、.With our global operations,certain of our subsidiaries are registered with or licensed by various U.S.and/or non-U.S.regulators,and our funds are subject to various U.S.and/or non-U.S.laws.In particular,we are subject to various securities,compliance,corporate governance,disclosure,privacy,anti-bri

146、bery and anti-corruption,anti-money laundering,anti-terrorist financing,and economic,trade and sanctions laws and regulations,both domestically and internationally,as well as to various cross-border rules and regulations,such as the anti-bribery and anti-corruption rules under the Foreign Corrupt Pr

147、actices Act of 1977(“FCPA”)and the data protection rules under the General Data Protection Regulation(“GDPR”)of the European Union(“EU”).We are subject to sanctions programs administered by the Office of Foreign Assets Control of the U.S.Department of Treasury(“USDT”),as well as sanctions programs a

148、dopted and administered by non-U.S.jurisdictions where our services and products are offered.Our subsidiaries with custody of client assets or accounts are also subject to the applicable laws and regulations of U.S.states and non-U.S.jurisdictions regarding the reporting and escheatment of unclaimed

149、 or abandoned property,and applicable banking,trust company and/or fiduciary related regulations.We also must comply with complex and changing tax regimes in the jurisdictions where we operate our business.Failure to comply with applicable U.S.and non-U.S.laws,regulations,rules,codes,notices,directi

150、ves,guidelines,orders,circulars and/or conditions in the various jurisdictions where we operate could result in a wide range of disciplinary actions against us,our subsidiaries and/or our business.Breaches of applicable laws and rules could result in regulatory enforcement,civil liability,criminal l

151、iability and/or the imposition of a range of sanctions or orders against us,including,as applicable,monetary damages,injunctions,disgorgements,fines,penalties,cease and desist orders,censures,reprimands,and the revocation,cancellation,suspension or restriction of licenses,registration status or appr

152、ovals held by us or our business in a jurisdiction or market.In addition,a public regulatory issue can have a negative impact on our reputation,and as a result have indirect impacts on our business or growth.See Item 7,Managements Discussion and Analysis of Financial Condition and Results of Operati

153、ons,of Part II of this Annual Report,for financial information about our business.U.S.RegulationU.S.Regulatory Framework.As a U.S.reporting company,we are subject to U.S.federal securities laws,state securities and corporate laws,state escheatment laws and regulations,and the rules and regulations o

154、f certain U.S.regulatory and self-regulatory organizations,such as the SEC and the NYSE.In particular,we are subject to various securities,compliance,corporate governance and disclosure rules adopted by the SEC.We are also subject to various other U.S.federal and state laws,including those affecting

155、 corporate governance and disclosure,such as the Securities Act of 1933,the Securities Exchange Act of 1934(“Exchange Act”),the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010,the Sarbanes-Oxley Act of 2002 and the USA PATRIOT Act of 2001.As a NYSE-listed company,we are also subjec

156、t to NYSE listing and disclosure requirements.9As a global investment management organization,certain of our subsidiaries are also subject to the rules and regulations of various U.S.regulatory and self-regulatory organizations,including the SEC,FINRA,the U.S.Commodity Futures Trading Commission(“CF

157、TC”),the National Futures Association,the U.S.Department of Justice(“DOJ”),the U.S.Department of Labor(“DOL”),and the USDT.Our non-U.S.operations also may be subject to regulation by U.S.regulators,including the SEC,the CFTC and the DOJ(for example with respect to the FCPA).Certain of our subsidiari

158、es are registered with the SEC under the Advisers Act and/or with the CFTC,and many of our funds are registered with the SEC under the Investment Company Act.These registrations,licenses and authorizations impose numerous obligations,as well as detailed operational requirements,on such subsidiaries

159、and funds.The Advisers Act imposes numerous obligations on our registered investment adviser subsidiaries,including record keeping,operating and marketing requirements,disclosure obligations and prohibitions against fraudulent activities.The Investment Company Act similarly imposes extensive obligat

160、ions on the registered investment companies advised by our subsidiaries.U.S.Regulatory Reforms.Over the years,the U.S.federal corporate governance and securities laws have been augmented substantially and made significantly more complex by various legislation.As we continue to address our legal and

161、regulatory requirements or focus on meeting new or expanded requirements,we may need to expend a substantial amount of additional time,costs and resources.Regulatory reforms may continue to add further complexity to our business and operations and could require us to alter our investment management

162、services and related activities,which could be costly,impede our growth and adversely impact our AUM,revenues and income.Such reforms could significantly increase our reporting,disclosure and compliance obligations.Certain key regulatory reforms in the U.S.that impact or relate to our business,and m

163、ay cause,or continue to cause,us to incur additional obligations,include:Antitrust Rules and Disclosure.In October 2024,the Federal Trade Commission(“FTC”)approved various rule changes under the Hart-Scott-Rodino Antitrust Improvements Act of 1976(“HSR Act”)that amend certain premerger reporting and

164、 notification rules.The HSR Act and its implementing rules require parties to certain mergers and acquisitions to submit premerger notifications to the FTC and DOJ and observe a waiting period before consummating such transactions.The new rule changes,scheduled to take effect in January 2025,signifi

165、cantly expand the premerger information and documentation required to be submitted in connection with an HSR filing,which could substantially increase our required disclosure and notification expenses and delay transactions.Cybersecurity Disclosure.The SECs amended rules requiring disclosure regardi

166、ng cybersecurity risk management,strategy,governance and incident reporting by public companies became effective in December 2023.The amendments require public companies to(i)disclose,on a current basis,any cybersecurity incident it deems to be material within four business days on a Form 8-K;(ii)de

167、scribe,on an annual basis,the companys processes,if any,for the assessment,identification and management of material risks from cybersecurity threats,as well as whether any risks from cybersecurity threats have materially affected or are reasonably likely to materially affect their business strategy

168、,results of operations or financial condition;and(iii)describe,on an annual basis,the boards oversight of risks from cybersecurity threats and managements role in assessing and managing those risks.The amendments require ongoing evaluation and analysis of our applicable processes and procedures,incl

169、uding regarding cyber incident response plans and procedures,disclosure analysis framework,risk management processes,and board oversight structure.Sustainable Investing and ESG,and Climate-Related Disclosure.Sustainable investing and ESG continue to be the focus of increased regulatory and legal scr

170、utiny across jurisdictions.In the U.S.,the SEC adopted,but subsequently stayed implementation of,climate disclosure rules to require public issuers to include enhanced disclosure and financial metrics regarding corporate climate-related information in their periodic reports and registration statemen

171、ts,and these rules remain subject to applicable legal challenges.In addition,state laws and regulations regarding these topics continue to evolve and impose further requirements.For example,in October 2023,California enacted a new climate accountability package pursuant to its Climate Corporate Data

172、 Accountability Act that requires annual disclosure of certain greenhouse gas emissions and Climate-Related Financial Risk Act that requires biennial disclosure of certain climate-related financial risks and mitigation measures,each beginning in 2026,subject to applicable implementing regulations an

173、d rulemaking that may impact final scope and compliance timing.Also,the SEC has increased its focus on disclosure and compliance related to ESG strategies of investment advisers and funds.Globally,the International Sustainability Standards Board and applicable sustainability disclosure standards imp

174、act how national regulators and governance bodies approach these and related topics.Privacy and Data Protection.There continues to be an increased regulatory and enforcement focus with respect to the protection of individuals privacy and personal data around the world,and the ongoing need to secure

175、and ensure only appropriate collection and use of sensitive customer,personnel,and others personal data.A majority of the jurisdictions where we operate are covered,or we expect will be covered,by stringent privacy and data protection laws and regulations.10As the regulatory focus on privacy continu

176、es to intensify and laws and regulations concerning the management of personal data continue to expand,risks related to the handling of privacy obligations and personal data collection across our business will increase.For example,in addition to international data protection and privacy laws and reg

177、ulations like the EUs GDPR,we are,and expect to continue to be,subject to and affected by existing,new and evolving country,federal and state laws,regulations and guidance around the world impacting consumer and personnel privacy,including the California Consumer Privacy Act,as amended by the Califo

178、rnia Privacy Rights Act,and various other U.S.state consumer privacy laws that provide for enhanced consumer protections for their residents and impose requirements for the handling,disclosure and deletion of personal information of their residents.Systemically Important Financial Institutions.The m

179、andate of the Financial Stability Oversight Council(“FSOC”)is to identify and respond to threats to U.S.financial stability.Similarly,the U.S.and other members of the G-20 group of nations have empowered the Financial Stability Board(“FSB”)to identify and respond,in a coordinated manner,to threats t

180、o global financial stability.The FSOC may designate certain non-bank financial companies as systemically important financial institutions(“SIFIs”),which are subject to supervision and regulation by the Board of Governors of the Federal Reserve System.The FSB may designate certain non-bank financial

181、companies as global systemically important financial institutions(“G-SIFIs”).To the extent that we or any of our funds are designated as a SIFI or G-SIFI,such designations would add additional supervision,review,monitoring and/or regulation resulting in increased scrutiny and oversight that could im

182、pact our business.Derivatives and Other Financial Products.Regulators continue to review practices and regulations relating to the use of futures,swaps and other derivatives,which could result in further restrictions and limitations on the use of such products.In October 2020,the SEC adopted new rul

183、es governing the use of derivatives by certain registered investment companies,including certain mutual funds,designed to address investor protection concerns,which became effective in August 2022.Key aspects of the new framework include,among other things,value at risk limits on a fund entering int

184、o derivatives transactions,required risk management program,and further fund board oversight,reporting and compliance requirements.The EU and other countries have adopted and implemented,or are in the process of adopting or implementing,similar and additional requirements.There is the risk that full

185、 mutual recognition may not be achieved between the various regulators,which may cause us to incur duplicate regulation and transaction costs.U.S.DOL Reforms.The DOLs 2024 amended fiduciary rule broadening the definition of who is considered an“investment advice fiduciary”to a retirement investor,an

186、d adding significant restrictions and requirements for the use of prohibited transaction exemptions typically relied upon by investment firms such as ours,remains subject to applicable legal challenges.Under the new rule,a financial services provider that provides one-time advice to a retirement inv

187、estor may become subject to the Employee Retirement Income Security Act(ERISA)fiduciary standard.In addition to the 2024 fiduciary rule,the DOL amended the Qualified Professional Asset Manager(QPAM)exemption as of June 2024,which many investment firms have relied upon when providing services to and

188、engaging in transactions on behalf of applicable retirement plans,individual retirement accounts(IRAs)and/or certain commingled investment vehicles that have retirement plan investors.The QPAM amendment makes material changes and imposes additional conditions and affirmative requirements for the ong

189、oing use of such exemption.Private Fund Adviser Reforms.In May 2023,the SEC adopted amendments to Form PF,which is the confidential reporting form that investment advisers to private funds file to provide confidential information to the SEC and the FSOC.The amendments require(i)current and quarterly

190、 reporting by large hedge fund advisers regarding certain events that may indicate stress at a fund or signal broader systemic risk;and(ii)enhanced reporting by large private equity advisers to allow the FSOC to monitor systemic risk.The amendments also require large private equity fund advisers to

191、report information on general partner and limited partner clawbacks on an annual basis as well as additional information on their strategies and borrowings as a part of their annual filing.The current and quarterly event reporting requirements became effective in November 2023 and the remaining amen

192、dments became effective in May 2024.Money Market Fund Reforms.The regulatory structure governing U.S.money market funds was previously reformed to address perceived systemic risks of money market funds relating to fund stability and investor risks,including allowing certain funds to impose liquidity

193、 fees and redemption gates under certain circumstances.In July 2023,the SEC adopted additional rule and form amendments concerning money market funds registered under the Investment Company Act,intended to address problems experienced by certain money market funds in connection with the COVID-19 pan

194、demic.The new and amended rules were phased in through October 2024 and,among other changes,impose increased minimum liquidity requirements,impose mandatory liquidity fees on institutional prime and institutional tax-exempt funds under certain circumstances,eliminate redemption gates,and permit shar

195、e cancellation measures during periods of negative 11interest rates.In addition,the Form PF was further amended to require additional information regarding the private liquidity funds that an investment manager advises.Fund Names Rule Reforms.In September 2023,the SEC adopted amendments to the fund“

196、Names Rule”impacting regulated investment funds.The Names Rule generally requires a fund to invest at least 80%of the value of its assets in the particular type of investments or industry suggested by the funds name.The amendments expand the applicability of the Names Rule and impacted funds may nee

197、d to modify their names or alter their investment strategies to comply with the amendments,potentially impacting their portfolios.Funds with names that suggest a focus on investments that have particular characteristics,such as“growth,”“value”or thematic terms such as“ESG,”would be required to adopt

198、 a policy to invest at least 80%of the funds assets in those investments and would be subject to enhanced disclosure and reporting requirements.The SEC did not clearly define these terms and instead is allowing fund managers the flexibility to create their own reasonable definitions.Compliance with

199、the rules is required effective in December 2025.U.S.and Global Tax Compliance.Our business may be directly or indirectly affected by tax legislation and regulation,or the modification of existing tax laws,by applicable tax and other governmental authorities.The Organization for Economic Co-operatio

200、n and Development,an intergovernmental organization,has focused on addressing the tax challenges of the digitalization of the economy,which may further impact multinational businesses by allocating a greater share of taxing rights to countries where consumers are located regardless of the current ph

201、ysical presence of a business,and by implementing a global minimum tax.We will continue to monitor developments regarding such matters and any significant impacts on our effective tax rate.Non-U.S.RegulationOur operations outside the U.S.are subject to the laws and regulations of various non-U.S.jur

202、isdictions and non-U.S.regulatory agencies and bodies.Our international operations are subject to regulatory systems in various jurisdictions,comparable to those covering our operations in the U.S.Europe.In Luxembourg,the Commission de Surveillance du Secteur Financier(“CSSF”)regulates our substanti

203、al activities in Luxembourg,including our subsidiary Franklin Templeton International Services S.r.l.(“FTIS Lux”).FTIS Lux is licensed as a management company for both the Undertakings for Collective Investment in Transferable Securities Directive(“UCITS”)and alternative investment funds(“AIFs”)and,

204、as such,it manages our Luxembourg-domiciled UCITS and our EU-domiciled AIFs.FTIS Luxs license also covers certain investment services,such as discretionary portfolio management,investment advice and reception and transmission of orders in relation to financial instruments.The CSSFs rules include cap

205、ital resource,governance and risk management requirements,business conduct rules,remuneration rules and oversight of systems and controls.Our international funds include two broad ranges of cross-border UCITS that are domiciled in Luxembourg and Ireland,as applicable,and thereby subject to regulatio

206、n by the CSSF and the Central Bank of Ireland.Both UCITS are also registered for public sale in many countries around the world,both in the EU and beyond,and thus are also subject to the laws of,and certain supervision by,the governmental authorities of those countries.In the U.K.,the Financial Cond

207、uct Authority(the“FCA”)regulates certain of our subsidiaries.Authorization by the FCA is required to conduct any financial services-related business in the U.K.pursuant to the Financial Services and Markets Act 2000.The FCAs rules under that act govern a firms capital resources requirements,senior m

208、anagement arrangements,business conduct,interaction with clients,and systems and controls.The FCA recently established Sustainability Disclosure Requirements and we are reviewing the applicable product,marketing and other disclosure requirements for compliance with the December 2024 deadline.We offe

209、r a significant number of EU UCITS to U.K.retail investors which will need to apply for registration under the U.K.s new Offshore Funds Regime by mid-2025 in order to continue such offerings.We await a further consultation from the U.K.Treasury as to how such funds may in the future also be covered

210、by the Sustainability Disclosure Requirements.12In addition,the EU Markets in Financial Instruments Directive,as revised and expanded in 2018(“MiFID II”),regulates the provision of investment services and conduct of investment activities throughout the European Economic Area(“EEA”).As revised,MiFID

211、II sets out detailed requirements,governing the organization and business conduct of investment firms and regulated markets,and includes pre-and post-trade transparency requirements for equity markets and extensive transaction reporting requirements.It also includes an expansion of the types of inst

212、ruments subject to these requirements,such as bonds,structured products and derivatives,and changes to business conduct requirements,including selling practices,intermediary inducements and client categorization.MiFID II also includes a ban on commission and other payments(“inducements”)to independe

213、nt advisers and discretionary managers,which has changed the commercial relationships between fund providers and distributors.Arrangements with non-independent advisers have also been affected,as narrower rules around the requirement that any commission reflect an enhancement of the service to custo

214、mers come into effect,along with a prescriptive list of permissible non-monetary benefits.The interpretation of the inducements rules has also resulted in major changes to how fund managers finance investment research with many firms,including ours.The European Market Infrastructure Regulation sets

215、out rules in relation to the central clearing of specified derivatives.Mutual recognition of central counterparties has been achieved between the EU regulatory authorities and other important jurisdictions including the U.S.In addition,there are rules relating to margin requirements for uncleared ov

216、er-the-counter derivatives.Future regulatory policy reviews will decide whether these rules are extended to other types of derivative instruments,which could increase operational costs for our business and transactional costs for our clients.The EUs Alternative Investment Fund Managers Directive(“AI

217、FMD”)regulates managers of,and service providers to,AIFs that are domiciled and offered in the EU and that are not authorized as retail funds under UCITS.The AIFMD also regulates the marketing within the EU of all AIFs,including those domiciled outside the EU.Compliance with the AIFMDs requirements

218、may restrict AIF marketing and imposes compliance obligations in the form of remuneration policies,capital requirements,reporting requirements,leverage oversight,valuation,stakes in EU companies,the domicile,duties and liability of custodians and liquidity management.The EU regulation on packaged re

219、tail investment and insurance products(“PRIIPs”)imposed new pre-contractual disclosure requirements under the form of a Key Information Document(“KID”)for the benefit of retail investors when they are considering the purchase of packaged retail investment products or insurance-based products.The EUs

220、 Sustainable Finance Disclosure Regulation(“SFDR”)imposes mandatory ESG disclosure obligations on asset managers and other financial markets participants.SFDR requires all covered firms to disclose how financial products integrate sustainability risks in the investment process,including whether they

221、 consider adverse sustainability impacts,and,for those products promoting sustainable objectives,the provision of sustainability-related information.Related amendments to applicable legislation require that all covered investment managers must consider in their investment process any ESG risks which

222、 are likely to have a material impact on the value of the investment and require investment advisers to inquire as to the investors desire for ESG-focused products in their portfolio when assessing suitability.The availability of such sustainability disclosures may impact the investment decisions of

223、 European investors.The EUs Corporate Sustainability Due Diligence Directive(“CSDD”)will impose due diligence obligations requiring companies to identify,and to prevent or at least mitigate,adverse impacts on human rights and the environment across their value chain,including by their subsidiaries,s

224、upply chain partners and clients.Obligations would be enforced through administrative sanctions and civil liability,with a defense of having exercised reasonable due diligence.The CSDD remains subject to further secondary rulemaking and guidance around implementation.While CSDD does not currently ap

225、ply to investment funds,the European Commission is required to consider the merits of potentially extending the requirements to funds within the next two years.As investors in the public markets do not have the contractual relationship with issuers to compel them to provide the information required

226、by CSDD,the imposition of CSDD to funds could prove problematic for the industry.Australia.In Australia,our subsidiaries are subject to various Australian federal and state laws and are regulated by the Australian Securities and Investments Commission(“ASIC”).ASIC regulates companies,financial marke

227、ts and financial services in Australia.ASIC imposes certain conditions on licensed financial services organizations that apply to our subsidiaries,including requirements relating to capital resources,operational capability and controls.Canada.In Canada,our subsidiaries are subject to provincial and

228、territorial laws and are registered with and regulated by provincial and territorial securities regulatory authorities.The mandate of Canadian securities regulatory authorities is generally to protect investors;to foster fair,efficient and competitive capital markets;to foster capital 13formation;an

229、d to contribute to the stability of the financial system and the reduction of systemic risk.Securities regulatory authorities impose certain requirements on registrants,including a standard of conduct,capital and insurance,record keeping,regulatory financial reporting,conflict of interest management

230、,compliance systems and security holder reporting.In addition,one of our Canadian subsidiaries is a federally licensed trust company subject to regulation and supervision by the Office of the Superintendent of Financial Institutions and another subsidiary is a member of and regulated by the Canadian

231、 Investment Regulatory Organization.These regulatory bodies have similar requirements to those of the securities regulatory authorities with a view to ensuring the capital adequacy and sound business practices of the subsidiaries and the appropriate treatment of their clients.Cayman Islands.In the C

232、ayman Islands,the Cayman Islands Monetary Authority(“CIMA”)is responsible for the regulation and supervision of financial services,the monitoring of compliance with anti-money laundering regulations,and the issuance of statements of principle and guidance.In February 2020,the Cayman Islands enacted

233、the Private Funds Law 2020(the“Private Funds Law”),which requires private funds that engage in business in or from the Cayman Islands to register with CIMA,unless an exemption applies.The Private Funds Law applies to any Cayman Islands closed-end fund.Open-end funds such as hedge funds continue to b

234、e regulated by the Mutual Funds Law in the Cayman Islands.The registration requirements applicable to our private funds domiciled in the Cayman Islands have posed,and may continue to pose,additional compliance costs and burdens on our business.Hong Kong.In Hong Kong,our applicable subsidiaries are s

235、ubject to the Securities and Futures Ordinance(“SFO”)and its subsidiary legislation,which governs the securities and futures markets and regulates,among others,offers of investments to the public and provides for the licensing of dealing in securities and asset management activities and intermediari

236、es.This legislation is administered by the Securities and Futures Commission(“SFC”).The SFC is also empowered under the SFO to establish standards for compliance as well as codes and guidelines.Our subsidiaries and employees conducting any of the regulated activities specified in the SFO are require

237、d to be licensed with the SFC,and are subject to the rules,codes and guidelines issued by the SFC from time to time.India.The Securities and Exchange Board of India,Reserve Bank of India,the International Financial Services Centres Authority,the Ministry of Corporate Affairs and the Department of In

238、dustrial Policy and Promotion are the major regulatory authorities that are capable of issuing directions of a binding nature to our subsidiaries in India.Japan.In Japan,our subsidiaries are subject to the Financial Instruments and Exchange Act and the Act on Investment Trusts and Investment Corpora

239、tions.These laws are administered and enforced by the Japanese Financial Services Agency,which establishes standards for compliance,including capital adequacy and financial soundness requirements,customer protection requirements,and business conduct rules.Singapore.In Singapore,our subsidiaries are

240、subject to,among others,the Securities and Futures Act(“SFA”),the Financial Advisers Act(“FAA”)and the subsidiary legislation promulgated pursuant to these Acts,which are administered by the Monetary Authority of Singapore(“MAS”).Our asset management subsidiaries and their employees conducting regul

241、ated activities specified in the SFA and/or the FAA are required to be licensed with the MAS.Other Non-U.S.Jurisdictions.There are similar legal and regulatory arrangements in effect in many other non-U.S.jurisdictions where our subsidiaries,branches and representative offices,as well as certain joi

242、nt ventures or companies in which we own minority stakes,are authorized to conduct business.We are also subject to regulation and supervision by,among others,the Securities Commission of The Bahamas,the Central Bank of Brazil and the Comisso de Valores Mobilirios in Brazil,the China Securities Regul

243、atory Commission in the Peoples Republic of China,the Financial Services Commission and the Financial Supervisory Service in South Korea,the Securities Commission in Malaysia,the Comision Nacional Bancaria y de Valores in Mexico,the Polish Securities and Exchange Commission,the Romanian Financial Se

244、rvices Authority,the Swiss Federal Banking Commission,the Financial Supervisory Commission in the Republic of China,the Dubai Financial Services Authority in the United Arab Emirates,the Saudi Capital Market Authority,and the State Securities Commission of Vietnam.14INTELLECTUAL PROPERTY We have use

245、d,registered,and/or applied to register certain trademarks,service marks and trade names to distinguish our sponsored products and services from those of our competitors in the U.S.and in other countries and jurisdictions,including,but not limited to,Alcentra,Benefit Street Partners,Brandywine Globa

246、l Investment Management,Canvas,Clarion Partners,ClearBridge Investments,Fiduciary Trust International,Franklin,Franklin Mutual Series,K2,Legg Mason,Lexington Partners,Martin Currie,OShaughnessy,Putnam,Royce,Templeton and Western Asset Management Company.Our trademarks,service marks and trade names a

247、re important to us and,accordingly,we enforce our trademark,service mark and trade name rights.The Franklin Templeton brand has been,and continues to be,extremely well received both in our industry and with our clients,reflecting the fact that our brand,like our business,is based in part on trust an

248、d confidence.If our brand is harmed,our future business prospects may be adversely affected.HUMAN CAPITAL RESOURCESAs of September 30,2024,we employed approximately 10,200 employees and operated offices in over 30 countries.We consider our relations with our employees to be satisfactory.We depend up

249、on our key personnel to manage our business,including our portfolio managers,investment analysts,sales and management personnel and other professionals as well as our executive officers and business unit heads.Competition for experienced personnel is significant and from time to time we may experien

250、ce a loss of valuable personnel.The retention of our key investment personnel is material to the management of our business.At an enterprise level,we use employee surveys to understand sentiment and engagement in the organization.At a team level,our performance management system supports ongoing,act

251、ive discussion about goals and objectives.We also host live forums for leaders to engage directly with employees to help reinforce our culture of open feedback.Our employees have access to a valuable set of equitable and competitive total rewards,which consists of a mix of monetary and non-monetary

252、rewards designed to recognize their time,talents and results.Recognizing the importance of diversity,equity,and inclusion(“DEI”)is a priority in our organization.We believe that our ability to attract,develop and retain a diverse and highly-skilled workforce is important to our long-term success.We

253、have developed DEI strategies and initiatives anchored in our core values.To support our DEI efforts,we have allocated dedicated resources for DEI,established a global governance structure,and have established research-based DEI policies and procedures.We believe that our commitment to creating and

254、maintaining a diverse workforce,including backgrounds and perspectives,makes us a better place to work and a more resilient business.We value an inclusive culture that leverages the expertise and perspectives of our diverse workforce as an important factor in our ability to deliver innovative and re

255、levant client solutions in a dynamic marketplace.AVAILABLE INFORMATION The SEC maintains a website that contains current and periodic reports,proxy and information statements,and other information regarding issuers,including Franklin,that file electronically with the SEC,at www.sec.gov.Additional in

256、formation about Franklins filings can also be obtained through our website at under“Investor Relations.”We make available free of charge on our website Franklins Annual Report on Form 10-K,Quarterly Reports on Form 10-Q,Current Reports on Form 8-K and amendments to those reports filed or furnished p

257、ursuant to Section 13(a)or 15(d)of the Exchange Act,as soon as reasonably practicable after we electronically file such material with,or furnish it to,the SEC.Franklin periodically provides other information for investors on its website,such as press releases,presentations and other information abou

258、t financial performance.The information on our website is not incorporated by reference into,and is not a part of,this Annual Report.15Item 1A.Risk Factors.MARKET AND VOLATILITY RISKSVolatility and disruption of our business and financial markets and adverse changes in the global economy may signifi

259、cantly affect our results of operations and put pressure on our financial results.We derive substantially all of our operating revenues and income from providing investment management and related services to investors in jurisdictions worldwide through our investment products,which include our funds

260、,as well as institutional and high-net-worth separate accounts,retail separately managed account programs,sub-advised products,and other investment vehicles.Related services include fund administration,sales and distribution,and shareholder servicing.We may perform services directly or through third

261、 parties.The asset management industry continues to experience disruption and challenges,including continued fee pressure,regulatory changes,an increasing and changing role of technology in asset management services,the continuous introduction of new products and services,and the consolidation of fi

262、nancial services firms through mergers and acquisitions.Further,financial markets have currently and in the past experienced and may continue,from time to time,to experience volatility and disruption worldwide.Declines in global economic markets have periodically resulted,and may continue to result,

263、in significant decreases in our AUM,revenues and income,and future declines may further negatively impact our financial results.Such declines have had,and may in the future have,a material adverse impact on our business.We may need to modify our business,strategies or operations and we may be subjec

264、t to additional constraints or costs in order to compete in a changing global economy and business environment.Individual financial,equity,debt and commodity markets may be adversely affected by financial,economic,operational,political,electoral,diplomatic or other changes and/or instabilities that

265、are particular to the country or region in which a market is located,including without limitation local acts of terrorism,economic crises,political protests,war,insurrection or other business,social or political crises.For example,the ongoing Ukraine-Russia and Middle East wars and conflicts may con

266、tinue to expand globally and significantly impact the global economy and financial markets,which may have an adverse effect on our investment performance and flows in certain products.Global economic conditions,exacerbated by war,terrorism,social,civil or political unrest,natural disasters,public he

267、alth crises,such as epidemics or pandemics,or financial crises,changes in the equity,debt or commodity marketplaces or market operations,changes in currency exchange rates,interest rates,inflation rates,the yield curve,defaults by trading counterparties,bond defaults,revaluation and bond market liqu

268、idity risks,geopolitical risks,the imposition of economic sanctions and other factors that are difficult to predict,affect the mix,market values and levels of our AUM.Changing market conditions could also cause an impairment to the value of our goodwill and other intangible assets.The amount and mix

269、 of our AUM are subject to significant fluctuations,and a shift in our asset mix toward lower-fee products may negatively impact our revenues and income.Fluctuations in the amount and mix of our AUM may be attributable in part to market conditions outside of our control that have had,and in the futu

270、re could have,a negative impact on our revenues and income.The level of our revenues depends largely on the level and relative mix of AUM.Our investment management fee revenues are based primarily on a percentage of AUM and vary with the types and strategies of our products.Any decrease in the value

271、 or amount of our AUM because of market volatility or other factors,such as asset outflows or a decline in the price of securities,in particular market segments or in the securities market generally,negatively impacts our revenues and income.Changing market conditions and investor preferences may ca

272、use a shift in our asset mix toward certain lower fee products,such as fixed income products and ETFs,and away from higher fee equity and alternative products,which may cause a related decline in our revenues and income.In addition,increases in interest rates,particularly if rapid,as well as uncerta

273、inty in the future direction of interest rates,may have a negative impact on our fixed income products and decrease the total return on bond investments due to lower market valuations of existing bonds.Moreover,we generally derive higher investment management and distribution fees from our internati

274、onal products than from our U.S.products,and higher sales fees from our U.S.products than from our international products.Changing market conditions may cause a shift in our asset mix between international and U.S.products,which may result in a decline in our revenues and income.Our funds may be sub

275、ject to liquidity risks or an unanticipated large number of redemptions and fund closures.Due to market volatility,reputational harm or other events or conditions described above,our funds may need to sell securities or instruments that they hold,possibly at a loss,or draw on any available lines of

276、credit,to obtain cash to maintain sufficient liquidity or settle redemptions,or settle in-kind with securities held in the applicable fund.While we 16have no legal or contractual obligation to do so,we have in the past provided,and may in the future at our discretion provide,financial support to our

277、 funds to enable them to maintain sufficient liquidity in any such event.Changes in investor preferences regarding our more popular products have in the past caused,and could in the future cause,sizable redemptions and lower the value of our AUM,which would result in lower revenue and operating resu

278、lts.Increased market volatility and changes in investor preferences also increase the risk of fund closures.Any decrease in the level of our AUM resulting from market declines,credit or interest rate volatility or uncertainty,increased redemptions or other factors could negatively impact our revenue

279、s and income.INVESTMENT PERFORMANCE AND REPUTATIONAL RISKSPoor investment performance of our products could reduce the level of our AUM or affect our sales,and negatively impact our revenues and income.Our investment performance,along with achieving and maintaining superior distribution and client s

280、ervice,is critical to the success of our business.Strong investment performance often stimulates sales of our products.Poor investment performance,as has been and may be periodically experienced by certain of our products,as compared to third-party benchmarks or competitive products,has led,and coul

281、d in the future lead,to a decrease in sales of our products and stimulate redemptions from existing products,generally lowering the overall level of AUM and reducing the management fees we earn.We can provide no assurance that past or present investment performance in our products will be indicative

282、 of future performance.If we fail,or appear to fail,to successfully and promptly address the underlying causes of poor investment performance,our future business prospects would likely be negatively affected.Harm to our reputation may negatively impact our revenues and income.Our reputation is criti

283、cal to the success of our business.We believe that our brand names have been,and continue to be,well received both in our industry and with our clients,reflecting the fact that our brands,like our business,are based in part on trust and confidence.If our brands or reputation are harmed,existing clie

284、nts may reduce amounts held in,or withdraw entirely from,our products and services,and/or our clients and products may terminate their management agreements with us,which could reduce the amount of our AUM and cause us to suffer a corresponding loss in our revenues and income.Such impacts could mate

285、rially and adversely affect our profitability,lead to further business and operational disruptions,and expose us to additional costs and increased reputational damage and risk.In addition,reputational harm may prevent us from attracting new clients or developing new business.Moreover,ESG topics and

286、activities have been the subject of increased focus by certain investors and regulators in the asset management industry,and any inability to meet applicable requirements may adversely impact our reputation and business.GLOBAL OPERATIONAL RISKSOur business and operations are subject to adverse effec

287、ts from the outbreak and spread of contagious diseases such as COVID-19.The outbreak and spread of contagious diseases such as COVID-19 have had,and may in the future have,adverse effects on our business,financial condition and results of operations.The COVID-19 pandemic resulted in a widespread glo

288、bal public health crisis.Such infectious illness outbreaks or other adverse public health developments in countries where we operate,as well as local,state and/or national government restrictive measures implemented to control such outbreaks,could adversely affect the economies of many nations or th

289、e entire global economy,the financial condition of individual issuers or companies and capital markets,in ways that cannot necessarily be foreseen,and such impacts could be significant and long term.Such extraordinary events and their aftermaths can cause investor fear and panic,which can further ad

290、versely affect the operations and performance of companies,sectors,nations,regions and financial markets in general and in ways that cannot necessarily be foreseen.It is not possible to predict the full extent to which a pandemic may evolve and/or adversely impact our business,liquidity,capital reso

291、urces,financial results and operations.17We may review and pursue strategic transactions that could pose risks to our business and global operations.As part of our global business strategy,we regularly consider,and have discussions with respect to,potential strategic transactions,including acquisiti

292、ons,dispositions,consolidations,joint ventures or similar transactions,some of which may be deemed material.There can be no assurance that we will find suitable candidates for strategic transactions at acceptable prices,have sufficient capital resources to accomplish our strategy,or be successful in

293、 entering into agreements for desired transactions.In addition,such transactions typically involve a number of risks and present financial,managerial and operational challenges.Acquisitions and related transactions pose the risk that any business we acquire may result in the loss of clients,customer

294、s or personnel or could underperform relative to expectations.We also may not realize the anticipated benefits of an acquisition,including with respect to revenue,tax benefits,financial benefits or returns,and expense and other synergies.We could also experience financial or other setbacks if transa

295、ctions encounter unanticipated problems,including problems related to execution or integration.Entries into material transactions typically are announced publicly even though they may remain subject to numerous closing conditions,contingencies and approvals,and there is no assurance that any announc

296、ed transaction will actually be consummated.Future transactions also may further increase our leverage or,if we issue equity securities to pay for acquisitions,dilute the holdings of our existing stockholders.In addition,from time to time,we enter into joint ventures or take minority stakes in compa

297、nies in which we typically do not have control.These investments may involve risks,including the risk that the controlling stakeholder or joint venture partner may have business interests,strategies or goals that are inconsistent with ours.The business decisions or other actions or omissions of the

298、controlling stakeholder,joint venture partner or the entity itself may result in liability to us or harm to our reputation,or adversely affect the value of our investment in the entity.Our business operations are complex and a failure to perform operational tasks properly or comply with applicable r

299、egulatory requirements could have an adverse effect on our revenues and income.Through our subsidiaries,we provide investment management and related services to investors globally.Further,we outsource various administration,technology,transfer agency and other services for our funds to third-party p

300、roviders who may serve as a sub-agent or delegate.In order to be competitive and comply with our agreements,we must properly manage our business and subsidiaries around the world,and effectively perform our fund and portfolio administration and related responsibilities,including portfolio record kee

301、ping and accounting,security pricing,corporate actions,investment restrictions compliance,daily net asset value computations,account reconciliations,and required distributions to fund shareholders.Many of our operations are complex and dependent on our ability,and the ability of our third-party prov

302、iders,to process and monitor a large number of transactions effectively,which may occur across numerous markets and currencies at high volumes and frequencies.Although we expend considerable resources on internal controls,supervision,technology and training in an effort to ensure that such transacti

303、ons do not violate applicable guidelines,rules and regulations or adversely affect our clients,counterparties or us,our operations are ultimately dependent on our personnel,as well as others involved in our business,such as third-party providers and other intermediaries,and subject to human error.Ou

304、r personnel and others involved in our business may,from time to time,make mistakes that are not always immediately detected,which may disrupt our operations,cause losses,lead to regulatory fines or sanctions,litigation,or otherwise damage our reputation.In addition,any misrepresentation of our serv

305、ices and products in advertising materials,public relations information,social media or other external communications could also adversely affect our reputation and business prospects.Our investment management fees,which represent a majority of our revenues,are dependent on fees earned under investm

306、ent management agreements that we have with our products and clients.Our revenues could be adversely affected if such agreements representing a significant portion of our AUM are terminated.Further,certain of our subsidiaries may act as general partner for various investment partnerships,which may s

307、ubject them to liability for the partnerships liabilities.If we fail to perform and monitor our operations properly,our business could suffer and our revenues and income could be adversely affected.Failure to establish adequate controls and risk management policies,or the circumvention of controls a

308、nd policies,could have an adverse effect on our global operations,reputation and financial position.Although we have adopted risk management,operational and financial controls and compliance policies,procedures and programs that are subject to regular review and update,we cannot ensure that these me

309、asures will enable us effectively to identify and manage internal and external risks including those related to fraudulent activity and dishonesty.We are subject to the risk that our personnel,contractors,vendors and other third parties may deliberately or recklessly circumvent or violate our contro

310、ls to commit fraud against our business,products and/or client accounts,pay or solicit bribes,or otherwise act in ways inconsistent with our controls,policies,workplace culture and business principles.Continued 18attempts to circumvent our policies and controls or repeated incidents involving violat

311、ion of controls and policies,fraud or conflicts of interests could negatively impact our business and reputation and result in adverse publicity,regulatory investigations and actions,legal proceedings and losses and adversely affect our operations,reputation,AUM and financial results.We face risks,a

312、nd corresponding potential costs and expenses,associated with conducting operations and growing our business in numerous countries.We sell our products and offer our strategies and investment management and related services in many different regulatory jurisdictions around the world,and intend to co

313、ntinue to expand our operations internationally.As we do so,we will continue to face challenges to the adequacy of our resources,procedures and controls to operate our business consistently and effectively.In order to remain competitive,we must be proactive and prepared to implement necessary resour

314、ces when growth opportunities present themselves,whether as a result of a business acquisition or rapidly increasing business activities in particular markets or regions.Local regulatory environments may vary widely in terms of scope,adequacy and sophistication.Similarly,local distributors,and their

315、 policies and practices as well as financial viability,may vary widely and they may be inconsistent or less developed or mature than other more internationally focused distributors.Growth of our international operations has involved and may continue to involve near-term increases in expenses,as well

316、 as additional capital costs,such as information systems and technology costs,and costs related to compliance with particular regulatory or other local requirements or needs.Local requirements or needs also may place additional demands on sales and compliance personnel and resources,such as meeting

317、local language requirements,while also integrating personnel into an organization with a single operating language.Finding,hiring and retaining additional,well-qualified personnel and crafting and adopting policies,procedures and controls to address local or regional requirements remain challenges a

318、s we expand our operations internationally.Moreover,regulators in non-U.S.jurisdictions could also change their policies or laws in a manner that might restrict or otherwise impede our ability to distribute or authorize products or maintain their authorizations in their respective markets.Any of the

319、se local requirements,activities or needs could increase the costs and expenses we incur in a specific jurisdiction without any corresponding increase in revenues and income from operating in the jurisdiction.Certain laws and regulations both inside and outside the U.S.have extraterritorial applicat

320、ion.This may lead to duplicative or conflicting legal or regulatory burdens and additional costs and risks.Our focus on international markets as a source of investments and sales of our products subjects us to increased exchange rate and market-specific political,economic or other risks that may adv

321、ersely impact our revenues and income generated overseas.While we maintain a significant portion of our operations in the U.S.,we also provide services and earn revenues in Asia-Pacific;Europe,Middle East and Africa;Latin America;and Canada.As a result,we are subject to foreign currency exchange ris

322、k through our non-U.S.operations.Fluctuations in the exchange rates to the U.S.dollar have affected,and will in the future affect,our financial results from one period to the next.While we have taken steps to reduce our exposure to foreign exchange risk,for example,by denominating a significant amou

323、nt of our transactions in U.S.dollars,our situation may change in the future.Appreciation of the U.S.dollar could in the future moderate revenues from managing our products internationally,or could affect relative investment performance of certain of our products invested in non-U.S.securities.In ad

324、dition,we have risk associated with the foreign exchange revaluation of U.S.dollar balances held by certain non-U.S.subsidiaries for which the local currency is the functional currency.Separately,management fees that we earn tend to be higher in connection with non-U.S.AUM than with U.S.AUM.Conseque

325、ntly,downturns in international markets have in the past had,and could in the future have,a significant effect on our revenues and income.Moreover,our emerging market portfolios and revenues derived from managing these portfolios are subject to significant risks of loss from financial,economic,polit

326、ical and diplomatic developments,currency fluctuations,social instability,changes in governmental policies,nationalization,asset confiscation and changes in legislation related to non-U.S.ownership.International trading markets,particularly in some emerging market countries,are often smaller,less li

327、quid,less regulated and significantly more volatile than those in the U.S.Any ongoing and future business,economic,political or social unrest affecting these markets,in addition to any direct consequences such unrest may have on our personnel and facilities located in the affected area,also may have

328、 a lasting impact on the long-term investment climate in these and other areas and,as a result,our AUM and the corresponding revenues and income that we generate from them may be negatively affected.19We may not effectively manage risks associated with the replacement of benchmark indices.The replac

329、ement of benchmark indices may impose a number of risks on our business,our clients and the financial services industry more widely.These include financial risks arising from changes in the valuation of financial instruments linked to benchmark indices,pricing and operational risks,and legal impleme

330、ntation and revised documentation.We may from time to time face operational challenges implementing successor benchmarks.COMPETITION AND DISTRIBUTION RISKSFailure to properly address the increased transformative pressures affecting the asset management industry could negatively impact our business.T

331、he asset management industry is facing transformative pressures and trends from a variety of different sources including increased fee pressure;a continued shift away from actively managed core equities and fixed income strategies towards alternative,passive and smart beta strategies;increased deman

332、ds from clients and distributors for client engagement and services;a trend towards institutions developing fewer relationships and partners and reducing the number of investment managers they work with;increased regulatory activity and scrutiny of many aspects of the asset management industry,inclu

333、ding ESG practices and related matters,transparency/unbundling of fees,inducements,conflicts of interest,capital,liquidity,solvency,leverage,operational risk management,controls and compensation;addressing the key emerging markets in the world,such as China and India,which often have populations with different needs,preferences and horizons than the U.S.and European markets;advances in technology