o 020 P-2
                        SUPPLEMENT DATED JANUARY 10, 2005
                              TO THE PROSPECTUS OF

                          FRANKLIN FLOATING RATE TRUST
                             DATED DECEMBER 1, 2004

The prospectus is amended as follows:

 On December 6, 2004, the Board of Trustees of Franklin Floating Rate Trust
 ("Floating Rate Trust") approved a proposal providing for the reorganization of
 Floating Rate Trust, a registered closed-end investment company, into Franklin
 Floating Rate Daily Access Fund ("Daily Access Fund"), a series of Franklin
 Investors Securities Trust, a registered open-end investment company. The
 proposed reorganization provides for Daily Access Fund's acquisition of
 substantially all of the assets of Floating Rate Trust solely in exchange for
 Class A shares of Daily Access Fund, and the distribution of Class A shares of
 Daily Access Fund to shareholders of Floating Rate Trust in complete
 liquidation and dissolution of Floating Rate Trust. This transaction is subject
 to the approval of the shareholders of Floating Rate Trust at a Special
 Shareholders Meeting. If approved, shares will be exchanged based on the
 relative net asset values of Floating Rate Trust and Class A shares of Daily
 Access Fund.

 It is anticipated that in March 2005 shareholders of Floating Rate Trust will
 receive a proxy card and prospectus/proxy statement requesting their approval
 of on the proposed reorganization.

 Floating Rate Trust will be closed to new investors after the close of the
 market on January 18, 2005. If you are a shareholder of record of Floating Rate
 Trust as of the close of the market on January 18, 2005, you may continue to
 add to your account or buy additional shares through reinvestment of dividends
 or capital gain distributions until the close of the market on May 18, 2005,
 the anticipated date of the Special Shareholders Meeting. If Floating Rate
 Trust's shareholders approve the reorganization, after the date of such
 approval Floating Rate Trust also will be closed to purchases by existing
 shareholders, except through the reinvestment of dividend or capital gain
 distributions, or through previously established automatic investment plans.

               Please keep this supplement for future reference.