AUSTRALIAN PROSPECTUS
SUPPLEMENT
CMA MONEY FUND
ARSN (to be provided by ASIC)
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Table of Contents
Interpretation..............................................................3
Important notice............................................................3
Statutory information and disclosures.......................................5
Experts.....................................................................5
INDEPENDENT AUDITORS.....................................................5
LEGAL COUNSEL............................................................5
CONSENTS.................................................................5
Purchase of shares..........................................................5
Redemption of shares........................................................6
Appointment of agent........................................................6
Disclaimer..................................................................6
Investments risks...........................................................7
Australian taxation issues..................................................7
Offices....................................................................10
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AUSTRALIAN PROSPECTUS
SUPPLEMENT
CMA MONEY FUND
ARSN (Available when lodged)
Interpretation
This Prospectus is comprised of the following documents:
o This Australian Prospectus Supplement;
o The Prospectus for the CMA Money Fund dated 27 July 1999 which
accompanies this Australian Prospectus Supplement ("US Prospectus");
o The Statement of Additional Information for the CMA Money Fund
dated 27 July 1999 which accompanies this Australian Prospectus
Supplement ("Statement of Additional Information");
o The Application Form for the CMA Money Fund accompanying this
Australian Prospectus Supplement ("Australian Application Form").
Accordingly, "the Australian Prospectus" means all of the above documents as if
they were one document.
The term "Australian Business Day" means any day on which the banks are open for
business in Sydney (other than a Saturday, Sunday or Public Holiday) or such
other day as the Manager from time to time may agree. The term "New York
Business Day" means any day on which the New York Stock Exchange is open or the
banks in New York are open for business.
Important notice
The CMA Money Fund ("Fund") is subject to regulation by the United States
Securities and Exchange Commission and the Federal laws of the United States of
America and the laws of the State of Massachusetts. Accordingly, this may have a
legal and practical effect on the rights and ability of an Australian investor
to make any claim or enforce any right arising out of or in connection with an
investment in the Fund. For example:
o Australian law may not always be the relevant law to be applied in
proceedings commenced by an investor;
o depending on the subject matter of the claim or enforcement,
proceedings may not be capable of commencement and determination in an
Australian jurisdiction;
o any judgement awarded in favour of an Australian investor may
need to be enforced in the United States or other foreign jurisdiction;
and
o consequentially there may be additional costs and legal risks
involved in making a claim or enforcing a right in connection with an
investment in the Fund.
Australian investors should read the Australian Prospectus carefully and are
encouraged to seek professional advice taking into account their financial and
taxation circumstances, investment objectives and particular needs before
investing in the Fund.
The US Prospectus which forms part of the Australian Prospectus has been issued
in the United States by the Fund and has been primarily directed at US
investors. Accordingly, references to legislation and other laws will be to US
legislation and laws. Similarly, references to "foreign" and "offshore" will
relate to issues and matters existing or occurring outside of the United States,
rather than outside Australia.
When reading the US Prospectus and the Statement of Additional Information,
Australian investors should disregard references to funds other than the CMA
Money Fund. The Australian Prospectus relates only to an offer of shares in the
CMA Money Fund.
If there is any inconsistency between the terms of the Australian Prospectus
Supplement and the US Prospectus or the Statement of Additional Information, the
terms of the Australian Prospectus Supplement prevail to the extent of that
inconsistency.
All amounts referred to in the US Prospectus are denominated in United States
dollars.
Financial information contained in the US Prospectus, the Statement of
Additional Information and other reports including, without limitation, annual
reports, is based on US Generally Accepted Accounting Practices, and not on
Australian Accounting Standards.
All subscriptions to the CMA Money Fund are processed in United States dollars.
In instances where the application is made for shares in a currency other than
United States dollars, a foreign exchange conversion will take place, after
which shares in the Fund will be ordered. Given the need to convert currency
there may be a delay between the time that monies are received and the order of
shares of up to 2 Sydney Business Days. The value of any shares will be
determined by the date that shares are allocated. Shares will be allocated on
the New York Business Day that the order is received by Merrill Lynch Financial
Data Services, Inc. Merrill Lynch does not guarantee that subscriptions will be
cleared, and will hold the investor liable in circumstances where an account
incurs a returned deposit due to uncleared subscriptions.
The Australian Securities and Investments Commission (ASIC) has granted interim
relief under sections 601QA and 1084 of the Corporations Law to various
provisions of Chapter 5C and Division 2 of Part 7.12 of the Corporations Law in
accordance with the provisions of Policy Statement 65 and Pro Formas 71 and 72
to:
o permit the issue of this Australian Prospectus; and
o permit registration of the Fund as a managed investments scheme. The
responsible entity of the Fund is the Trustees of the CMA Money Fund from
time to time, organisation number 087 669 118.
ASIC is currently reviewing Policy Statement 65 and accordingly the relief has
been granted on an interim basis until 1 July 2000. It is expected that ASIC
will give relief after its review, although the relief may be on different
terms. ASIC has confirmed that it will give reasonable notice of applicable
transitional arrangements and will consider the position of schemes established
during the interim period.
The Fund has been registered as a managed investment scheme pursuant to the
relief granted by ASIC under Policy Statement 65.
Trustees of the Fund have lodged a deed poll with ASIC undertaking to maintain
this registration until the number of Australian residents holding shares in the
Fund falls below 20, the Fund is wound up or ASIC otherwise agrees.
If the number of Australian investors falls below 20, the Fund will no longer be
required to maintain this registration. This may lead to reduced protection for
Australian investors as, for example, there will no longer be a requirement to
maintain a local agent.
The remaining Australian shareholders may instead be required to deal directly
with the Fund in the United States.
Statutory information and disclosures
The Australian Prospectus is dated 12 August 1999. A copy of the Australian
Prospectus has been lodged with ASIC on 12 August 1999. No responsibility as to
the contents of the Australian Prospectus is taken by ASIC.
Shares in the Fund will not be issued or allotted on the basis of this
Australian Prospectus after later than 12 months after the date of this
Australian Prospectus.
Experts
Independent auditors
Deloitte & Touche LLP, the Fund's auditor, has been paid US$5,000 for services
rendered in relation to the US Prospectus from 1 January, 1997 to 31 December,
1998.
Legal Counsel
Brown & Wood LLP has been paid US$23,000 for legal services rendered in relation
to the US Prospectus from 1 January, 1997 to 31 December, 1998.
Consents
Deloitte & Touche LLP, the Fund's auditor, has given and has not, before the
date of this Australian Prospectus, withdrawn its written consent to:
(a) be named in this Australian Prospectus as the Fund's
independent auditor; and
(b) the issue of this Australian Prospectus insofar as it includes
their report on the Fund's financial statements which appears
in the annual report of the Fund incorporated by reference in
the Fund's Statement of Additional Information.
Purchase of shares
Shares in the CMA Money Fund may be purchased by lodging an Australian
Application Form with Merrill Lynch Private (Australia) Limited. You will be
required to pay the subscription amount on the same Business Day on which the
relevant shares are issued.
All cheques must be made payable to the Trustees of the CMA Money Fund - "name
of the investor".
The issue price will be determined as set out in the US Prospectus and Statement
of Additional Information. Australian investors should be aware that Merrill
Lynch Private (Australia) Limited will maintain and receive all applications.
Subsequent issue of shares in the Fund, may be delayed where applications are
lodged on days which are not Business Days in the relevant Australian
jurisdiction, or on days which are not New York Business Days or generally after
2.30pm (Sydney time).
If an application is received by Merrill Lynch Private (Australia) Limited on a
day that the New York Stock Exchange is closed or the banks in New York are
closed for business, the net asset value applicable will be the price on the
next Business Day on which the New York Stock Exchange is open.
Redemption of shares
Australian shareholders have the right to lodge a full or partial withdrawal
from the Fund by providing written notice to Merrill Lynch Private (Australia)
Limited on any Sydney Business Day. The shareholder will not be required to
lodge this written request with the Fund's Transfer Agent.
All full or partial redemptions by Australian investors must specify the number
of shares to be redeemed.
Properly completed requests for redemption of shares received by Merrill Lynch
Private (Australia) Limited by 2.30pm (Sydney Time) on any Sydney Business Day
will be redeemed at the next determined net asset value. If a properly completed
request for withdrawal is received by Merrill Lynch Private (Australia) Limited
on a non-Business Day or after 2.30pm (Sydney Time) on any Business Day, the
relevant shares will be redeemed at the net asset value applicable on the second
Business Day following receipt.
If a written redemption in the proper form is received by Merrill Lynch Private
(Australia) Limited on a day that the New York Stock Exchange is closed or the
banks in New York are closed for business, the net asset value applicable will
be the price determined on the next Business Day on which the New York Stock
Exchange is open.
Appointment of agent
The Fund has appointed Merrill Lynch Private (Australia) Limited (A.C.N. 004 620
026) ("Agent") as its agent, in relation to:
o receiving applications for shares;
o receiving redemption requests;
o accepting other Australian Prospectus Supplements, correspondence
and service of process on behalf of the Fund; and
o making available for public inspection and providing Fund shareholders
with copies of constituent and other documents in relation to the Fund,
and meeting all reasonable requests for information relating to the
affairs of the Fund.
All Australian Prospectus Supplements, including applications for shares and
redemption requests must be sent to:
Merrill Lynch Private (Australia) Limited
Level 43
120 Collins Street
Melbourne, Victoria, AUSTRALIA, 3000.
Or any of the offices specified at the end of this Australian
Prospectus Supplement.
Disclaimer
Neither the Fund, the Trustees, Merrill Lynch Private (Australia) Limited nor
any member of the Merrill Lynch group of companies guarantees the success of the
Fund, any rate of return or the repayment of capital.
Investments risks
Almost any investment involves some risks.
Investors should be aware that the underlying investments of the Fund may rise
and fall in value, and foreign currencies will fluctuate in relation to the
Australian dollar. Investments on an international basis involve certain risks
not typically involved in domestic investments, including, but not limited to,
fluctuations in foreign exchange rates, future foreign political and economic
developments, and the possible imposition of exchange controls or other foreign
governmental laws or restrictions applicable to such investments. Securities
prices in different countries are subject to different economic, financial,
political and social factors.
Changes in the foreign currency exchange rates relative to the Australian dollar
and to the underlying investments of the Fund may impact on the value to the
investor.
A deposit in a currency other than the investor's base currency may, because of
higher interest rates paid on certain currencies in relation to others from time
to time, provide potentially attractive returns. However, possible adverse
currency movements - that is, the risk that the value of the currency of the
deposit may decline, can not only eliminate such benefits but also result in
substantial losses. Losses, as such, may be more substantial if the currency of
the deposit weakens along with the currency's interest rate. All persons
considering foreign currency deposits should carefully consider the risk of
movements of both interest and exchange rates prior to making any such deposits.
Australian taxation issues
The following is a general discussion of the Australian taxation issues that may
be relevant to an investment by an Australian investor in the Fund. No comment
is made on the tax treatment of investments in Cash Management Accounts or any
other account from which or to which the money is provided to or from the Fund.
It is assumed that the investor is an Australian resident individual for
taxation purposes, not subject to US tax on non-US sourced income and gains, and
that any investment in the Fund will be on capital account. It is also assumed
that the investor does not (with associated parties) at any time hold an
interest of 10% or more in the Fund.
Tax consequences for any investor will depend on their individual financial
circumstances. Accordingly, this information is not to be taken as tax advice
nor as necessarily canvassing all relevant tax issues, and this information
should in no way be relied upon as such by any investor or potential investor.
All investors should seek their own independent professional tax advice on any
investment in light of their particular circumstances.
These comments should be read in conjunction with the discussion of "Taxes" in
the US Prospectus and Statement of Additional Information.
Taxation of the Fund
The Fund is established, managed and operated in the US. US tax issues are
discussed in the US Prospectus and Statement of Additional Information. Assuming
that the Fund does not invest in Australia, it will not be taxable in Australia
on its income or capital gains.
Taxation of the Investor
Foreign Investment Fund (FIF) rules
The FIF rules tax a resident taxpayer on unrealised gains on certain interests
in foreign companies and trusts. The Fund is a FIF and thus investments in the
Fund are potentially subject to taxation under the FIF rules. However, recent
amendments in Taxation Laws Amendment Act (No. 2) 1999 have the effect that an
investment in the Fund, as a US Regulated Investment Company, will be exempt
from the FIF rules.
Australian tax on distributions to investors
Investors will be liable to pay tax on the net income, currency gains and (if
there are any under Australian tax rules) net capital gains of the Fund that
they are entitled to receive in any financial year. This will apply whether the
distributions are received after the end of the financial year and/or whether
they are paid in cash or reinvested in additional shares in the Fund.
Investors may be subject to foreign tax applicable to the distributions,
including US withholding tax that would generally apply at 15%. If so, investors
may be entitled to an Australian tax credit for the foreign tax paid. Any excess
foreign tax credit may be able to be offset against other foreign income of the
investor or otherwise carried forward to offset foreign income in future years.
It should be noted that the Government's policy statement "Tax Reform: Not a New
Tax, A New Tax System" indicates that the law may change to treat the Fund as a
company for Australian tax purposes. If that occurs, any distribution out of the
income or gains of the Fund (including any foreign tax deducted from the
distribution) will be treated as a dividend. Investors will need to monitor any
changes of law relating to the tax treatment of trusts to assess whether (and to
what extent) the treatment of an investment in the Fund is affected.
Redemption of your investment
Each redemption of some part or the whole of the investment in the Fund may
realise a gain or loss upon redemption. Investors will be subject to Australian
tax on any gains, either as ordinary income or as a capital gain. Any loss will
be a capital loss and will only be able to be offset against capital gains.
In broad terms, any capital gain will be the difference between the proceeds
received on redemption, reduced by amounts (if any) representing distributions
of income, and the cost base of the investment. Both the cost base and the
redemption proceeds are translated to Australian dollars at the exchange rate on
the date(s) when (for costs) the cost(s) are incurred and (for proceeds) on the
date of disposal of the investment. The cost base of the investment includes any
costs of acquisition and any amount of income reinvested in the Fund. To
calculate a capital gain, each element of the cost base is indexed for inflation
to the extent that the investment in the Fund has been held for more than 12
months. The cost base or indexed cost base as appropriate is reduced to the
extent that the investor has received any non-assessable capital distributions
from the Fund. The proceeds may be decreased by any deferred sales charges and
any amount included in assessable income under the FIF rules which has not
previously been applied to reduce the tax applicable on distributions or
previous gains on the investment.
The exchange of shares in one class for another, or from one Fund to another
where permitted, will involve a redemption and therefore potentially generate a
gain or loss for Australian tax purposes.
Tax file numbers
There is no obligation on an investor to provide their tax file number (TFN)
with the Application Form. However, if the investor does not do so and no
exemption applies, tax may be required to be deducted from any distribution at
the top marginal tax rate plus the Medicare Levy.
US estate duty
In certain situations, US estate duty can apply if an investor dies while
holding US investments. The Fund is one such investment. Estate duty will
generally only apply where the investor holds US assets of at least US$60,000 in
value. However, advice should be sought on the implications of this law prior to
making an investment in the Fund.
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Offices
Melbourne
Merrill Lynch Private (Australia) Limited
Level 43
120 Collins Street
Melbourne, Victoria, AUSTRALIA, 3000
Sydney
Merrill Lynch Private (Australia) Limited
Level 51
MLC Centre 19-29 Martin Place
Sydney, New South Wales, AUSTRALIA, 2000
Brisbane
Merrill Lynch Private (Australia) Limited
Level 32
AMP Place
10 Eagle Street
Brisbane, Queensland, AUSTRALIA, 4000
Perth
Merrill Lynch Private (Australia) Limited
Level 37
Exchange Plaza
2 The Esplanade
Perth, Western Australia, AUSTRALIA 6000
