As filed with the Securities and Exchange
Commission on August 31, 1999
File No. 2-63315
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
Post-Effective Amendment No. 27 X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF
1940
Amendment No. 26 X
ALLIANCE GOVERNMENT RESERVES
(Exact Name of Registrant as Specified in Charter)
1345 Avenue of the Americas, New York, New York 10105
(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, including Area Code:
(800) 221-5672
EDMUND P. BERGAN, JR.
Alliance Capital Management L.P.
1345 Avenue of the Americas
New York, New York 10105
(Name and address of agent for service)
It is proposed that this filing will become effective (check
appropriate line)
immediately upon filing pursuant to paragraph (b)
_____on (date) pursuant to paragraph (b)
X 60 days after filing pursuant to paragraph (a)
_____on (date) pursuant to paragraph (a) of rule 485.
_____75 days after filing pursuant to paragraph (a)(2)
_____on (date) pursuant to paragraph (a)(2) of Rule 485
Registrant has registered an indefinite number of shares of
beneficial interest pursuant to Rule 24f-2 under the
<PAGE>
Investment Company Act of 1940. Registrant's Rule 24f-2
notice for its fiscal year ended June 30, 1999 was filed on
September __, 1999.
<PAGE>
ALLIANCE GOVERNMENT RESERVES
PROSPECTUS
OCTOBER ____, 1999
The Securities and Exchange Commission has not approved or
disapproved these securities or passed upon the adequacy of this
Prospectus.
Any representation to the contrary is a criminal offense.
<PAGE>
TABLE OF CONTENTS
RISK/RETURN SUMMARY 2
FEES AND EXPENSES OF THE FUND 4
OTHER INFORMATION ABOUT THE FUND'S OBJECTIVES, STRATEGIES, AND
RISKS 5
Investment Objectives and Strategies 5
Risk Considerations 5
MANAGEMENT OF THE FUND 10
PURCHASE AND SALE OF SHARES 11
How The Fund Values Its Shares 11
How To Buy Shares 11
How To Sell Shares 12
Other 12
DIVIDENDS, DISTRIBUTIONS, AND TAXES 13
DISTRIBUTION ARRANGEMENTS 13
GENERAL INFORMATION 13
FINANCIAL HIGHLIGHTS 14
2
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The Fund's investment adviser is Alliance Capital Management
L.P., a global investment manager providing diversified services
to institutions and individuals through a broad line of
investments including more than 100 mutual funds.
RISK/RETURN SUMMARY
The following is a summary of certain key information about the
Fund. You will find additional information about the Fund,
including a detailed description of the risks of an investment in
the Fund, after this summary.
OBJECTIVES: The investment objectives of the Fund are - in the
following order of priority - safety of principal, excellent
liquidity, and maximum current income to the extent consistent
with the first two objectives.
PRINCIPAL INVESTMENT STRATEGY: The Fund is a "money market fund"
that seeks to maintain a stable net asset value of $1.00 per
share. The Fund pursues its objectives by maintaining a
portfolio of high-quality, U.S. dollar-denominated money market
securities.
PRINCIPAL RISKS: The principal risks of investing in the Fund
are:
-- INTEREST RATE RISK. This is the risk that changes in
interest rates will adversely affect the yield or value
of the Fund's investments in debt securities.
-- CREDIT RISK. This is the risk that the issuer or
guarantor of a debt security will be unable or unwilling
to make timely interest or principal payments, or to
otherwise honor its obligations. The degree of risk for
a particular security may be reflected in its credit
rating. Credit risk includes the possibility that any
of the Fund's investments will have its credit ratings
downgraded.
ANOTHER IMPORTANT THING FOR YOU TO NOTE:
An investment in the Fund is not a deposit in a bank and
is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency.
Although the Fund seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose
money by investing in the Fund.
3
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PERFORMANCE AND BAR CHART INFORMATION
The performance table shows the Fund's average annual total
returns and the bar chart shows the Fund's annual total returns.
The table and the bar chart provide an indication of the
historical risk of an investment in the Fund by showing:
-- the Fund's average annual total returns for one, five,
and 10 years; and
-- changes in the Fund's performance from year to year over
10 years.
The Fund's past performance does not necessarily indicate how it
will perform in the future.
You may obtain current seven-day yield information for the Fund
by calling (800) 221-9513 or your financial intermediary.
PERFORMANCE TABLE
[Insert Table]
BAR CHART
[Insert Chart]
During the period shown in the bar chart, the highest return for
a quarter was ____% (quarter ending ________) and the lowest
return for a quarter was ____% (quarter ending _________).
4
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FEES AND EXPENSES OF THE FUND
This table describes the fees and expenses that you may pay if
you buy and hold shares of the Fund.
SHAREHOLDER TRANSACTION EXPENSES (FEES PAID DIRECTLY FROM YOUR
INVESTMENT)
None
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM
FUND ASSETS) AND EXAMPLE
The example is to help you compare the cost of investing in the
Fund with the cost of investing in other funds. It assumes that
you invest $10,000 in the Fund for the time periods indicated and
then redeem all of your shares at the end of those periods. It
also assumes that your investment has a 5% return each year, the
Fund's operating expenses stay the same, and all dividends and
distributions are reinvested. Your actual costs may be higher or
lower.
ANNUAL FUND OPERATING EXPENSES EXAMPLE
Management Fees 1 Year
Rule 12b-1 Fees 3 Years
Other Expenses 5 Years
Total Operating Expenses 10 Years
Waiver and/or Expense Reimbursement*
Net Expenses
_______________
* Reflects Alliance's contractual waiver of a portion of its
advisory fee and/or reimbursement of a portion of the
Fund's operating expenses so that the Fund's expense
ratio does not exceed 1.00%.
5
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OTHER INFORMATION ABOUT THE FUND'S OBJECTIVES, STRATEGIES, AND
RISKS
This section of the Prospectus provides a more complete
description of the investment objectives and principal strategies
and risks of the Fund.
Please note:
-- Additional descriptions of the Fund's strategies and
investments, as well as other strategies and investments
not described below, may be found in the Fund's
Statement of Additional Information or SAI.
-- There can be no assurance that the Fund will achieve its
investment objectives.
INVESTMENT OBJECTIVES AND STRATEGIES
As a money market fund, the Fund must meet the requirements of
Securities and Exchange Commission Rule 2a-7. The Rule imposes
strict requirements on the investment quality, maturity and
diversification of the Fund's investments. Under that Rule, the
Fund's investments must each have a remaining maturity of no more
than 397 days and the Fund must maintain an average weighted
maturity that does not exceed 90 days.
The Fund's investments may include:
-- marketable obligations issued or guaranteed by the U.S.
Government, its agencies, or instrumentalities,
including issues of the U.S. Treasury, such as bills,
certificates of indebtedness, notes, and bonds;
-- variable rate obligations; and
-- repurchase agreements that are fully collateralized.
The Fund may commit up to 15% of its net assets to the purchase
of when-issued U.S. Government securities.
RISK CONSIDERATIONS
The Fund's principal risks are interest rate risk and credit
risk. Because the Fund invests in short-term securities, a
decline in interest rates will affect the Fund's yields as these
securities mature or are sold and the Fund purchases new short-
term securities with lower yields. Generally, an increase in
6
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interest rates causes the value of a debt instrument to decrease.
The change in value for shorter-term securities is usually
smaller than for securities with longer maturities. Because the
Fund invests in securities with short maturities and seeks to
maintain a stable net asset value of $1.00 per share, it is
possible, though unlikely, that an increase in interest rates
would change the value of your investment.
Credit risk is the possibility that a security's credit rating
will be downgraded or that the issuer of the security will
default (fail to make scheduled interest and principal payments).
The Fund invests in highly-rated securities to minimize credit
risk.
The Fund may invest up to 10% of its net assets in illiquid
securities. Investments in illiquid securities may be subject to
liquidity risk, which is the risk that, under certain
circumstances, particular investments may be difficult to sell at
an advantageous price. Illiquid restricted securities also are
subject to the risk that the Fund may be unable to sell the
security due to legal or contractual restrictions on resale.
The Fund also is subject to management risk because it is an
actively managed portfolio. Alliance will apply its investment
techniques and risk analyses in making investment decisions for
the Fund, but there is no guarantee that its techniques will
produce the intended result.
YEAR 2000: Many computer systems and applications that process
transactions use two-digit date fields for the year of a
transaction, rather than the full four digits. If these systems
are not modified or replaced, transactions occurring after 1999
could be processed as year "1900," which could result in
processing inaccuracies and inoperability at or after the year
2000. The Fund and its major service providers, including
Alliance, utilize a number of computer systems and applications
that have been either developed internally or licensed from
third-party suppliers. In addition, the Fund and its major
service providers, including Alliance, are dependent on third-
party suppliers for certain systems applications and for
electronic receipt of information critical to their business.
Should any of the computer systems employed by the Fund or its
major service providers, including Alliance, fail to process Year
2000 related information properly, that could have a significant
negative impact on the Fund's operations and the services that
are provided to the Fund's shareholders. To the extent that the
operations of issuers of securities held by the Fund are impaired
by the Year 2000 problem, the value of the Fund's shares may be
7
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materially affected. In addition, for the Fund's investments in
foreign markets, it is possible that foreign companies and
markets will not be as prepared for Year 2000 as domestic
companies and markets.
The Year 2000 issue is a high priority for the Fund and Alliance.
During 1997, Alliance began a formal Year 2000 initiative which
established a structured and coordinated process to deal with the
Year 2000 issue. As part of its initiative, Alliance established
a Year 2000 project office to manage the Year 2000 initiative,
focusing on both information technology and non-information
technology systems. The Year 2000 project office meets
periodically with the audit committee of the board of directors
of Alliance Capital Management Corporation, Alliance's general
partner, and with Alliance's executive management to review the
status of the Year 2000 efforts. Alliance has also retained the
services of a number of consulting firms which have expertise in
advising and assisting with regard to Year 2000 issues. Alliance
reports that by June 30, 1998 it had completed its inventory and
assessment of its domestic and international computer systems and
applications, identified mission critical systems (those systems
where loss of their function would result in immediate stoppage
or significant impairment to core business units) and nonmission
critical systems and determined which of these systems were not
Year 2000 compliant. All third-party suppliers of mission
critical computer systems and nonmission critical systems
applications have been contacted to verify whether their systems
and applications will be Year 2000 compliant and their responses
are being evaluated. Substantially all of those contacted have
responded and approximately 90% have informed Alliance that their
systems and applications are or will be Year 2000 compliant. All
mission and nonmission critical systems supplied by third parties
have been tested with the exception of those third parties not
able to comply with Alliance's testing schedule. Alliance
reports that it expects that all testing will be completed before
the end of 1999.
Alliance has remediated, replaced or retired all of its non-
compliant mission critical systems and applications that can
affect the Fund. Nonmission critical systems have been
remediated. After each system has been remediated, it is tested
with 19XX dates to determine if it still performs its intended
business function correctly. Next, each system undergoes a
simulation test using dates occurring after December 31, 1999.
Inclusive of the replacement and retirement of some of its
systems, Alliance has completed these testing phases for 98% of
mission critical systems and 100% of nonmission critical systems.
Integrated systems tests were conducted to verify that the
8
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systems would continue to work together. Full integration
testing of all mission critical and nonmission critical systems
is completed. Testing of interfaces with third-party suppliers
has begun and will continue throughout 1999. Alliance reports
that it has completed an inventory of its facilities and related
technology applications and has begun to evaluate and test these
systems. Alliance reports that it anticipates that these systems
will be fully operable in the year 2000. Alliance has deferred
certain other planned information technology projects until after
the year 2000 initiative is completed. Such delay is not
expected to have a material adverse effect on Alliance's
financial condition or results of operations. Alliance, with the
assistance of a consulting firm, is developing Year 2000 specific
contingency plans with emphasis on mission critical functions.
These plans seek to provide alternative methods of processing in
the event of a failure that is outside Alliance's control.
The estimated current cost to Alliance of the Year 2000
initiative ranges from approximately $40 million to $45 million.
These costs consist principally of modification and testing and
costs to develop formal Year 2000 specific contingency plans.
These costs, which will generally be expensed as incurred, will
be funded from Alliance's operations and the issuance of debt.
Through June 30, 1999, Alliance had incurred approximately $36.0
million of costs related to the Year 2000 initiative. At this
time, management of Alliance believes that the costs associated
with resolving the Year 2000 issue will not have a material
adverse effect on Alliance's results of operations, liquidity or
capital resources.
There are many risks associated with Year 2000 issues, including
the risks that the computer systems and applications used by the
Fund and its major service providers, will not operate as
intended and that the systems and applications of third-party
suppliers to the Fund and its service providers will not be Year
2000 compliant. Likewise there can be no assurance the
compliance schedules outlined above will be met or that the
actual cost incurred will not exceed cost estimates. Should the
significant computer systems and applications used by the Fund or
its major service providers, or the systems of their important
third-party suppliers, be unable to process date-sensitive
information accurately after 1999, the Fund and its service
providers may be unable to conduct their normal business
operations and to provide shareholders with required services.
In addition, the Fund and its service providers may incur
unanticipated expenses, regulatory actions and legal liabilities.
The Fund and Alliance cannot determine which risks, if any, are
most reasonably likely to occur or the effects of any particular
9
<PAGE>
failure to be Year 2000 compliant. Certain statements provided
by Alliance in this section entitled "Year 2000", as such
statements relate to Alliance, are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform
Act of 1995. To the fullest extent permitted by law, the
foregoing Year 2000 discussion is a "Year 2000 Readiness
Disclosure" within the meaning of the Year 2000 Information and
Readiness Disclosure Act, 15 U.S.C. Sec. 1 (1998).
10
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MANAGEMENT OF THE FUND
The Fund's investment adviser is Alliance Capital Management
L.P., 1345 Avenue of the Americas, New York, New York 10105.
Alliance is a leading international investment adviser
supervising client accounts with assets as of June 30, 1999
totaling more than $321 billion (of which more than $140 billion
represented assets of investment companies). As of June 30,
1999, Alliance managed retirement assets for many of the largest
public and private employee benefit plans (including 29 of the
nation's FORTUNE 100 companies), for public employee retirement
funds in 32 states, for investment companies, and for
foundations, endowments, banks and insurance companies worldwide.
The 54 registered investment companies managed by Alliance,
comprising 120 separate investment portfolios, currently have
more than 4.5 million shareholder accounts.
Alliance provides investment advisory services and order
placement facilities for the Fund. For the fiscal year ended June
30, 1999, the Fund paid Alliance ____% as a percentage of average
daily net assets, net of any waivers. (See the "Annual Fund
Operating Expenses" at the beginning of the Prospectus for more
information about fee waivers.)
Alliance makes significant payments from its own resources, which
include the management fees paid by the Fund, to compensate
broker-dealers, depository institutions, or other persons for
providing distribution assistance and administrative services and
to otherwise promote the sale of Fund shares, including paying
for the preparation, printing, and distribution of prospectuses
and sales literature or other promotional activities.
11
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PURCHASE AND SALE OF SHARES
HOW THE FUND VALUES ITS SHARES
The Fund's net asset value or NAV is expected to be constant at
$1.00 per share, although this price is not guaranteed. The NAV
is calculated at 12:00 Noon and 4:00 p.m., Eastern time, on each
Fund business day (I.E., each weekday exclusive of days the New
York Stock Exchange or the banks in Massachusetts are closed).
To calculate NAV, the Fund's assets are valued and totaled,
liabilities subtracted, and the balance, called net assets, is
divided by the number of shares outstanding. The Fund values its
securities at their amortized cost. This method involves valuing
an instrument at its cost and thereafter applying a constant
amortization to maturity of any discount or premium, regardless
of the impact of fluctuating interest rates on the market value
of the investment.
HOW TO BUY SHARES
-- INITIAL INVESTMENT
You may purchase the Fund's shares by instructing your Account
Executive to invest in the Fund in connection with your brokerage
account.
You also may purchase the Fund's shares directly from Alliance
Fund Services, Inc., or AFS. To obtain an Application Form,
please telephone AFS toll-free at (800) 237-5822. You also may
obtain information about the Form, purchasing shares, or other
Fund procedures by calling this number.
- Minimum Investment Amounts
-- Initial $1,000
-- Subsequent $100
-- Minimum Maintenance Amount $500
These minimums do not apply to shareholder accounts maintained
through financial intermediaries, which may maintain their own
minimums.
12
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-- SUBSEQUENT INVESTMENTS
- By Check:
Mail or deliver your check or negotiable draft made
payable to your brokerage firm to your Account
Executive, who will deposit it into the Fund.
Please indicate your brokerage account number.
- By Sweep:
Your brokerage firm may offer an automatic "sweep"
for the Fund in the operation of brokerage cash
accounts for its customers. Contact your Account
Executive to determine if a sweep is available and
what the sweep requirements are.
HOW TO SELL SHARES
You may "redeem" your shares (I.E., sell your shares) on any Fund
business day by contacting your Account Executive. If you do not
maintain your shares though a financial intermediary and recently
purchased shares by check or electronic funds transfer, you
cannot redeem your investment until the Fund is reasonably
satisfied the check or electronic funds transfer has cleared
(which may take up to 15 days).
You also may redeem your shares:
- By Sweep:
If your brokerage firm offers an automatic sweep
arrangement, the sweep will automatically transfer from
your Fund account sufficient amounts to cover a debit
balance that occurs in your brokerage account for any
reason.
- By Checkwriting:
With this service, you may write checks made payable to
any payee. First, you must fill out a signature card,
which you may obtain from your Account Executive. There
is a charge for check reorders. The checkwriting
service enables you to receive the daily dividends
declared on the shares to be redeemed until the day that
your check is presented for payment. You cannot write
checks for more than the principal balance (not
including any accrued dividends) in your account.
13
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OTHER
The Fund has two transaction times each Fund business day, 12:00
Noon and 4:00 p.m., Eastern time. Investments receive the full
dividend for a day if Federal funds or bank wire monies are
received by State Street Bank before 4:00 p.m., Eastern time, on
that day.
Redemption proceeds are normally wired the same business day if a
redemption request is received prior to 12:00 p.m., Eastern time.
Redemption proceeds are wired or mailed the same day or the next
business day, but in no event later than seven days, unless
redemptions have been suspended or postponed due to the
determination of an "emergency" by the Securities and Exchange
Commission or to certain other unusual conditions. Shares do not
earn dividends on the day a redemption is effected.
The Fund offers a variety of shareholder services. For more
information about these services, telephone AFS at
(800) 221-5672.
A transaction, service, administrative or other similar fee may
be charged by your financial broker-dealer, agent, financial
representative or other financial intermediary with respect to
the purchase, sale or exchange of shares made through these
financial intermediaries. These financial intermediaries may
also impose requirements with respect to the purchase, sale or
exchange of shares that are different from, or in addition to,
those imposed by the Fund.
DIVIDENDS, DISTRIBUTIONS, AND TAXES
The Fund's net income is calculated at 4:00 p.m., Eastern time,
each business day and paid as dividends to shareholders. The
dividends are automatically invested in additional shares in your
account. These additional shares are entitled to dividends on
following days resulting in compounding growth of income. The
Fund expects that its distributions will primarily consist of net
income, or, if any, short-term capital gains as opposed to long-
term capital gains. For Federal income tax purposes, the Fund's
dividend distributions of net income (or short-term capital
gains) will be taxable to you as ordinary income. Any capital
gains distributions may be taxable to you as capital gains. The
Fund's distributions also may be subject to certain state and
local taxes.
14
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Each year shortly after December 31, the Fund will send you tax
information stating the amount and type of all of its
distributions for the year.
DISTRIBUTION ARRANGEMENTS
The Fund has adopted a plan under Securities and Exchange
Commission Rule 12b-1 that allows it to pay asset-based sales
charges or distribution and service fees in connection with the
distribution of its shares. The amount of these fees is .25% as
a percentage of aggregate average daily net assets. Because
these fees are paid out of the Fund's assets on an on-going
basis, over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales
fees.
GENERAL INFORMATION
During drastic economic or market developments, you might have
difficulty in reaching AFS by telephone, in which event you
should issue written instructions to AFS. AFS is not responsible
for the authenticity of telephone requests to purchase or sell
shares. AFS will employ reasonable procedures to verify that
telephone requests are genuine and could be liable for losses
resulting from unauthorized transactions if it failed to do so.
Dealers and agents may charge a commission for handling telephone
requests. The telephone service may be suspended or terminated
at any time without notice.
15
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FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand
the Fund's financial performance for the past five years.
Certain information reflects financial information for a single
Fund share. The total return in the table represents the rate
that an investor would have earned (or lost) on an investment in
the Fund (assuming investment of all dividends and
distributions). The information has been audited by McGladrey &
Pullen LLP, the Fund's independent auditors, whose report, along
with the Fund's financial statements, appears in the SAI, which
is available upon request.
16
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Year Ended June 30
----------------------------------
1999 1998 1997 1996 1995
----- ----- ----- ----- -----
Net asset value, beginning of period
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a)
Net gains or losses on securities
Total from investment operations
LESS: DISTRIBUTIONS
Dividends
Distributions
Total distributions
Net asset value, end of period
TOTAL RETURN
Total investment return based
on net asset value (b)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in millions)
Ratio to average net assets of:
Expenses, net of waivers
and reimbursements
Expenses, before waivers
and reimbursements
Net investment income (a)
- -----------------------------------------------------------------------------
(a) Net of expenses reimbursed or waived by Alliance.
(b) Total investment return is calculated assuming an initial investment
made at the net asset value at the beginning of the period, reinvestment
of all dividends and distributions at net asset value during the period,
and redemption on the last day of the period.
17
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For more information about the Fund, the following documents are
available upon request:
- -- ANNUAL/SEMI-ANNUAL REPORTS TO SHAREHOLDERS
The Fund's annual and semi-annual reports to shareholders contain
additional information on the Fund's investments.
- -- STATEMENT OF ADDITIONAL INFORMATION (SAI)
The Fund has an SAI, which contains more detailed information
about the Fund, including its operations and investment policies.
The Fund's SAI is incorporated by reference into (and is legally
part of) this Prospectus.
You may request a free copy of a current annual/semi-annual
report or the SAI, or make inquiries concerning the Fund, by
contacting your broker or other financial intermediary, or by
contacting Alliance:
BY MAIL: c/o Alliance Fund Services, Inc.
P.O. Box 1520, Secaucus, New Jersey 07096
BY PHONE: For Information: (800) 824-1916
For Literature: (800) 824-1916
Or you may view or obtain these documents from the Securities and
Exchange Commission:
IN PERSON: at the Securities and Exchange Commission's
Public Reference Room in Washington, D.C.
BY PHONE: (800) SEC-0330 (for information only)
BY MAIL: Public Reference Section
Securities and Exchange Commission
Washington, DC 20549-6009
(duplicating fee required)
ON THE INTERNET: www.sec.gov
You also may find more information about Alliance on the Internet
at: www.Alliancecapital.com.
File No. 811-2888
18
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ALLIANCE TREASURY RESERVES
PROSPECTUS
OCTOBER ____, 1999
The Securities and Exchange Commission has not approved or
disapproved these securities or passed upon the adequacy of this
Prospectus.
Any representation to the contrary is a criminal offense.
<PAGE>
TABLE OF CONTENTS
RISK/RETURN SUMMARY 2
FEES AND EXPENSES OF THE FUND 4
OTHER INFORMATION ABOUT THE FUND'S OBJECTIVES, STRATEGIES, AND
RISKS 5
Investment Objectives and Strategies 5
Risk Considerations 5
MANAGEMENT OF THE FUND 10
PURCHASE AND SALE OF SHARES 11
How The Fund Values Its Shares 11
How To Buy Shares 11
How To Sell Shares 12
Other 12
DIVIDENDS, DISTRIBUTIONS, AND TAXES 13
DISTRIBUTION ARRANGEMENTS 13
GENERAL INFORMATION 13
FINANCIAL HIGHLIGHTS 14
2
<PAGE>
The Fund's investment adviser is Alliance Capital Management
L.P., a global investment manager providing diversified services
to institutions and individuals through a broad line of
investments including more than 100 mutual funds.
RISK/RETURN SUMMARY
The following is a summary of certain key information about the
Fund. You will find additional information about the Fund,
including a detailed description of the risks of an investment in
the Fund, after this summary.
OBJECTIVES: The investment objectives of the Fund are - in the
following order of priority - safety of principal, excellent
liquidity, and maximum current income to the extent consistent
with the first two objectives.
PRINCIPAL INVESTMENT STRATEGY: The Fund is a "money market fund"
that seeks to maintain a stable net asset value of $1.00 per
share. The Fund pursues its objectives by maintaining a
portfolio of high-quality, U.S. dollar-denominated money market
securities.
PRINCIPAL RISKS: The principal risks of investing in the Fund
are:
-- INTEREST RATE RISK. This is the risk that changes in
interest rates will adversely affect the yield or value
of the Fund's investments in debt securities.
-- CREDIT RISK. This is the risk that the issuer or
guarantor of a debt security will be unable or unwilling
to make timely interest or principal payments, or to
otherwise honor its obligations. The degree of risk for
a particular security may be reflected in its credit
rating. Credit risk includes the possibility that any
of the Fund's investments will have its credit ratings
downgraded.
ANOTHER IMPORTANT THING FOR YOU TO NOTE:
An investment in the Fund is not a deposit in a bank and
is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency.
Although the Fund seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose
money by investing in the Fund.
3
<PAGE>
PERFORMANCE AND BAR CHART INFORMATION
The performance table shows the Fund's average annual total
returns and the bar chart shows the Fund's annual total returns.
The table and the bar chart provide an indication of the
historical risk of an investment in the Fund by showing:
-- the Fund's average annual total returns for one and five
years and the life of the Fund; and
-- changes in the Fund's performance from year to year over
the life of the Fund.
The Fund's past performance does not necessarily indicate how it
will perform in the future.
You may obtain current seven-day yield information for the Fund
by calling (800) 221-9513 or your financial intermediary.
PERFORMANCE TABLE
[Insert Table]
BAR CHART
[Insert Chart]
During the period shown in the bar chart, the highest return for
a quarter was ____% (quarter ending ________) and the lowest
return for a quarter was ____% (quarter ending _________).
4
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FEES AND EXPENSES OF THE FUND
This table describes the fees and expenses that you may pay if
you buy and hold shares of the Fund.
SHAREHOLDER TRANSACTION EXPENSES (FEES PAID DIRECTLY FROM YOUR
INVESTMENT)
None
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM
FUND ASSETS) AND EXAMPLE
The example is to help you compare the cost of investing in the
Fund with the cost of investing in other funds. It assumes that
you invest $10,000 in the Fund for the time periods indicated and
then redeem all of your shares at the end of those periods. It
also assumes that your investment has a 5% return each year, the
Fund's operating expenses stay the same, and all dividends and
distributions are reinvested. Your actual costs may be higher or
lower.
ANNUAL FUND OPERATING EXPENSES EXAMPLE
Management Fees 1 Year
Rule 12b-1 Fees 3 Years
Other Expenses 5 Years
Total Operating Expenses 10 Years
Waiver and/or Expense Reimbursement*
Net Expenses
_______________
* Reflects Alliance's contractual waiver of a portion of its
advisory fee and/or reimbursement of a portion of the
Fund's operating expenses so that the Fund's expense
ratio does not exceed 1.00%.
5
<PAGE>
OTHER INFORMATION ABOUT THE FUND'S OBJECTIVES, STRATEGIES, AND
RISKS
This section of the Prospectus provides a more complete
description of the investment objectives and principal strategies
and risks of the Fund.
Please note:
-- Additional descriptions of the Fund's strategies and
investments, as well as other strategies and investments
not described below, may be found in the Fund's
Statement of Additional Information or SAI.
-- There can be no assurance that the Fund will achieve its
investment objectives.
INVESTMENT OBJECTIVES AND STRATEGIES
As a money market fund, the Fund must meet the requirements of
Securities and Exchange Commission Rule 2a-7. The Rule imposes
strict requirements on the investment quality, maturity and
diversification of the Fund's investments. Under that Rule, the
Fund's investments must each have a remaining maturity of no more
than 397 days and the Fund must maintain an average weighted
maturity that does not exceed 90 days.
The Fund's investments may include:
-- issues of the U.S. Treasury, such as bills, certificates
of indebtedness, notes, and bonds;
-- variable rate obligations; and
-- repurchase agreements that are fully collateralized.
The Fund may commit up to 15% of its net assets to the purchase
of when-issued U.S. Government securities.
RISK CONSIDERATIONS
The Fund's principal risks are interest rate risk and credit
risk. Because the Fund invests in short-term securities, a
decline in interest rates will affect the Fund's yields as these
securities mature or are sold and the Fund purchases new short-
term securities with lower yields. Generally, an increase in
interest rates causes the value of a debt instrument to decrease.
The change in value for shorter-term securities is usually
6
<PAGE>
smaller than for securities with longer maturities. Because the
Fund invests in securities with short maturities and seeks to
maintain a stable net asset value of $1.00 per share, it is
possible, though unlikely, that an increase in interest rates
would change the value of your investment.
Credit risk is the possibility that a security's credit rating
will be downgraded or that the issuer of the security will
default (fail to make scheduled interest and principal payments).
The Fund invests in highly-rated securities to minimize credit
risk.
The Fund may invest up to 10% of its net assets in illiquid
securities. Investments in illiquid securities may be subject to
liquidity risk, which is the risk that, under certain
circumstances, particular investments may be difficult to sell at
an advantageous price. Illiquid restricted securities also are
subject to the risk that the Fund may be unable to sell the
security due to legal or contractual restrictions on resale.
The Fund also is subject to management risk because it is an
actively managed portfolio. Alliance will apply its investment
techniques and risk analyses in making investment decisions for
the Fund, but there is no guarantee that its techniques will
produce the intended result.
YEAR 2000: Many computer systems and applications that process
transactions use two-digit date fields for the year of a
transaction, rather than the full four digits. If these systems
are not modified or replaced, transactions occurring after 1999
could be processed as year "1900," which could result in
processing inaccuracies and inoperability at or after the year
2000. The Fund and its major service providers, including
Alliance, utilize a number of computer systems and applications
that have been either developed internally or licensed from
third-party suppliers. In addition, the Fund and its major
service providers, including Alliance, are dependent on third-
party suppliers for certain systems applications and for
electronic receipt of information critical to their business.
Should any of the computer systems employed by the Fund or its
major service providers, including Alliance, fail to process Year
2000 related information properly, that could have a significant
negative impact on the Fund's operations and the services that
are provided to the Fund's shareholders. To the extent that the
operations of issuers of securities held by the Fund are impaired
by the Year 2000 problem, the value of the Fund's shares may be
materially affected. In addition, for the Fund's investments in
foreign markets, it is possible that foreign companies and
7
<PAGE>
markets will not be as prepared for Year 2000 as domestic
companies and markets.
The Year 2000 issue is a high priority for the Fund and Alliance.
During 1997, Alliance began a formal Year 2000 initiative which
established a structured and coordinated process to deal with the
Year 2000 issue. As part of its initiative, Alliance established
a Year 2000 project office to manage the Year 2000 initiative,
focusing on both information technology and non-information
technology systems. The Year 2000 project office meets
periodically with the audit committee of the board of directors
of Alliance Capital Management Corporation, Alliance's general
partner, and with Alliance's executive management to review the
status of the Year 2000 efforts. Alliance has also retained the
services of a number of consulting firms which have expertise in
advising and assisting with regard to Year 2000 issues. Alliance
reports that by June 30, 1998 it had completed its inventory and
assessment of its domestic and international computer systems and
applications, identified mission critical systems (those systems
where loss of their function would result in immediate stoppage
or significant impairment to core business units) and nonmission
critical systems and determined which of these systems were not
Year 2000 compliant. All third-party suppliers of mission
critical computer systems and nonmission critical systems
applications have been contacted to verify whether their systems
and applications will be Year 2000 compliant and their responses
are being evaluated. Substantially all of those contacted have
responded and approximately 90% have informed Alliance that their
systems and applications are or will be Year 2000 compliant. All
mission and nonmission critical systems supplied by third parties
have been tested with the exception of those third parties not
able to comply with Alliance's testing schedule. Alliance
reports that it expects that all testing will be completed before
the end of 1999.
Alliance has remediated, replaced or retired all of its non-
compliant mission critical systems and applications that can
affect the Fund. Nonmission critical systems have been
remediated. After each system has been remediated, it is tested
with 19XX dates to determine if it still performs its intended
business function correctly. Next, each system undergoes a
simulation test using dates occurring after December 31, 1999.
Inclusive of the replacement and retirement of some of its
systems, Alliance has completed these testing phases for 98% of
mission critical systems and 100% of nonmission critical systems.
Integrated systems tests were conducted to verify that the
systems would continue to work together. Full integration
testing of all mission critical and nonmission critical systems
8
<PAGE>
is completed. Testing of interfaces with third-party suppliers
has begun and will continue throughout 1999. Alliance reports
that it has completed an inventory of its facilities and related
technology applications and has begun to evaluate and test these
systems. Alliance reports that it anticipates that these systems
will be fully operable in the year 2000. Alliance has deferred
certain other planned information technology projects until after
the year 2000 initiative is completed. Such delay is not
expected to have a material adverse effect on Alliance's
financial condition or results of operations. Alliance, with the
assistance of a consulting firm, is developing Year 2000 specific
contingency plans with emphasis on mission critical functions.
These plans seek to provide alternative methods of processing in
the event of a failure that is outside Alliance's control.
The estimated current cost to Alliance of the Year 2000
initiative ranges from approximately $40 million to $45 million.
These costs consist principally of modification and testing and
costs to develop formal Year 2000 specific contingency plans.
These costs, which will generally be expensed as incurred, will
be funded from Alliance's operations and the issuance of debt.
Through June 30, 1999, Alliance had incurred approximately $36.0
million of costs related to the Year 2000 initiative. At this
time, management of Alliance believes that the costs associated
with resolving the Year 2000 issue will not have a material
adverse effect on Alliance's results of operations, liquidity or
capital resources.
There are many risks associated with Year 2000 issues, including
the risks that the computer systems and applications used by the
Fund and its major service providers, will not operate as
intended and that the systems and applications of third-party
suppliers to the Fund and its service providers will not be Year
2000 compliant. Likewise there can be no assurance the
compliance schedules outlined above will be met or that the
actual cost incurred will not exceed cost estimates. Should the
significant computer systems and applications used by the Fund or
its major service providers, or the systems of their important
third-party suppliers, be unable to process date-sensitive
information accurately after 1999, the Fund and its service
providers may be unable to conduct their normal business
operations and to provide shareholders with required services.
In addition, the Fund and its service providers may incur
unanticipated expenses, regulatory actions and legal liabilities.
The Fund and Alliance cannot determine which risks, if any, are
most reasonably likely to occur or the effects of any particular
failure to be Year 2000 compliant. Certain statements provided
by Alliance in this section entitled "Year 2000", as such
9
<PAGE>
statements relate to Alliance, are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform
Act of 1995. To the fullest extent permitted by law, the
foregoing Year 2000 discussion is a "Year 2000 Readiness
Disclosure" within the meaning of the Year 2000 Information and
Readiness Disclosure Act, 15 U.S.C. Sec. 1 (1998).
10
<PAGE>
MANAGEMENT OF THE FUND
The Fund's investment adviser is Alliance Capital Management
L.P., 1345 Avenue of the Americas, New York, New York 10105.
Alliance is a leading international investment adviser
supervising client accounts with assets as of June 30, 1999
totaling more than $321 billion (of which more than $140 billion
represented assets of investment companies). As of June 30,
1999, Alliance managed retirement assets for many of the largest
public and private employee benefit plans (including 29 of the
nation's FORTUNE 100 companies), for public employee retirement
funds in 32 states, for investment companies, and for
foundations, endowments, banks and insurance companies worldwide.
The 54 registered investment companies managed by Alliance,
comprising 120 separate investment portfolios, currently have
more than 4.5 million shareholder accounts.
Alliance provides investment advisory services and order
placement facilities for the Fund. For the fiscal year ended June
30, 1999, the Fund paid Alliance ____% as a percentage of average
daily net assets, net of any waivers. (See the "Annual Fund
Operating Expenses" at the beginning of the Prospectus for more
information about fee waivers.)
Alliance makes significant payments from its own resources, which
include the management fees paid by the Fund, to compensate
broker-dealers, depository institutions, or other persons for
providing distribution assistance and administrative services and
to otherwise promote the sale of Fund shares, including paying
for the preparation, printing, and distribution of prospectuses
and sales literature or other promotional activities.
11
<PAGE>
PURCHASE AND SALE OF SHARES
HOW THE FUND VALUES ITS SHARES
The Fund's net asset value or NAV is expected to be constant at
$1.00 per share, although this price is not guaranteed. The NAV
is calculated at 12:00 Noon and 4:00 p.m., Eastern time, on each
Fund business day (I.E., each weekday exclusive of days the New
York Stock Exchange or the banks in Massachusetts are closed).
To calculate NAV, the Fund's assets are valued and totaled,
liabilities subtracted, and the balance, called net assets, is
divided by the number of shares outstanding. The Fund values its
securities at their amortized cost. This method involves valuing
an instrument at its cost and thereafter applying a constant
amortization to maturity of any discount or premium, regardless
of the impact of fluctuating interest rates on the market value
of the investment.
HOW TO BUY SHARES
-- INITIAL INVESTMENT
You may purchase the Fund's shares by instructing your Account
Executive to invest in the Fund in connection with your brokerage
account.
You also may purchase the Fund's shares directly from Alliance
Fund Services, Inc., or AFS. To obtain an Application Form,
please telephone AFS toll-free at (800) 237-5822. You also may
obtain information about the Form, purchasing shares, or other
Fund procedures by calling this number.
- Minimum Investment Amounts
Initial $1,000
Subsequent $100
Minimum Maintenance Amount $500
These minimums do not apply to shareholder accounts maintained
through financial intermediaries, which may maintain their own
minimums.
12
<PAGE>
-- SUBSEQUENT INVESTMENTS
- By Check:
Mail or deliver your check or negotiable draft made
payable to your brokerage firm to your Account
Executive, who will deposit it into the Fund.
Please indicate your brokerage account number.
- By Sweep:
Your brokerage firm may offer an automatic "sweep"
for the Fund in the operation of brokerage cash
accounts for its customers. Contact your Account
Executive to determine if a sweep is available and
what the sweep requirements are.
HOW TO SELL SHARES
You may "redeem" your shares (I.E., sell your shares) on any Fund
business day by contacting your Account Executive. If you do not
maintain your shares though a financial intermediary and recently
purchased shares by check or electronic funds transfer, you
cannot redeem your investment until the Fund is reasonably
satisfied the check or electronic funds transfer has cleared
(which may take up to 15 days).
You also may redeem your shares:
- By Sweep:
If your brokerage firm offers an automatic sweep
arrangement, the sweep will automatically transfer
from your Fund account sufficient amounts to cover
a debit balance that occurs in your brokerage
account for any reason.
- By Checkwriting:
With this service, you may write checks made
payable to any payee. First, you must fill out a
signature card, which you may obtain from your
Account Executive. There is a charge for check
reorders. The checkwriting service enables you to
receive the daily dividends declared on the shares
to be redeemed until the day that your check is
presented for payment. You cannot write checks for
13
<PAGE>
more than the principal balance (not including any
accrued dividends) in your account.
OTHER
The Fund has two transaction times each Fund business day, 12:00
Noon and 4:00 p.m., Eastern time. Investments receive the full
dividend for a day if Federal funds or bank wire monies are
received by State Street Bank before 4:00 p.m., Eastern time, on
that day.
Redemption proceeds are normally wired the same business day if a
redemption request is received prior to 12:00 p.m., Eastern time.
Redemption proceeds are wired or mailed the same day or the next
business day, but in no event later than seven days, unless
redemptions have been suspended or postponed due to the
determination of an "emergency" by the Securities and Exchange
Commission or to certain other unusual conditions. Shares do not
earn dividends on the day a redemption is effected.
The Fund offers a variety of shareholder services. For more
information about these services, telephone AFS at (800) 221-
5672.
A transaction, service, administrative or other similar fee may
be charged by your financial broker-dealer, agent, financial
representative or other financial intermediary with respect to
the purchase, sale or exchange of shares made through these
financial intermediaries. These financial intermediaries may
also impose requirements with respect to the purchase, sale or
exchange of shares that are different from, or in addition to,
those imposed by the Fund.
DIVIDENDS, DISTRIBUTIONS, AND TAXES
The Fund's net income is calculated at 4:00 p.m., Eastern time,
each business day and paid as dividends to shareholders. The
dividends are automatically invested in additional shares in your
account. These additional shares are entitled to dividends on
following days resulting in compounding growth of income. The
Fund expects that its distributions will primarily consist of net
income, or, if any, short-term capital gains as opposed to long-
term capital gains. For Federal income tax purposes, the Fund's
dividend distributions of net income (or short-term capital
gains) will be taxable to you as ordinary income. Any capital
gains distributions may be taxable to you as capital gains. The
Fund's distributions also may be subject to certain state and
local taxes.
14
<PAGE>
Each year shortly after December 31, the Fund will send you tax
information stating the amount and type of all of its
distributions for the year.
DISTRIBUTION ARRANGEMENTS
The Fund has adopted a plan under Securities and Exchange
Commission Rule 12b-1 that allows it to pay asset-based sales
charges or distribution and service fees in connection with the
distribution of its shares. The amount of these fees is .25% as
a percentage of aggregate average daily net assets. Because
these fees are paid out of the Fund's assets on an on-going
basis, over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales
fees.
GENERAL INFORMATION
During drastic economic or market developments, you might have
difficulty in reaching AFS by telephone, in which event you
should issue written instructions to AFS. AFS is not responsible
for the authenticity of telephone requests to purchase or sell
shares. AFS will employ reasonable procedures to verify that
telephone requests are genuine and could be liable for losses
resulting from unauthorized transactions if it failed to do so.
Dealers and agents may charge a commission for handling telephone
requests. The telephone service may be suspended or terminated
at any time without notice.
15
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand
the Fund's financial performance for the past five years.
Certain information reflects financial information for a single
Fund share. The total return in the table represents the rate
that an investor would have earned (or lost) on an investment in
the Fund (assuming investment of all dividends and
distributions). The information has been audited by McGladrey &
Pullen LLP, the Fund's independent auditors, whose report, along
with the Fund's financial statements, appears in the SAI, which
is available upon request.
16
<PAGE>
Year Ended June 30
----------------------------------
1999 1998 1997 1996 1995
----- ----- ----- ----- -----
Net asset value, beginning of period
INCOME FROM INVESTMENT OPERATIONS
Net investment income (a)
Net gains or losses on securities
Total from investment operations
LESS: DISTRIBUTIONS
Dividends
Distributions
Total distributions
Net asset value, end of period
TOTAL RETURN
Total investment return based
on net asset value (b)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in millions)
Ratio to average net assets of:
Expenses, net of waivers
and reimbursements
Expenses, before waivers
and reimbursements
Net investment income (a)
- -----------------------------------------------------------------------------
(a) Net of expenses reimbursed or waived by Alliance.
(b) Total investment return is calculated assuming an initial investment
made at the net asset value at the beginning of the period, reinvestment
of all dividends and distributions at net asset value during the period,
and redemption on the last day of the period.
17
<PAGE>
For more information about the Fund, the following documents are
available upon request:
- -- ANNUAL/SEMI-ANNUAL REPORTS TO SHAREHOLDERS
The Fund's annual and semi-annual reports to shareholders contain
additional information on the Fund's investments.
- -- STATEMENT OF ADDITIONAL INFORMATION (SAI)
The Fund has an SAI, which contains more detailed information
about the Fund, including its operations and investment policies.
The Fund's SAI is incorporated by reference into (and is legally
part of) this Prospectus.
You may request a free copy of a current annual/semi-annual
report or the SAI, or make inquiries concerning the Fund, by
contacting your broker or other financial intermediary, or by
contacting Alliance:
BY MAIL: c/o Alliance Fund Services, Inc.
P.O. Box 1520, Secaucus, New Jersey 07096
BY PHONE: For Information: (800) 824-1916
For Literature: (800) 824-1916
Or you may view or obtain these documents from the Securities and
Exchange Commission:
IN PERSON: at the Securities and Exchange Commission's
Public Reference Room in Washington, D.C.
BY PHONE: (800) SEC-0330 (for information only)
BY MAIL: Public Reference Section
Securities and Exchange Commission
Washington, DC 20549-6009
(duplicating fee required)
ON THE INTERNET: www.sec.gov
You also may find more information about Alliance on the Internet
at: www.Alliancecapital.com.
File No. 811-2888
18
<PAGE>
[LOGO] ALLIANCE GOVERNMENT RESERVES
____________________________________________________________
P.O. Box 1520, Secaucus, New Jersey 07096-1520
Toll Free (800) 221-5672
____________________________________________________________
STATEMENT OF ADDITIONAL INFORMATION
October __, 1999
____________________________________________________________
TABLE OF CONTENTS
Page
Investment Objectives and Policies.........................
Investment Restrictions....................................
Management.................................................
Purchase and Redemption of Shares...........................
Additional Information......................................
Daily Dividends-Determination of Net Asset Value............
Taxes.......................................................
General Information.........................................
Appendix-Commercial Paper and Bond Ratings..................
Financial Statements........................................
Independent Auditor's Report.............................
_______________________________________________________________
This Statement of Additional Information is not a prospectus but
supplements and should be read in conjunction with the Fund's
current Prospectus dated October __, 1999. A copy of the
Prospectus may be obtained by contacting the Fund at the address
or telephone number shown above.
(R) This registered service mark used under license from the
owner, Alliance Capital Management L.P.
<PAGE>
_______________________________________________________________
INVESTMENT OBJECTIVES AND POLICIES
_______________________________________________________________
The Fund is a diversified, open-end investment company
whose objectives are - in the following order of priority -
safety of principal, excellent liquidity, and maximum current
income to the extent consistent with the first two objectives.
There can be no assurance, as is true with all investment
companies, that the Fund's objectives will be achieved. The Fund
pursues its objectives by maintaining a portfolio of the
following investments diversified by maturities not exceeding one
year or less (which maturities pursuant to Rule 2a-7 under the
Investment Company Act of 1940 as amended (the "Act"), may extend
to 397 days or such greater length of time as may be permitted
from time to time pursuant to Rule 2a-7):
1. Marketable obligations of, or guaranteed by, the
United States Government, its agencies or instrumentalities.
These include issues of the United States Treasury, such as
bills, certificates of indebtedness, notes and bonds, and issues
of agencies and instrumentalities established under the authority
of an act of Congress. The latter issues include, but are not
limited to, obligations of the Bank for Cooperatives, Federal
Financing Bank, Federal Home Loan Bank, Federal Intermediate
Credit Banks, Federal Land Banks, Federal National Mortgage
Association and Tennessee Valley Authority. Some of these
securities are supported by the full faith and credit of the U.S.
Treasury, others are supported by the right of the issuer to
borrow from the Treasury, and still others are supported only by
the credit of the agency or instrumentality.
2. Repurchase agreements pertaining to the above
securities. A repurchase agreement arises when a buyer purchases
a security and simultaneously agrees to resell it to the
counterparty at an agreed-upon future date. The resale price is
greater than the purchase price, reflecting an agreed-upon market
rate which is effective for the period of time the buyer's money
is invested in the security and which is not related to the
coupon rate on the purchased security. Repurchase agreements may
be entered into with member banks of the Federal Reserve System
or "primary dealers" (as designated by the Federal Reserve Bank
of New York) in U.S. Government securities or with State Street
Bank and Trust Company ("State Street Bank"), the Fund's
custodian. It is the Fund's current practice, which may be
changed at any time without shareholder approval, to enter into
repurchase agreements only with such primary dealers or State
<PAGE>
Street Bank. For each repurchase agreement, the Fund requires
continual maintenance of the market value of the underlying
collateral in amounts equal to, or in excess of, the agreement
amount. While the maturities of the underlying collateral may
exceed 397 days, the term of the repurchase agreement is always
less than 397 days. In the event that a counterparty defaulted
on its repurchase obligation, the Fund might suffer a loss to the
extent that the proceeds from the sale of the collateral were
less than the repurchase price. If the counterparty became
bankrupt, the Fund might be delayed in selling the collateral.
Repurchase agreements often are for short periods such as one day
or a week, but may be longer. Repurchase agreements not
terminable within seven days will be limited to no more than 10%
of the Fund's assets.1 Pursuant to Rule 2a-7, a repurchase
agreement is deemed to be an acquisition of the underlying
securities provided that the obligation of the seller to
repurchase the securities from the money market fund is
collateralized fully (as defined in such Rule). Accordingly, the
counterparty of a fully collateralized repurchase agreement is
deemed to be the issuer of the underlying securities.
Reverse Repurchase Agreements. While the Fund has no
present plans to do so, it may enter into reverse repurchase
agreements, which have the characteristics of borrowing and which
involve the sale of securities held by the Fund with an agreement
to repurchase the securities at an agreed-upon price, date and
interest payment.
When-Issued Securities. Certain new issues that the
Fund is permitted to purchase are available on a "when-issued"
basis. When so offered, the price, which is generally expressed
in yield terms, is fixed at the time the commitment to purchase
is made, but delivery and payment for the when-issued securities
take place at a later date. Normally, the settlement date occurs
from within ten days to one month after the purchase of the
issue. During the period between purchase and settlement, no
payment is made by the Fund to the issuer and, thus, no interest
accrues to the Fund from the transaction. When-issued securities
may be sold prior to the settlement date, but the Fund makes
when-issued commitments only with the intention of actually
acquiring the securities. To facilitate such acquisitions, the
Fund's Custodian will maintain, in a separate account of the
Fund, U.S. Government securities or other liquid high grade debt
securities having value equal to or greater than commitments held
____________________
1. As used throughout the Prospectus and Statement of Additional
Information, the term assets shall refer to the Funds total
assets.
<PAGE>
by the Fund. Similarly, a separate account will be maintained to
meet obligations in respect of reverse repurchase agreements. On
delivery dates for such transactions, the Fund will meet its
obligations from maturities or sales of the securities held in
the separate account and/or from the available cash flow. If the
Fund, however, chooses to dispose of the right to acquire a when-
issued security prior to its acquisition, it can incur a gain or
loss. At the time the Fund makes the commitment to purchase a
security on a when-issued basis, it records the transaction and
reflects the value of the security in determining its net asset
value. No when-issued commitments will be made if, as a result,
more than 15% of the Fund's net assets would be committed.
Floating and Variable Rate Obligations. The Fund may
purchase floating and variable rate obligations, including
floating and variable rate demand notes and bonds. The Fund may
invest in variable and floating rate obligations whose interest
rates are adjusted either at predesignated periodic intervals or
whenever there is a change in the market rate to which the
security's interest rate is tied. The Fund may also purchase
floating and variable rate demand notes and bonds, which are
obligations ordinarily having stated maturities in excess of
13 months, but which permit the holder to demand payment of
principal and accrued interest at any time, or at specified
intervals not exceeding 397 days, in each case upon not more than
30 days' notice.
While there are many kinds of short-term securities used
by money market investors, the Fund, in keeping with its primary
investment objective of safety of principal, generally restricts
its portfolio to the types of investments listed above. Net
income to shareholders is aided both by the Fund's ability to
make investments in large denominations and by its efficiencies
of scale. Also, the Fund may seek to improve its income by
selling certain portfolio securities prior to maturity in order
to take advantage of yield disparities that occur in money
markets. The market value of the Fund's investments tends to
decrease during periods of rising interest rates and to increase
during intervals of falling rates.
Except as otherwise provided, the Fund's investment
policies are not designated "fundamental policies" within the
meaning of the Investment Company Act of 1940, as amended (the
"Act") and may, therefore, be changed by the Trustees of the
Trust without a shareholder vote. However, the Fund will not
change its investment policies without contemporaneous written
notice to shareholders.
<PAGE>
Rule 2a-7 under the Act. The Fund will comply with Rule
2a-7 under the Act, as amended from time to time, including the
diversification, quality and maturity limitations imposed by the
Rule. To the extent that the Fund's limitations are more
permissive than Rule 2a-7, the Fund will comply with the more
restrictive provisions of the Rule.
Currently, pursuant to Rule 2a-7, the Fund may invest
only in U.S. dollar-denominated "Eligible Securities" (as that
term is defined in the Rule) that have been determined by
Alliance Capital Management L.P. (the "Adviser") to present
minimal credit risks pursuant to procedures approved by the
Trustees. Generally, an Eligible Security is a security that
(i) has a remaining maturity of 397 days or less and (ii) is
rated, or is issued by an issuer with short-term debt outstanding
that is rated, in one of the two highest rating categories by two
nationally recognized statistical rating organizations ("NRSROs")
or, if only one NRSRO has issued a rating, by that NRSRO ("the
requisite NRSROs"). Unrated securities may also be Eligible
Securities if the Adviser determines that they are of comparable
quality to a rated Eligible Security pursuant to guidelines
approved by the Trustees. A description of the ratings of some
NRSROs appears in the Appendix attached hereto. Securities in
which the Fund invest may be subject to liquidity or credit
enhancements. These securities are generally considered to be
Eligible Securities if the enhancement or the issuer of the
enhancement has received the appropriate rating from the
requisite NRSROs.
Under Rule 2a-7 the Fund may not invest more than five
percent of its assets in the first tier securities of any one
issuer other than the United States Government, its agencies and
instrumentalities. A first tier security is an Eligible Security
that has received a short-term rating from the requisite NRSROs
in the highest short-term rating category for debt obligations or
is an unrated security deemed to be of comparable quality.
Government securities are considered to be first tier securities.
In addition, the Fund may not invest in a security that has
received, or is deemed comparable in quality to a security that
has received, the second highest rating by the requisite number
of NRSROs (a "second tier security") if immediately after the
acquisition thereof the Fund would have invested more than
(A) the greater of one percent of its total assets or one million
dollars in securities issued by that issuer which are second tier
securities, or (B) five percent of its total assets in second
tier securities.
<PAGE>
_______________________________________________________________
INVESTMENT RESTRICTIONS
_______________________________________________________________
The foregoing investment objectives and policies and the
following restrictions may not, except as otherwise indicated, be
changed without the approval of a majority of the Fund's
outstanding shares. As used in this prospectus, the term
"majority of the Fund's outstanding shares" means the affirmative
vote of the holders of (a) 67% or more of the shares represented
at a meeting at which more than 50% of the outstanding shares are
represented or (b) more than 50% of the outstanding shares,
whichever is less. If a percentage restriction is adhered to at
the time of an investment, a later increase or decrease in
percentage resulting from a change in value of portfolio
securities or in amount of the Fund's assets will not constitute
a violation of that restriction.
The Fund:
1. May not purchase any security which has a maturity
date more than one year2 from the date of the Fund's purchase;
2. May not purchase securities other than marketable
obligations of, or guaranteed by, the United States Government,
its agencies or instrumentalities, or repurchase agreements
pertaining thereto;
3. May not enter into repurchase agreements if, as a
result thereof, more than 10% of the Fund's assets would be
subject to repurchase agreements not terminable within seven days
(which may be considered to be illiquid) or with any one seller3
if, as a result thereof, more than 5% of the Fund's assets would
be invested in repurchase agreements purchased from such seller;
and may not enter into any reverse repurchase agreements if, as a
result thereof, the Fund's obligations with respect to reverse
repurchase agreements would exceed 10% of the Fund's assets;
____________________
2. Which maturity, pursuant to Rule 2a-7, may extend to 397
days, or such greater length of time as may be permitted from
time to time pursuant to Rule 2a-7.
3. Pursuant to Rule 2a-7, the seller of a fully collateralized
repurchase agreement is deemed to be the issuer of the
underlying securities.
<PAGE>
4. May not borrow money except from banks on a
temporary basis or via entering into reverse repurchase
agreements in aggregate amounts not to exceed 10% of the Fund's
assets and to be used exclusively to facilitate the orderly
maturation and sale of portfolio securities during any periods of
abnormally heavy redemption requests, if they should occur; such
borrowings may not be used to purchase investments and the Fund
will not purchase any investment while any such borrowings exist;
5. May not pledge, hypothecate or in any manner
transfer, as security for indebtedness, any securities owned or
held by the Fund except as may be necessary in connection with
any borrowing mentioned above, including reverse repurchase
agreements, and in an aggregate amount not to exceed 10% of the
Fund's assets;
6. May not make loans, provided that the Fund may
purchase securities of the type referred to in paragraph 2 above
and enter into repurchase agreements with respect thereto; or
7. May not act as an underwriter of securities.
_______________________________________________________________
MANAGEMENT
_______________________________________________________________
Trustees and Officers
The Trustees and principal officers of the Fund and
their principal occupations during the past five years are set
forth below. Unless otherwise specified, the address of each
such person is 1345 Avenue of the Americas, New York, New York
10105. Those Trustees whose names are preceded by an asterisk
are "interested persons" of the Fund as determined under the Act.
Each Trustee and officer is also a director, trustee or officer
of other registered companies sponsored by the Adviser.
Trustees
DAVE H. WILLIAMS4 , 67, Chairman, is Chairman of the
Board of Directors of Alliance Capital Management Corporation
____________________
4.
An "interested person" of the Fund as defined in the
Act.
<PAGE>
("ACMC")5 , sole general partner of the Adviser with which he has
been associated since prior to 1994.[/R]
JOHN D. CARIFA4, 54, is the President, Chief Operating
Officer and a Director of ACMC with which he has been associated
since prior to 1994.
SAM Y. CROSS, 72, was, since prior to December 1993,
Executive Vice President of The Federal Reserve Bank of New York
and manager for foreign operations for The Federal Reserve
System. He is also a director of Fuji Bank and Trust Co. He is
Executive-In-Residence at the School of International and Public
Affairs, Columbia University. His address is 200 East 66th
Street, New York, New York 10021.
CHARLES H. P. DUELL, 61, is President of Middleton Place
Foundation with which he has been associated since prior to 1994.
He is also a Director of GRC International, Inc., a Trustee
Emeritus of the National Trust for Historic Preservation and
serves on the Board of Architectural Review, City of Charleston.
His address is Middleton Place Foundation, Ashley River Road,
Charleston, South Carolina 29414.
WILLIAM H. FOULK, JR., 67, is an Investment Adviser and
an Independent Consultant. He was formerly Senior Manager of
Barrett Associates, Inc., a registered investment adviser, with
which he had been associated since prior to 1994. His address is
2 Greenwich Plaza, Suite 100, Greenwich, CT 06830.
DAVID K. STORRS, 55, is President and Chief Executive
Officer of Alternative Investment Group, LLC (an investment
firm). He was formerly President of The Common Fund (investment
management for educational institutions) with which he had been
since prior to 1994. His address is 65 South Gate Road,
Southport, Connecticut 06490.
SHELBY WHITE, 61, is an author and financial journalist.
Her address is One Sutton Place South, New York, New York
10022.
____________________
5. For purposes of this Statement of Additional Information,
ACMC refers to Alliance Capital Management Corporation, the
sole general partner of the Adviser, and to the predecessor
general partner of the Adviser of the same name.
<PAGE>
Officers
RONALD M. WHITEHILL - President, 61, is a Senior Vice
President of ACMC and President of Alliance Cash Management
Services with which he has been associated since prior to
1994.
KATHLEEN A. CORBET - Senior Vice President, 39, is an
Executive Vice President of ACMC with which she has been
associated since prior to 1994.
DREW BIEGEL - Senior Vice President, 48 is a Vice
President of ACMC with which he has been associated since prior
to 1994.
JOHN R. BONCZEK - Senior Vice President, 39, is a Vice
President of ACMC with which he has been associated since prior
to 1994.
ROBERT I. KURZWEIL - Senior Vice President, 48, is a
Vice President of ACMC with which he has been associated since
prior to May 1994.
WAYNE D. LYSKI - Senior Vice President, 58, is an
Executive Vice President of ACMC with which he has been
associated since prior to 1994.
PATRICIA NETTER - Senior Vice President, 48, is a Vice
President of ACMC with which she has been associated since prior
to 1994.
RAYMOND J. PAPERA - Senior Vice President, 43, is a
Senior Vice President of ACMC with which he has been associated
since prior to 1994.
KENNETH T. CARTY - Vice President, 38 is a Vice
President of ACMC with which he has been associated since prior
to 1994.
JOHN F. CHIODI, Jr. - Vice President, 33, is a Vice
President of ACMC with which he has been associated since prior
to 1994.
DORIS T. CILIBERTI - Vice President, 35, is an Assistant
Vice President of ACMC with which she has been associated since
prior to 1994.
<PAGE>
MARIA R. CONA - Vice President, 44, is an Assistant Vice
President of ACMC with which she has been associated since prior
to 1994.
WILLIAM J. FAGAN - Vice President, 37, is an Assistant
Vice President of ACMC with which he has been associated since
prior to 1994.
JOSEPH R. LASPINA - Vice President, 39, is an Assistant
Vice President of ACMC with which he has been associated since
prior to 1994.
LINDA N. KELLEY - Vice President, 39, is an Assistant
Vice President of ACMC with which she has been associated since
prior to 1994.
EDMUND P. BERGAN, Jr. - Secretary, 49, is a Senior Vice
President and the General Counsel of Alliance Fund Distributors,
Inc. ("AFD") and Alliance Fund Services, Inc. ("AFS") with which
he has been associated since prior to 1994.
MARK D. GERSTEN - Treasurer and Chief Financial Officer,
48, is a Senior Vice President of AFS and a Vice President of AFD
with which he has been associated since prior to 1994.
VINCENT S. NOTO - Controller, 34, is an Assistant Vice
President of AFS with which he has been associated since prior to
1994.
ANDREW L. GANGOLF - Assistant Secretary, 45, is a Vice
President and Assistant General Counsel of AFD with which he has
been associated since December 1994.
DOMENICK PUGLIESE - Assistant Secretary, 38, is a Vice
President and Assistant General Counsel of AFD with which he has
been associated since May 1995. Prior thereto, he was Vice
President and Counsel of Concord Holding Corporation since
1994.
EMILIE D. WRAPP - Assistant Secretary, 43, is a Vice
President and Assistant General Counsel of AFD with which she has
been associated since prior to 1994.
As of October 16, 1999, the Trustees and officers as a
group owned less than 1% of the shares of the Fund.
The Fund does not pay any fees to, or reimburse expenses
of, its Trustees who are considered "interested persons" of the
<PAGE>
Fund. The aggregate compensation paid by the Fund to each of the
Trustees during its fiscal year ended June 30, 1999, the
aggregate compensation paid to each of the Trustees during
calendar year 1998 by all of the funds to which the Adviser
provides investment advisory services (collectively, the
"Alliance Fund Complex") and the total number of registered
investment companies (and separate investment portfolios within
those companies) in the Alliance Fund Complex with respect to
which each of the Trustees serves as a director or trustee, are
set forth below. Neither the Fund nor any other fund in the
Alliance Fund Complex provides compensation in the form of
pension or retirement benefits to any of its directors or
trustees.
Total Number
Total Number of Investment
of Funds in Portfolios
the Alliance Within the
Fund Complex, Funds,
Compensation Including the Including the
from the Fund, as to Fund, as to
Aggregate Alliance Fund which the which the
Compensation Complex, Trustee is a Trustee is a
Name of Trustee from Including Director or Director or
of the Fund the Fund the Fund Trustee Trustee
Dave H. Williams $-0- $-0- 6 15
John D. Carifa $-0- $-0- 50 116
Sam Y. Cross $ $ 12,000 3 12
Charles H.P. Duell $ $ 12,000 3 12
William H. Foulk, Jr. $ $214,002.50 45 111
David K. Storrs $ $ 12,000 3 12
Shelby White $ $ 12,000 3 12
The Adviser
The Adviser, a Delaware limited partnership with
principal offices at 1345 Avenue of the Americas, New York, New
York 10105, has been retained under an investment advisory
agreement (the "Advisory Agreement") to provide investment advice
and, in general, to conduct the management and investment program
of the Fund under the supervision and control of the Fund's
Trustees.
The Adviser is a leading international investment
adviser managing client accounts with assets as of June 30, 1999
<PAGE>
totaling more than $321 billion (of which approximately $140
billion represented assets of investment companies). As of
June 30, 1999, the Adviser managed retirement assets for many of
the largest public and private employee benefit plans (including
29 of the nation's Fortune 100 companies), for public employee
retirement funds in 32 out of the 50 states, for investment
companies, and for foundations, endowments, banks and insurance
companies worldwide. The 54 registered investment companies,
with more than 120 separate portfolios, managed by the Adviser
currently have over 4.5 million shareholder accounts.
Alliance Capital Management Corporation, the sole
general partner of, and the owner of a 1% general partnership
interest in the Adviser, is an indirect wholly-owned subsidiary
of The Equitable Life Assurance Society of the United States
("Equitable"), one of the largest life insurance companies in the
United States and a wholly-owned subsidiary of The Equitable
Companies Incorporated ("ECI"). ECI is a holding company
controlled by AXA, a French insurance holding company. For
insurance regulatory purposes the shares of capital stock of ECI
beneficially owned by AXA and its subsidiaries have been
deposited into a voting trust which has an initial term of 10
years commencing in 1992. The trustees of the voting trust (the
"Voting Trustees") have agreed to protect the legitimate economic
interests of AXA, but with a view of ensuring that certain
minority shareholders of AXA do not exercise control over ECI or
certain of its insurance subsidiaries. As of March 1, 1999, AXA,
ECI, Equitable and certain subsidiaries of Equitable were the
beneficial owners of approximately 56.6% of the issued and
outstanding units representing assignments of beneficial
ownership of limited partnership interests ("Units") in the
Adviser.
Based on information provided by AXA, on March 1, 1999,
approximately 20.7% of the issued ordinary shares (representing
32.7% of the voting power) of AXA were owned directly and
indirectly by Finaxa, a French holding company. As of March 1,
1999, 61.7% of the shares (representing 72.3% of the voting
power) of Finaxa were owned by four French mutual insurance
companies (the "Mutuelles AXA") (one of which, AXA Assurances
I.A.R.D. Mutuelle, owned 35.4% of the shares, representing 41.5%
of the voting power of Finaxa, and 22.7% of the shares of Finaxa
(representing 13.7% of the voting power) were owned by Paribas, a
French Bank. Including the ordinary shares owned by Finaxa, on
March 1, 1999, the Mutuelles AXA directly and indirectly owned
approximately 23.9% of the issued ordinary shares (representing
37.6% of the voting power) of AXA. The Voting Trustees may be
deemed to be beneficial owners of all Units beneficially owned by
<PAGE>
AXA and its subsidiaries. By virtue of the provisions of the
voting trust agreement, AXA may be deemed to have shared voting
power with respect to the Units. In addition, the Mutuelles AXA,
as a group, and Finaxa may be deemed to be beneficial owners of
all Units beneficially owned by AXA and its subsidiaries. AXA
and its subsidiaries have the power to dispose or direct the
disposition of all shares of the capital stock of ECI deposited
in the voting trust. The Mutuelles AXA, as a group, and Finaxa
may be deemed to share the power to vote or to direct the vote
and to dispose or to direct the disposition of all the Units of
the Advise beneficially owned by AXA and its subsidiaries. By
reason of their relationship, AXA, the Voting Trustees, the
Mutuelles AXA, Finaxa, ECI, Equitable, Equitable Holdings,
L.L.C., Equitable Investment Corporation, Alliance Capital
Management Corporation and Equitable Capital Management
Corporation may be deemed to share the power to vote or to direct
the vote and to dispose or direct the disposition of all or a
portion of the Units beneficially owned by AXA and its
subsidiaries.
AXA, a French company, is the holding company for an
international group of insurance and related financial services
companies. AXA's insurance operations include activities in life
insurance, property and casualty insurance and reinsurance. The
insurance operations are diverse geographically, with activities
principally in Western Europe, North America, the Asia/Pacific
area and, to a lesser extent, in Africa and South America. AXA
is also engaged in asset management, investment banking,
securities trading, brokerage, real estate and other financial
services activities principally in the United States, as well as
in Western Europe and the Asia/Pacific area.
Under the Advisory Agreement, the Adviser provides
investment advisory services and order placement facilities for
the Fund and pays all compensation of Trustees of the Fund who
are affiliated persons of the Adviser. The Adviser or its
affiliates also furnish the Fund without charge with management
supervision and assistance and office facilities. Under the
Advisory Agreement, the Fund pays an advisory fee at an annual
rate of .50 of 1% of up to $1.25 billion of the average daily
value of the Fund's net assets, .49 of 1% of the next $.25
billion of such assets, .48 of 1% of the next $.25 billion of
such assets, .47 of 1% of the next $.25 billion of such assets,
.46 of 1% of the next $1 billion of such assets and .45 of 1% of
the average daily net assets of the Fund in excess of $3 billion.
The fee is accrued daily and paid monthly. The Adviser will
reimburse the Fund to the extent that its net expenses (excluding
taxes, brokerage, interest and extraordinary expenses) exceed 1%
<PAGE>
of its average daily net assets for any fiscal year. For the
fiscal years ended June 30, 1997, 1998 and 1999 the Adviser
received from the Fund, advisory fees (net of reimbursement for
the fiscal year ended June 30, 1998) of $17,412,020, $19,694,085
and $____________, respectively. In accordance with the
Distribution Services Agreement described below, the Fund may pay
a portion of advertising and promotional expenses in connection
with the sale of shares of the Fund. The Fund also pays for
printing of prospectuses and other reports to shareholders and
all expenses and fees related to registration and filing with the
Commission and with state regulatory authorities. The Fund pays
all other expenses incurred in its operations, including the
Adviser's management fees; custody, transfer and dividend
disbursing expenses; legal and auditing costs; clerical,
administrative accounting, and other office costs; fees and
expenses of Trustees who are not affiliated with the Adviser;
costs of maintenance of the Trust's existence; and interest
charges, taxes, brokerage fees, and commissions. As to the
obtaining of clerical and accounting services not required to be
provided to the Fund by the Adviser under the Advisory Agreement,
the Fund may employ its own personnel. For such services, it
also may utilize personnel employed by the Adviser; if so done,
the services are provided to the Fund at cost and the payments
therefor must be specifically approved in advance by the
Trustees. The Fund paid to the Adviser a total of $164,000,
$167,000 and $________, respectively, for such services for the
fiscal years ended June 30, 1997, 1998 and 1999.
The Fund has made arrangements with certain broker-
dealers, including Pershing, Division of Donaldson, Lufkin &
Jenrette Securities Corporation ("Pershing"), an affiliate of the
Adviser, whose customers are Fund shareholders pursuant to which
payments are made to such broker-dealers performing recordkeeping
and shareholder servicing functions. Such functions may include
opening new shareholder accounts, processing purchase and
redemption transactions, and responding to inquiries regarding
the Fund's current yield and the status of shareholder accounts.
The Fund pays fully disclosed and omnibus broker dealers
(including Pershing) for such services. The fund may also pay
for the electronic communications equipment maintained at the
broker-dealers' offices that permits access to the Fund's
computer files and, in addition, reimburses fully-disclosed
broker-dealers at cost for personnel expenses involved in
providing such services. All such payments must be approved or
ratified by the Trustees. For the fiscal years ended June 30,
1997, 1998 and 1999, the Fund reimbursed such broker-dealers a
total of $2,146,522, $5,301,680 and $__________,
respectively.
<PAGE>
The Advisory Agreement became effective on July 22,
1992. Continuance of the Advisory Agreement until June 30, 2000
was approved by the vote, cast in person by all the Trustees of
the Trust who neither were interested persons of the Trust nor
had any direct or indirect financial interest in the Agreement or
any related agreement, at a meeting called for that purpose on
June 21, 1999.
The Advisory Agreement will remain in effect thereafter
from year to year provided that such continuance is specifically
approved annually by a vote of a majority of the outstanding
shares of the Fund or by the Fund's Trustees, including in either
case approval by a majority of the Trustees who are not parties
to the Advisory Agreement or interested persons as defined in the
Act. The Advisory Agreement may be terminated without penalty on
60 days' written notice at the option of either party or by a
vote of the outstanding voting securities of the Fund; it will
automatically terminate in the event of assignment. The Adviser
is not liable for any action or inaction in regard to its
obligations under the Advisory Agreement as long as it does not
exhibit willful misfeasance, bad faith, gross negligence, or
reckless disregard of its obligations.
Distribution Services Agreement
Rule 12b-1 under the Act permits an investment company
to directly or indirectly pay expenses associated with the
distribution of its shares in accordance with a duly adopted and
approved plan. The Fund has entered into a Distribution Services
Agreement (the "Agreement") which includes a plan adopted
pursuant to Rule 12b-1 (the "Plan") with AFD (the "Distributor"),
which applies to both series of the Trust. Pursuant to the Plan,
the Fund makes payments each month to AFD in an amount that will
not exceed, on an annualized basis, .25 of 1% of the Fund's
aggregate average daily net assets. In addition, under the
Agreement the Distributor makes payments for distribution
assistance and for administrative, accounting and other services
from its own resources which may include the management fee paid
by the Fund.
Payments under the Agreement are used in their entirety
for (i) payments to broker-dealers and other financial
intermediaries, including the Distributor and Donaldson, Lufkin &
Jenrette Securities Corporation and its Pershing Division,
affiliates of the Adviser, for distribution assistance and to
banks and other depository institutions for administrative and
accounting services, and (ii) otherwise promoting the sale of
<PAGE>
shares of the Fund such as by paying for the preparation,
printing and distribution of prospectuses and other promotional
materials sent to existing and prospective shareholders and by
directly or indirectly purchasing radio, television, newspaper
and other advertising. In approving the Agreement the Trustees
determined that there was a reasonable likelihood that the
Agreement would benefit the Fund and its shareholders. During
the fiscal year ended June 30, 1999, the Fund made payments to
the Distributor for expenditures, under the Agreement in amounts
aggregating $ which constituted . of 1% of the
Fund's average daily net assets during the period, and the
Adviser made payments from its own resources as described above
aggregating $ . Of the $ paid by the
Adviser and the Fund under the Agreement, $ was paid for
advertising, printing, and mailing of prospectuses to persons
other than current shareholders; and $ was paid to
broker-dealers and other financial intermediaries for
distribution assistance.
The administrative and accounting services provided by
banks and other depository institutions may include, but are not
limited to, establishing and maintaining shareholder accounts,
sub-accounting, processing of purchase and redemption orders,
sending confirmations of transactions, forwarding financial
reports and other communications to shareholders and responding
to shareholder inquiries regarding the Fund. As interpreted by
courts and administrative agencies, certain laws and regulations
limit the ability of a bank or other depository institution to
become an underwriter or distributor of securities. However, in
the opinion of the Fund's management based on the advice of
counsel, these laws and regulations do not prohibit such
depository institutions from providing other services for
investment companies such as the administrative and accounting
services described above. The Trustees will consider appropriate
modifications to the Fund's operations, including discontinuance
of payments under the Agreement to banks and other depository
institutions, in the event of any future change in such laws or
regulations which may affect the ability of such institutions to
provide the above-mentioned services.
The Treasurer of the Fund reports the amounts expended
under the Agreement and the purposes for which such expenditures
were made to the Trustees on a quarterly basis. Also, the
Agreement provides that the selection and nomination of
disinterested Trustees (as defined in the Act) are committed to
the discretion of the disinterested Trustees then in office.
<PAGE>
The Agreement became effective on July 22, 1992.
Continuance of the Agreement until June 30, 2000 was approved by
the vote, cast in person by all the Trustees of the Fund who
neither were interested persons of the Fund nor had any direct or
indirect financial interest in the Agreement or any related
agreement, at a meeting called for that purpose on
June 21, 1999. The Agreement may be continued annually
thereafter if approved by a majority vote of the Trustees who
neither are interested persons of the Fund nor have any direct or
indirect financial interest in the Agreement or in any related
agreement, cast in person at a meeting called for that
purpose.
All material amendments to the Agreement must be
approved by a vote of the Trustees, including a majority of the
disinterested Trustees, cast in person at a meeting called for
that purpose, and the Agreement may not be amended in order to
increase materially the costs which the Fund may bear pursuant to
the Agreement without the approval of a majority of the
outstanding shares of the Fund. The Agreement may also be
terminated at any time by a majority vote of the disinterested
Trustees, or by a majority of the outstanding shares of the Fund
or by the Distributor. Any agreement with a qualifying broker-
dealer or other financial intermediary may be terminated without
penalty on not more than sixty days' written notice by a vote of
the majority of non-party Trustees, by a vote of a majority of
the outstanding shares of the Fund, or by the Distributor and
will terminate automatically in the event of its assignment.
The Agreement is in compliance with rules of the
National Association of Securities Dealers, Inc. (the "NASD")
which became effective July 7, 1993 and which limit the annual
asset-based sales charges and service fees that a mutual fund may
impose to .75% and .25%, respectively, of average annual net
assets.
_______________________________________________________________
PURCHASE AND REDEMPTION OF SHARES
_______________________________________________________________
Generally, shares of the Fund are sold and redeemed on a
continuous basis without sales or redemption charges at their net
asset value which is expected to be constant at $1.00 per share,
although this price is not guaranteed.
<PAGE>
Accounts Not Maintained Through Financial Intermediaries
Opening Accounts - New Investments
A. When Funds are Sent by Wire (the wire method permits
immediate credit)
1) Telephone the Fund toll-free at (800) 824-1916.
The Fund will ask for the name of the account as
you wish it to be registered, address of the
account, and taxpayer identification number (social
security number for an individual). The Fund will
then provide you with an account number.
2) Instruct your bank to wire Federal funds (minimum
$1,000) exactly as follows:
ABA 0110 0002-8
State Street Bank and Trust Company
Boston, MA 02101
Alliance Government Reserves
DDA 9903-279-9
Your account name as registered with the Fund
Your account number as registered with the Fund
3) Mail a completed Application Form to:
Alliance Fund Services, Inc.
P.O. Box 1520
Secaucus, New Jersey 07096-1520
B. When Funds are Sent by Check
1) Fill out an Application Form.
2) Mail the completed Application Form along with your
check or negotiable bank draft (minimum $1,000),
payable to "Alliance Government Reserves," to
Alliance Fund Services, Inc. as in A(3) above.
Subsequent Investments
A. Investments by Wire (to obtain immediate credit)
Instruct your bank to wire Federal funds (minimum $100)
to State Street Bank and Trust Company ("State Street Bank") as
in A(2) above.
<PAGE>
B. Investments by Check
Mail your check or negotiable bank draft (minimum $100),
payable to "Alliance Government Reserves," to Alliance Fund
Services, Inc. as in A(3) above.
Include with the check or draft the "next investment"
stub from one of your previous monthly or interim account
statements. For added identification, place your Fund account
number on the check or draft.
Investments Made by Check
Money transmitted by a check drawn on a member of the
Federal Reserve System is converted to Federal funds in one
business day following receipt and, thus, is then invested in the
Fund. Checks drawn on banks which are not members of the Federal
Reserve System may take longer to be converted and invested. All
payments must be in United States dollars.
PROCEEDS FROM ANY SUBSEQUENT REDEMPTION BY YOU OF FUND
SHARES THAT WERE PURCHASED BY CHECK OR ELECTRONIC FUNDS TRANSFER
WILL NOT BE FORWARDED TO YOU UNTIL THE FUND IS REASONABLY ASSURED
THAT YOUR CHECK OR ELECTRONIC FUNDS TRANSFER HAS CLEARED, UP TO
FIFTEEN DAYS FOLLOWING THE PURCHASE DATE. If the redemption
request during such period is in the form of a Fund check, the
check will be marked "insufficient funds" and be returned unpaid
to the presenting bank.
Redemptions
A. By Telephone
You may withdraw any amount from your account on any
Fund business day (i.e., any weekday exclusive of days on which
the New York Stock Exchange or State Street Bank is closed) via
orders given to AFS by telephone toll-free (800) 824-1916. Such
redemption orders must include your account name as registered
with the Fund and the account number.
If your telephone redemption order is received by AFS
prior to 12:00 Noon (Eastern time), we will send the proceeds in
Federal funds by wire to your designated bank account that day.
The minimum amount for a wire is $1,000. If your telephone
redemption order is received by AFS after 12:00 Noon and before
4:00 p.m., we will wire the proceeds the next business day. You
<PAGE>
also may request that proceeds be sent by check to your
designated bank. Redemptions are made without any charge to you.
During periods of drastic economic or market
developments, such as the market break of October 1987, it is
possible that shareholders would have difficulty in reaching AFS
by telephone (although no such difficulty was apparent at any
time in connection with the 1987 market break). If a shareholder
were to experience such difficulty, the shareholder should issue
written instructions to AFS at the address shown on the cover of
this Statement of Additional Information. The Fund reserves the
right to suspend or terminate its telephone redemption service at
any time without notice. Neither the Fund nor the Adviser, or
AFS will be responsible for the authenticity of telephone
requests for redemptions that the Fund reasonably believes to be
genuine. The Fund will employ reasonable procedures in order to
verify that telephone requests for redemptions are genuine,
including among others, recording such telephone instructions and
causing written confirmations of the resulting transactions to be
sent to shareholders. If the Fund did not employ such
procedures, it could be liable for losses arising from
unauthorized or fraudulent telephone instructions. Selected
dealers or agents may charge a commission for handling telephone
requests for redemptions.
B. By Checkwriting
With this service, you may write checks made payable to
any payee. Checks cannot be written for more than the principal
balance (not including any accrued dividends) in your account.
First, you must fill out the Signature Card which is with the
Application Form. If you wish to establish this checkwriting
service subsequent to the opening of your Fund account, contact
the Fund by telephone or mail. There is no separate charge for
the checkwriting service, except that State Street Bank may
impose charges for checks which are returned unpaid because of
insufficient funds or for checks upon which you have placed a
stop order. There is currently a $7.50 charge for check
reorders.
The checkwriting service enables you to receive the daily
dividends declared on the shares to be redeemed until the day
that your check is presented to State Street Bank for payment.
<PAGE>
C. By Mail
You may withdraw any amount from your account at any
time by mail. Written orders for withdrawal, accompanied by duly
endorsed certificates, if issued, should be mailed to Alliance
Fund Services, Inc., P.O. Box 1520, Secaucus, New Jersey
07096-1520. Such orders must include the account name as
registered with the Fund and the account number. All written
orders for redemption, and accompanying certificates, if any,
must be signed by all owners of the account with the signatures
guaranteed by an institution which is an "eligible guarantor" as
defined in Rule 17Ad-15 under the Securities Exchange Act of
1934, as amended.
_______________________________________________________________
ADDITIONAL INFORMATION
_______________________________________________________________
Shareholders maintaining Fund accounts through brokerage
firms and other institutions should be aware that such
institutions necessarily set deadlines for receipt of transaction
orders from their clients that are earlier than the transaction
times of the Fund itself so that the institutions may properly
process such orders prior to their transmittal to State Street
Bank. Should an investor place a transaction order with such an
institution after its deadline, the institution may not effect
the order with the Fund until the next business day.
Accordingly, an investor should familiarize himself or herself
with the deadlines set by his or her institution. (For example,
the Distributor accepts purchase orders from its customers up to
2:15 p.m. Eastern time for issuance at the 4:00 p.m. transaction
time and price.) A brokerage firm acting on behalf of a customer
in connection with transactions in Fund shares is subject to the
same legal obligations imposed on it generally in connection with
transactions in securities for a customer, including the
obligation to act promptly and accurately.
Orders for the purchase of Fund shares become effective
at the next transaction time after Federal funds or bank wire
monies become available to State Street Bank for a shareholder's
investment. Federal funds are a bank's deposits in a Federal
Reserve Bank. These funds can be transferred by Federal Reserve
wire from the account of one member bank to that of another
member bank on the same day and are considered to be immediately
available funds; similar immediate availability is accorded
monies received at State Street Bank by bank wire. Money
transmitted by a check drawn on a member of the Federal Reserve
<PAGE>
System is converted to Federal funds in one business day
following receipt. Checks drawn on banks which are not members
of the Federal Reserve System may take longer. All payments
(including checks from individual investors) must be in United
States dollars.
All shares purchased are confirmed to each shareholder
and are credited to his or her account at the net asset value.
To avoid unnecessary expense to the Fund and to facilitate the
immediate redemption of shares, share certificates, for which no
charge is made, are not issued except upon the written request of
a shareholder. Certificates are not issued for fractional
shares. Shares for which certificates have been issued are not
eligible for any of the optional methods of withdrawal; namely,
the telephone, telegraph, checkwriting or periodic redemption
procedures. The Fund reserves the right to reject any purchase
order.
Arrangements for Telephone Redemptions. If you wish to
use the telephone redemption procedure, indicate this on your
Application Form and designate a bank and account number to
receive the proceeds of your withdrawals. If you decide later
that you wish to use this procedure, or to change instructions
already given, send a written notice to Alliance Fund Services,
Inc., P.O. Box 1520, Secaucus, New Jersey 07096-1520, with your
signature guaranteed by an institution which is an eligible
guarantor. For joint accounts, all owners must sign and have
their signatures guaranteed.
Automatic Investment Program. A shareholder may
purchase shares of the Fund through an automatic investment
program through a bank that is a member of the National Automated
Clearing House Association. Purchases can be made on a Fund
business day each month designated by the shareholder.
Shareholders wishing to establish an automatic investment program
should write or telephone the Fund or AFS at (800) 221-5672.
Retirement Plans. The Fund's objectives of safety of
principal, excellent liquidity and maximum current income to the
extent consistent with the first two objectives may make it a
suitable investment vehicle for part or all of the assets held in
various tax-deferred retirement plans. The Fund has available
forms of individual retirement account (IRA), simplified employee
pension plans (SEP), 403(b)(7) plans and employer-sponsored
retirement plans (Keogh or HR10 Plan). Certain services
described in this prospectus may not be available to retirement
accounts and plans. Persons desiring information concerning
<PAGE>
these plans should write or telephone the Fund or AFS at
(800) 221-5672.
The Alliance Plans Division of Frontier Trust Company, a
subsidiary of The Equitable Life Assurance Society of the United
States, is the custodian under these plans. The custodian
charges a nominal account establishment fee and a nominal annual
maintenance fee. A portion of such fees is remitted to AFS to
compensate that organization for services rendered to retirement
plan accounts maintained with the Fund.
Periodic Distribution Plans. Without affecting your
right to use any of the methods of redemption described above, by
checking the appropriate boxes on the Application Form, you may
elect to participate additionally in the following plans without
any separate charge. Under the Income Distribution Plan you
receive monthly payments of all the income earned in your Fund
account, with payments forwarded by check or electronically via
the Automated Clearing House ("ACH") network shortly after the
close of the month. Under the Systematic Withdrawal Plan, you
may request payments by check or electronically via the ACH
network in any specified amount of $50 or more each month or in
any intermittent pattern of months. If desired, you can order,
via a signature-guaranteed letter to the Fund, such periodic
payments to be sent to another person. Shareholders wishing
either of the above plans electronically through the ACH network
should write or telephone the Fund or AFS at (800) 221-5672.
The Fund has the right to close out an account if it has
a zero balance on December 31 and no account activity for the
first six months of the subsequent year. Therefore, unless this
has occurred, a shareholder with a zero balance, when
reinvesting, should continue to use his account number.
Otherwise, the account should be re-opened pursuant to procedures
described above or through instructions given to a financial
intermediary.
A "business day," during which purchases and redemptions
of Fund shares can become effective and the transmittal of
redemption proceeds can occur, is considered for Fund purposes as
any weekday exclusive of New Year's Day, Martin Luther King, Jr.
Day, President's Day (observed), Good Friday, Memorial Day
(observed), Independence Day, Labor Day, Thanksgiving Day and
Christmas Day; if one of these holidays falls on a Saturday or
Sunday, purchases and redemptions will likewise not be processed
on the preceding Friday or the following Monday, respectively.
On any such day that is an official bank holiday in
Massachusetts, neither purchases nor wired redemptions can become
<PAGE>
effective because Federal funds cannot be received or sent by
State Street Bank. On such days, therefore, the Fund can only
accept redemption orders for which shareholders desire remittance
by check. The right of redemption may be suspended or the date
of a redemption payment postponed for any period during which the
New York Stock Exchange is closed (other than customary weekend
and holiday closings), when trading on the New York Stock
Exchange is restricted, or an emergency (as determined by the
Commission) exists, or the Commission has ordered such a
suspension for the protection of shareholders. The value of a
shareholder's investment at the time of redemption may be more or
less than his or her cost, depending on the market value of the
securities held by the Fund at such time and the income earned.
_______________________________________________________________
DAILY DIVIDENDS--DETERMINATION OF NET ASSET VALUE
_______________________________________________________________
All net income of the Fund is determined after the close
of each business day, currently 4:00 p.m. Eastern time (and at
such other times as the Trustees may determine) and is paid
immediately thereafter pro rata to shareholders of record via
automatic investment in additional full and fractional shares in
each shareholder's account at the rate of one share for each
dollar distributed. As such additional shares are entitled to
dividends on following days, a compounding growth of income
occurs.
Net income consists of all accrued interest income on
Fund portfolio assets less the Fund's expenses applicable to that
dividend period. Realized gains and losses are reflected in net
asset value and are not included in net income. Net asset value
per share is expected to remain constant at $1.00 since all net
income is declared as a dividend each time net income is
determined.
The valuation of the Fund's portfolio securities is
based upon their amortized cost which does not take into account
unrealized securities gains or losses as measured by market
valuations. The amortized cost method involves valuing an
instrument at its cost and thereafter applying a constant
amortization to maturity of any discount or premium, regardless
of the impact of fluctuating interest rates on the market value
of the instrument. During periods of declining interest rates,
the daily yield on shares of the Fund may be higher than that of
a fund with identical investments utilizing a method of valuation
based upon market prices for its portfolio instruments; the
converse would apply in a period of rising interest rates.
<PAGE>
The Fund maintains procedures designed to maintain, to
the extent reasonably possible, the price per share as computed
for the purpose of sales and redemptions at $1.00. Such
procedures include review of the Fund's portfolio holdings by the
Trustees to the extent required by Rule 2a-7 under the Act at
such intervals as they deem appropriate to determine whether and
to what extent the net asset value of the Fund calculated by
using available market quotations or market equivalents deviates
from net asset value based on amortized cost. There can be no
assurance, however, that the Fund's net asset value per share
will remain constant at $1.00.
The net asset value of the shares is determined each
business day at 12:00 Noon and 4:00 p.m. (Eastern time). The net
asset value per share is calculated by taking the sum of the
value of the Fund's investments and any cash or other assets,
subtracting liabilities, and dividing by the total number of
shares outstanding. All expenses, including the fees payable to
the Adviser, are accrued daily.
_______________________________________________________________
TAXES
_______________________________________________________________
The Fund has qualified in each fiscal year to date and
intends to qualify in each future year to be taxed as a regulated
investment company under the Internal Revenue Code of 1986, as
amended (the "Code") and, as such, will not be liable for Federal
income and excise taxes on the net income and capital gains
distributed to its shareholders. Since the Fund distributes all
of its net income and capital gains, the Fund itself should
thereby avoid all Federal income and excise taxes.
For shareholders' Federal income tax purposes, all
distributions by the Fund out of interest income and net realized
short-term capital gains are treated as ordinary income and
distributions of long-term capital gains, if any, are treated as
long-term capital gains irrespective of the length of time the
shareholder held shares in the Fund. Since the Fund derives
nearly all of its gross income in the form of interest and the
balance in the form of short-term capital gains, it is expected
that for corporate shareholders, none of the Fund's distributions
will be eligible for the dividends-received deduction under
current law.
<PAGE>
_______________________________________________________________
GENERAL INFORMATION
_______________________________________________________________
Portfolio Transactions. Subject to the general
supervision of the Trustees of the Fund, the Adviser is
responsible for the investment decisions and the placing of the
orders for portfolio transactions for the Fund. Because the Fund
invests in securities with short maturities, there is a
relatively high portfolio turnover rate. However, the turnover
rate does not have an adverse effect upon the net yield and net
asset value of the Fund's shares since the Fund's portfolio
transactions occur primarily with issuers, underwriters or major
dealers in money market instruments acting as principals. Such
transactions are normally on a net basis which do not involve
payment of brokerage commissions. The cost of securities
purchased from an underwriter usually includes a commission paid
by the issuer to the underwriters; transactions with dealers
normally reflect the spread between bid and asked prices.
The Fund has no obligations to enter into transactions
in portfolio securities with any dealer, issuer, underwriter or
other entity. In placing orders, it is the policy of the Fund to
obtain the best price and execution for its transactions. Where
best price and execution may be obtained from more than one
dealer, the Adviser may, in its discretion, purchase and sell
securities through dealers who provide research, statistical and
other information to the Adviser. Such services may be used by
the Adviser for all of its investment advisory accounts and,
accordingly, not all such services may be used by the Adviser in
connection with the Fund. The supplemental information received
from a dealer is in addition to the services required to be
performed by the Adviser under the Advisory Agreement, and the
expenses of the Adviser will not necessarily be reduced as a
result of the receipt of such information. During the fiscal
years ended June 30, 1997, 1998 and 1999, the Fund paid no
brokerage commissions.
Capitalization. All shares of the Fund, when issued,
are fully paid and non-assessable. The Trustees are authorized
to reclassify and issue any unissued shares to any number of
additional classes or series without shareholder approval.
Accordingly, the Trustees, in the future, for reasons such as the
desire to establish one or more additional portfolios with
different investment objectives, policies or restrictions, may
create additional classes or series of shares. Any issuance of
shares of another class would be governed by the Act and the law
<PAGE>
of the Commonwealth of Massachusetts. If shares of another class
were issued in connection with the creation of a second
portfolio, each share of either portfolio would normally be
entitled to one vote for all purposes. Generally, shares of both
portfolios would vote as a single series for the election of
Trustees and on any other matter that affected both portfolios in
substantially the same manner. As to matters affecting each
portfolio differently, such as approval of the Advisory Agreement
and changes in investment policy, shares of each portfolio would
vote as separate classes. Certain procedures for the removal by
shareholders of trustees of investment trusts, such as the Fund,
are set forth in Section 16(c) of the Act.
At October 15, 1999, there were shares of
beneficial interest of the Fund outstanding. To the knowledge
of the Fund the following persons owned of record and no person
owned beneficially, 5% or more of the outstanding shares of the
Portfolio as of October 15, 1999:
No. of % of
Name and Address Shares Class
Pershing as Agent 1,093,021,908 19%
Omnibus Account for
Exclusive Benefit of Customers
1 Pershing Plaza
Jersey City, NJ 07399-0002
Pershing as Agent 4,042,233,8698 70%
Omnibus Account for
Exclusive Benefit of Customers
1 Pershing Plaza
Jersey City, NJ 07399-0002
Shareholder Liability. Under Massachusetts law,
shareholders could, under certain circumstances, be held
personally liable for the obligations of the Fund. However, the
Agreement and Declaration of Trust disclaims shareholder
liability for acts or obligations of the Fund and requires that
the Trustees use their best efforts to ensure that notice of such
disclaimer be given in each note, bond, contract, instrument,
certificate or undertaking made or issued by the Trustees or
officers of the Trust. The Agreement and Declaration of Trust
provides for indemnification out of the property of the Fund for
all loss and expense of any shareholder of the Fund held
personally liable for the obligations of the Fund. Thus, the
risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which the
<PAGE>
Fund would be unable to meet its obligations. In the view of the
Adviser, such risk is not material.
Legal Matters. The legality of the shares offered
hereby has been passed upon by Seward & Kissel LLP, New York, New
York, counsel for the Fund and the Adviser. Seward & Kissel LLP
has relied upon the opinion of Sullivan & Worcester, Boston,
Massachusetts, for matters relating to Massachusetts law.
Accountants. An opinion relating to the Fund's
financial statements is given herein by McGladrey & Pullen, LLP,
New York, New York, independent auditors for the Fund. Effective
September 25, 1999, the Fund's auditors for the fiscal year
ending June 30, 2000 are PricewaterhouseCoopers LLP.
Yield Quotations. Advertisements containing yield
quotations for the Fund may from time to time be sent to
investors or placed in newspapers, magazines or other media on
behalf of the Fund. These advertisements may quote performance
rankings, ratings or data from independent organizations or
financial publications such as Lipper Analytical Services, Inc.,
Morningstar, Inc., IBC's Money Fund Report, IBC's Money Market
Insight or Bank Rate Monitor or compare the Fund's performance to
bank money market deposit accounts, certificates of deposit or
various indices. Such yield quotations are calculated in
accordance with the standardized method referred to in Rule 482
under the Securities Act of 1933. Yield quotations are thus
determined by (i) computing the net change over a seven-day
period, exclusive of capital changes, in the value of a
hypothetical pre-existing account having a balance of one share
at the beginning of such period, (ii) dividing the net change in
account value by the value of the account at the beginning of
such period, and (iii) multiplying such base period return the
result by (365/7)--with the resulting yield figure carried to the
nearest hundredth of one percent. The Fund's effective annual
yield represents a compounding of the annualized yield according
to the following formula:
effective yield = [(base period return + 1)365/7] - 1
The Fund's yield for the seven-day period ended June 30,
1999 was % which is the equivalent of a % compounded
effective yield. Absent such reimbursement, the annualized yield
for such period would have been %, equivalent to an
effecitve yield of %. Current yield information for the
Fund can be obtained by a recorded message by telephoning toll-
free at (800) 221-9513.
<PAGE>
Additional Information. This Statement of Additional
Information does not contain all the information set forth in the
Registration Statement filed by the Fund with the Commission
under the Securities Act of 1933. Copies of the Registration
Statement may be obtained at a reasonable charge from the
Commission or may be examined, without charge, at the
Commission's offices in Washington, D.C.
<PAGE>
FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT AUDITORS.
(To be filed at a later date.)
<PAGE>
_______________________________________________________________
APPENDIX
_______________________________________________________________
A-1+, A-1 and Prime-1 Commercial Paper Ratings
"A-1+" is the highest, and "A-1" the second highest,
commercial paper rating assigned by Standard & Poor's Corporation
("Standard & Poor's") and "Prime-1" is the highest commercial
paper rating assigned by Moody's Investors Service, Inc.
("Moody's"). Standard & Poor's uses the numbers 1+, 1, 2 and 3
to denote relative strength within its highest classification of
"A", while Moody's uses the numbers 1, 2 and 3 to denote relative
strength within its highest classification of "Prime."
Commercial paper issuers rated "A" by Standard & Poor's have the
following characteristics: liquidity ratios are better than
industry average; long term debt rating is A or better; the
issuer has access to at least two additional channels of
borrowing; basic earnings and cash flow are in an upward trend;
and typically, the issuer is a strong company in a well-
established industry and has superior management. Commercial
paper issuers rated "Prime" by Moody's have the following
characteristics: their short-term debt obligations carry the
smallest degree of investment risk; margins of support for
current indebtedness are large or stable with cash flow and asset
protection well assured; current liquidity provides ample
coverage of near-term liabilities and unused alternative
financing arrangements are generally available; and while
protective elements may change over the intermediate or longer
term, such changes are most unlikely to impair the fundamentally
strong position of short-term obligations.
AAA & AA and Aaa & Aa Bond Ratings
Bonds rated AAA and Aaa have the highest ratings
assigned to debt obligations by Standard & Poor's and Moody's,
respectively. Standard & Poor's AAA rating indicates an
extremely strong capacity to pay principal and interest. Bonds
rated AA by Standard & Poor's also qualify as high-quality debt
obligations. Capacity to pay principal and interest is very
strong, and the majority of instances they differ from AAA issues
only in small degree. Moody's Aaa rating indicates the ultimate
degree of protection as to principal and interest. Moody's Aa
rated bonds, though also high-grade issues, are rated lower than
Aaa bonds because margins of protection may not be as large or
fluctuations of protective elements may be of greater amplitude
<PAGE>
or there may be other elements present which make the long-term
risks appear somewhat larger.
A-2
<PAGE>
[LOGO] ALLIANCE TREASURY RESERVES
_______________________________________________________________
P.O. Box 1520, Secaucus, New Jersey 07096-1520
Toll Free (800) 221-5672
_______________________________________________________________
STATEMENT OF ADDITIONAL INFORMATION
October , 1999
_______________________________________________________________
TABLE OF CONTENTS
Page
Investment Objectives and Policies..........................
Investment Restrictions.....................................
Management..................................................
Purchase and Redemption of Shares...........................
Additional Information......................................
Daily Dividends-Determination of Net Asset Value............
Taxes.......................................................
General Information.........................................
Appendix-Commercial Paper and Bond Rating...................
Financial Statements........................................
Independent Auditor's Report................................
________________________________________________________________
This Statement of Additional Information is not a prospectus but
supplements and should be read in conjunction with the Fund's
current Prospectus dated October , 1999. A copy of the
Prospectus may be obtained by contacting the Fund at the address
or telephone number shown above.
(R): This registered service mark used under license from the
owner, Alliance Capital Management L.P.
<PAGE>
_________________________________________________________________
INVESTMENT OBJECTIVES AND POLICIES
_________________________________________________________________
The Fund is a diversified, open-end investment company
whose objectives are - in the following order of priority -
safety of principal, excellent liquidity, and maximum current
income to the extent consistent with the first two objectives.
There can be no assurance, as is true with all investment
companies, that the Fund's objectives will be achieved. The Fund
pursues its objectives by maintaining a portfolio of the
following investments diversified by maturities not exceeding 397
days:
1. Issues of the United States Treasury, such as
bills, certificates of indebtedness, notes and bonds. Such issues
are supported by the full faith and credit of the U.S. Treasury.
2. Repurchase agreements pertaining to the above
securities. A repurchase agreement arises when a buyer purchases
a security and simultaneously agrees to resell it to the
counterparty at an agreed-upon future date. The resale price is
greater than the purchase price, reflecting an agreed-upon market
rate which is effective for the period of time the buyer's money
is invested in the security and which is not related to the
coupon rate on the purchased security. Repurchase agreements
may be entered into with member banks of the Federal Reserve
System or "primary dealers" (as designated by the Federal Reserve
Bank of New York) in U.S. Government securities or with State
Street Bank and Trust Company ("State Street Bank"), the Fund's
Custodian. It is the Fund's current practice, which may be
changed at any time without shareholder approval, to enter into
repurchase agreements only with such primary dealers or State
Street Bank. For each repurchase agreement, the Fund requires
continual maintenance of the market value of the underlying
collateral in amounts equal to, or in excess of, the agreement
amount. While the maturities of the underlying collateral may
exceed 397 days, the term of the repurchase agreement is always
less than 397 days. In the event that a counterparty defaulted
on its repurchase obligation, the Fund might suffer a loss to the
extent that the proceeds from the sale of the collateral were
less than the repurchase price. If the counterparty became
bankrupt, the Fund might be delayed in selling the collateral.
Repurchase agreements often are for short periods such as one day
or a week, but may be longer. Repurchase agreements not
terminable within seven days will be limited to no more than 10%
2
<PAGE>
of the Fund's assets. Pursuant to Rule 2a-7 under the Investment
Company Act of 1940, as amended (the "Act"), a repurchase
agreement is deemed to be an acquisition of the underlying
securities, provided that the obligation of the seller to
repurchase the securities from the money market fund is
collateralized fully (as defined in such Rule). Accordingly, the
counterparty of a fully collateralized repurchase agreement is
deemed to be the issuer of the underlying securities.
Reverse Repurchase Agreements. While the Fund has no
present plans to do so, it may enter into reverse repurchase
agreements, which have the characteristics of borrowing and which
involve the sale of securities held by the Fund with an agreement
to repurchase the securities at an agreed-upon price, date and
interest payment.
When-Issued Securities. Certain new issues that the
Fund is permitted to purchase are available on a "when-issued"
basis. When so offered, the price, which is generally expressed
in yield terms, is fixed at the time the commitment to purchase
is made, but delivery and payment for the when-issued securities
take place at a later date. Normally, the settlement date occurs
from within ten days to one month after the purchase of the
issue. During the period between purchase and settlement, no
payment is made by the Fund to the issuer and, thus, no interest
accrues to the Fund from the transaction. When-issued securities
may be sold prior to the settlement date, but the Fund makes
when-issued commitments only with the intention of actually
acquiring the securities. To facilitate such acquisitions, the
Fund's Custodian will maintain, in a separate account of the
Fund, U.S. Government securities or other liquid high grade debt
securities having value equal to or greater than commitments held
by the Fund. Similarly, a separate account will be maintained to
meet obligations in respect of reverse repurchase agreements. On
delivery dates for such transactions, the Fund will meet its
obligations from maturities or sales of the securities held in
the separate account and/or from the available cash flow. If the
Fund, however, chooses to dispose of the right to acquire a when-
issued security prior to its acquisition, it can incur a gain or
loss. At the time the Fund makes the commitment to purchase a
security on a when-issued basis, it records the transaction and
reflects the value of the security in determining its net asset
value. No when-issued commitments will be made if, as a result,
more than 15% of the Fund's net assets would be committed.
3
<PAGE>
Floating and Variable Rate Obligations. The Fund may
purchase floating and variable rate obligations, including
floating and variable rate demand notes and bonds. The Fund may
invest in variable and floating rate obligations whose interest
rates are adjusted either at predesignated periodic intervals or
whenever there is a change in the market rate to which the
security's interest rate is tied. The Fund may also purchase
floating and variable rate demand notes and bonds, which are
obligations ordinarily having stated maturities in excess of 397
days, but which permit the holder to demand payment of principal
and accrued interest at any time, or at specified intervals not
exceeding 397 days, in each case upon not more than 30 days'
notice.
While there are many kinds of short-term securities used
by money market investors, the Fund, in keeping with its primary
investment objective of safety of principal, generally restricts
its portfolio to the types of investments listed above. Net
income to shareholders is aided both by the Fund's ability to
make investments in large denominations and by its efficiencies
of scale. Also, the Fund may seek to improve its income by
selling certain portfolio securities prior to maturity in order
to take advantage of yield of the Fund's investments tends to
decrease during periods of rising interest rates and to increase
during intervals of falling rates.
Except as otherwise provided, the Fund's investment
policies are not designated "fundamental policies" within the
meaning of the Act and may, therefore, be changed by the Trustees
of the Trust without a shareholder vote. However, the Fund will
not change its investment policies without contemporaneous
written notice to shareholders.
Rule 2a-7 under the Act. The Fund will comply with Rule
2a-7 under the Act, as amended from time to time, including the
diversification, quality and maturity limitations imposed by the
Rule. To the extent that the Fund's limitations are more
permissive than Rule 2a-7, the Fund will comply with the more
restrictive provisions of the Rule.
Currently, pursuant to Rule 2a-7, the Fund may invest
only in U.S. dollar-denominated "Eligible Securities" (as that
term is defined in the Rule) that have been determined by the
Alliance Capital Management L.P. (the "Adviser") to present
minimal credit risks pursuant to procedures approved by the
4
<PAGE>
Trustees. Generally, an Eligible Security is a security that
(i) has a remaining maturity of 397 days or less and (ii) is
rated, or is issued by an issuer with short-term debt outstanding
that is rated in one of the two highest rating categories by two
nationally recognized statistical rating organizations ("NRSROs")
or, if only one NRSRO has issued a rating, by that NRSRO ("the
requisite NRSROs").Unrated securities may also be Eligible
Securities if the Adviser determines that they are of comparable
quality to a rated Eligible Security pursuant to guidelines
approved by the Trustees. A description of the ratings of some
NRSROs appears in the Appendix attached hereto. Securities in
which the Fund invests may be subject to liquidity or credit
enhancements. These securities are generally considered to be
Eligible Securities if the enhancement or the issuer of the
enhancement has received the appropriate rating from the
requisite NRSROs.
Under Rule 2a-7 the Fund may not invest more than five
percent of its assets in the first tier securities of any one
issuer other than the United States Government, its agencies and
instrumentalities. A first tier security is an Eligible Security
that has received a short-term rating from the requisite NRSROs
in the highest short-term rating category for debt obligations or
is an unrated security deemed to be of comparable quality.
Government Securities are also considered to be first tier
securities. In addition, the Fund may not invest in a security
that has received, or is deemed comparable in quality to a
security that has received, the second highest rating by the
requisite number of NRSROs (a "second tier security") if
immediately after the acquisition thereof the Fund would have
invested more than (A) the greater of one percent of its total
assets or one million dollars in securities issued by that issuer
which are second tier securities, or (B) five percent of its
total assets in second tier securities.
_______________________________________________________________
INVESTMENT RESTRICTIONS
_______________________________________________________________
The foregoing investment objectives and policies and the
following restrictions may not, except as otherwise indicated, be
changed without the approval of a majority of the Fund's
outstanding shares. As used in this prospectus, the term
"majority of the Fund's outstanding shares" means the affirmative
vote of the holders of (a) 67% or more of the shares represented
at a meeting at which more than 50% of the outstanding shares are
5
<PAGE>
represented or (b) more than 50% of the outstanding shares,
whichever is less. If a percentage restriction is adhered to at
the time of an investment, a later increase or decrease in
percentage resulting from a change in value of portfolio
securities or in amount of the Fund's assets will not constitute
a violation of that restriction.
The Fund:
1. May not purchase any security which has a remaining
maturity of more than 397 days from the date of the Fund's
purchase;
2. May not purchase securities other than marketable
obligations of the United States Treasury, or repurchase
agreements pertaining thereto;
3. May not enter into repurchase agreements if, as a
result thereof, more than 10% of the Fund's net assets would be
subject to repurchase agreements not terminable within seven days
(which may be considered to be illiquid) or with any one seller6
if, as a result thereof, more than 5% of the Fund's assets would
be invested in repurchase agreements purchased from such seller;
and may not enter into any reverse repurchase agreements if, as a
result thereof, the Fund's obligations with respect to reverse
repurchase agreements would exceed 10% of the Fund's assets;
4. May not borrow money except from banks on a
temporary basis or via entering into reverse repurchase
agreements in aggregate amounts not to exceed 10% of the Fund's
assets and to be used exclusively to facilitate the orderly
maturation and sale of portfolio securities during any periods of
abnormally heavy redemption requests, if they should occur; such
borrowings may not be used to purchase investments and the Fund
will not purchase any investment while any such borrowings exist;
5. May not pledge, hypothecate or in any manner
transfer, as security for indebtedness, any securities owned or
held by the Fund except as may be necessary in connection with
any borrowing mentioned above, including reverse repurchase
agreements, and in an aggregate amount not to exceed 10% of the
Fund's assets;
____________________
6. Pursuant to Rule 2a-7, the seller of a fully collateralized
repurchase agreement is deemed to be the issuer of the
underlying securities.
6
<PAGE>
6. May not make loans, provided that the Fund may
purchase securities of the type referred to in paragraph 2 above
and enter into repurchase agreements with respect thereto; or
7. May not (a) make investments for the purpose of
exercising control; (b) purchase securities of other investment
companies, except in connection with a merger, consolidation,
acquisition or reorganization; (c) invest in real estate (other
than money market securities secured by real estate or interests
therein or money market securities issued by companies which
invest in real estate, or interests therein), commodities or
commodity contracts, interests in oil, gas and other mineral
exploration or other development programs; (d) purchase any
restricted securities or securities on margin; (e) make short
sales of securities or maintain a short position or write,
purchase or sell puts, calls, straddles, spreads or combinations
thereof; (f) invest in securities of issuers (other than agencies
and instrumentalities of the United States Government) having a
record, together with predecessors, of less than three years of
continuous operation if more than 5% of the Fund's assets would
be invested in such securities; (g) purchase or retain securities
of any issuers if those officers and trustees of the Fund and
employees of the Adviser who own individually more than 1/2 of 1%
of the outstanding securities of such issuer together own more
than 5% of the securities of such issuer; or (h) act as an
underwriter of securities.
_______________________________________________________________
MANAGEMENT
_______________________________________________________________
Trustees and Officers
The Trustees and principal officers of the Trust and
their primary occupations during the past five years are set
forth below. Unless otherwise specified, the address of each
such person is 1345 Avenue of the Americas, New York, New York
10105. Those Trustees whose names are preceded by an asterisk are
"interested persons" of the Trust as determined under the Act.
Each Trustee and officer is affiliated as such with one or more
of the other registered investment companies that are advised by
the Adviser.
Trustees
7 DAVE H. WILLIAMS, 67, Chairman, is Chairman of the
Board of Directors of Alliance Capital Management Corporation
____________________
7. An "interested person" of the Fund as defined in the Act.
7
<PAGE>
("ACMC"),8 sole general partner of the Adviser with which he has
been associated since prior to 1993.
**JOHN D. CARIFA, 54, is the President, Chief Operating
Officer and a Director of ACMC with which he has been associated
since prior to 1994.
SAM Y. CROSS, 72, was, since prior to December 1993,
Executive Vice President of The Federal Reserve Bank of New York
and manager for foreign operations for The Federal Reserve
System. He is also a director of Fuji Bank and Trust Co. He is
Executive-In-Residence at the School of International and Public
Affairs, Columbia University. His address is 200 East 66th
Street, New York, New York 10021.
CHARLES H. P. DUELL, 61, is President of Middleton Place
Foundation with which he has been associated since prior to 1994.
He is also a Director of GRC International, Inc., a Trustee
Emeritus of the National Trust for Historic Preservation and
serves on the Board of Architectural Review, City of Charleston.
His address is Middleton Place Foundation, Ashley River Road,
Charleston, South Carolina 29414.
WILLIAM H. FOULK, JR., 67, is an Investment Adviser and
an Independent Consultant. He was formerly Senior Manager of
Barrett Associates, Inc., a registered investment adviser, with
which he had been associated since prior to 1994. His address is
2 Greenwich Plaza, Suite 100, Greenwich, CT 06830.
DAVID K. STORRS, 55, is President and Chief Executive
Officer of Alternative Investment Group, LLC (an investment
firm). He was formerly President of The Common Fund (investment
management for educational institutions) with which he had been
associated since prior to 1994. His address is 65 South Gate
Road, Southport, Connecticut 06490.
SHELBY WHITE, 61, is an author and financial journalist.
Her address is One Sutton Place South, New York, New York
10022.
____________________
8. For purposes of this Statement of Additional Information,
ACMC refers to Alliance Capital Management Corporation, the
sole general partner of the Adviser, and to the predecessor
general partner of the Adviser of the same name.
8
<PAGE>
Officers
RONALD M. WHITEHILL - President, 61, is a Senior Vice
President of ACMC and President of Alliance Cash Management
Services with which he has been associated since prior to
1994.
KATHLEEN A. CORBET - Senior Vice President, 39, is an
Executive Vice President of ACMC with which she has been
associated since prior to 1994.
DREW BIEGEL - Senior Vice President, 48, is a Vice
President of ACMC with which he has been associated since prior
to 1994.
JOHN R. BONCZEK - Senior Vice President, 39, is a Vice
President of ACMC with which he has been associated since prior
to 1994.
ROBERT I. KURZWEIL - Senior Vice President, 48, is a
Vice President of ACMC with which he has been associated since
prior to 1994.
WAYNE D. LYSKI - Senior Vice President, 58, is an
Executive Vice President of ACMC with which he has been
associated since prior to 1994.
PATRICIA NETTER - Senior Vice President, 48, is a Vice
President of ACMC with which she has been associated since prior
to 1994.
RAYMOND J. PAPERA - Senior Vice President, 43, is a
Senior Vice President of ACMC with which he has been associated
since prior to 1994.
KENNETH T. CARTY - Vice President, 38 is Vice President
of ACMC with which he has been associated since prior to
1994.
JOHN F. CHIODI, Jr. - Vice President, 33, is a Vice
President of ACMC with which he has been associated since prior
to 1994.
DORIS T. CILIBERTI - Vice President, 35, is an Assistant
Vice President of ACMC with which she has been associated since
prior to 1994.
9
<PAGE>
MARIA R. CONA - Vice President, 44, is an Assistant Vice
President of ACMC with which she has been associated since prior
to 1994.
WILLIAM J. FAGAN - Vice President, 37, is an Assistant
Vice President of ACMC with which he has been associated since
prior to 1994.
JOSEPH R. LASPINA - Vice President, 39, is an Assistant
Vice President of ACMC with which he has been associated since
prior to 1994.
LINDA N. KELLEY - Vice President, 39, is an Assistant
Vice President of ACMC with which she has been associated since
prior to 1993.
EDMUND P. BERGAN, Jr. - Secretary, 49, is a Senior Vice
President and the General Counsel of Alliance Fund Distributors,
Inc. ("AFD") and Alliance Fund Services, Inc. ("AFS") with which
he has been associated since prior to 1994.
MARK D. GERSTEN - Treasurer and Chief Financial Officer,
49, is a Senior Vice President of AFS and a Vice President of AFD
with which he has been associated since prior to 1994.
VINCENT S. NOTO - Controller, 34, is an Assistant Vice
President of AFSwith which he has been associated since prior to
1994.
ANDREW L. GANGOLF - Assistant Secretary, 45, is a Vice
President and Assistant General Counsel of AFD with which he has
been associated since December 1994.
DOMENICK PUGLIESE - Assistant Secretary, 38, is a Vice
President and Assistant General Counsel of AFD with which he has
been associated since May 1995. Prior thereto, he was Vice
President and Counsel of Concord Holding Corporation since
1994.
EMILIE D. WRAPP - Assistant Secretary, 43, is a Vice
President and Assistant General Counsel of AFD with which she has
been associated since prior to 1994.
As of October 15, 1999, the Trustees and officers as a
group owned less than 1% of the shares of the Fund.
The Fund does not pay any fees to, or reimburse expenses
of, its Trustees who are considered "interested persons" of the
10
<PAGE>
Fund. The aggregate compensation paid by the Fund to each of the
Trustees during its fiscal year ended June 30, 1999, the
aggregate compensation paid to each of the Trustees during
calendar year 1998 by all of the funds to which the Adviser
provides investment advisory services (collectively, the
"Alliance Fund Complex") and the total number of registered
investment companies (and separate investment portfolios within
those companies) in the Alliance Fund Complex with respect to
which each of the Trustees serves as a director or trustee, are
set forth below. Neither the Fund nor any other fund in the
Alliance Fund Complex provides compensation in the form of
pension or retirement benefits to any of its directors or
trustees.
Total Number
Total Number of Investment
of Funds in Portfolios
the Alliance Within the
Fund Complex, Funds,
Compensation Including the Including the
from the Fund, as to Fund, as to
Aggregate Alliance Fund which the which the
Compensation Complex, Trustee is a Trustee is a
Name of Trustee from Including Director or Director or
of the Fund the Fund the Fund Trustee Trustee
Dave H. Williams $-0- $-0- 6 15
John D. Carifa $-0- $-0- 50 116
Sam Y. Cross $ $ 12,000 3 12
Charles H.P. Duell $ $ 12,000 3 12
William H. Foulk, Jr. $ $241,002.50 45 111
David K. Storrs $ $ 12,000 3 12
Shelby White $ $ 12,000 3 12
The Adviser
The Adviser, a Delaware limited partnership with
principal offices at 1345 Avenue of the Americas, New York, New
York 10105, has been retained under an investment advisory
agreement (the "Advisory Agreement") to provide investment advice
and, in general, to conduct the management and investment program
of the Fund under the supervision and control of the Fund's
Trustees.
The Adviser is a leading international investment
adviser managing client accounts with assets as of June 30, 1999
11
<PAGE>
totaling more than $321 billion (of which approximately $140
billion represented assets of investment companies). As of June
30, 1999, the Adviser managed retirement assets for many of the
largest public and private employee benefit plans (including 29
of the nation's Fortune 100 companies), for public employee
retirement funds in 32 out of the 50 states, for investment
companies, and for foundations, endowments, banks and insurance
companies worldwide. The 54 registered investment companies, with
more than 120 separate portfolios, managed by the Adviser
currently have over 4.5 million shareholder accounts.
Alliance Capital Management Corporation, the sole
general partner of, and the owner of a 1% general partnership
interest in the Adviser, is an indirect wholly-owned subsidiary
of The Equitable Life Assurance Society of the United States
("Equitable"), one of the largest life insurance companies in the
United States and a wholly-owned subsidiary of The Equitable
Companies Incorporated ("ECI"). ECI is a holding company
controlled by AXA, a French insurance holding company.
For insurance regulatory purposes the shares of capital
stock of ECI beneficially owned by AXA and its subsidiaries have
been deposited into a voting trust which has an initial term of
10 years commencing in 1992. The trustees of the voting trust
(the "Voting Trustees") have agreed to protect the legitimate
economic interests of AXA, but with a view of ensuring that
certain minority shareholders of AXA do not exercise control over
ECI or certain of its insurance subsidiaries. As of March 1,
1999, AXA, ECI, Equitable and certain subsidiaries of Equitable
were the beneficial owners of approximately 56.6% of the issued
and outstanding units representing assignments of beneficial
ownership of limited partnership interests ("Units") in the
Adviser.
Based on information provided by AXA, on March 1, 1999,
approximately 20.7% of the issued ordinary shares (representing
32.7% of the voting power) of AXA were owned directly and
indirectly by Finaxa, a French holding company. As of March 1,
1999, 61.7% of the shares (representing 72.3% of the voting
power) of Finaxa were owned by four French mutual insurance
companies (the "Mutuelles AXA") (one of which, AXA Assurances
I.A.R.D. Mutuelle, owned 35.4% of the shares, representing 41.5%
of the voting power of Finaxa, and 22.7% of the shares of Finaxa
(representing 13.7% of the voting power) were owned by Paribas, a
French Bank. Including the ordinary shares owned by Finaxa, on
March 1, 1999, the Mutuelles AXA directly and indirectly owned
approximately 23.9% of the issued ordinary shares (representing
37.6% of the voting power) of AXA. The Voting Trustees may be
12
<PAGE>
deemed to be beneficial owners of all Units beneficially owned by
AXA and its subsidiaries. By virtue of the provisions of the
voting trust agreement, AXA may be deemed to have shared voting
power with respect to the Units. In addition, the Mutuelles AXA,
as a group, and Finaxa may be deemed to be beneficial owners of
all Units beneficially owned by AXA and its subsidiaries. AXA and
its subsidiaries have the power to dispose or direct the
disposition of all shares of the capital stock of ECI deposited
in the voting trust. The Mutuelles AXA, as a group, and Finaxa
may be deemed to share the power to vote or to direct the vote
and to dispose or to direct the disposition of all the Units of
the Advise beneficially owned by AXA and its subsidiaries. By
reason of their relationship, AXA, the Voting Trustees, the
Mutuelles AXA, Finaxa, ECI, Equitable, Equitable Holdings,
L.L.C., Equitable Investment Corporation, Alliance Capital
Management Corporation and Equitable Capital Management
Corporation may be deemed to share the power to vote or to direct
the vote and to dispose or direct the disposition of all or a
portion of the Units beneficially owned by AXA and its
subsidiaries.
AXA, a French company, is the holding company for an
international group of insurance and related financial services
companies. AXA's insurance operations include activities in life
insurance, property and casualty insurance and reinsurance. The
insurance operations are diverse geographically, with activities
principally in Western Europe, North America, the Asia/Pacific
area and to a lesser extent in Africa and South America. AXA is
also engaged in asset management, investment banking, securities
trading, brokerage, real estate and other financial services
activities principally in the United States, as well as in
Western Europe and the Asia/Pacific area.
As of March 1, 1999, AXA and certain of its subsidiaries
beneficially owned approximately 58.4% of ECI's outstanding
common stock. ECI is a public company with shares traded on the
New York Stock Exchange.
Under the Advisory Agreement, the Adviser provides
investment advisory services and order placement facilities for
the Fund and pays all compensation of Trustees of the Trust who
are affiliated persons of the Adviser. The Adviser or its
affiliates also furnish the Fund without charge with management
supervision and assistance and office facilities. Under the
Advisory Agreement, the Fund pays an advisory fee at an annual
rate of .50 of 1% of up to $1.25 billion of the average daily
value of the Fund's net assets, .49 of 1% of the next
$.25 billion of such assets, .48 of 1% of the next $.25 billion
13
<PAGE>
of such assets, .47 of 1% of the next $.25 billion of such
assets, .46 of 1% of the next $1 billion of such assets and .45
of 1% of the average daily net assets of the Fund in excess of
$3 billion. The fee is accrued daily and paid monthly. The
Adviser has agreed to reimburse the Fund to the extent that its
net expenses (excluding taxes, brokerage, interest and
extraordinary expenses) exceed 1% of its average daily net assets
for any fiscal year. The Adviser also voluntarily agreed to
reimburse the Portfolio from April 26, 1996 to October 26, 1997
for expenses exceeding .85 of 1% of its average daily net assets,
and from October 27, 1997 to November 19, 1997 for expenses
exceeding .90% of its average daily net assets. Accordingly, for
the fiscal periods ended June 30, 1997, 1998 and 1999, the
Adviser received from the Fund advisory fees of $3,339,651,
$3,597,041 and $________, respectively (net of reimbursements).
In accordance with the Distribution Services Agreement described
below, the Fund may pay a portion of advertising and promotional
expenses in connection with the sale of shares of the Fund. The
Fund also pays for printing of prospectuses and other reports to
shareholders and all expenses and fees related to registration
and filing with the Securities and Exchange Commission (the
"Commission") and with state regulatory authorities. The Fund
pays all other expenses incurred in its operations, including the
Adviser's management fees; custody, transfer and dividend
disbursing expenses; legal and auditing costs; clerical,
administrative accounting, and other office costs; fees and
expenses of Trustees who are not affiliated with the Adviser;
costs of maintenance of the Trust's existence; and interest
charges, taxes, brokerage fees, and commissions. As to the
obtaining of clerical and accounting services not required to be
provided to the Fund by the Adviser under the Advisory Agreement,
the Fund may employ its own personnel. For such services, it
also may utilize personnel employed by the Adviser; if so done,
the services are provided to the Fund at cost and the payments
therefor must be specifically approved in advance by the
Trustees. The Fund paid to the Adviser a total of $131,000,
$131,500 and $__________ for such services for the fiscal years
ended June 30, 1997, 1998 and 1999, respectively.
The Fund has made arrangements with certain broker-
dealers, including Donaldson, Lufkin & Jenrette Securities
Corporation and its Pershing Division, affiliates of the Adviser,
whose customers are Fund shareholders pursuant to which payments
are made to such broker-dealers performing recordkeeping and
shareholder servicing functions. Such functions may include
opening new shareholder accounts, processing purchase and
redemption transactions, and responding to inquiries regarding
the Fund's current yield and the status of shareholder accounts.
14
<PAGE>
The Fund pays fully disclosed and omnibus broker dealers
(including Pershing) for such services. The Fund may also pay
for the electronic communications equipment maintained at the
broker-dealers' offices that permits access to the Fund's
computer files and, in addition, reimburses fully-disclosed
broker-dealers at cost for personnel expenses involved in
providing such services. All such payments must be approved or
ratified by the Trustees. For the years ended June 30, 1997,
1998 and 1999, the Fund reimbursed such broker-dealers a total of
$132,648, $547,713 and $__________, respectively.
The Advisory Agreement became effective on July 22,
1992. Continuance of the Advisory Agreement until June 30, 2000
was approved by the vote, cast in person by all the Trustees of
the Trust who neither were interested persons of the Trust nor
had any direct or indirect financial interest in the Agreement or
any related agreement, at a meeting called for that purpose on
June 21, 1999.
The Advisory Agreement will remain in effect thereafter
from year to year provided that such continuance is specifically
approved annually by a vote of a majority of the outstanding
shares of the Fund or by the Fund's Trustees, including in either
case approval by a majority of the Trustees who are not parties
to the Advisory Agreement or interested persons as defined in the
Act. The Advisory Agreement may be terminated without penalty on
60 days' written notice at the option of either party or by a
vote of the outstanding voting securities of the Fund; it will
automatically terminate in the event of assignment. The Adviser
is not liable for any action or inaction in regard to its
obligations under the Advisory Agreement as long as it does not
exhibit willful misfeasance, bad faith, gross negligence, or
reckless disregard of its obligations.
Distribution Services Agreement
Rule 12b-1 under the Act permits an investment company
to directly or indirectly pay expenses associated with the
distribution of its shares in accordance with a duly adopted and
approved plan. The Fund has entered into a Distribution Services
Agreement (the "Agreement") which includes a plan adopted
pursuant to Rule 12b-1 (the "Plan") with AFD (the "Distributor")
which applies to both Series of the Trust. Pursuant to the Plan,
the Fund makes payments each month to AFD in an amount that will
not exceed, on an annualized basis, .25 of 1% of the Fund's
aggregate average daily net assets. In addition, under the
Agreement the Distributor makes payments for distribution
assistance and for administrative, accounting and other services
15
<PAGE>
from its own resources which may include the management fee paid
by the Fund.
Payments under the Agreement are used in their entirety
for (i) payments to broker-dealers and other financial
intermediaries, including the Distributor and Donaldson, Lufkin &
Jenrette Securities Corporation and its Pershing Division,
affiliates of the Adviser, for distribution assistance and to
banks and other depository institutions for administrative and
accounting services, and (ii) otherwise promoting the sale of
shares of the Fund such as by paying for the preparation,
printing and distribution of prospectuses and other promotional
materials sent to existing and prospective shareholders and by
directly or indirectly purchasing radio, television, newspaper
and other advertising. In approving the Agreement the Trustees
determined that there was a reasonable likelihood that the
Agreement would benefit the Fund and its shareholders. For the
year ended June 30, 1999, the Fund made payments to the
Distributor for expenditures under the Agreement in amounts
aggregating __________ which constituted ____ at an annual rate
of the Fund's average daily net assets during the period, and the
Adviser made payments from its own resources as described above
aggregating _________. Of the $3,480,574 paid by the Adviser and
the Fund under the Agreement, _________ was paid for advertising,
printing, and mailing of prospectuses to persons other than
current shareholders; and __________ was paid to broker-dealers
and other financial intermediaries for distribution
assistance.
The administrative, accounting and other services
provided by broker-dealers, depository institutions and other
financial intermediaries may include, but are not limited to,
establishing and maintaining shareholder accounts, sub-
accounting, processing of purchase and redemption orders, sending
confirmations of transactions, forwarding financial reports and
other communications to shareholders and responding to
shareholder inquiries regarding the Fund. As interpreted by
courts and administrative agencies, certain laws and regulations
limit the ability of a bank or other depository institution to
become an underwriter or distributor of securities. However, in
the opinion of the Fund's management based on the advice of
counsel, these laws and regulations do not prohibit such
depository institutions from providing other services for
investment companies such as the administrative, accounting and
other services described above. The Trustees will consider
appropriate modifications to the Fund's operations, including
discontinuance of payments under the Agreement to banks and other
depository institutions, in the event of any future change in
16
<PAGE>
such laws or regulations which may affect the ability of such
institutions to provide the above-mentioned services.
The Treasurer of the Trust reports the amounts expended
under the Agreement and the purposes for which such expenditures
were made to the Trustees on a quarterly basis. Also, the
Agreement provides that the selection and nomination of
disinterested Trustees (as defined in the Act) are committed to
the discretion of the disinterested Trustees then in office. The
Agreement was initially approved for the Fund by the Trustees at
a meeting held on June 14, 1993. Continuance of the Agreement
until June 30, 2000 was approved by the vote, cast in person by
all the Trustees of the Fund who neither were interested persons
of the Fund nor had any direct or indirect financial interest in
the Agreement or any related agreement, at a meeting called for
that purpose on June 21, 1999. The Agreement may be continued
annually thereafter if approved by a majority vote of the
Trustees who neither are interested persons of the Trust nor have
any direct or indirect financial interest in the Agreement or in
any related agreement, cast in person at a meeting called for
that purpose.
All material amendments to the Agreement must be
approved by a vote of the Trustees, including a majority of the
disinterested Trustees, cast in person at a meeting called for
that purpose, and the Agreement may not be amended in order to
increase materially the costs which the Fund may bear pursuant to
the Agreement without the approval of a majority of the
outstanding shares of the Fund. The Agreement may also be
terminated at any time by a majority vote of the disinterested
Trustees, or by a majority of the outstanding shares of the Fund
or by the Distributor. Any agreement with a qualifying broker-
dealer or other financial intermediary may be terminated without
penalty on not more than sixty days' written notice by a vote of
the majority of non-party Trustees, by a vote of a majority of
the outstanding shares of the Fund, or by the Distributor and
will terminate automatically in the event of its assignment.
The Agreement is in compliance with rules of the
National Association of Securities Dealers, Inc. (the "NASD")
which became effective July 7, 1993 and which limit the annual
asset-based sales charges and service fees that a mutual fund may
impose to .75% and .25%, respectively, of average annual net
assets.
17
<PAGE>
_______________________________________________________________
PURCHASE AND REDEMPTION OF SHARES
_______________________________________________________________
Generally, shares of the Fund are sold and redeemed on a
continuous basis without sales or redemption charges at their net
asset value which is expected to be constant at $1.00 per share,
although this price is not guaranteed.
Accounts Not Maintained Through Financial Intermediaries
Opening Accounts -- New Investments
A. When Funds are Sent by Wire (the wire method permits
immediate credit)
1) Telephone the Fund toll-free at (800) 824-1916. The
Fund will ask for the name of the account as you
wish it to be registered, address of the account,
and taxpayer identification number (social security
number for an individual). The Fund will then
provide you with an account number.
2) Instruct your bank to wire Federal funds (minimum
$1,000) exactly as follows:
ABA 0110 0002-8
State Street Bank and Trust Company
DDA 9903-279-9
Attention: Mutual Funds Division
Alliance Treasury Reserves
Your account name as registered with the Fund
Your account number as registered with the Fund
3) Mail a completed Application Form to:
Alliance Fund Services, Inc.
P.O. Box 1520
Secaucus, New Jersey 07096-1520
B. When Funds are Sent by Check
1) Fill out an Application Form.
2) Mail the completed Application Form along with your
check or negotiable bank draft (minimum $1,000),
18
<PAGE>
payable to "Alliance Treasury Reserves," to
Alliance Fund Services, Inc. as in A(3) above.
Subsequent Investments
A. Investments by Wire (to obtain immediate credit)
Instruct your bank to wire Federal funds (minimum $100)
to State Street Bank and Trust Company ("State Street Bank") as
in A(2) above.
B. Investments by Check
Mail your check or negotiable bank draft (minimum $100),
payable to "Alliance Treasury Reserves," to Alliance Fund
Services, Inc. as in A(3) above.
Include with the check or draft the "next investment"
stub from one of your previous monthly or interim account
statements. For added identification, place your Fund account
number on the check or draft.
Investments Made by Check
Money transmitted by a check drawn on a member of the
Federal Reserve System is converted to Federal funds in one
business day following receipt and, thus, is then invested in the
Fund. Checks drawn on banks which are not members of the Federal
Reserve System may take longer to be converted and invested. All
payments must be in United States dollars.
PROCEEDS FROM ANY SUBSEQUENT REDEMPTION BY YOU OF FUND
SHARES THAT WERE PURCHASED BY CHECK OR ELECTRONIC FUNDS TRANSFER
WILL NOT BE FORWARDED TO YOU UNTIL THE FUND IS REASONABLY ASSURED
THAT YOUR CHECK OR ELECTRONIC FUNDS TRANSFER HAS CLEARED, UP TO
FIFTEEN DAYS FOLLOWING THE PURCHASE DATE. If the redemption
request during such period is in the form of a Fund check, the
check will be marked "insufficient funds" and be returned unpaid
to the presenting bank.
Redemptions
A. By Telephone
You may withdraw any amount from your account on any
Fund business day (i.e., any weekday exclusive of days on which
the New York Stock Exchange or State Street Bank is closed)
between 9:00 a.m. and 5:00 p.m. (Eastern time) via orders given
19
<PAGE>
to AFS by telephone toll-free (800) 824-1916. Such redemption
orders must include your account name as registered with the Fund
and the account number.
If your telephone redemption order is received by AFS
prior to 12:00 Noon (Eastern time), we will send the proceeds in
Federal funds by wire to your designated bank account that day.
The minimum amount for a wire is $1,000. If your telephone
redemption order is received by AFS after 12:00 Noon and before
4:00 p.m., we will wire the proceeds the next business day. You
also may request that proceeds be sent by check to your
designated bank. Redemptions are made without any charge to you.
During periods of drastic economic or market
developments, such as the market break of October 1987, it is
possible that shareholders would have difficulty in reaching AFS
by telephone (although no such difficulty was apparent at any
time in connection with the 1987 market break). If a shareholder
were to experience such difficulty, the shareholder should issue
written instructions to AFS at the address shown on the cover of
this Statement of Additional Information. The Fund reserves the
right to suspend or terminate its telephone redemption service at
any time without notice. Neither the Fund nor the Adviser, or
AFS will be responsible for the authenticity of telephone
requests for redemptions that the Fund reasonably believes to be
genuine. The Fund will employ reasonable procedures in order to
verify that telephone requests for redemptions are genuine,
including among others, recording such telephone instructions and
causing written confirmations of the resulting transactions to be
sent to shareholders. If the Fund did not employ such
procedures, it could be liable for losses arising from
unauthorized or fraudulent telephone instructions. Selected
dealers or agents may charge a commission for handling telephone
requests for redemptions.
B. By Checkwriting
With this service, you may write checks made payable to
any payee. Checks cannot be written for more than the principal
balance (not including any accrued dividends) in your account.
First, you must fill out the Signature Card which is with the
Application Form. If you wish to establish this checkwriting
service subsequent to the opening of your Fund account, contact
the Fund by telephone or mail. There is no separate charge for
the checkwriting service, except that State Street Bank may
impose charges for checks which are returned unpaid because of
insufficient funds or for checks upon which you have placed a
20
<PAGE>
stop order. There is currently a $7.50 charge for check
reorders.
The checkwriting service enables you to receive the daily
dividends declared on the shares to be redeemed until the day
that your check is presented to State Street Bank for payment.
C. By Mail
You may withdraw any amount from your account at any
time by mail. Written orders for withdrawal, accompanied by duly
endorsed certificates, if issued, should be mailed to Alliance
Fund Services, Inc., P.O. Box 1520, Secaucus, New Jersey 07096-
1520. Such orders must include the account name as registered
with the Fund and the account number. All written orders for
redemption, and accompanying certificates, if any, must be signed
by all owners of the account with the signatures guaranteed by an
institution which is an "eligible guarantor" as defined in Rule
17Ad-15 under the Securities Exchange Act of 1934, as amended.
_______________________________________________________________
ADDITIONAL INFORMATION
_______________________________________________________________
Shareholders maintaining Fund accounts through brokerage
firms and other institutions should be aware that such
institutions necessarily set deadlines for receipt of transaction
orders from their clients that are earlier than the transaction
times of the Fund itself so that the institutions may properly
process such orders prior to their transmittal to State Street
Bank. Should an investor place a transaction order with such an
institution after its deadline, the institution may not effect
the order with the Fund until the next business day.
Accordingly, an investor should familiarize himself with the
deadlines set by his institution. (For example, the Distributor
accepts purchase orders from its customers up to 2:15 p.m.
(Eastern time) for issuance at the 4:00 p.m. (Eastern time)
transaction time and price.) A brokerage firm acting on behalf
of a customer in connection with transactions in Fund shares is
subject to the same legal obligations imposed on it generally in
connection with transactions in securities for a customer,
including the obligation to act promptly and accurately.
Orders for the purchase of Fund shares become effective
at the next transaction time after Federal funds or bank wire
monies become available to State Street Bank for a shareholder's
investment. Federal funds are a bank's deposits in a Federal
21
<PAGE>
Reserve Bank. These funds can be transferred by Federal Reserve
wire from the account of one member bank to that of another
member bank on the same day and are considered to be immediately
available funds; similar immediate availability is accorded
monies received at State Street Bank by bank wire. Money
transmitted by a check drawn on a member of the Federal Reserve
System is converted to Federal funds in one business day
following receipt. Checks drawn on banks which are not members
of the Federal Reserve System may take longer. All payments
(including checks from individual investors) must be in United
States dollars.
All shares purchased are confirmed to each shareholder
and are credited to his account at the net asset value. To avoid
unnecessary expense to the Fund and to facilitate the immediate
redemption of shares, share certificates, for which no charge is
made, are not issued except upon the written request of a
shareholder. Certificates are not issued for fractional shares.
Shares for which certificates have been issued are not eligible
for any of the optional methods of withdrawal; namely, the
telephone, telegraph, checkwriting or periodic redemption
procedures. The Fund reserves the right to reject any purchase
order.
Arrangements for Telephone Redemptions. If you wish to
use the telephone redemption procedure, indicate this on your
Application Form and designate a bank and account number to
receive the proceeds of your withdrawals. If you decide later
that you wish to use this procedure, or to change instructions
already given, send a written notice to Alliance Fund Services,
Inc., P.O. Box 1520, Secaucus, New Jersey 07096-1520, with your
signature guaranteed by an institution which is an eligible
guarantor. For joint accounts, all owners must sign and have
their signatures guaranteed.
Automatic Investment Program. A shareholder may
purchase shares of the Fund through an automatic investment
program through a bank that is a member of the National Automated
Clearing House Association. Purchases can be made on a Fund
business day each month designated by the shareholder.
Shareholders wishing to establish an automatic investment program
should write or telephone the Fund or AFS at (800) 221-5672.
Retirement Plans. The Fund's objectives of safety of
principal, excellent liquidity and maximum current income to the
extent consistent with the first two objectives may make it a
suitable investment vehicle for part or all of the assets held in
various tax-deferred retirement plans. The Fund has available
22
<PAGE>
forms of individual retirement account (IRA), simplified employee
pension plans (SEP), 403(b)(7) plans and employer-sponsored
retirement plans (Keogh or HR10 Plan). Certain services
described in this prospectus may not be available to retirement
accounts and plans. Persons desiring information concerning
these plans should write or telephone the Fund or AFS at
(800) 221-5672.
The Alliance Plans Division of Frontier Trust Company, a
subsidiary of The Equitable Life Assurance Society of the United
States, is the custodian under these plans. The custodian
charges a nominal account establishment fee and a nominal annual
maintenance fee. A portion of such fees is remitted to AFS to
compensate that organization for services rendered to retirement
plan accounts maintained with the Fund.
Periodic Distribution Plans. Without affecting your
right to use any of the methods of redemption described above, by
checking the appropriate boxes on the Application Form, you may
elect to participate additionally in the following plans without
any separate charge. Under the Income Distribution Plan you
receive monthly payments of all the income earned in your Fund
account, with payments forwarded by check or electronically via
the Automated Clearing House ("ACH") network shortly after the
close of the month. Under the Systematic Withdrawal Plan, you
may request payments by check or electronically via the ACH
network in any specified amount of $50 or more each month or in
any intermittent pattern of months. If desired, you can order,
via a signature-guaranteed letter to the Fund, such periodic
payments to be sent to another person. Shareholders wishing
either of the above plans electronically through the ACH network
should write or telephone the Fund or AFS at (800) 221-5672.
The Fund has the right to close out an account if it has
a zero balance on December 31 and no account activity for the
first six months of the subsequent year. Therefore, unless this
has occurred, a shareholder with a zero balance, when
reinvesting, should continue to use his account number.
Otherwise, the account should be re-opened pursuant to procedures
described above or through instructions given to a financial
intermediary.
A "business day," during which purchases and redemptions
of Fund shares can become effective and the transmittal of
redemption proceeds can occur, is considered for Fund purposes as
any weekday exclusive of New Year's Day, Martin Luther King, Jr.
Day, President's Day (observed), Good Friday, Memorial Day
(observed), Independence Day, Labor Day, Thanksgiving Day and
23
<PAGE>
Christmas Day; if one of these holidays falls on a Saturday or
Sunday, purchases and redemptions will likewise not be processed
on the preceding Friday or the following Monday, respectively.
On any such day that is an official bank holiday in
Massachusetts, neither purchases nor wired redemptions can become
effective because Federal funds cannot be received or sent by
State Street Bank. On such days, therefore, the Fund can only
accept redemption orders for which shareholders desire remittance
by check. The right of redemption may be suspended or the date
of a redemption payment postponed for any period during which the
New York Stock Exchange is closed (other than customary weekend
and holiday closings), when trading on the New York Stock
Exchange is restricted, or an emergency (as determined by the
Commission) exists, or the Commission has ordered such a
suspension for the protection of shareholders. The value of a
shareholder's investment at the time of redemption may be more or
less than his cost, depending on the market value of the
securities held by the Fund at such time and the income earned.
_______________________________________________________________
DAILY DIVIDENDS--DETERMINATION OF NET ASSET VALUE
_______________________________________________________________
All net income of the Fund is determined after the close
of each business day, currently 4:00 p.m. Eastern time (and at
such other times as the Trustees may determine) and is paid
immediately thereafter pro rata to shareholders of record via
automatic investment in additional full and fractional shares in
each shareholder's account at the rate of one share for each
dollar distributed. As such additional shares are entitled to
dividends on following days, a compounding growth of income
occurs.
Net income consists of all accrued interest income on
Fund portfolio assets less the Fund's expenses applicable to that
dividend period. Realized gains and losses are reflected in net
asset value and are not included in net income. Net asset value
per share is expected to remain constant at $1.00 since all net
income is declared as a dividend each time net income is
determined.
The valuation of the Fund's portfolio securities is
based upon their amortized cost which does not take into account
unrealized securities gains or losses as measured by market
valuations. The amortized cost method involves valuing an
instrument at its cost and thereafter applying a constant
amortization to maturity of any discount or premium, regardless
24
<PAGE>
of the impact of fluctuating interest rates on the market value
of the instrument. During periods of declining interest rates,
the daily yield on shares of the Fund may be higher than that of
a fund with identical investments utilizing a method of valuation
based upon market prices for its portfolio instruments; the
converse would apply in a period of rising interest rates.
The Fund maintains procedures designed to maintain, to
the extent reasonably possible, the price per share as computed
for the purpose of sales and redemptions at $1.00. Such
procedures include review of the Fund's portfolio holdings by the
Trustees to the extent required by Rule 2a-7 under the Act at
such intervals as they deem appropriate to determine whether and
to what extent the net asset value of the Fund calculated by
using available market quotations or market equivalents deviates
from net asset value based on amortized cost. There can be no
assurance, however, that the Fund's net asset value per share
will remain constant at $1.00.
The net asset value of the shares is determined each
business day at 12:00 Noon and 4:00 p.m. (Eastern time). The net
asset value per share is calculated by taking the sum of the
value of the Fund's investments and any cash or other assets,
subtracting liabilities, and dividing by the total number of
shares outstanding. All expenses, including the fees payable to
the Adviser, are accrued daily.
_______________________________________________________________
TAXES
_______________________________________________________________
The Fund has qualified in each fiscal year to date and
intends to qualify in each future year to be taxed as a regulated
investment company under the Internal Revenue Code of 1986, as
amended (the "Code") and, as such, will not be liable for Federal
income and excise taxes on the net income and capital gains
distributed to its shareholders. Since the Fund intends to
distribute all of its net income and capital gains, the Fund
itself should thereby avoid all Federal income and excise taxes.
For shareholders' Federal income tax purposes, all
distributions by the Fund out of interest income and net realized
short-term capital gains are treated as ordinary income and
distributions of long-term capital gains, if any, are treated as
long-term capital gains irrespective of the length of time the
shareholder held shares in the Fund. Since the Fund derives
nearly all of its gross income in the form of interest and the
25
<PAGE>
balance in the form of short-term capital gains, it is expected
that for corporate shareholders, none of the Fund's distributions
will be eligible for the dividends-received deduction under
current law.
_______________________________________________________________
GENERAL INFORMATION
_______________________________________________________________
Portfolio Transactions. Subject to the general
supervision of the Trustees of the Trust, the Adviser is
responsible for the investment decisions and the placing of the
orders for portfolio transactions for the Fund. Because the Fund
invests in securities with short maturities, there may be a
relatively high portfolio turnover rate. However, the turnover
rate does not have an adverse effect upon the net yield and net
asset value of the Fund's shares since the Fund's portfolio
transactions occur primarily with issuers, underwriters or major
dealers in money market instruments acting as principals. Such
transactions are normally on a net basis which do not involve
payment of brokerage commissions. The cost of securities
purchased from an underwriter usually includes a commission paid
by the issuer to the underwriters; transactions with dealers
normally reflect the spread between bid and asked prices.
The Fund has no obligations to enter into transactions
in portfolio securities with any dealer, issuer, underwriter or
other entity. In placing orders, it is the policy of the Fund to
obtain the best price and execution for its transactions. Where
best price and execution may be obtained from more than one
dealer, the Adviser may, in its discretion, purchase and sell
securities through dealers who provide research, statistical and
other information to the Adviser. Such services may be used by
the Adviser for all of its investment advisory accounts and,
accordingly, not all such services may be used by the Adviser in
connection with the Fund. The supplemental information received
from a dealer is in addition to the services required to be
performed by the Adviser under the Advisory Agreement, and the
expenses of the Adviser will not necessarily be reduced as a
result of the receipt of such information. For the fiscal years
ended June 30, 1997, 1998 and 1999, the Fund paid no brokerage
commissions.
Capitalization. All shares of the Trust, when issued,
are fully paid and non-assessable. The Trustees are authorized
to reclassify and issue any unissued shares to any number of
additional classes or series without shareholder approval.
26
<PAGE>
Accordingly, the Trustees, in the future, for reasons such as the
desire to establish one or more additional portfolios with
different investment objectives, policies or restrictions, may
create additional classes or series of shares. Any issuance of
shares of another class would be governed by the Act and the law
of the Commonwealth of Massachusetts. Shares of each portfolio
are normally entitled to one vote for all purposes. Generally,
shares of all portfolios vote as a single series for the election
of Trustees and on any other matter that affected all portfolios
in substantially the same manner. As to matters affecting each
portfolio differently, such as approval of the Advisory Agreement
and changes in investment policy, shares of each portfolio vote
as separate series. Certain procedures for the removal by
shareholders of trustees of investment trusts, such as the Trust,
are set forth in Section 16(c) of the Act.
At October 15, 1999, there were shares of beneficial
interest of the Fund outstanding. To the knowledge of the Fund
the following persons owned of record and no person owned
beneficially, 5% or more of the outstanding shares of the
Portfolio as of October 15, 1999:
No. of % of
Shares Class
Pershing As Agent 489,891,912 61.5%
Omnibus Account
For Exclusive Benefit of Customers
1 Pershing Plaza
Jersey City, NJ 07399-0022
Shareholder Liability. Under Massachusetts law,
shareholders could, under certain circumstances, be held
personally liable for the obligations of the Fund. However, the
Agreement and Declaration of Trust disclaims shareholder
liability for acts or obligations of the Fund and requires that
the Trustees use their best efforts to ensure that notice of such
disclaimer be given in each note, bond, contract, instrument,
certificate or undertaking made or issued by the Trustees or
officers of the Trust. The Agreement and Declaration of Trust
provides for indemnification out of the property of the Fund for
all loss and expense of any shareholder of the Fund held
personally liable for the obligations of the Fund. Thus, the
risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which the
Fund would be unable to meet its obligations. In the view of the
Adviser, such risk is not material.
27
<PAGE>
Legal Matters. The legality of the shares offered
hereby has been passed upon by Seward & Kissel LLP, New York, New
York, counsel for the Fund and the Adviser. Seward & Kissel has
relied upon the opinion of Sullivan & Worcester, Boston,
Massachusetts, for matters relating to Massachusetts law.
Accountants. An opinion relating to the Fund's
financial statements is given herein by McGladrey & Pullen, LLP,
New York, New York, independent auditors for the Trust.
Effective September 25, 1999, the Fund's auditors for the fiscal
year ending June 30, 2000 are Pricewaterhouse Coopers LLP.
Yield Quotations. Advertisements containing yield
quotations for the Fund may from time to time be sent to
investors or placed in newspapers, magazines or other media on
behalf of the Fund. These advertisements may quote performance
rankings, ratings or data from independent organizations or
financial publications such as Lipper Analytical Services, Inc.,
Morningstar, Inc., IBC's Money Fund Report, IBC's Money Market
Insight or Bank Rate Monitor or compare the Fund's performance to
bank money market deposit accounts, certificates of deposit or
various indices. Such yield quotations are calculated in
accordance with the standardized method referred to in Rule 482
under the Securities Act of 1933. Yield quotations are thus
determined by (i) computing the net change over a seven-day
period, exclusive of capital changes, in the value of a
hypothetical pre-existing account having a balance of one share
at the beginning of such period, (ii) dividing the net change in
account value by the value of the account at the beginning of
such period, and (iii) multiplying such base period return the
result by (365/7)--with the resulting yield figure carried to the
nearest hundredth of one percent. The Fund's effective annual
yield represents a compounding of the annualized yield according
to the following formula:
effective yield = [(base period return + 1)365/7] - 1
The Fund's yield for the seven-day period ended June 30,
1999, after expense reimbursement, was _____ which is the
equivalent of a _____ compounded effective yield. Absent such
reimbursement, the annualized yield for such period would have
been _____, equivalent to an effective yield of _____. Current
yield information for the Fund can be obtained by a recorded
message by telephoning toll-free at (800) 221-9513.
Additional Information. This Statement of Additional
Information does not contain all the information set forth in the
28
<PAGE>
Registration Statement filed by the Fund with the Commission
under the Securities Act of 1933. Copies of the Registration
Statement may be obtained at a reasonable charge from the
Commission or may be examined, without charge, at the
Commission's offices in Washington, D.C.
29
<PAGE>
FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT AUDITORS.
(To be filed at a later date.)
<PAGE>
_______________________________________________________________
APPENDIX
_______________________________________________________________
A-1+, A-1 and Prime-1 Commercial Paper Ratings
"A-1+" is the highest, and "A-1" the second highest,
commercial paper rating assigned by Standard & Poor's Corporation
("Standard & Poor's") and "Prime-1" is the highest commercial
paper rating assigned by Moody's Investors Service, Inc.
("Moody's"). Standard & Poor's uses the numbers 1+, 1, 2 and 3
to denote relative strength within its highest classification of
"A", while Moody's uses the numbers 1, 2 and 3 to denote relative
strength within its highest classification of "Prime." Commercial
paper issuers rated "A" by Standard & Poor's have the following
characteristics: liquidity ratios are better than industry
average; long term debt rating is A or better; the issuer has
access to at least two additional channels of borrowing; basic
earnings and cash flow are in an upward trend; and typically, the
issuer is a strong company in a well-established industry and has
superior management. Commercial paper issuers rated "Prime" by
Moody's have the following characteristics: their short-term debt
obligations carry the smallest degree of investment risk; margins
of support for current indebtedness are large or stable with cash
flow and asset protection well assured; current liquidity
provides ample coverage of near-term liabilities and unused
alternative financing arrangements are generally available; and
while protective elements may change over the intermediate or
longer term, such changes are most unlikely to impair the
fundamentally strong position of short-term obligations.
AAA & AA and Aaa & Aa Bond Ratings
Bonds rated AAA and Aaa have the highest ratings
assigned to debt obligations by Standard & Poor's and Moody's,
respectively. Standard & Poor's AAA rating indicates an extremely
strong capacity to pay principal and interest. Bonds rated AA by
Standard & Poor's also qualify as high-quality debt obligations.
Capacity to pay principal and interest is very strong, and the
majority of instances they differ from AAA issues only in small
degree. Moody's Aaa rating indicates the ultimate degree of
protection as to principal and interest. Moody's Aa rated bonds,
though also high-grade issues, are rated lower than Aaa bonds
because margins of protection may not be as large or fluctuations
of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear
somewhat larger.
A-1
<PAGE>
PART C
OTHER INFORMATION
ITEM 23. Exhibits
(a) Declaration of Trust of the Registrant -
Incorporated by reference to Exhibit 1 to
Post-Effective Amendment No. 25 of the
Registrant's Registration Statement on Form N-
1A (File Nos. 2-63315 and 811-2889) filed with
the Securities and Exchange Commission on
October 28, 1997.
(b) By-Laws of the Registrant - Incorporated by
reference to Exhibit 2 to Post-Effective
Amendment No. 25 of the Registrant's
Registration Statement on Form N-1A (File Nos.
2-63315 and 811-2889) filed with the
Securities and Exchange Commission on October
28, 1997.
(c) Not applicable.
(d) Advisory Agreement between the Registrant and
Alliance Capital Management L.P. -
Incorporated by reference to Exhibit 5 to
Post-Effective Amendment No. 25 of the
Registrant's Registration Statement on Form N-
1A (File Nos. 2-63315 and 811-2889) filed with
the Securities and Exchange Commission on
October 28, 1997.
(e) Distribution Services Agreement between the
Registrant and Alliance Fund Distributors,
Inc., amended as of January 1, 1998 -
Incorporated by reference to Exhibit 6 to
Post-Effective Amendment No. 26 of the
Registrant's Registration Statement on Form N-
1A (File Nos. 2-63315 and 811-2889) filed with
the Securities and Exchange Commission on
October 30, 1998.
(f) Not applicable.
(g) (1) Custodian Contract between the Registrant
and State Street Bank and Trust Company -
Incorporated by reference to Exhibit 8(a) to
C-1
<PAGE>
Post-Effective Amendment No. 25 of the
Registrant's Registration Statement on Form N-
1A (File Nos. 2-63315 and 811-2889) filed with
the Securities and Exchange Commission on
October 30, 1997.
(2) Amendment to Custodian Contract between
the Registrant and State Street Bank and Trust
Company - Incorporated by reference to Exhibit
8(b) to Post-Effective Amendment No. 25 of the
Registrant's Registration Statement on Form N-
1A (File Nos. 2-63315 and 811-2889) filed with
the Securities and Exchange Commission on
October 30, 1997.
(h) Transfer Agency Agreement between the
Registrant and Alliance Fund Services, Inc. -
Incorporated by reference to Exhibit 9 to
Post-Effective Amendment No. 25 of the
Registrant's Registration Statement on Form N-
1A (File Nos. 2-63315 and 811-2889) filed with
the Securities and Exchange Commission on
October 30, 1997.
(i) Not applicable.
(j) Consent of Independent Auditors - Not
applicable.
(k) Not applicable.
(l) Not applicable.
(m) Rule 12b-1 Plan - See Exhibit (e) hereto.
(n) Financial Data Schedule - Not applicable.
(o) Not applicable.
Other Exhibit:
Powers of Attorney of: John D. Carifa, Sam Y.
Cross, Charles H.P. Duell, William H. Foulk,
Jr., David K. Storrs, Shelby White, Dave. H.
Williams - Incorporated by reference to Other
Exhibit to Post-Effective Amendment No. 26 of
the Registrant's Registration Statement on
Form N-1A (File Nos. 2-63315 and 811-2889)
C-2
<PAGE>
filed with the Securities and Exchange
Commission on October 30, 1997.
ITEM 24. Persons Controlled by or under Common Control with
Registrant.
None.
ITEM 25. Indemnification
It is the Registrant's policy to indemnify its
trustees and officers, employees and other agents
as set forth in Article V of Registrant's Agreement
and Declaration of Trust, filed as Exhibit (a) in
response to Item 23 and Section 7 of the
Distribution Agreement filed as Exhibit (e) in
response to Item 23, all as set forth below. The
liability of the Registrant's trustees and officers
is also dealt with in Article V of Registrant's
Agreement and Declaration of Trust. The Adviser's
liability for loss suffered by the Registrant or
its shareholders is set forth in Section 4 of the
Advisory Agreement filed as Exhibit (d) in response
to Item 23, as set forth below.
Article V of Registrant's Agreement and Declaration
of Trust reads as follows:
Section 5.1 - No Personal Liability of
Shareholders, Trustees, etc.
No Shareholder shall be subject to any personal
liability whatsoever to any Person in connection
with Trust Property, including the or any series
thereof. No Trustee, officer, employee or agent of
the Trust shall property of any series of the
Trust, or the acts, obligations or affairs of the
Trust be subject to any personal liability
whatsoever to any Person, other than the Trust or
applicable series thereof or its Shareholders, in
connection with Trust Property or the property of
any series thereof or the affairs of the Trust or
any series thereof, save only that arising from bad
faith, willful misfeasance, gross negligence or
reckless disregard for his duty to such Person; and
all such Persons shall look solely to the Trust
Property or the property of the appropriate series
of the Trust for satisfaction of claims of any
C-3
<PAGE>
nature arising in connection with the affairs of
the Trust or any series thereof. If any
Shareholder, Trustee, officer, employee or agent,
as such, of the Trust is made a party to any suit
or proceeding to enforce any such liability, he
shall not, on account thereof, be held to any
personal liability. The Trust shall indemnify and
hold each Shareholder harmless from and against all
claims by reason of his being or having been a
Shareholder, and shall reimburse such Shareholder
for all legal and other expenses reasonably
incurred by him in connection with any such claim
or liability, provided that any such expenses shall
be paid solely out of the funds and property of the
series of the Trust with respect to which such
Shareholder's Shares are issued. The rights
accruing to a Shareholder under this Section 5.1
shall not exclude any other right to which such
Shareholder may be lawfully entitled, nor shall
anything herein contained restrict the right of the
Trust to indemnify or reimburse a Shareholder in
any appropriate situation even though not
specifically provided herein.
Section 5.2 - Non-Liability of Trustees, etc. No
Trustee, officer, employee or agent of the Trust
shall be liable to the Trust, its Shareholders, or
to any Shareholder, Trustee, officer, employee, or
agent thereof for any action or failure to act
(including without limitation the failure to compel
in any way any former or acting Trustee to redress
any breach of trust) except for his own bad faith,
willful misfeasance, gross negligence or reckless
disregard of his duties.
Section 5.3 - Indemnification.
(a) The Trustees shall provide for indemnification
by the Trust (or by the appropriate series thereof)
of every person who is, or has been, a Trustee or
officer of the Trust against all liability and
against all expenses reasonably incurred or paid by
him in connection with any claim, action, suit or
proceeding in which he becomes involved as a party
or otherwise by virtue of his being or having been
a Trustee or officer and against amounts paid or
incurred by him in the settlement thereof, in such
manner as the Trustees may provide from time to
time in the By-Laws.
C-4
<PAGE>
(b) The words "claim," "action," "suit," or
"proceeding" shall apply to all claims, actions,
suits or proceedings (civil, criminal, or other,
including appeals), actual or threatened; and the
words "liability" and "expenses" shall include,
without limitation, attorneys' fees, costs,
judgments, amounts paid in settlement, fines,
penalties and other liabilities.
Section 5.4 - No Bond Required of Trustees. No
Trustee shall be obligated to give any bond or
other security for performance of any of his duties
hereunder.
Section 5.5 - No Duty of Investigation; Notice in
Trust Instruments, Insurance. No purchaser,
lender, transfer agent or other Person dealing with
the Trustees or any officer, employee or agent of
the Trust shall be bound to make any inquiry
concerning the validity of any transaction
purporting to be made by the Trustees or by said
officer, employee or agent or be liable for the
application of money or property paid, loaned, or
delivered to or on the order of the Trustees or of
said officer, employee or agent. Every obligation,
contract, instrument, certificate, Share, other
security of the Trust or undertaking, and every
other act or thing whatsoever executed in
connection with the Trust shall be conclusively
presumed to have been executed or done by the
executors thereof only in their capacity as
Trustees under the Declaration or in their capacity
as officers, employees or agents of the Trust.
Every written obligation, contract, instrument,
certificate, Share, other security of the Trust or
undertaking made or issued by the Trustees shall
recite that the same is executed or made by them
not individually, but as Trustees under the
Declaration, and that the obligations of any such
instrument are not binding upon any of the Trustees
or Shareholders, individually, but bind only the
Trust Property or the property of the appropriate
series of the Trust, and may contain any further
recital which they or he may deem appropriate, but
the omission of such recital shall not operate to
bind the Trustees or Shareholders individually.
The Trustees shall at all times maintain insurance
C-5
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for the protection of the Trust Property, its
Shareholders, Trustees, officers, employees and
agents in such amount as the Trustees shall deem
adequate to cover possible tort liability, and such
other insurance as the Trustees in their sole
judgment shall deem advisable.
Section 5.6 - Reliance on Experts, etc. Each
Trustee and officer or employee of the Trust shall,
in the performance of his duties, be fully and
completely justified and protected with regard to
any act or any failure to act resulting from
reliance in good faith upon the books of account or
other records of the Trust, upon an opinion of
counsel or upon reports made to the Trust by any of
its officers or employees or by the Investment
Adviser, the Distributor, Transfer Agent, selected
dealers, accountants, appraisers or other experts
or consultants selected with reasonable care by the
Trustees, officers or employees of the Trust,
regardless of whether such counsel or expert may
also be a Trustee.
The Advisory Agreement between Registrant and
Alliance Capital Management L.P. provides that
Alliance Capital Management L.P. will not be liable
under such agreement for any mistake of judgment or
in any event whatsoever except for lack of good
faith and that nothing therein shall be deemed to
protect, or purport to protect, Alliance Capital
Management L.P. against any liability to Registrant
or its security holders to which it would otherwise
be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of its
duties thereunder, or by reason of reckless
disregard of its obligations and duties thereunder.
The Distribution Agreement between the Registrant
and Alliance Fund Distributors, Inc. provides that
the Registrant will indemnify, defend and hold
Alliance Fund Distributors, Inc., and any person
who controls it within the meaning of Section 15 of
the Investment Company Act of 1940, free and
harmless from and against any and all claims,
demands, liabilities and expenses which Alliance
Fund Distributors, Inc. or any controlling person
may incur arising out of or based upon any alleged
untrue statement of a material fact contained in
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Registrant's Registration Statement or Prospectus
or Statement of Additional Information or arising
out of, or based upon any alleged omission to state
a material fact required to be stated in or
necessary to make the statements in either thereof
not misleading; provided, however that nothing
therein shall be so construed as to protect
Alliance Fund Distributors, Inc. against any
liability to Registrant or its security holders to
which it would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence
in the performance of its duties thereunder, or by
reason of reckless disregard of its obligations and
duties thereunder.
The foregoing summaries are qualified by the entire
text of Registrant's Agreement and Declaration of
Trust, the Advisory Agreement between Registrant
and Alliance Capital Management L.P. and the
Distribution Agreement between Registrant and
Alliance Fund Distributors, Inc.
Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to
trustees, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that, in
the opinion of the Securities and Exchange
Commission, such indemnification is against public
policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a
claim for indemnification against such liabilities
(other than the payment by the Registrant of
expenses incurred or paid by a trustee, officer or
controlling person of the Registrant in the
successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or
controlling person in connection with the
securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question of
whether such indemnification by it is against
public policy as expressed in the Securities Act
and will be governed by the final adjudication of
such issue.
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In accordance with Release No. IC-11330 (September
2, 1980) the Registrant will indemnify its
directors, officers, investment manager and
principal underwriters only if (1) a final decision
on the merits was issued by the court or other body
before whom the proceeding was brought that the
person to be indemnified (the "indemnitee") was not
liable by reason or willful misfeasance, bad faith,
gross negligence or reckless disregard of the
duties involved in the conduct of his office
("disabling conduct") or (2) a reasonable
determination is made, based upon a review of the
facts, that the indemnitee was not liable of
disabling conduct, by (a) the vote of a majority of
a quorum of the directors who are neither
"interested persons" of the Registrant as defined
in section 2(a)(19) of the Investment Company Act
of 1940 nor parties to the proceeding
("disinterested, non-party directors"), or (b) an
independent legal counsel in a written opinion.
The Registrant will advance attorneys fees or other
expenses incurred by its directors, officers,
investment adviser or principal underwriters in
defending a proceeding, upon the undertaking by or
on behalf of the indemnitee to repay the advance
unless it is ultimately determined that he is
entitled to indemnification and, as a condition to
the advance, (1) the indemnitee shall provide a
security for his undertaking, (2) the Registrant
shall be insured against losses arising by reason
of any lawful advances, or (3) a majority of a
quorum of disinterested, non-party directors of the
Registrant, or an independent legal counsel in a
written opinion, shall determine, based on a review
of readily available facts (as opposed to a full
trial-type inquiry), that there is reason to
believe that the indemnitee ultimately will be
found entitled to indemnification.
The Registrant participates in a joint directors
and officers liability insurance policy issued by
the ICI Mutual Insurance Company. Coverage under
this policy has been extended to directors,
trustees and officers of the investment companies
managed by Alliance Capital Management L.P. Under
this policy, outside trustees and directors would
be covered up to the limits specified for any claim
against them for acts committed in their capacities
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as trustee or director. A pro rata share of the
premium for this coverage is charged to each
investment company.
ITEM 26. Business and Other Connections of Investment
Adviser.
The descriptions of Alliance Capital Management
L.P. under the caption "The Adviser" in the
Prospectus and "Management of the Fund" in the
Prospectus and in the Statement of Additional
Information constituting Parts A and B,
respectively, of this Registration Statement are
incorporated by reference herein.
The information as to the directors and executive
officers of Alliance Capital Management
Corporation, the general partner of Alliance
Capital Management L.P., set forth in Alliance
Capital Management L.P.'s Form ADV filed with the
Securities and Exchange Commission on April 21,
1988 (File No. 801-32361) and amended through the
date hereof, is incorporated by reference.
ITEM 29. Principal Underwriters
(a) Alliance Fund Distributors, Inc., the Registrant's
Principal Underwriter in connection with the sale
of shares of the Registrant. Alliance Fund
Distributors, Inc. also acts as Principal
Underwriter or Distributor for the following
investment companies:
AFD Exchange Reserves
Alliance All-Asia Investment Fund, Inc.
Alliance Balanced Shares, Inc.
Alliance Bond Fund, Inc.
Alliance Capital Reserves
Alliance Global Dollar Government Fund, Inc.
Alliance Global Environment Fund, Inc.
Alliance Global Small Cap Fund, Inc.
Alliance Global Strategic Income Trust, Inc.
Alliance Government Reserves
Alliance Greater China '97 Fund, Inc.
Alliance Growth and Income Fund, Inc.
Alliance Health Care Fund, Inc.
Alliance High Yield Fund, Inc.
Alliance Institutional Funds, Inc.
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Alliance Institutional Reserves, Inc.
Alliance International Fund
Alliance International Premier Growth Fund, Inc.
Alliance Limited Maturity Government Fund, Inc.
Alliance Money Market Fund
Alliance Mortgage Securities Income Fund, Inc.
Alliance Multi-Market Strategy Trust, Inc.
Alliance Municipal Income Fund, Inc.
Alliance Municipal Income Fund II
Alliance Municipal Trust
Alliance New Europe Fund, Inc.
Alliance North American Government Income Trust, Inc.
Alliance Premier Growth Fund, Inc.
Alliance Quasar Fund, Inc.
Alliance Real Estate Investment Fund, Inc.
Alliance Select Investor Series, Inc.
Alliance Technology Fund, Inc.
Alliance Utility Income Fund, Inc.
Alliance Variable Products Series Fund, Inc.
Alliance Worldwide Privatization Fund, Inc.
The Alliance Fund, Inc.
The Alliance Portfolios
(b) The following are the Directors and Officers of
Alliance Fund Distributors, Inc., the principal
place of business of which is 1345 Avenue of the
Americas, New York, New York, 10105.
POSITIONS AND POSITIONS AND
OFFICES WITH OFFICES WITH
NAME UNDERWRITER REGISTRANT
Michael J. Laughlin Director and Chairman
John D. Carifa Director
Robert L. Errico Director and President
Geoffrey L. Hyde Director and Senior
Vice President
Dave H. Williams Director
David Conine Executive Vice President
Richard K. Saccullo Executive Vice President
Edmund P. Bergan, Jr. Senior Vice President, Secretary
C-10
<PAGE>
General Counsel and
Secretary
Richard A. Davies Senior Vice President
and Managing Director
Robert H. Joseph, Jr. Senior Vice President
and Chief Financial Officer
Anne S. Drennan Senior Vice President
and Treasurer
Benji A. Baer Senior Vice President
Karen J. Bullot Senior Vice President
John R. Carl Senior Vice President
James S. Comforti Senior Vice President
James L. Cronin Senior Vice President
Daniel J. Dart Senior Vice President
Byron M. Davis Senior Vice President
Mark J. Dunbar Senior Vice President
Donald N. Fritts Senior Vice President
Bradley F. Hanson Senior Vice President
George H. Keith Senior Vice President
Richard E. Khaleel Senior Vice President
Stephen R. Laut Senior Vice President
Susan L. Matteson-King Senior Vice President
Daniel D. McGinley Senior Vice President
Antonios G. Poleondakis Senior Vice President
Robert E. Powers Senior Vice President
Kevin A. Rowell Senior Vice President
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Raymond S. Sclafani Senior Vice President
Gregory K. Shannahan Senior Vice President
Joseph F. Sumanski Senior Vice President
Peter J. Szabo Senior Vice President
William C. White Senior Vice President
Nicholas K. Willett Senior Vice President
Richard A. Winge Senior Vice President
Gerard J. Friscia Vice President and
Controller
Ricardo Arreola Vice President
Kenneth F. Barkoff Vice President
Charles M. Barrett Vice President
Gregory P. Best Vice President
Casimir F. Bolanowski Vice President
Robert F. Brendli Vice President
Christopher L. Butts Vice President
Timothy W. Call Vice President
Jonathan W. Cangalosi Vice President
Kevin T. Cannon Vice President
William W. Collins, Jr. Vice President
Leo H. Cook Vice President
Russell R. Corby Vice President
John W. Cronin Vice President
William J. Crouch Vice President
Robert J. Cruz Vice President
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<PAGE>
Richard W. Dabney Vice President
Stephen J. Demetrovits Vice President
John F. Dolan Vice President
Richard P. Dyson Vice President
John C. Endahl Vice President
John E. English Vice President
Sohaila S. Farsheed Vice President
Duff C. Ferguson Vice President
Daniel J. Frank Vice President
Shawn C. Gage Vice President
Joseph C. Gallagher Vice President
Andrew L. Gangolf Vice President and Assistant
Assistant General Secretary
Counsel
Alex G. Garcia Vice President
Michael J. Germain Vice President
Mark D. Gersten Vice President Treasurer and
Chief
Financial
Officer
John Grambone Vice President
Charles M. Greenberg Vice President
Alan Halfenger Vice President
William B. Hanigan Vice President
Michael S. Hart Vice President
Scott F. Heyer Vice President
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Timothy A. Hill Vice President
Brian R. Hoegee Vice President
George R. Hrabovsky Vice President
Valerie J. Hugo Vice President
Michael J. Hutten Vice President
Scott Hutton Vice President
Oscar J. Isoba Vice President
Richard D. Keppler Vice President
Richard D. Kozlowski Vice President
Daniel W. Krause Vice President
Donna M. Lamback Vice President
P. Dean Lampe Vice President
Nicholas J. Lapi Vice President
Henry Michael Lesmeister Vice President
Eric L. Levinson Vice President
James M. Liptrot Vice President
James P. Luisi Vice President
Jerry W. Lynn Vice President
Michael F. Mahoney Vice President
Shawn P. McClain Vice President
David L. McGuire Vice President
Jeffrey P. Mellas Vice President
Michael V. Miller Vice President
Thomas F. Monnerat Vice President
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<PAGE>
Timothy S. Mulloy Vice President
Joanna D. Murray Vice President
Michael F. Nash, Jr. Vice President
Nicole Nolan-Koester Vice President
Daniel A. Notto Vice President
Peter J. O'Brien Vice President
John C. O'Connell Vice President
John J. O'Connor Vice President
Christopher W. Olson Vice President
Richard J. Olszewski Vice President
Catherine N. Peterson Vice President
James J. Posch Vice President
Domenick Pugliese Vice President and Assistant
Assistant General Secretary
Counsel
Bruce W. Reitz Vice President
Karen C. Satterberg Vice President
John P. Schmidt Vice President
Robert C. Schultz Vice President
Richard J. Sidell Vice President
Clara Sierra Vice President
Teris A. Sinclair Vice President
Scott C. Sipple Vice President
Martine H. Stansbery, Jr. Vice President
Vincent T. Strangio Vice President
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<PAGE>
Andrew D. Strauss Vice President
Michael J. Tobin Vice President
Joseph T. Tocyloski Vice President
Benjamin H. Travers Vice President
David R. Turnbough Vice President
Martha D. Volcker Vice President
Patrick E. Walsh Vice President
Mark E. Westmoreland Vice President
David E. Willis Vice President
Stephen P. Wood Vice President
Emilie D. Wrapp Vice President and Assistant
Assistant General Secretary
Counsel
Michael W. Alexander Assistant Vice
President
Richard J. Appaluccio Assistant Vice
President
Paul G. Bishop Assistant Vice
President
Mark S. Burns Assistant Vice
President
John M. Capeci Assistant Vice
President
Maria L. Carreras Assistant Vice
President
John P. Chase Assistant Vice
President
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<PAGE>
William P. Condon Assistant Vice
President
Jean A. Coomber Assistant Vice
President
Terri J. Daly Assistant Vice
President
Ralph A. DiMeglio Assistant Vice
President
Faith C. Deutsch Assistant Vice
President
Timothy J. Donegan Assistant Vice
President
Adam E. Engelhardt Assistant Vice
President
Michele Grossman Assistant Vice
President
Arthur F. Hoyt, Jr. Assistant Vice
President
Theresa Iosca Assistant Vice
President
Erik A. Jorgensen Assistant Vice
President
Eric G. Kalender Assistant Vice
President
Edward W. Kelly Assistant Vice
President
Victor Kopelakis Assistant Vice
President
Evamarie C. Lombardo Assistant Vice
President
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<PAGE>
Kristine J. Luisi Assistant Vice
President
Kathryn Austin Masters Assistant Vice
President
Richard F. Meier Assistant Vice
President
Rizwan A. Raja Assistant Vice
President
Carol H. Rappa Assistant Vice
President
Mark V. Spina Assistant Vice
President
Gayle S. Stamer Assistant Vice
President
Eileen Stauber Assistant Vice
President
Margaret M. Tompkins Assistant Vice
President
Marie R. Vogel Assistant Vice
President
John Wilkens Assistant Vice
President
Wesley S. Williams Assistant Vice
President
Matthew Witschel Assistant Vice
President
David M. Wolf Assistant Vice
President
Christopher J. Zingaro Assistant Vice
President
Mark R. Manley Assistant Secretary
(c) Not applicable.
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ITEM 28. Location of Accounts and Records.
The majority of the accounts, books and other documents
required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and the Rules thereunder
are maintained as follows: journals, ledgers, securities
records and other original records are maintained
principally at the offices of Alliance Fund Services,
Inc. 500 Plaza Drive, Secaucus, New Jersey 07094 and at
the offices of State Street Bank and Trust Company, the
Registrant's Custodian, 225 Franklin Street, Boston,
Massachusetts 02110. All other records so required to
be maintained are maintained at the offices of Alliance
Capital Management L.P., 1345 Avenue of the Americas,
New York, New York 10105.
ITEM 29. Management Services.
Not applicable.
ITEM 30. Undertakings.
The Registrant undertakes to furnish each person to whom
a prospectus is delivered with a copy of the
Registrant's latest report to shareholders, upon request
and without charge.
C-19
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SIGNATURE
Pursuant to the requirements of the Securities Act of
1933, as amended, and the Investment Company Act of 1940, as
amended, the Registrant has duly caused this Amendment to its
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York
and State of New York on the 30th day of August 1999.
ALLIANCE GOVERNMENT RESERVES
by /s/Ronald M. Whitehill
__________________________
Ronald M. Whitehill
President
Pursuant to the requirements of the Securities Act of
l933, as amended, this Amendment to the Registration Statement
has been signed below by the following persons in the capacities
and on the dates indicated:
Signature Title Date
1) Principal
Executive Officer
/s/ Ronald M. Whitehill President August 30, 1999
_______________________
Ronald M. Whitehill
2) Principal Financial and
Accounting Officer
/s/ Mark D. Gersten Treasurer and August 30, 1999
_______________________ Chief Financial
Mark D. Gersten Officer
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3) All of the Trustees
John D. Carifa David K. Storrs
Sam Y. Cross Shelby White
Charles H.P. Duell Dave H. Williams
William H. Foulk, Jr.
by/s/ Edmund P. Bergan, Jr. August 30, 1999
_________________________
(Attorney-in-fact)
Edmund P. Bergan, Jr.
C-21
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Index to Exhibits
None.
C-22
00250083.AH5
