<PAGE>
As filed with the Securities and Exchange
Commission on October 27, 2000
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. 29 X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF
1940
Amendment No. 28 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)
Copies of communications to:
Thomas G. MacDonald, Esq.
Seward & Kissel LLP
One Battery Park Plaza
New York, New York 10004
It is proposed that this filing will become effective (check
appropriate line)
_____immediately upon filing pursuant to paragraph (b)
__X__on November 1, 2000 pursuant to paragraph (b)
_____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
<PAGE>
If appropriate, check the following box:
_____ This post-effective amendment designates a new
effective date for a previously filed post-effective
amendment.
<PAGE>
For more information about the Fund, the following documents are available upon
request:
o Annual/Semi-Annual Reports to Shareholders
The Fund's annual and semi-annual reports to shareholders contain additional
information on the Fund's investments.
o 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 and Literature: (800) 824-1916
Or you may view or obtain these documents from the Securities and Exchange
Commission:
o Call the Commission at 1-202-942-8090 for information on the operation of
the Public Reference Room.
o Reports and other information about the Fund are available on the EDGAR
Database on the Commission's Internet site at http://www.sec.gov
o Copies of the information may be obtained, after paying a duplicating fee,
by electronic request at [email protected], or by writing the
Commission's Public Reference Section, Wash. DC 20549-0102
On the Internet: www.sec.gov
You may also find more information about Alliance and the Fund on the Internet
at: www.Alliancecapital.com
-------------------------------------------------------
Table of Contents
-----------------
RISK/RETURN SUMMARY .............................. 2
FEES AND EXPENSES OF THE FUND .................... 3
OTHER INFORMATION ABOUT THE FUND'S
OBJECTIVES, STRATEGIES, AND RISKS ................ 3
Investment Objectives and Strategies ........... 3
Risk Considerations ............................ 3
MANAGEMENT OF THE FUND ........................... 4
PURCHASE AND SALE OF SHARES ...................... 4
How The Fund Values Its Shares ................. 4
How To Buy Shares .............................. 4
How To Sell Shares ............................. 5
Other .......................................... 5
DIVIDENDS, DISTRIBUTIONS, AND TAXES .............. 6
DISTRIBUTION ARRANGEMENTS ........................ 6
GENERAL INFORMATION .............................. 6
FINANCIAL HIGHLIGHTS ............................. 7
-------------------------------------------------------
File No. 811-2888
AGRPRO1100
--------------------------------------------------------------------------------
Alliance
Government
Reserves
--------------------------------------------------------------------------------
Prospectus
November 1, 2000
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>
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 investing in a portfolio of high-quality, U.S. Government
(including its agencies and instrumentalities) and other U.S. dollar-denominated
money market securities.
Principal Risks: The principal risks of investing in the Fund are:
o 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.
o 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.
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:
o the Fund's average annual total returns for one, five, and 10 years; and
o 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
1 Year 5 Years 10 Years
--------------------------------------------------------------------------------
4.26% 4.61% 4.47%
--------------------------------------------------------------------------------
BAR CHART
[The following table was depicted as a bar chart in the printed material.]
7.50% 5.39% 3.21% 2.36% 3.27% 5.02% 4.48% 4.67% 4.60% 4.26%
90 91 92 93 94 95 96 97 98 99
Calendar Year End
Through 9/30/00, the year to date unannualized return for the Fund was
4.01%. During the period shown in the bar chart, the highest return for a
quarter was 1.85% (quarter ending June 30, 1990) and the lowest return for a
quarter was 0.57% (quarter ending September 30, 1993).
2
<PAGE>
--------------------------------------------------------------------------------
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 Fees (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...................... .46% 1 Year............... $102
Distribution (12b-1) Fees............ .25% 3 Years.............. $318
Other Expenses....................... .32% 5 Years.............. $552
---- 10 Years............. $1,225
Total Operating Expenses............. 1.03%
Waiver and/or Expense Reimbursement*. (.03)%
----
Net Expenses......................... 1.00%
----------
* Reflects Alliance's contractual waiver (which continues from year to year
unless changed by vote of the Fund's shareholders) 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%.
--------------------------------------------------------------------------------
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:
o 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.
o 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:
o 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;
o adjustable rate obligations; and
o 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 smaller than for securities with
longer maturities. Because the Fund invests in securities with short maturities
and seeks to maintain a
3
<PAGE>
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,
including illiquid restricted 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.
--------------------------------------------------------------------------------
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 managing client accounts with assets as of June
30, 2000 totaling more than $388 billion (of which more than $185 billion
represented assets of investment companies). As of June 30, 2000, 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 33 states, for investment companies, and for
foundations, endowments, banks and insurance companies worldwide. The 52
registered investment companies managed by Alliance, comprising 122 separate
investment portfolios, currently have more than 6.1 million shareholder
accounts.
Alliance provides investment advisory services and order placement
facilities for the Fund. For the fiscal year ended June 30, 2000, the Fund paid
Alliance .43% 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 your broker-dealer,
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.
--------------------------------------------------------------------------------
PURCHASE AND SALE OF SHARES
--------------------------------------------------------------------------------
How The Fund Values Its Shares
The Fund's net asset value, or NAV, which is the price at which shares of
the Fund are sold and redeemed, 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
o 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.
4
<PAGE>
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
Application Form, purchasing shares, or other Fund procedures by calling this
number.
Minimum Investment Amounts
o Initial $1,000
o Subsequent $100
o Minimum Maintenance Amount $500
These minimums do not apply to shareholder accounts maintained through
financial intermediaries, which may maintain their own minimums.
o 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:
o 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.
o 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.
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.
5
<PAGE>
--------------------------------------------------------------------------------
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 long-term capital gains distributions may be taxable to
you as long-term capital gains. The Fund's distributions also may be subject to
certain state and local taxes.
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.
6
<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 PricewaterhouseCoopers LLP, the Fund's
independent accountants, for the fiscal year ended June 30, 2000 and by other
independent accountants for years prior to June 30, 2000. The report of
PricewaterhouseCoopers LLP, along with the Fund's financial statements, appears
in the Fund's Annual Report, which is available upon request.
<TABLE>
<CAPTION>
Year Ended June 30
===============================================================
2000 1999 1998 1997 1996
====== ====== ====== ====== ======
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------
Income from Investment Operations
Net investment income .............................. .047(a) .042(a) .046(a) .044 .046(a)
------ ------ ------ ------ ------
Less: Dividends
Dividends from net investment income ............... (.047) (.042) (.046) (.044) (.046)
------ ------ ------ ------ ------
Net asset value, end of period ..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ======
Total Return
Total investment return based on net asset value (b) 4.82% 4.27% 4.74% 4.53% 4.72%
Ratios/Supplemental Data
Net assets, end of period (in millions) ............ $5,867 $5,583 $4,909 $3,762 $3,205
Ratio to average net assets of:
Expenses, net of waivers and reimbursements ...... 1.00% 1.00% 1.00% 1.00% 1.00%
Expenses, before waivers and reimbursements ...... 1.03% 1.02% 1.01% 1.00% 1.01%
Net investment income ............................ 4.74%(a) 4.18%(a) 4.63%(a) 4.44% 4.60%(a)
</TABLE>
--------------------------------------------------------------------------------
(a) Net of expenses reimbursed or waived by Alliance.
(b) Total investment return is calculated assuming an initial investment made
at 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. Total investment return
calculated for a period of less than one year is not annualized.
7
<PAGE>
(This page left intentionally blank.)
8
<PAGE>
<PAGE>
For more information about the Fund, the following documents are available upon
request:
o Annual/Semi-Annual Reports to Shareholders
The Fund's annual and semi-annual reports to shareholders contain additional
information on the Fund's investments.
o 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 and Literature: (800) 824-1916
Or you may view or obtain these documents from the Securities and Exchange
Commission:
o Call the Commission at 1-202-942-8090 for information on the operation of
the Public Reference Room.
o Reports and other information about the Fund are available on the
EDGAR Database on the Commission's Internet site at http://www.sec.gov
o Copies of the information may be obtained, after paying a duplicating fee,
by electronic request at [email protected], or by writing the
Commission's Public Reference Section, Wash. DC 20549-0102
On the Internet: www.sec.gov
You may also find more information about Alliance and the Fund on the Internet
at: www.Alliancecapital.com
--------------------------------------------------------------------------------
Table of Contents
-----------------
RISK/RETURN SUMMARY ........................................................ 2
FEES AND EXPENSES OF THE FUND .............................................. 3
OTHER INFORMATION ABOUT THE FUND'S
OBJECTIVES, STRATEGIES, AND RISKS .......................................... 3
Investment Objectives and Strategies .................................... 3
Risk Considerations ..................................................... 3
MANAGEMENT OF THE FUND ..................................................... 4
PURCHASE AND SALE OF SHARES ................................................ 4
How The Fund Values Its Shares .......................................... 4
How To Buy Shares ....................................................... 4
How To Sell Shares ...................................................... 5
Other ................................................................... 5
DIVIDENDS, DISTRIBUTIONS, AND TAXES ........................................ 6
DISTRIBUTION ARRANGEMENTS .................................................. 6
GENERAL INFORMATION ........................................................ 6
FINANCIAL HIGHLIGHTS ....................................................... 7
--------------------------------------------------------------------------------
File No. 811-02889
ATRPRO1100
--------------------------------------------------------------------------------
Alliance
Treasury
Reserves
--------------------------------------------------------------------------------
Prospectus
November 1, 2000
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>
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 investing in a portfolio of high-quality, U.S. Treasury and
other U.S. dollar-denominated money market securities.
Principal Risks: The principal risks of investing in the Fund are:
o 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.
o 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.
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:
o the Fund's average annual total returns for one and five years and the
life of the Fund; and
o 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
Since
1 Year 5 Year Inception*
--------------------------------------------------------------------------------
3.92% 4.51% 4.31%
--------------------------------------------------------------------------------
* Inception date:9/1/93.
BAR CHART
[GRAPHIC OMITTED]
[The following table was represented as a bar chart in the printed material.]
90 91 92 93 94 95 96 97 98 99
--------------------------------------------------------------------------------
n/a n/a n/a n/a 3.73% 5.10% 4.53% 4.66% 4.36% 3.92%
Calendar Year End
Through 9/30/00, the year to date unannualized return for the Fund was
3.72%. During the period shown in the bar chart, the highest return for a
quarter was 1.27% (quarter ending March 31, 1995) and the lowest return for a
quarter was 0.75% (quarter ending March 31, 1994).
2
<PAGE>
--------------------------------------------------------------------------------
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 Fees (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
================================================================================
Management Fees ..................................................... .50%
Distribution (12b-1) Fees ........................................... .25%
Other Expenses ...................................................... .25%
----
Total Operating Expenses ............................................ 1.00%
EXAMPLE
================================================================================
1 Year .............................................................. $ 102
3 Years ............................................................. $ 318
5 Years ............................................................. $ 552
10 Years ............................................................ $1,225
--------------------------------------------------------------------------------
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:
o 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.
o 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:
o issues of the U.S. Treasury, such as bills, certificates of
indebtedness, notes, and bonds;
o adjustable rate obligations; and
o 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 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.
3
<PAGE>
The Fund may invest up to 10% of its net assets in illiquid securities,
including illiquid restricted 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.
--------------------------------------------------------------------------------
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 managing client accounts with assets as of June
30, 2000 totaling more than $388 billion (of which more than $185 billion
represented assets of investment companies). As of June 30, 2000, 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 33 states, for investment companies, and for
foundations, endowments, banks and insurance companies worldwide. The 52
registered investment companies managed by Alliance, comprising 122 separate
investment portfolios, currently have more than 6.1 million shareholder
accounts.
Alliance provides investment advisory services and order placement
facilities for the Fund. For the fiscal year ended June 30, 2000, the Fund paid
Alliance .50% as a percentage of average daily net assets, net of any waivers.
Alliance makes significant payments from its own resources, which include
the management fees paid by the Fund, to compensate your broker-dealer,
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.
--------------------------------------------------------------------------------
PURCHASE AND SALE OF SHARES
--------------------------------------------------------------------------------
How The Fund Values Its Shares
The Fund's net asset value, or NAV, which is the price at which shares of
the Fund are sold and redeemed, 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
o 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
Application Form, purchasing shares, or other Fund procedures by calling this
number.
4
<PAGE>
Minimum Investment Amounts
o Initial $1,000
o Subsequent $ 100
o Minimum Maintenance Amount $ 500
These minimums do not apply to shareholder accounts maintained through
financial intermediaries, which may maintain their own minimums.
o Subsequent Investments
o 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.
o 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:
o 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.
o 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.
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.
5
<PAGE>
--------------------------------------------------------------------------------
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 long-term capital gains distributions may be taxable to
you as long-term capital gains. The Fund's distributions also may be subject to
certain state and local taxes.
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.
6
<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 PricewaterhouseCoopers LLP, the Fund's
independent accountants, for the fiscal year ended June 30, 2000 and by other
independent accountants for years prior to June 30, 2000. The report of
PricewaterhouseCoopers LLP, along with the Fund's financial statements, appears
in the Fund's Annual Report, which is available upon request.
<TABLE>
<CAPTION>
Year Ended June 30
-----------------------------------------------------------------------
2000 1999 1998 1997 1996
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
Income from Investment Operations
Net investment income .............................. .044 .039(a) .045(a) .044 (a) .047(a)
--------- --------- --------- --------- ---------
Less: Distributions
Dividends from net investment income ............... (.044) (.039) (.045) (.044) (.047)
--------- --------- --------- --------- ---------
Net asset value, end of period ..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ========= =========
Total Return
Total investment return based on net
asset value (b) ................................... 4.47% 3.96% 4.63% 4.53% 4.77%
Ratios/Supplemental Data
Net assets, end of period (in thousands) ........... $ 785,790 $ 811,752 $ 740,056 $ 704,084 $ 700,558
Ratios to average net assets of:
Expenses, net of waivers and reimbursements ..... 1.00% 1.00% .95% .85% .81%
Expenses, before waivers and reimbursements ..... 1.00% 1.02% 1.01% 1.00% 1.05%
Net investment income ........................... 4.38% 3.88%(a) 4.53%(a) 4.43%(a) 4.64%(a)
</TABLE>
----------
(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. Total investment return
calculated for a period of less than one year is not annualized.
7
<PAGE>
(This page left intentionally blank.)
<PAGE>
<PAGE>
[LOGO] ALLIANCE GOVERNMENT RESERVES
____________________________________________________________
P.O. Box 1520, Secaucus, New Jersey 07096-1520
Toll Free (800) 221-5672
____________________________________________________________
STATEMENT OF ADDITIONAL INFORMATION
November 1, 2000
____________________________________________________________
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.........................................
Financial Statements and Report of Independent Accountants..
Appendix-Commercial Paper and Bond Ratings..................
_______________________________________________________________
This Statement of Additional Information is not a prospectus but
supplements and should be read in conjunction with the Fund's
current Prospectus dated November 1, 2000. 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 series of Alliance Government Reserves
(the "Trust"). The Trust was reorganized in October 1984, as a
Massachusetts business trust, having previously been a Maryland
corporation since its formation in December 1978. 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 including 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 are
currently entered into with counterparties deemed to be
creditworthy by Alliance Capital Management L.P. (the "Adviser"),
including broker-dealers, 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
2
<PAGE>
Street Bank and Trust Company ("State Street Bank"), the Fund's
Custodian. 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.* 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
by the Fund. Similarly, a separate account will be maintained to
____________________
* As used throughout the Prospectus and Statement of
Additional Information, the term "assets" shall refer to
the Fund's total assets.
3
<PAGE>
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.
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
4
<PAGE>
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
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.
Senior Securities. The Fund will not issue senior
securities except as permitted by the Act or the rules,
regulations, or interpretations thereof.
5
<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 year** 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
seller*** 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
____________________
** 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.
*** 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>
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 business and affairs of the Fund are managed under
the direction of the Board of Trustees. 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. WILLIAMS**** , 68, Chairman, is Chairman of the
Board of Directors of Alliance Capital Management Corporation
("ACMC")***** , sole general partner of the Adviser with which he
has been associated since prior to 1995.
____________________
**** An "interested person" of the Fund as defined in the Act.
***** 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
(footnote continued)
7
<PAGE>
JOHN D. CARIFA4, 55, is the President, Chief Operating
Officer and a Director of ACMC with which he has been associated
since prior to 1995.
SAM Y. CROSS, 73, was, since prior to 1995, 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, 62, is President of Middleton Place
Foundation with which he has been associated since prior to 1995.
He is also a Trustee Emeritus of the National Trust for Historic
Preservation and serves as Chairman of the Board of Architectural
Review, City of Charleston. His address is Middleton Place
Foundation, 4300 Ashley River Road, Charleston, South Carolina
29414.
WILLIAM H. FOULK, JR., 68, 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 1995. He was
formerly Deputy Comptroller of the State of New York and, prior
thereto, Chief Investment Officer of the New York Bank for
Savings. His address is 2 Greenwich Plaza, Suite 100, Greenwich,
CT 06830.
DAVID K. STORRS, 56, 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 with since prior to 1995. His address is 65 South
Gate Lane, Southport, Connecticut 06490.
SHELBY WHITE, 62, is an author and financial journalist.
Her address is One Sutton Place South, New York, New York 10022.
Officers
RONALD M. WHITEHILL - President, 62, is a Senior Vice
President of ACMC and President and Chief Executive Officer of
Alliance Cash Management Services with which he has been
associated since prior to 1995.
____________________
(footnote continued)
predecessor general partner of the Adviser of the same
name.
8
<PAGE>
KATHLEEN A. CORBET - Senior Vice President, 40, is an
Executive Vice President of ACMC with which she has been
associated since prior to 1995.
ANDREW M. ARAN - Senior Vice President, 43, is a Senior
Vice President of ACMC with which he has been associated since
prior to 1995.
DREW A. BIEGEL - Senior Vice President, 49 is a Vice
President of Alliance Fund Distributors ("AFD") with which he has
been associated since prior to 1995.
JOHN R. BONCZEK - Senior Vice President, 40, is a Senior
Vice President of AFD with which he has been associated since
prior to 1995.
DORIS T. CILIBERTI - Senior Vice President, 36, is a
Vice President of AFD with which she has been associated since
prior to 1995.
ROBERT I. KURZWEIL - Senior Vice President, 49, is a
Vice President of ACMC with which he has been associated since
prior to May 1995.
WAYNE D. LYSKI - Senior Vice President, 59, is an
Executive Vice President of ACMC with which he has been
associated since prior to 1995.
PATRICIA ITTNER - Senior Vice President, 49, is a Vice
President of AFD with which she has been associated since prior
to 1995.
RAYMOND J. PAPERA - Senior Vice President, 44, is a
Senior Vice President of ACMC with which he has been associated
since prior to 1995.
KENNETH T. CARTY - Vice President, 39 is a Vice
President of ACMC with which he has been associated since prior
to 1995.
JOHN F. CHIODI, Jr. - Vice President, 34, is a Vice
President of ACMC with which he has been associated since prior
to 1995.
MARIA R. CONA - Vice President, 45, is a Vice President
of ACMC with which she has been associated since prior to 1995.
JOSEPH DONA - Vice President, 39, is a Vice President of
ACMC with which he has been associated since prior to 1995.
9
<PAGE>
WILLIAM J. FAGAN - Vice President, 38, is an Assistant
Vice President of AFD with which he has been associated since
prior to 1995.
LINDA N. KELLEY - Vice President, 40, is an Assistant
Vice President of AFD with which she has been associated since
prior to 1995.
JOSEPH R. LASPINA - Vice President, 40, is an Assistant
Vice President of ACMC with which he has been associated since
prior to 1995.
EDMUND P. BERGAN, Jr. - Secretary, 50, is a Senior Vice
President and the General Counsel of AFDand Alliance Fund
Services, Inc. ("AFS") with which he has been associated since
prior to 1995.
MARK D. GERSTEN - Treasurer and Chief Financial Officer,
50, is a Senior Vice President of AFS and a Vice President of AFD
with which he has been associated since prior to 1995.
VINCENT S. NOTO - Controller, 35, is a Vice President of
AFS with which he has been associated since prior to 1995.
ANDREW L. GANGOLF - Assistant Secretary, 46, is a Senior
Vice President and Assistant General Counsel of AFD with which he
has been associated since prior to 1995.
DOMENICK PUGLIESE - Assistant Secretary, 39, is a Senior
Vice President and Assistant General Counsel of AFD with which he
has been associated since prior to 1995.
As of October 6, 2000, 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
Fund. The aggregate compensation paid by the Fund to each of the
Trustees during its fiscal year ended June 30, 2000, the
aggregate compensation paid to each of the Trustees during
calendar year 1999 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.
10
<PAGE>
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 16
John D. Carifa $-0- $-0- 49 107
Sam Y. Cross $2,506 $ 15,750 3 14
Charles H.P. Duell $2,506 $ 15,000 3 14
William H. Foulk, Jr. $2,427 $246,413 45 102
David K. Storrs $2,506 $ 15,000 3 14
Shelby White $2,506 $ 15,750 3 14
The Adviser
The Fund's investment adviser is Alliance Capital
Management L.P., 1345 Avenue of the Americas, New York, New York
10105. The Adviser is a leading international adviser managing
client accounts with assets as of June 30, 2000 totaling more
than $388 billion (of which more than $185 billion represented
assets of investment companies). As of June 30, 2000, 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
33 out of the 50 states, for investment companies, and for
foundations, endowments, banks and insurance companies worldwide.
The 52 registered investment companies managed by the Adviser,
comprising 122 separate investment portfolios, currently have
approximately 6.1 million shareholder accounts.
Alliance Capital Management Corporation ("ACMC") is the
general partner of the Adviser and a wholly owned subsidiary of
the The Equitable Life Assurance Society of the United States
("Equitable"). Equitable, one of the largest life insurance
companies in the United States, is the beneficial owner of an
approximately 55.4% partnership interest in the Adviser.
Alliance Capital Management Holding L.P. ("Alliance Holding")
owns an approximately 41.9% partnership interest in the
11
<PAGE>
Adviser.****** Equity interests in Alliance Holding are traded
on the New York Stock Exchange in the form of units.
Approximately 98% of such interests are owned by the public and
management or employees of the Adviser and approximately 2% are
owned by Equitable. Equitable is a wholly owned subsidiary of
AXA Financial, Inc. ("AXA Financial"), a Delaware corporation
whose shares are traded on the New York Stock Exchange. AXA
Financial serves as the holding company for the Adviser,
Equitable and Donaldson, Lufkin & Jenrette, Inc., an integrated
investment and merchant bank. As of June 30, 1999, AXA, a French
insurance holding company, owned approximately 58.2% of the
issued and outstanding shares of common stock of AXA Financial.
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 under the Advisory
Agreement. The Adviser will 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. For the fiscal years ended June 30, 1998,
1999 and 2000, the Adviser received from the Fund, advisory fees
(net of reimbursement for each fiscal year ) of $19,694,085 (net
of $528,930 of expense reimbursement), $25,589,419 (net of
$1,123,076 of expense reimbursement) and $27,785,105 (net of
$1,675,047 of expense reimbursement), respectively. In
accordance with the Distribution Services Agreement described
below, the Fund may pay a portion of advertising and promotional
____________________
****** Until October 29, 1999, Alliance Holding served as the
investment adviser to the Fund. On that date, Alliance
Holding reorganized by transferring its business to the
Adviser. Prior thereto, the Adviser had no material
business operations. One result of the reorganization was
that the Advisory Agreement, then between the Fund and
Alliance Holding, was transferred to the Adviser by means
of a technical assignment, and ownership of Alliance Fund
Distributors, Inc. and Alliance Fund Services, Inc., the
Fund's principal underwriter and transfer agent,
respectively, also was transferred to the Advisers.
12
<PAGE>
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 $167,000,
$169,000 and $172,000, respectively, for such services for the
fiscal years ended June 30, 1998, 1999 and 2000.
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,
1998, 1999 and 2000, the Fund paid such broker-dealers a total of
$5,301,680, $10,301,555 and $11,843,632, respectively, a
substantial portion of which was paid to affiliates.
The Advisory Agreement became effective on July 22,
1992. Continuance of the Advisory Agreement for an additional
annual term 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 5, 2000.
13
<PAGE>
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
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, 2000, the Fund made payments to
the Distributor for expenditures, under the Agreement in amounts
aggregating $15,838,974 which constituted .25 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
14
<PAGE>
$18,362,207. Of the $34,201,181 paid by the Adviser and the Fund
under the Agreement, $73,000 was paid for advertising, printing,
and mailing of prospectuses to persons other than current
shareholders (the Fund's pro rata share was approximately
$33,807); and $34,128,181 was paid to broker-dealers and other
financial intermediaries for distribution assistance (the Fund's
pro rata share was approximately $15,805,167).
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.
The Agreement became effective on July 22, 1992.
Continuance of the Agreement for an additional annual term 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 5, 2000. 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
15
<PAGE>
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.
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:
16
<PAGE>
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.
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.
17
<PAGE>
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
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. Telephone redemption is not available
with respect to shares (i) for which certificates have been
issued, (ii) held by a shareholder who has changed his or her
address of record within the preceding 30 calendar days or (iii)
held in any retirement plan account. 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
18
<PAGE>
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.
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.
19
<PAGE>
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
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
20
<PAGE>
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
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
21
<PAGE>
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
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.
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<PAGE>
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.
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
23
<PAGE>
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.
_______________________________________________________________
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, 1998, 1999 and 2000, 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.
24
<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. 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 6, 2000, there were 6,632,674,580 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 6, 2000:
No. of % of
Name and Address Shares Class
Pershing as Agent
Omnibus Account for 1,639,146,043 24.57%
Exclusive Benefit of Customers
1 Pershing Plaza
Jersey City, NJ 07399-0002
Pershing as Agent
Omnibus Account for 4,078,212,641 61.13%
Exclusive Benefit of Customers
1 Pershing Plaza
Jersey City, NJ 07399-0002
Janney Montgomery Scott 378,452,491 5.67%
As Agent Omnibus A/C For
Exclusive Benefit of Customers
1801 Market Street
Philadelphia, PA
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
25
<PAGE>
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.
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. The Fund's independent accountants for the
fiscal year ending June 30, 2001 are PricewaterhouseCoopers LLP.
Prior to June 30, 2000 the accountants were McGladrey & Pullen
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 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
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
26
<PAGE>
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.
27
<PAGE>
_______________________________________________________________
FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT ACCOUNTANTS
______________________________________________________________
The financial statements and the report of
PricewaterhouseCoopers LLP of Alliance Government Reserves are
incorporated herein by reference to its annual report filing made
with the SEC pursuant to Section 30(b) of the Act and Rule 30b2-1
thereunder. The annual report is dated June 30, 2000 and was
filed on August 29, 2000. It is available without charge upon
request by calling Alliance Fund Services, Inc. at (800) 227-
4618. The Fund's financial statements include the financial
statements of each of the Fund's portfolios.
28
<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.
<PAGE>
[LOGO] ALLIANCE TREASURY RESERVES
_______________________________________________________________
P.O. Box 1520, Secaucus, New Jersey 07096-1520
Toll Free (800) 221-5672
_______________________________________________________________
STATEMENT OF ADDITIONAL INFORMATION
November 1, 2000
_______________________________________________________________
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.........................................
Financial Statements and Report of Independent
Accountants.................................................
Appendix-Commercial Paper and Bond Rating...................A-1
________________________________________________________________
This Statement of Additional Information is not a prospectus but
supplements and should be read in conjunction with the Fund's
current Prospectus dated November 1, 2000. 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 series of Alliance Government Reserves
(the "Trust"). The Trust was reorganized in October 1984, as a
Massachusetts business trust, having previously been a Maryland
corporation since its formation in December 1978. 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
are currently entered into with counterparties deemed to be
creditworthy by Alliance Capital Management L.P. (the "Adviser"),
including broker-dealers, 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
2
<PAGE>
terminable within seven days will be limited to no more than 10%
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.
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
3
<PAGE>
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 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 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
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
4
<PAGE>
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.
Senior Securities. The Fund will not issue senior
securities except as permitted by the Act or the rules,
regulations, or interpretations thereof.
_______________________________________________________________
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.
5
<PAGE>
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
seller******* 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. 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
____________________
*******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>
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 business and affairs of the Fund are managed under
the direction of the Board of Trustees. 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
DAVE H. WILLIAMS******** , 68, Chairman, is Chairman of
the Board of Directors of Alliance Capital Management Corporation
("ACMC"),********* sole general partner of the Adviser with which
he has been associated since prior to 1995.
____________________
********An "interested person" of the Fund as defined in the Act.
*********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.
7
<PAGE>
JOHN D. CARIFA2, 55, is the President, Chief Operating
Officer and a Director of ACMC with which he has been associated
since prior to 1995.
SAM Y. CROSS, 73, was, since prior to 1995, 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, 62, is President of Middleton Place
Foundation with which he has been associated since prior to 1995.
He is also a Trustee Emeritus of the National Trust for Historic
Preservation and serves as Chairman of the Board of Architectural
Review, City of Charleston. His address is Middleton Place
Foundation, 4300 Ashley River Road, Charleston, South Carolina
29414.
WILLIAM H. FOULK, JR., 68, 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 1995. He was
formerly Deputy Comptroller of the State of New York and, prior
thereto, Chief Investment Officer of the New York Bank for
Savings. His address is 2 Greenwich Plaza, Suite 100, Greenwich,
CT 06830.
DAVID K. STORRS, 56, 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 1995. His address is 65 South Gate
Lane, Southport, Connecticut 06490.
SHELBY WHITE, 62, is an author and financial journalist.
Her address is One Sutton Place South, New York, New York
10022.
Officers
RONALD M. WHITEHILL - President, 62, is a Senior Vice
President of ACMC and President and Chief Executive Officer of
Alliance Cash Management Services with which he has been
associated since prior to 1995.
KATHLEEN A. CORBET - Senior Vice President, 40, is an
Executive Vice President of ACMC with which she has been
associated since prior to 1995.
8
<PAGE>
ANDREW M. ARAN - Senior Vice President, 43, is a Senior
Vice President of ACMC with which he has been associated since
prior to 1995.
DREW A. BIEGEL - Senior Vice President, 49, is a Vice
President of Alliance Fund Distributors ("AFD") with which he has
been associated since prior to 1995.
JOHN R. BONCZEK - Senior Vice President, 40, is a Senior
Vice President of AFD with which he has been associated since
prior to 1995.
DORIS T. CILIBERTI - Senior Vice President, 36, is a
Vice President of AFD with which she has been associated since
prior to 1995.
ROBERT I. KURZWEIL - Senior Vice President, 49, is a
Vice President of ACMC with which he has been associated since
prior to 1995.
WAYNE D. LYSKI - Senior Vice President, 59, is an
Executive Vice President of ACMC with which he has been
associated since prior to 1995.
PATRICIA ITTNER - Senior Vice President, 49, is a Vice
President of AFD with which she has been associated since prior
to 1995.
RAYMOND J. PAPERA - Senior Vice President, 44, is a
Senior Vice President of ACMC with which he has been associated
since prior to 1995.
KENNETH T. CARTY - Vice President, 39 is a Vice
President of ACMC with which he has been associated since prior
to 1995.
JOHN F. CHIODI, Jr. - Vice President, 34, is a Vice
President of ACMC with which he has been associated since prior
to 1995.
MARIA R. CONA - Vice President, 45, is a Vice President
of ACMC with which she has been associated since prior to 1995.
JOSEPH DONA - Vice President, 39, is a Vice President of
ACMC with which he has been associated since prior to 1995.
WILLIAM J. FAGAN - Vice President, 38, is an Assistant
Vice President of AFD with which he has been associated since
prior to 1995.
9
<PAGE>
LINDA N. KELLEY - Vice President, 40, is an Assistant
Vice President of AFD with which she has been associated since
prior to 1995.
JOSEPH R. LASPINA - Vice President, 40, is an Assistant
Vice President of ACMC with which he has been associated since
prior to 1995.
EDMUND P. BERGAN, Jr. - Secretary, 50, is a Senior Vice
President and the General Counsel of AFD and Alliance Fund
Services, Inc. ("AFS") with which he has been associated since
prior to 1995.
MARK D. GERSTEN - Treasurer and Chief Financial Officer,
50, is a Senior Vice President of AFS and a Vice President of AFD
with which he has been associated since prior to 1995.
VINCENT S. NOTO - Controller, 35, is a Vice President of
AFS with which he has been associated since prior to 1995.
ANDREW L. GANGOLF - Assistant Secretary, 46, is a Senior
Vice President and Assistant General Counsel of AFD with which he
has been associated since prior to 1995.
DOMENICK PUGLIESE - Assistant Secretary, 39, is a Senior
Vice President and Assistant General Counsel of AFD with which he
has been associated since prior to 1995.
As of October 6, 2000, 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
Fund. The aggregate compensation paid by the Fund to each of the
Trustees during its fiscal year ended June 30, 2000, the
aggregate compensation paid to each of the Trustees during
calendar year 1999 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.
10
<PAGE>
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 16
John D. Carifa $-0- $-0- 49 107
Sam Y. Cross $1,815 $ 15,750 3 14
Charles H.P. Duell $1,815 $ 15,000 3 14
William H. Foulk, Jr. $1,736 $246,413 45 111
David K. Storrs $1,815 $ 15,000 3 14
Shelby White $1,815 $ 15,750 3 14
The Adviser
The Fund's investment adviser is Alliance Capital
Management L.P., 1345 Avenue of the Americas, New York, New York
10105. The Adviser is a leading international adviser managing
client accounts with assets as of June 30, 2000 totaling more
than $388 billion (of which more than $185 billion represented
assets of investment companies). As of June 30, 2000, the
Adviser managed retirement assets for many of the largest public
and private employee companies), for public employee retirement
funds in 33 out of the 50 states, for investment companies, and
for foundations, endowments, banks and insurance companies
worldwide. The 52 registered investment copies managed by the
Adviser, comprising 122 separate investment portfolios, currently
have approximately 6.1 million shareholder accounts.
Alliance Capital Management Corporation ("ACMC") is the
general partner of the Adviser and a wholly owned subsidiary of
the The Equitable Life Assurance Society of the United States
("Equitable"). Equitable, one of the largest life insurance
companies in the United States, is the beneficial owner of an
approximately 55.4% partnership interest in the Adviser.
Alliance Capital Management Holding L.P. ("Alliance Holding")
owns an approximately 41.9% partnership interest in the
11
<PAGE>
Adviser.********** Equity interests in Alliance Holding are
traded on the New York Stock Exchange in the form of units.
Approximately 98% of such interests are owned by the public and
management or employees of the Adviser and approximately 2% are
owned by Equitable. Equitable is a wholly owned subsidiary of
AXA Financial, Inc. ("AXA Financial"), a Delaware corporation
whose shares are traded on the New York Stock Exchange. AXA
Financial serves as the holding company for the Adviser,
Equitable and Donaldson, Lufkin & Jenrette, Inc., an integrated
investment and merchant bank. As of June 30, 1999, AXA, a French
insurance holding company, owned approximately 58.2% of the
issued and outstanding shares of common stock of AXA Financial.
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
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 under the
Advisory Agreement. The Adviser will 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. For the fiscal years ended
June 30, 1998, 1999 and 2000, the Adviser received from the Fund
advisory fees (net of reimbursement for the fiscal years ended
June 30, 1998 and 1999) of $3,597,041 (net of $39,480 of expense
reimbursement), $3,756,549 (net of $131,532 of expense
reimbursement) and $4,170,967, respectively. In accordance with
the Distribution Services Agreement described below, the Fund may
pay a portion of advertising and promotional expenses in
____________________
**********Until October 29, 1999, Alliance Holding served as the
investment adviser to the Fund. On that date, Alliance
Holding reorganized by transferring its business to the
Adviser. Prior thereto, the Adviser had no material
business operations. One result of the reorganization was
that the Advisory Agreement, then between the Fund and
Alliance Holding, was transferred to the Adviser by means
of a technical assignment, and ownership of Alliance Fund
Distributors, Inc. and Alliance Fund Services, Inc., the
Fund's principal underwriter and transfer agent,
respectively, also was transferred to the Advisers.
12
<PAGE>
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 $131,500,
$131,000 and $134,000 for such services for the fiscal years
ended June 30, 1998, 1999 and 2000, 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.
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, 1998,
1999 and 2000, the Fund paid such broker-dealers a total of
$547,713, $1,043,411 and $1,059,191, respectively, a substantial
portion of which was paid to affiliates.
The Advisory Agreement became effective on July 22,
1992. Continuance of the Advisory Agreement for an additional
annual term 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 5, 2000.
13
<PAGE>
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
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, 2000, the Fund made payments to the
Distributor for expenditures under the Agreement in amounts
aggregating $2,085,483 which constituted .25 of 1% 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
14
<PAGE>
above aggregating $1,699,975. Of the $3,785,458 paid by the
Adviser and the Fund under the Agreement, $53,000 was paid for
advertising, printing, and mailing of prospectuses to persons
other than current shareholders (the Fund's pro rata share was
approximately $29,199); and $3,732,458 was paid to broker-dealers
and other financial intermediaries for distribution assistance
(the Fund's pro rata share was approximately $2,056,284).
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
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 for an additional annual term 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 5, 2000. 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.
15
<PAGE>
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.
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:
16
<PAGE>
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),
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.
17
<PAGE>
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
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. Telephone redemption is not available
with respect to shares (i) for which certificates have been
issued, (ii) held by a shareholder who has changed his or her
address of record within the preceding 30 calendar days or
(iii) held in any retirement plan account. 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
18
<PAGE>
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.
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
19
<PAGE>
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
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
20
<PAGE>
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 accounts (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.
21
<PAGE>
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
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
22
<PAGE>
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.
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
23
<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, 1998, 1999 and 2000, 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.
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
24
<PAGE>
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 6, 2000, there were 748,940,575 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 6, 2000:
No. of % of
Shares Class
National Investor Services Corp 81,639,203 11.16%
FBO Our Customers
Atn Mutual Funds Money Market Dept
55 Water Street 32nd Floor
New York, NY 10041-3299
Pershing As Agent 361,517,156 49.42%
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
25
<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. The Fund's independent accountants for the
fiscal year ending June 30, 2001 are PricewaterhouseCoopers LLP.
Prior to June 30, 2000 the accountants were McGladrey & Pullen
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 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
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.
26
<PAGE>
_______________________________________________________________
FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT ACCOUNTANTS
______________________________________________________________
The financial statements and the report of
PricewaterhouseCoopers LLP of Alliance Treasury Reserves are
incorporated herein by reference to its annual report filing made
with the SEC pursuant to Section 30(b) of the Act and Rule 30b2-1
thereunder. The annual report is dated June 30, 2000 and was
filed on August 29, 2000. It is available without charge upon
request by calling Alliance Fund Services, Inc. at
(800) 227-4618. The Fund's financial statements include the
financial statements of each of the Fund's portfolios.
27
<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
Post-Effective Amendment No. 25 of the
Registrant's Registration Statement on Form N-
1A (File Nos. 2-63315 and 811-2889) filed with
C-1
<PAGE>
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) Opinion of Seward & Kissel LLP - Filed
herewith.
(j) Consent of Independent Accountants - Filed
herewith.
(k) Not applicable.
(l) Not applicable.
(m) Rule 12b-1 Plan - See Exhibit (e) hereto.
(n) Not applicable
(p) 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)
filed with the Securities and Exchange
Commission on October 30, 1997.
C-2
<PAGE>
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
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
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<PAGE>
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.
(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.
C-4
<PAGE>
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
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
C-5
<PAGE>
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
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.
C-6
<PAGE>
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.
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
C-7
<PAGE>
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
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,
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<PAGE>
1988 (File No. 801-32361) and amended through the
date hereof, is incorporated by reference.
ITEM 27. 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 Disciplined Value Fund, Inc.
Alliance Global Dollar Government 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.
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
C-9
<PAGE>
(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 [President],
Director/Trustee
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 Clerk
General Counsel and
Secretary
Richard A. Davies Senior Vice President
Managing Director
Robert H. Joseph, Jr. Senior Vice President and
Chief Financial Officer
Anne S. Drennan Senior Vice President &
Treasurer
Benji A. Baer Senior Vice President
John R. Bonczek 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
Byron M. Davis Senior Vice President
C-10
<PAGE>
Mark J. Dunbar Senior Vice President
Donald N. Fritts Senior Vice President
Andrew L. Gangolf Senior Vice President Assistant
and Assistant General Secretary/
Counsel Assistant Clerk
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
Domenick Pugliese Senior Vice President Assistant
and Assistant General Secretary/
Counsel Assistant Clerk
Kevin A. Rowell Senior Vice President
John P. Schmidt Senior Vice President
Raymond S. Sclafani Senior Vice President
Gregory K. Shannahan Senior Vice President
Scott C. Sipple Senior Vice President
Joseph F. Sumanski Senior Vice President
Peter J. Szabo Senior Vice President
William C. White Senior Vice President
Richard A. Winge Senior Vice President
Emilie D. Wrapp Senior Vice President and
Assistant General Counsel
Gerard J. Friscia Vice President &
Controller
C-11
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Ricardo Arreola Vice President
Kenneth F. Barkoff Vice President
Adam J. Barnett Vice President
Charles M. Barrett Vice President
Matthew F. Beaudry Vice President
(R)Leo Benitez Vice President
Gregory P. Best Vice President
Dale E. Boyd Vice President
Robert F. Brendli Vice President
Christopher L. Butts Vice President
Thomas C. Callahan Vice President
Kevin T. Cannon Vice President
John M. Capeci Vice President
John P. Chase Vice President
Doris T. Ciliberti Vice President
William W. Collins, Jr. Vice President
Leo H. Cook Vice President
Russell R. Corby Vice President
John W. Cronin Vice President
Robert J. Cruz Vice President
Richard W. Dabney Vice President
Daniel J. Deckman Vice President
Sherry V. Delaney Vice President
Richard P. Dyson Vice President
John C. Endahl Vice President
John E. English Vice President
C-12
<PAGE>
Sohaila S. Farsheed Vice President
Daniel J. Frank Vice President
Shawn C. Gage Vice President
Joseph C. Gallagher Vice President
Michael J. Germain Vice President
Mark D. Gersten Vice President Treasurer and
Chief Financial
Officer
Hyman Glasman Vice President
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
Timothy A. Hill Vice President
Brian R. Hoegee Vice President
George R. Hrabovsky 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
Henry Michael Lesmeister Vice President
C-13
<PAGE>
Eric L. Levinson Vice President
James M. Liptrot Vice President
James P. Luisi Vice President
Michael F. Mahoney Vice President
Kathryn Austin Masters 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
Timothy S. Mulloy Vice President
Joanna D. Murray Vice President
Michael F. Nash, Jr. Vice President
Timothy H. Nasworthy 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
Daniel P. O'Donnell Vice President
Richard J. Olszewski Vice President
Catherine N. Peterson Vice President
Jeffrey R. Petersen Vice President
James J. Posch Vice President
Bruce W. Reitz Vice President
Jeffrey B. Rood Vice President
C-14
<PAGE>
Karen C. Satterberg Vice President
Robert C. Schultz Vice President
Richard J. Sidell Vice President
Clara Sierra Vice President
Teris A. Sinclair Vice President
Jeffrey C. Smith Vice President
David A. Solon Vice President
Martine H. Stansbery, Jr. Vice President
Eileen Stauber Vice President
Michael J. Tobin Vice President
Joseph T. Tocyloski Vice President
Benjamin H. Travers Vice President
David R. Turnbough Vice President
Andrew B. Vaughey Vice President
Wayne W. Wagner Vice President
Mark E. Westmoreland Vice President
Paul C. Wharf Vice President
Stephen P. Wood Vice President
Keith A. Yoho Vice President
Michael W. Alexander Assistant Vice President
Richard J. Appaluccio Assistant Vice President
Paul G. Bishop Assistant Vice President
Mark S. Burns Assistant Vice President
Maria L. Carreras Assistant Vice President
Judith A. Chin Assistant Vice President
Jorge Ciprian Assistant Vice President
C-15
<PAGE>
William P. Condon Assistant Vice President
Jean A. Coomber Assistant Vice President
Dorsey Davidge Assistant Vice President
Ralph A. DiMeglio Assistant Vice President
Faith C. Deutsch Assistant Vice President
Timothy J. Donegan Assistant Vice President
Joan Eilbott Assistant Vice President
Adam E. Engelhardt Assistant Vice President
Michael J. Eustic Assistant Vice President
Michele Grossman Assistant Vice President
Arthur F. Hoyt, Jr. Assistant Vice President
David A. Hunt Assistant Vice President
Theresa Iosca Assistant Vice President
Erik A. Jorgensen Assistant Vice President
Eric G. Kalender Assistant Vice President
Elizabeth E. Keefe Assistant Vice President
Edward W. Kelly Assistant Vice President
Victor Kopelakis Assistant Vice President
Jeffrey M. Kusterer Assistant Vice President
Alexandra C. Landau Assistant Vice President
Laurel E. Lindner Assistant Vice President
Evamarie C. Lombardo Assistant Vice President
Amanda C. McNichol Assistant Vice President
Richard F. Meier Assistant Vice President
Charles B. Nanick Assistant Vice President
Alex E. Pady Assistant Vice President
C-16
<PAGE>
Raymond E. Parker Assistant Vice President
Wandra M. Perry-Hartsfield Assistant Vice President
Rizwan A. Raja Assistant Vice President
Carol H. Rappa Assistant Vice President
Brendan J. Reynolds Assistant Vice President
James A. Rie Assistant Vice President
Lauryn A. Rivello Assistant Vice President
Christina Santiago Assistant Vice Assistant Vice
President and Counsel President and
and Counsel Counsel
Nancy D. Testa Assistant Vice President
Margaret M. Tompkins Assistant Vice President
Marie R. Vogel Assistant Vice President
Nina C. Wilkinson Assistant Vice President
Wesley S. Williams Assistant Vice President
Matthew Witschel Assistant Vice President
Mark R. Manley Assistant Secretary
(c) Not applicable.
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.
C-17
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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-18
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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 certifies that it meets all of the
requirements for effectiveness of this Amendment to its
Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and 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 27th day of October 2000.
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 October 27, 2000
_______________________
Ronald M. Whitehill
2) Principal Financial and
Accounting Officer
/s/ Mark D. Gersten Treasurer and October 27, 2000
_______________________ 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. October 27, 2000
_________________________
(Attorney-in-fact)
Edmund P. Bergan, Jr.
C-20
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Index to Exhibits
(i) Opinion of Seward & Kissel LLP
(j) Consent of Independent Accountants
C-21
00250083.AJ4