SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (No. 2-77909)
UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 44 [X]
and
REGISTRATION STATEMENT (No. 811-3480)
UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 44 [X]
Daily Money Fund
(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, Massachusetts 02109
(Address Of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number: 617-563-7000
Arthur S. Loring, Secretary
82 Devonshire Street
Boston, Massachusetts 02109
(Name and Address of Agent for Service)
It is proposed that this filing will become effective
( ) immediately upon filing pursuant to paragraph (b).
( ) on ( ) pursuant to paragraph (b).
( ) 60 days after filing pursuant to paragraph (a)(1).
(X) on (May 30, 1997) pursuant to paragraph (a)(1) of Rule 485.
( ) 75 days after filing pursuant to paragraph (a)(2).
( ) on ( ) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
( ) this post-effective amendment designates a new effective date for a
previously filed
post-effective amendment.
Registrant has filed a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940 and filed the Notice required by such Rule
on December 18, 1996.
TREASURY FUND -DAILY MONEY CLASS
(FORMERLY U.S. TREASURY PORTFOLIO -INITIAL CLASS)
PRIME FUND -DAILY MONEY CLASS
(FORMERLY MONEY MARKET PORTFOLIO - INITIAL CLASS)
TAX-EXEMPT FUND -DAILY MONEY CLASS
(FORMERLY DAILY TAX-EXEMPT MONEY FUND - INITIAL CLASS)
CROSS REFERENCE SHEET
Form N-1A Item Number
Part A Prospectus Caption
1 Cover Page
2 Expenses
3 a Financial Highlights
b *
c Performance
d Performance
4 a(i) Charter
(ii) Investment Principles and Risks; Securities and Investment
Practices
b Securities and Investment Practices
c Who May Want To Invest; Investment Principals and Risks; Securities and
Investment Practices
5 a Charter
b(i) Cover Page; FMR and Its Affiliates
b(ii) FMR and Its Affiliates; Charter; Breakdown of Expenses
b(iii) Expenses; Breakdown of Expenses
c,d Cover Page; Charter; Breakdown of
Expenses; FMR and Its Affiliates
e Expenses
f Expenses
g Expenses; FMR and Its Affiliates
5A *
6 a(i) Charter
a(ii) How to Buy Shares; How to Sell Shares; Transaction Details;
Exchange Restrictions
a(iii) *
b FMR and Its Affiliates
c Exchange Restrictions; Transaction Details
d *
e Cover Page; How to Buy Shares; How to Sell Shares; Investor Services;
Exchange Restrictions
f,g Dividends, Capital Gains, and Taxes
7 a Charter; Cover Page
b How to Buy Shares; Transaction Details;Expenses
c *
d How to Buy Shares
e *
f Expenses; Breakdown of Expenses
8 How to Sell Shares; Investor Services; Transaction Details; Exchange
Restrictions
9 *
*Not Applicable
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how each
fund invests and the services available to shareholders.
To learn more about each fund and its investments, you can obtain a copy of
a fund's most recent financial report and portfolio listing or a copy of
the Statement of Additional Information (SAI) dated May 30, 1997. The SAI
has been filed with the Securities and Exchange Commission (SEC) and is
available along with other related materials on the SEC's Internet Web site
(http:/www.sec.gov). The SAI is incorporated herein by reference (legally
forms a part of the prospectus). For a free copy of either document,
contact Fidelity Client Services at 1-800-843-3001, or your investment
professional.
INVESTMENTS IN THE FUNDS ARE NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT A FUND WILL MAINTAIN A
STABLE $1.00 SHARE PRICE.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR
OBLIGATIONS OF, OR GUARANTEED BY, ANY
DEPOSITORY INSTITUTION. SHARES ARE NOT
INSURED BY THE FDIC, FEDERAL RESERVE
BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT
TO INVESTMENT RISKS, INCLUDING POSSIBLE
LOSS OF PRINCIPAL AMOUNT INVESTED.
LIKE ALL MUTUAL FUNDS, THESE
SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
DMFI-pro-0597
TREASURY FUND - DAILY MONEY CLASS
(FORMERLY U.S. TREASURY PORTFOLIO - INITIAL CLASS)
(fund number 058)
PRIME FUND - DAILY MONEY CLASS
(FORMERLY MONEY MARKET PORTFOLIO - INITIAL CLASS)
(fund number 083)
TAX-EXEMPT FUND - DAILY MONEY CLASS
(FORMERLY DAILY TAX-EXEMPT MONEY FUND - INITIAL CLASS)
(fund number 084)
PROSPECTUS
DATED MAY 30, 1997
(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA 02109
CONTENTS
PROSPECTUS
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<S> <C> <C>
KEY FACTS 3 WHO MAY WANT TO INVEST
3 EXPENSES Initial Class's yearly operating expenses.
5 FINANCIAL HIGHLIGHTS A summary of each fund's
financial data.
6 PERFORMANCE
THE FUNDS IN DETAIL 7 CHARTER How each fund is organized.
7 INVESTMENT PRINCIPLES AND RISKS Each fund's overall
approach to investing.
11 BREAKDOWN OF EXPENSES How operating costs are
calculated and what they include.
YOUR ACCOUNT 13 TYPES OF ACCOUNTS Different ways to set up your
account, including tax-sheltered retirement plans.
14 HOW TO BUY SHARES Opening an account and making
additional investments.
15 HOW TO SELL SHARES Taking money out and closing your
account.
16 INVESTOR SERVICES Services to help you manage your
account.
SHAREHOLDER AND ACCOUNT POLICIES 18 DIVIDENDS, CAPITAL GAINS, AND TAXES
19 TRANSACTION DETAILS Share price calculations and the
timing of purchases and redemptions.
20 EXCHANGE RESTRICTIONS
</TABLE>
KEY FACTS
WHO MAY WANT TO INVEST
Each fund offers investors a convenient way to invest in a professionally
managed portfolio of money market instruments.
Each fund is designed for investors who would like to earn current income
while preserving the value of their investment.
The rate of income will vary from day to day, generally reflecting
short-term interest rates.
Each fund is managed to keep its share price stable at $1.00. Treasury
F und offers an added measure of safety with its focus on U.S. Treasury
securities.
These funds do not constitute a balanced investment plan. However, because
they emphasize stability, they could be well-suited for a portion of your
investments. Each fund offers free checkwriting to give you easy access to
your money.
T reasu ry Fund is composed of two classes of shares. Each class of
the fund has a common investment objective and investment portfolio.
Daily Money Class shares do not have a sales charge, but do pay a
distribution fee. Advisor B Class shares (Class B) do not
have a front-end sales charge, but do have a contingent deferred sales
charge (CDSC) and pay a distribution fee and a shareholder service fee.
Class B shares may be purchased directly in connection with the Fidelity
Advisor Systematic Exchange Program (the Program) for the purpose of
exchanging into Class B of the Fidelity Advisor Funds. Because Daily
Money Class shares do not have a sales charge, have a lower
distribution fee and do not have a shareholder service fee, Daily Money
Class shares are expected to have a higher total return than Class B
shares. You may obtain more information about Class B shares, which are
not offered through this prospectus, from your investment professional or
by calling Fidelity Client Services at 1-800-843-3001.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you may pay when you buy or
sell Daily Money Class shares of a fund.
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Maximum sales charge on purchases and reinvested distributions None
Maximum deferred sales charge None
Redemption fee None
Exchange fee None
</TABLE>
ANNUAL OPERATING EXPENSES are paid out of each fund's assets. Each fund
pays a management fee to Fidelity Management & Research Company (FMR). Each
fund also incurs other expenses for services such as maintaining
shareholder records and furnishing shareholder statements and financial
reports.
12b-1 fees are paid by the Daily Money Class of each fund to the
distributor for services and expenses in connection with the distribution
of Daily Money Class shares of each fund.
Daily Money Class 's expenses are factored into its share price or
dividends and are not charged directly to shareholder accounts (see
"Breakdown of Expenses" on page ).
The following figures are based on historical expenses , adjusted to
reflect current fees, of Daily Money Class of each fund and are
calculated as a percentage of average net assets of Daily Money
Class of each fund. A portion of the brokerage commissions that the
funds pay is used to reduce fund expenses. In addition, each fund has
entered into arrangements with its custodian and transfer agent whereby
interest earned on uninvested cash balances is used to reduce custodian and
transfer agent expenses. I ncluding these reductions, the total
Daily Money Class operating expenses presented in the table would
have been __% for Treasury Fund, ___% for Prime Fund, and ___% for
Tax-Exempt Fund.
MONEY MARKET PORTFOLIO- DAILY MONEY CLASS
Management fee 0.25
%
12b-1 fee (Distribution Fee) 0.25
%
Other expenses (after reimbursement) 0.15
%
Total operating expenses 0.65
%
PRIME FUND - DAILY MONEY CLASS
Management fee 0.25
%
12b-1 fee (Distribution Fee) 0.25
%
Other expenses (after reimbursement) 0.15
%
Total operating expenses 0.65
%
TAX-EXEMPT FUND - DAILY MONEY CLASS
Management fee 0.25
%
12b-1 fee (Distribution Fee) 0.25
%
Other expenses (after reimbursement) 0.15
%
Total operating expenses 0.65
%
EXPENSE TABLE EXAMPLE: You would pay the following expenses on a $1,000
investment in Daily Money Class shares, assuming a 5% annual return
and full redemption at the end of each time period:
Treasury Fund $ 7 $ 21 $ 36 $ 81
Prime Fund $ 7 $ 21 $ 36 $ 81
Tax-Exempt Fund $ 7 $ 21 $ 36 $ 81
THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO
SUGGEST ACTUAL OR EXPECTED COSTS OR RETURNS, ALL OF WHICH MAY VARY.
FMR has voluntarily agreed to reimburse Daily Money Class of each
fund to the extent that total operating expenses exceed 0.65% of its
average net assets. If these agreements were not in effect, other expenses
and total operating expenses, as a percentage of average net assets, of
Daily Money Class of each fund would have been, ___ % and
___ % for Treasury Fund ; ____ % and ___ % fo r
Prime Fund ; and ____ % and ___ % for Tax-Exempt
Fund . Expenses eligible for reimbursement do not include interest,
taxes, brokerage commissions, and extraordinary expenses.
FINANCIAL HIGHLIGHTS
The financial highlights tables that follow for Treasury Fund and Prime
Fund have been audited by Coopers & Lybrand L.L.P. , independent
accountants. The financial highlights table that follows for Tax-Exempt
Fund has been audited by Price Waterhouse LLP. The funds' financial
highlights, financial statements, and reports of the auditors are included
in the funds' Annual Report, and are incorporated by reference into (are
legally a part of) the funds' SAI. Contact Fidelity Client Services (Client
Services) or your investment professional for a free copy of an Annual
Report or the SAI.
TREASURY FUND - DAILY MONEY CLASS
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Selected Per-Share Data and
Ratios
Years ended July 31 1996A 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period
Income from
Investment Operations
Net interest income .012 .049 .049 .029 .027 .042 .065 .079 .083 .063 .057
Less Distributions
From net interest (.012) (.049) (.049) (.029) (.027) (.042) (.065) (.079) (.083) (.063) (.057)
income
Net asset value, end of $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
Total returnB 1.19% 5.06% 5.02% 2.89% 2.78% 4.25% 6.69% 8.24% 8.64% 6.45% 5.81%
Net assets, end of $ 1,801 $ 1,801 $ 1,828 $ 2,025 $ 2,949 $ 3,094 $ 1,702 $ 1,177 $ 994 $ 320 $ 240
period
(In millions)
Ratio of expenses to .65%C, .65%C .65%C .60% .57% .59% .59% .59% .64% .64% .58%
average D
net assets
Ratio of net interest 4.66% 4.94% 4.89% 2.81% 2.73% 4.14% 6.42% 7.91% 8.47% 6.26% 5.67%
income to average net D
assets
</TABLE>
A THREE MONTHS ENDED OCTOBER 31, 1996
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL
RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING
THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
C FMR AGREED TO REIMBURSE A PORTION OF THE CLASS'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT THE CLASS'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
D ANNUALIZED
PRIME FUND - DAILY MONEY CLASS
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Selected Per-Share Data and
Ratios
Years ended July 31 1996A 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period
Income from .012 .050 .050 .029 .028 .041 .067 .080 .085 .066 .057
Investment Operations
Net interest income
Less Distributions (.012) (.050) (.050) (.029) (.028) (.041) (.067) (.080) (.085) (.066) (.057)
From net interest
income
Net asset value, end of $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
Total returnB 1.22% 5.13% 5.16% 2.98% 2.82% 4.21% 6.90% 8.34% 8.81% 6.81% 5.87%
Net assets, end of $ 2,663 $ 2,581 $ 2,139 $ 1,525 $ 1,451 $ 1,531 $ 1,714 $ 1,350 $ 894 $ 561 $ 441
period
(In millions)
Ratio of expenses to .65%C, .65%C .65%C .65%C .61% .59% .60% .61% .64%C .66% .62%
average D
net assets
Ratio of net interest 4.85% 5.00% 5.11% 2.96% 2.76% 4.19% 6.61% 7.99% 8.56% 6.57% 5.78%
income D
to average net assets
</TABLE>
A THREE MONTHS ENDED OCTOBER 31, 1996
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL
RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING
THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
C FMR AGREED TO REIMBURSE A PORTION OF THE CLASS'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT THE CLASS'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
D ANNUALIZED
TAX-EXEMPT FUND - DAILY MONEY CLASS
<TABLE>
<CAPTION>
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Selected Per-Share Data and
Ratios
Years ended October 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
31
Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period
Income from .030 .033 .022 .021 .029 .044 .053 .056 .045 .039
Investment Operations
Net interest income
Less Distributions (.030) (.033) (.022) (.021) (.029) (.044) (.053) (.056) (.045) (.039)
From net interest
income
Net asset value, end
of $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
Total returnA 3.02% 3.36% 2.21% 2.11% 2.93% 4.46% 5.38% 5.72% 4.55% 3.93%
Net assets, end of $ 500,09 $ 559,17 $ 454,25 $ 538,75 $ 484,99 $ 304,14 $ 259,38 $ 203,51 $ 212,02 $ 288,27
period 4 3 9 6 9 7 1 3 9 9
(In millions)
Ratio of expenses to .65%B .65%B .65%B .61% .63% .65%B .65%B .64%B .70%B .63%
average
net assets
Ratio of net interest 2.98% 3.31% 2.17% 2.09% 2.86% 4.29% 5.32% 5.64% 4.37% 3.87%
income to average net
assets
</TABLE>
A TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
B FMR AGREED TO REIMBURSE A PORTION OF THE CLASS'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT THE CLASS'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
PERFORMANCE
Money market fund performance can be measured as TOTAL RETURN or YIELD.
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment over a given period,
assuming reinvestment of any dividends and capital gains. A CUMULATIVE
TOTAL RETURN reflects actual performance over a stated period of time. An
AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that, if
achieved annually, would have produced the same cumulative total return if
performance had been constant over the entire period. Average annual total
returns smooth out variations in performance; they are not the same as
actual year-by-year results.
YIELD refers to the income generated by an investment in a fund over a
given period of time, expressed as an annual percentage rate. When a yield
assumes that income earned is reinvested, it is called an EFFECTIVE YIELD.
A TAX-EQUIVALENT YIELD shows what an investor would have to earn before
taxes to equal a tax-free yield.
SEVEN-DAY YIELD illustrates the income earned by an investment in a money
market fund over a recent seven-day period. Since money market funds
maintain a stable $1.00 share price, current seven-day yields are the most
common illustration of money market fund performance.
The funds' performance and holdings are detailed twice a year in financial
reports, which are sent to all shareholders. For current performance call
Client Services at 1-800-843-3001.
THE FUNDS IN DETAIL
CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders' money
and invests it toward a specified goal. Each fund is a diversified fund
of Newbury Street Trust (formerly Daily Tax-Exempt Money Fund), an open-end
management investment company organized as a Delaware business tru st
December 30, 1991. There is a remote possibility that one fund might become
liable for a misstatement in the prospectus about another fund.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet throughout the year to oversee the funds' activities,
review contractual arrangements with companies that provide services to the
funds, and review the funds' performance. The majority of trustees are not
otherwise affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These
meetings may be called to elect or remove trustees, change fundamental
policies, approve a management contract, or for other purposes.
Shareholders not attending these meetings are encouraged to vote by proxy.
The transfer agent will mail proxy materials in advance, including a voting
card and information about the proposals to be voted on. The number of
votes you are entitled to is based upon the dollar value of your
investment.
Separate votes are taken by each class of shares, fund, or trust, if a
matter affects just that class of shares, fund, or trust, respectively.
FMR AND ITS AFFILIATES
Fidelity Investments is one of the largest investment management
organizations in the United States and has its principal business address
at 82 Devonshire Street, Boston, Massachusetts 02109. It includes a number
of different subsidiaries and divisions which provide a variety of
financial services and products. The funds employ various Fidelity
companies to perform activities required for their operation.
The funds are managed by FMR, which handles their business affairs. FMR
Texas Inc. (FMR Texas), located in Irving, Texas, has primary
responsibility for providing investment management services.
As of March 31, 1997, FMR advised funds having approximately __million
shareholder accounts with a total value of more than $__ billion.
Fidelity investment personnel may invest in securities for their own
accounts pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets Fidelity's
funds and services. Fidelity Investments Institu tional Operations
Company, Inc. (FIIOC) performs transfer agent servicing functions for the
Daily Money Class shares of each fund.
FMR Corp. is the ultimate parent company of FMR and FMR Texas. Members of
the Edward C. Johnson 3d family are the predominant owners of a class of
shares of common stock representing approximately 49% of the voting power
of FMR Corp. Under the Investment Company Act of 1940 (the 1940 Act),
control of a company is presumed where one individual or group of
individuals owns more than 25% of the voting stock of that company;
therefore, the Johnson family may be deemed under the 1940 Act to form a
controlling group with respect to FMR Corp.
UMB Bank, n.a. (UMB) is Tax-Exempt Fund's transfer agent, although it
employs FIIOC to perform these functions for Daily Money Class of
the fund. UMB is located at 1010 Grand Avenue, Kansas City, Missouri.
To carry out the funds' transactions, FMR may use its broker-dealer
affiliates and other firms that sell fund shares, provided that a fund
receives services and commission rates comparable to those of other
broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
EACH FUND'S INVESTMENT APPROACH
When you sell your shares, they should be worth the same amount as when you
bought them. Of course, there is no guarantee that the funds will maintain
a stable $1.00 share price. The funds follow industry-standard guidelines
on the quality, maturity, and diversification of their investments, which
are designed to help maintain a stable $1.00 share price. The funds will
purchase only high-quality securities that FMR believes present minimal
credit risks and will observe maturity restrictions on securities they buy.
In general, securities with longer maturities are more vulnerable to price
changes, although they may provide higher yields. It is possible that a
major change in interest rates or a default on the funds' investments could
cause their share prices (and the value of your investment) to change.
The funds earn income at current money market rates. Each fund stresses
preservation of capital, liquidity, and income (tax-free income in the case
of Tax-Exempt Fund) and does not seek the higher yields or capital
appreciation that more aggressive investments may provide. Each fund's
yield will vary from day to day and generally reflects current short-term
interest rates and other market conditions. It is important to note that
neither the funds nor their yields are guaranteed by the U.S. Government.
TREASURY FUND seeks to obtain as high a level of current income as
is consistent with the preservation of capital and liquidity.
The fund invests only in U.S. Treasury securities and repurchase agreements
for these securities. The fund does not enter into reverse repurchase
agreements.
PRIME FUND seeks to obtain as high a level of current income as is
consistent with the preservation of capital and liquidity.
The fund invests only in U.S. dollar-denominated money market securities of
domestic and foreign issuers rated in the highest rating category by at
least two nationally recognized rating services, U.S. Government
securities, and repurchase agreements. The fund also may enter into reverse
repurchase agreements.
TAX-EXEMPT FUND seeks to provide individual and institutional
investors with as high a level of current income, exempt from federal
income taxes, as is consistent with a portfolio of high quality, short-term
municipal obligations selected on the basis of liquidity and stability of
principal.
The fund, under normal conditions, invests in U.S. dollar denominated
high-quality short-term municipal securities of all types. The fund
normally invests so that at least 80% of its income distributions is free
from federal income tax. The fund does not currently intend to purchase
municipal securities subject to the federal alternative minimum tax. The
fund may invest any portion of its assets in industrial revenue bonds
(IRBs) backed by private issuers.
FMR normally invests the fund's assets according to its investment strategy
and does not expect to invest in federally taxable obligations. The fund
also reserves the right to hold a substantial amount of uninvested cash or
to invest more than normally permitted in federally taxable obligations for
temporary, defensive purposes.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related risks.
Any restrictions listed supplement those discussed earlier in this section.
A complete listing of each fund's limitations and more detailed information
about each fund's investments are contained in the funds' SAI. Policies and
limitations are considered at the time of purchase; the sale of instruments
is not required in the event of a subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these techniques
unless it believes that they are consistent with a fund's investment
objective and policies and that doing so will help a fund achieve its goal.
Fund holdings are detailed in each fund's financial reports, which are sent
to shareholders twice a year. For a free SAI or financial report, call
Client Services at 1-800-843-3001 or your investment professional.
MONEY MARKET SECURITIES are high-quality, short-term instruments issued by
the U.S. Government, corporations, financial institutions, municipalities,
local and state governments, and other entities. These securities may
carry fixed, variable, or floating interest rates. Some money market
securities employ a trust or similar structure to modify the maturity,
price characteristics, or quality of financial assets so that they are
eligible investments for money market funds. If the structure does not
perform as intended, adverse tax or investment consequences may result.
U.S. TREASURY MONEY MARKET SECURITIES are short-term debt obligations
issued by the U.S. Treasury and include bills, notes, and bonds. U.S.
Treasury securities are backed by the full faith and credit of the United
States.
U.S. GOVERNMENT MONEY MARKET SECURITIES are short-term debt instruments
issued or guaranteed by the U.S. Treasury or by an agency or
instrumentality of the U.S. Government. Not all U.S. Government securities
are backed by the full faith and credit of the United States. For example,
U.S. Government securities such as those issued by the Federal National
Mortgage Association are supported by the instrumentality's right to borrow
money from the U.S. Treasury under certain circumstances. Other U.S.
Government securities, such as those issued by the Federal Farm Credit
Banks Funding Corporation, are supported only by the credit of the entity
that issued them.
MUNICIPAL SECURITIES are issued to raise money for a variety of public or
private purposes, including general financing for state and local
governments, or financing for specific projects or public facilities. They
may be issued in anticipation of future revenues, and may be backed by the
full taxing power of a municipality, the revenues from a specific project,
or the credit of a private organization. The value of some or all municipal
securities may be affected by uncertainties in the municipal market related
to legislation or litigation involving the taxation of municipal securities
or the rights of municipal securities holders. A fund may own a municipal
security directly or through a participation interest.
CREDIT AND LIQUIDITY SUPPORT. Issuers may employ various forms of credit
and liquidity enhancement, including letters of credit, guarantees, puts
and demand features, and insurance, provided by foreign or domestic
entities such as banks and other financial institutions. These arrangements
expose a fund to the credit risk of the entity providing the credit or
liquidity support. Changes in the credit quality of the provider could
affect the value of the security and a fund's share price.
FOREIGN EXPOSURE. Securities issued by foreign entities, including foreign
governments, corporations, and banks, and securities issued by U.S.
entities with substantial foreign operations may involve additional risks
and considerations. Likewise, securities for which foreign entities provide
credit or liquidity support may involve different risks than those
supported by domestic entities. Extensive public information about the
foreign entity may not be available, and unfavorable political, economic,
or governmental developments in the foreign country involved could affect
the repayment of principal or payment of interest.
ASSET-BACKED SECURITIES include interests in pools of mortgages, loans,
receivables, or other assets. Payment of principal and interest may be
largely dependent upon the cash flows generated by the assets backing the
securities.
VARIABLE AND FLOATING RATE SECURITIES have interest rates that are
periodically adjusted either at specific intervals or whenever a benchmark
rate changes. These interest rate adjustments are designed to help
stabilize the security's price.
STRIPPED SECURITIES are the separate income or principal components of a
debt security. The risks associated with stripped securities are similar to
those of other money market securities, although stripped securities may be
more volatile. U.S. Treasury securities that have been stripped by a
Federal Reserve Bank are obligations issued by the U.S. Treasury.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a security at
one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults
or becomes insolvent.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
temporarily transfers possession of a portfolio instrument to another party
in return for cash. This could increase the risk of fluctuation in the
fund's yield or in the market value of its assets.
OTHER MONEY MARKET SECURITIES may include commercial paper, certificates of
deposit, bankers' acceptances, and time deposits.
MUNICIPAL LEASE OBLIGATIONS are used by municipalities to acquire land,
equipment, or facilities. If the municipality stops making payments or
transfers its obligations to a private entity, the obligation could lose
value or become taxable.
OTHER MUNICIPAL SECURITIES may include obligations of U.S. territories and
possessions such as Guam, the Virgin Islands, and Puerto Rico, and their
political subdivisions and public corporations.
PUT FEATURES entitle the holder to put (sell back) a security to the issuer
or another party. In exchange for this benefit, a fund may accept a lower
interest rate. The credit quality of the investment may be affected by the
creditworthiness of the put provider. Demand features, standby commitments,
and tender options are types of put features.
PRIVATE ENTITIES may be involved in some municipal securities. For example,
industrial revenue bonds are backed by private entities, and resource
recovery bonds often involve private corporations. The viability of a
project or tax incentives could affect the value and credit quality of
these securities.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by
FMR, under the supervision of the Board of Trustees, to be illiquid, which
means that they may be difficult to sell promptly at an acceptable price.
The sale of some illiquid securities, and some other securities, may be
subject to legal restrictions. Difficulty in selling securities may result
in a loss or may be costly to a fund.
RESTRICTIONS: A fund may not purchase a security if, as a result, more
than 10% of its assets would be invested in illiquid securities.
WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS are trading practices in
which payment and delivery for the securities take place at a future date.
The market value of a security could change during this period.
FINANCIAL SERVICES INDUSTRY. Companies in the financial services industry
are subject to various risks related to that industry, such as government
regulation, changes in interest rates, and exposure on loans, including
loans to foreign borrowers. If a fund invests substantially in this
industry, its performance may be affected by conditions affecting the
industry.
R ESTRICT IONS: Prime Fund will invest more than 25% of its total
assets in the financial services industry.
CASH MANAGEMENT. A fund may invest in money market securities, in
repurchase agreements, and in a money market fund available only to funds
and accounts managed by FMR or its affiliates, whose goal is to seek a high
level of current income (exempt from federal income tax in the case of a
municipal money market fund) while maintaining a stable $1.00 share price.
A major change in interest rates or a default on the money market fund's
investments could cause its share price to change.
RESTRICTIONS: Tax-Exempt Fund will not invest in a money market fund and
does not currently intend to invest in repurchase agreements. Treasury
Fund and Prime Fund do not currently intend to invest in a money market
fund.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the
risks of investing. This may include limiting the amount of money invested
in any one issuer or, on a broader scale, in any one industry or type of
project. Economic, business, or political changes can affect all
securities of a similar type.
RESTRICTIONS: Prime Fund may not invest more than 5% of its total
assets in any one issuer, except that it may invest up to 25% of its total
assets in the highest quality securities of a single issuer for up to three
business days.
With respect to 75% of its total assets, Tax-Exempt Fund may not
purchase a security if, as a result, more than 5% of its total assets would
be invested in the securities of a single issuer.
These limitations do not apply to U.S. Government securi ties or to
securities of other investment companies.
Tax-Exempt Fund may invest more than 25% o f its total assets in
tax-free securities that finance similar types of projects.
BORROWING. A fund may borrow from banks or from other funds advised by FMR,
or through reverse repurchase agreements, and may make additional
investments while borrowings are outstanding.
R ESTRICTIONS: Prime Fund may borrow only for temporary or emergency
purposes, or engage in reverse repurchase agreements, but not in an
amount exceeding 331/3% of its total assets. Each of Treasury Fund and
Tax-Exempt Fund may borrow only for temporary or emergency purposes,
but not in an amount exceeding 331/3% of its total assets.
LENDING A fund may lend money to other funds advised by FMR.
RESTRICTIONS: Loans, in the aggregate, may not exceed 331/3% of a
fu nd's total assets. Treasury Fund and Tax-Exempt Fund do not
lend money to other funds advised by FMR.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraphs restate all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraphs, can be changed without shareholder approval.
Each o f Treasury Fund and Prime Fund seeks to obtain as high a level
of current income as is consistent with the preservation of capital and
liquidity.
Tax-Exempt Fund seeks to provide individual and institutional
investors with as high a level of current income, exempt from federal
income taxes, as is consistent with a portfolio of high quality, short-term
municipal obligations selected on the basis of liquidity and stability of
principal. The fund normally invests so that at least 80% of its income
distributions is free from federal income tax.
With respect to 75% of its total assets, Tax-Exempt Fund may not
purchase a security if, as a result, more than 5% of its total assets would
be invested in the securities of a single issuer. This limitation does
not apply to U.S. Government securities or to securities of other
investment companies.
Prime Fund will invest more than 25% of its total assets in the
financial services industry.
Prime Fu nd may borrow only for temporary or emergency purposes, or
engage in reverse repurchase agreements, but not in an amount exceeding
331/3% of its total assets. Tax-Exempt Fund may borrow only for
temporary or emergency purposes, but not in an amount exceeding 331/3% of
its total assets.
Loans, in the aggregate, may not exceed 331/3% of a fund's total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of each class's assets are reflected in that
class's share price or dividends; they are neither billed directly to
shareholders nor deducted from shareholder accounts.
Each fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs. FMR in turn pays fees to an affiliate who provides
assistance with these services. Each fund also pays OTHER EXPENSES, which
are explained on page .
MANAGEMENT FEE
Each fund pays FMR a monthly management fee at an annual rate of 0.25% of
its average net assets.
FMR Texas is the funds ' sub-adviser and has primary
responsibility for managing its investments. FMR is responsible for
providing other management services. FMR pays FMR Texas 50% of its
management fee (before expense reimbursements) for FMR Texas's
services. FMR paid FMR T exas fees equal to 0.11 % of Treasury
Fund's and 0.14 % of Prim e Fund's average net assets for the
three month period ended October 31, 1996 but after payments made by FMR
pursuant to the funds' Distribution and Service Plans. FMR paid FMR
Texas a fee equal to 0.12 % of Tax-Exempt Fund 's average net
assets for the fiscal year ended October 31, 1996.
OTHER EXPENSES
While the management fee is a significant component of each fund's annual
operating costs, the funds have other expenses as well.
FIIOC performs certain transfer agency, dividend disbursing and shareholder
services for Daily Money Class shares of Treasury Fund and
Prime Fund (the Taxable Funds). Fidelity Service Co., Inc. (FSC) calculates
the NAV and dividends for each Taxable Fund, and maintains the general
accounting records for each Taxable Fund.
For the three month period ended October 31, 1996, fees pai d by Daily
Money Class shares of Treasury Fund and Prime F und to F IIOC
amounted to 0.17 % and 0.26 % of its average net assets,
respectively, and fees paid by each Taxable Fund to FSC amounted to
0.01 % of its average net assets.
UMB has entered into a sub-arrangement with FIIOC. FIIOC performs transfer
agency, dividend disbursing and shareholder services for the Daily Money
Class shares of Tax-Exempt Fund . UMB has also entered into a
sub-arrangement with FSC. FSC calculates the NAV and dividends for Daily
Money Class shares of Tax-Exempt Fund , and maintains the fund's
general accounting records. All of the fees are paid to FIIOC and FSC by
UMB, which is reimbursed by Daily Money Class or the fund, as
appropriate, for such payments.
For the fiscal year ended October 31, 1996, fees paid by UMB to FIIOC on
behalf of Daily Money Class of Tax-Exempt Fund amounted to
0.18 % of average net assets, and fees paid by UMB to FSC on behalf
of the fund amounted to 0.02 % of its average net assets.
Daily Money Class shares of the funds have adopted a DISTRIBU TION
AND SERVICE PLAN. Under the Plans, Daily Money Class of each fund is
authorized to pay FDC a monthly distribution fee as compensation for its
services and expenses in connection with the distribution of Daily Money
Class of each fund. Daily Money Class of each fund currently pays FDC
monthly at an annual rate of 0.25% of its average net assets throughout the
month. FDC may compensate intermediaries that provide shareholder support
services, engage in the sale of Daily Money Class's shares or to pay
distribution expenses at an annual rate of up to 0.25% of average net
assets they maintain.
The Daily Money Class Plans specifically recognize that FMR may make
payments from its management fee revenue, past profits, or other resources
to FDC for expenses incurred in connection with the distribution of Daily
Money Class's shares, including payments made to intermediaries that
provide shareholder support services or engage in the sale of the Daily
Money Class's shares. The Board of Trustees of each fund has authorized
such payments for certain intermediaries who may be eligible to be
compensated at prior compensation amounts exceeding 0.25% (up to 0.40% of
average net assets they maintain) until January 1, 1998.
Independent of the Daily Money Class Plans, intermediaries that maintain an
average balance of $10 million or more in a single omnibus account may
receive an additional recordkeeping fee of up to 0.15% of the average net
assets they maintain. The recordkeeping fee will be paid by FMR or its
affiliates, not by the fund, and will not be paid for distribution
services.
In total, intermediaries may receive annual compensation of up to 0.40% of
the average net assets they maintain.
Each fund also pays other expenses, such as legal, audit, and custodian
fees; in some instances, proxy solicitation costs; and the compensation of
trustees who are not affiliated with Fidelity.
YOUR ACCOUNT
TYPES OF ACCOUNTS
If you invest through an investment professional, your investment
professional, including a broker-dealer or financial institution, may
charge you a transaction fee with respect to the purchase and sale of fund
shares. Read your investment professional's program materials in
conjunction with this prospectus for additional service features or fees
that may apply. Certain features of the funds, such as minimum initial or
subsequent investment amounts, may be modified.
The different ways to set up (register) your account with Fidelity are
listed at right.
The account guidelines that follow may not apply to certain funds or to
certain retirement accounts. For instance, municipal funds are not
available for purchase in retirement accounts. If you are investing through
a retirement account or if your employer offers a fund through a retirement
program, you may be subject to additional fees. For more information,
please refer to your program materials, contact your employer, or call your
retirement benefits number or Client Services at 1-800-843-3001 or your
investment professional directly, as appropriate.
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have two or
more owners (tenants).
RETIREMENT (THE FOLLOWING OPTIONS ARE AVAILABLE ONLY FOR TAXABLE FUNDS)
TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES
Retirement plans allow individuals to shelter investment income and
capital gains from current taxes. In addition, contributions to these
accounts may be tax deductible. Retirement accounts require special
applications and typically have lower minimums.
(solid bullet) INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow anyone of legal
age under 701/2 with earned income to invest up to $2,000 per tax year.
Individuals can also invest in a spouse's IRA if the spouse has earned
income of less than $250.
(solid bullet) ROLLOVER IRAS retain special tax advantages for certain
distributions from employer-sponsored retirement plans.
(solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide small
business owners or those with self-employed income (and their eligible
employees) with many of the same advantages as a Keogh, but with fewer
administrative requirements.
(solid bullet) 401(K) PLANS allow employees of corporations of all sizes to
contribute a percentage of their wages on a tax-deferred basis. These
accounts need to be established by the trustee of the plan.
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and obtain
tax benefits. An individual can give up to $10,000 a year per child without
paying federal gift tax. Depending on state laws, you can set up a
custodial account under the Uniform Gifts to Minors Act (UGMA) or the
Uniform Transfers to Minors Act (UTMA). Contact your investment
professional.
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER
GROUPS
Contact your investment professional.
HOW TO BUY SHARES
EACH CLASS'S SHARE PRICE, called NAV, is calculated every business day. The
funds are managed to keep share prices stable at $1.00.
Shares are purchased at the next NAV calculated after your order is
received and accepted. NAV is normally calculated at the times indicated in
the table below.
NAV Calculation Times
Fund (Eastern Time)
Treasury Fund 2:00 p.m. and 4:00 p.m.
Prime Fund 2:00 p.m. and 4:00 p.m.
Tax-Exempt Fund 12:00 noon and 4:00 p.m.
It is the responsibility of your investment professional to transmit your
order to buy shares to Fidelity before the close of business on the day you
place your order.
Share certificates are not available for Daily Money Class .
IF YOU ARE NEW TO FIDELITY, an initial investment must be preceded or
accompanied by a completed, signed application, which should be forwarded
to:
Fidelity Investments
P.O. Box 770002
Cincinnati, OH 45277-0081
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Mail an account application with a check,
(small solid bullet) Place an order and wire money into your account,
(small solid bullet) Open your account by exchanging from Class A or Class
T of a Fidelity Advisor fund or from another Fidelity fund, or
(small solid bullet) Contact your investment professional or call Fidelity
Client Services.
BY MAIL. You or your investment professional must send a check payable to
the fund in which you plan to invest. When making subsequent investments by
check, please write your fund account number on the check. All investments
by check should be sent to the above address.
BY WIRE. You must sign up for the wire feature before using it. For wiring
information and instructions, you should call the investment professional
through which you trade or if you trade directly through Fidelity, call
Client Services. There is no fee imposed by the funds for wire purchases.
However, if you buy shares through an investment professional, the
investment professional may impose a fee for wire purchases.
Fidelity Client Services:
Nationwide 1-800-843-3001
Shareholders of record as of the times indicated in the table below will be
entitled to dividends declared that day.
Dividend Times
Fund (Eastern Time)
Treasury Fund 2:00 p.m.
Prime Fund 2:00 p.m.
Tax-Exempt Fund 12:00 noon
Shares purchased after the times indicated in the table above will begin to
earn income dividends on the following business day.
Your wire must be received and accepted by the transfer agent at the
applicable fund's designated wire bank.
You are advised to wire funds as early in the day as possible, and to
provide advance notice to Client Services for large purchases.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $1,000
For Fidelity retirement accounts $500
TO ADD TO AN ACCOUNT $250
For Fidelity retirement accounts $100
Through regular investment plans* $100
MINIMUM BALANCE $500
* FOR MORE INFORMATION ABOUT REGULAR INVESTMENT PLANS, PLEASE REFER TO
"INVESTOR SERVICES," PAGE .
HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares. Your shares will be sold at
the next NAV calculated after your order is received and accepted. NAV is
normally calculated at the times indicated in the table on page .
It is the responsibility of your investment professional to transmit your
order to redeem shares to Fidelity before the close of business on the day
you place your order.
TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the methods
described on these two pages.
TO SELL SHARES IN A FIDELITY RETIREMENT ACCOUNT, your request must be made
in writing, except for exchanges to Class A or Class T shares of a Fidelity
Advisor fund or shares of other Fidelity funds, which can be requested by
phone or in writing.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, please leave at least
$500 worth of shares in the account to keep it open.
BY TELEPHONE. Redemption requests may be made by calling Client Services at
1-800-843-3001.
BY MAIL. Send a letter of instruction with signature guarantee(s) to the
address on page . The letter should specify the name of the fund, the
number of shares to be sold, name, account numbers, address, and should
include the additional requirements listed below that apply to each
particular account.
<TABLE>
<CAPTION>
<S> <C>
TYPE OF REGISTRATION REQUIREMENTS
Individual, Joint Tenants, Letter of instruction signed by all person(s)
Sole Proprietorship, Custodial, (Uniform Gifts or required to sign for the account exactly as it is
Transfers to Minors Act), General Partners registered, accompanied by signature
guarantee(s).
Corporations, Associations Letter of instruction and a corporate resolution,
signed by person(s) required to sign for the
account accompanied by signature guarantee(s).
Trusts A letter of instruction signed by the Trustee(s) with
signature guarantee(s). (If the Trustee's name is
not registered on the account, also provide a copy
of the trust document, certified within the last 60
days.)
</TABLE>
If you do not fall into any of these registration categories (i.e.,
executors, administrators, conservators, or guardians) you should call your
investment professional or Fidelity Client Services for further
instructions.
BY WIRE. Redemptions may be made by calling Client Services at
1-800-843-3001.
You must designate on your account application the U.S. commercial bank
account(s) into which you wish the redemption proceeds to be deposited.
Client Services will then notify you that this feature has been activated
and that you may request wire redemptions.
You may change the bank account(s) designated to receive redemption
proceeds at any time prior to making a redemption request. You should send
a letter of instruction, including a signature guarantee, to Client
Services at the address shown on page .
You should be able to obtain a signature guarantee from a bank, broker,
dealer, credit union (if authorized under state law), securities exchange
or association, clearing agency, or savings association. A notary public
cannot provide a signature guarantee.
There is no fee imposed by the funds for wiring of redemption proceeds.
However, if you sell shares through an investment professional, the
investment professional may impose a fee for wire redemptions.
Redemption proceeds will be wired via the Federal Reserve Wire System to
your bank account of record. If your redemption request is received and
accepted by the transfer agent before the times indicated in the "Dividend
Times" table on page , redemption proceeds will normally be wired on that
day. If your redemption request is received and accepted by the transfer
agent after the times indicated in the "Dividend Times" table on page ,
redemption proceeds will normally be wired on the following business day.
A fund reserves the right to take up to seven days to pay you if making
immediate payment would adversely affect the fund.
CHECKWRITING
If you have a checkbook for your account, you may write an unlimited number
of checks. The minimum amount for a check is $500. Do not, however, try to
close out your account by check.
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your account.
INFORMATION SERVICES
FIDELITY'S TELEPHONE REPRESENTATIVES are available Monday through Friday,
8:30 a.m. to 6:00 p.m. Eastern time.
STATEMENTS AND REPORTS that Fidelity sends to you include the following:
(small solid bullet) Confirmation statements (after every transaction,
except a reinvestment, that affects your account balance or your account
registration)
(small solid bullet) Account statements (monthly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed, even if you have more than one account in a
fund. Call your investment professional or Fidelity Client Services if you
need additional copies of financial reports, prospectuses, or historical
account information.
SUB-ACCOUNTING AND SPECIAL SERVICES. Special processing has been arranged
with FIIOC for institutions that wish to open multiple accounts (a master
account and sub-accounts). You may be required to enter into a separate
agreement with FIIOC. Charges for these services, if any, will be
determined based on the level of services to be rendered.
One easy way to pursue your financial goals is to invest money regularly.
The funds offer a convenient service that lets you transfer money between
fund accounts, automatically. While regular investment plans do not
guarantee a profit and will not protect you against loss in a declining
market, they can be an excellent way to invest for retirement, a home,
educational expenses, and other long-term financial goals. Certain
restrictions apply for retirement accounts. Call your investment
professional for more information.
REGULAR INVESTMENT PLANS
FIDELITY ADVISOR SYSTEMATIC EXCHANGE PROGRAM
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY FUND
<TABLE>
<CAPTION>
<S> <C> <C>
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly, quarterly, (small solid bullet) To establish, call your investment professional after
semi-annually, or both accounts are opened.
annually (small solid bullet) To change the amount or frequency of your
investment, contact your investment professional
directly or, if you purchased your shares through a
broker-dealer or insurance representative, call
1-800-522-7297. If you purchased your shares
through a bank representative, call 1-800-843-3001.
(small solid bullet) The account from which the exchanges are to be
processed must have a minimum balance of
$10,000. The account into which the exchange is
being processed must have a minimum of $1,000.
(small solid bullet) Both accounts must have the same registrations
and taxpayer ID numbers.
(small solid bullet) Call at least 2 business days prior to your next
scheduled exchange date.
</TABLE>
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net investment income and
capital gains, if any, to shareholders each year. Income dividends are
declared daily and paid monthly.
Income dividends declared are accrued daily throughout the month and are
normally distributed on the first business day of the following month.
Based on prior approval of each fund, dividends relating to Daily Money
Class shares redeemed during the month can be distributed on the day of
redemption. Each fund reserves the right to limit this service.
DISTRIBUTION OPTIONS
When you open an account, specify on your account application how you want
to receive your distributions. Daily Money Class offers two options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions, if
any, will be automatically reinvested in additional shares of the same
class of the fund. If you do not indicate a choice on your application, you
will be assigned this option.
2. CASH OPTION. You will be sent a check or wire for your dividend and
capital gain distributions, if any.
For retirement accounts, all distributions are automatically reinvested.
When you are over 59 years old, you can receive distributions in cash.
Dividends will be reinvested at each fund's Daily Money Class NAV on the
last day of the month. Capital gain distributions, if any, will be
reinvested at the NAV as of the record date of the distribution. The
mailing of distribution checks will begin within seven days.
TAXES
As with any investment, you should consider how an investment in the funds
could affect you. Below are some of the funds' tax implications.
TAXES ON DISTRIBUTIONS. Interest income that Tax-Exempt Fund earns is
distributed to shareholders as income dividends. Interest that is federally
tax-free remains tax-free when it is distributed. Distributions from the
Taxable Funds, however, are subject to federal income tax and may also be
subject to state or local taxes. If you live outside the United States,
your distributions from these funds could also be taxed by the country in
which you reside.
For federal tax purposes, income and short-term capital gain distributions
from each Taxable Fund are taxed as dividends; long-term capital gain
distributions, if any, are taxed as long-term capital gains.
For shareholders of Tax-Exempt Fund, gain on the sale of tax-free bonds
results in taxable distributions. Short-term capital gains and a portion of
the gain on bonds purchased at market discount are taxed as dividends;
long-term capital gain distributions, if any, are taxed as long-term
capital gains.
Mutual fund dividends from U.S. Government securities are generally free
from state and local income taxes. However, particular states may limit
this benefit, and some types of securities, such as repurchase agreements
and some agency-backed securities, may not qualify for the benefit. In
addition, some states may impose intangible property taxes. You should
consult your own tax adviser for details and up-to-date information on the
tax laws in your state.
For the three month period ended October 31, 1996, 18.96% of Treasury
Fund's and 6.68% of Prime Fund's income distributions were derived from
interest on U.S. Government securities, which is generally exempt from
state income tax.
Distributions are taxable when they are paid, whether you take them in cash
or reinvest them. However, distributions declared in December and paid in
January are taxable as if they were paid on December 31.
Every January, Fidelity will send you and the IRS a statement showing the
taxable distributions paid to you in the previous year.
A portion of Tax-Exempt Fund's dividends may be free from state or local
taxes. Income from investments in your state are often tax-free to you.
Each year, Fidelity will send you a breakdown of your fund's income from
each state to help you calculate your taxes.
During the fiscal year ended October 31, 1996, 100% of Tax-Exempt Fund's
income dividends was free from federal income tax.
There are tax requirements that all funds must follow in order to avoid
federal taxation. In its effort to adhere to these requirements, a fund may
have to limit its investment activity in some types of instruments.
TRANSACTION DETAILS
EACH FUND IS OPEN FOR BUSINESS and its NAV is normally calculated each day
that both the Federal Reserve Bank of New York (New York Fed) (for the
Taxable Funds) or the Federal Reserve Bank of Kansas City (Kansas City Fed)
(for Tax-Exempt Fund) and the New York Stock Exchange (NYSE) are open. The
following holiday closings have been scheduled for 1997: New Year's Day,
Martin Luther King's Birthday, Washington's Birthday, Good Friday, Memorial
Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving
Day, and Christmas Day. Although FMR expects the same holiday schedule to
be observed in the future, the New York Fed, the Kansas City Fed, or the
NYSE may modify its holiday schedule at any time. On any day that the New
York Fed, the Kansas City Fed, or the NYSE closes early, the principal
government securities markets close early (such as on days in advance of
holidays generally observed by participants in such markets), or as
permitted by the SEC, the right is reserved to advance the time on that day
by which purchase and redemption orders must be received.
To the extent that portfolio securities are traded in other markets on days
when the New York Fed, the Kansas City Fed, or the NYSE is closed, each
class's NAV may be affected on days when investors do not have access to
the fund to purchase or redeem shares. Certain Fidelity funds may follow
different holiday closing schedules.
A CLASS'S NAV is the value of a single share. The NAV of Daily Money Class
of each fund is computed by adding Daily Money Class's pro rata share of
the value of the fund's investments, cash, and other assets, subtracting
Daily Money Class's pro rata share of the value of the fund's liabilities,
subtracting the liabilities allocated to Daily Money Class, and dividing
the result by the number of Daily Money Class shares of that fund that are
outstanding. Each fund values its portfolio securities on the basis of
amortized cost. This method minimizes the effect of changes in a security's
market value and helps each fund maintain a stable $1.00 share price.
THE OFFERING PRICE (price to buy one share) and REDEMPTION PRICE (price to
sell one share) of Daily Money Class shares is its NAV.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that
your social security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require a fund to
withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity and the transfer
may only be liable for losses resulting from unauthorized transactions if
they do not follow reasonable procedures designed to verify the identity of
the caller. Fidelity and the transfer agent will request personalized
security codes or other information, and may also record calls. You should
verify the accuracy of the confirmation statements immediately after
receipt. If you do not want the ability to redeem and exchange by
telephone, call the transfer agent for instructions. Additional
documentation may be required from corporations, associations, and certain
fiduciaries.
IF YOU ARE UNABLE TO REACH THE TRANSFER AGENT BY PHONE (for example, during
periods of unusual market activity), consider placing your order by mail.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. Each fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion, they would
disrupt management of a fund.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased at the
next NAV calculated after your order is received and accepted. Note the
following:
(small solid bullet) All of your purchases must be made in U.S. dollars and
checks must be drawn on U.S. banks.
(small solid bullet) The funds do not accept cash.
(small solid bullet) When making a purchase with more than one check, each
check must have a value of at least $50.
(small solid bullet) Each fund reserves the right to limit the number of
checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will be
canceled and you could be liable for any losses or fees a fund or the
transfer agent has incurred.
Shareholders of record as of the times indicated in the "Dividend Times"
table on page will be entitled to dividends declared that day.
Shares purchased after the times indicated in the "Dividend Times" table on
page begin to earn income dividends on the following business day.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your order is received and accepted. Note the
following:
(small solid bullet) Shares redeemed before the times indicated in the
"Dividend Times" table on page do not receive the dividend declared on the
day of redemption. Shares redeemed after the times indicated in the
"Dividend Times" table on page do receive the dividend declared on the day
of redemption.
(small solid bullet) A fund may withhold redemption proceeds until it is
reasonably assured that investments credited to your account have been
received and collected.
(small solid bullet) If you sell shares by writing a check and the amount
of the check is greater than the value of your account, your check will be
returned to you and you may be subject to additional charges.
When the NYSE or the New York Fed (for the Taxable Funds) or the Kansas
City Fed (for Tax-Exempt Fund) is closed (or when trading is restricted)
for any reason other than its customary weekend or holiday closings, or
under any emergency circumstances as determined by the SEC to merit such
action, a fund may suspend redemption or postpone payment dates. In cases
of suspension of the right of redemption, the request for redemption may
either be withdrawn or payment may be made based on the NAV next determined
after the termination of the suspension.
IF YOUR ACCOUNT BALANCE FALLS BELOW $500 due to redemption, the account may
be closed and the proceeds may be mailed or wired to your address or bank
account of record, as applicable. You will be given 30 days' notice that
your account will be closed unless it is increased to the minimum.
THE TRANSFER AGENT MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
EXCHANGE RESTRICTIONS
As a shareholder you have the privilege of exchanging shares of a fund for
shares of other Fidelity funds.
If you have purchased Daily Money Class shares of a fund in connection with
the Fidelity Advisor funds program, your Daily Money Class shares may be
exchanged only for Class A or Class T shares, as applicable, of Fidelity
Advisor funds or Daily Money Class shares of any other fund offered through
this prospectus. Other shareholders may not exchange Daily Money Class
shares of a fund for Class A or Class T shares of Fidelity Advisor funds.
An exchange involves the redemption of all or a portion of the shares of
one fund and the purchase of shares of another fund.
BY TELEPHONE. Exchanges may be requested on any day a fund is open for
business by calling Client Ser vices at 1-800-843-3001 between 8:30 a.m.
and 4:00 p.m. East ern time.
BY MAIL. You may exchange shares on any business day by submitting written
instructions with an authorized signature which is on file for that
account. Written requests for exchanges should contain the fund name, class
name, account number, the number of shares to be redeemed, and the name of
the fund to be purchased. Written requests for exchange should be mailed to
Client Services at the address on page .
WHEN YOU PLACE AN ORDER TO EXCHANGE SHARES, Daily Money Class shares will
be redeemed at the next determined NAV after your order is received and
accepted. Shares of the fund to be acquired will be purchased at its next
NAV calculated after redemption proceeds are made available. You should
note that, under certain circumstances, a fund may take up to seven days to
make redemption proceeds available for the exchange purchase of shares of
another fund. In addition, please note the following:
(small solid bullet) Exchanges will not be permitted until a completed and
signed account application is on file.
(small solid bullet) The fund you are exchanging into must be available for
sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification number.
(small solid bullet) Before exchanging into a fund, read its prospectus.
(small solid bullet) If you exchange into a fund with a sales charge, you
pay the percentage difference between that fund's sales charge and any
sales charge you have already paid in connection with the shares you are
exchanging.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Currently, there is no limit on the number of
exchanges out of a fund, nor are there any administrative or redemption
fees applicable to exchanges out of a fund.
(small solid bullet) Each fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would be
unable to invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
(small solid bullet) Your exchanges may be restricted or refused if a fund
receives or anticipates simultaneous orders affecting significant portions
of the fund's assets. In particular, a pattern of exchanges that coincides
with a "market timing" strategy may be disruptive to a fund.
Although the funds will attempt to give you prior notice whenever they are
reasonably able to do so, they may impose these restrictions at any time.
The funds reserve the right to terminate or modify the exchange privilege
in the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to $7.50 and redemption fees of up to 1.50% on
exchanges. Check each fund's prospectus for details.
No dealer, sales representative, or any other person has been authorized to
give any information or to make any representations, other than those
contained in this Prospectus and in the related SAI, in connection with the
offer contained in this Prospectus. If given or made, such other
information or representations must not be relied upon as having been
authorized by the funds. This Prospectus and the related SAI do not
constitute an offer by the funds to sell or to buy shares of the funds to
any person to whom it is unlawful to make such offer.
TREASURY FUND -DAILY MONEY CLASS
(FORMERLY U.S. TREASURY PORTFOLIO -INITIAL CLASS)
PRIME FUND -DAILY MONEY CLASS
(FORMERLY MONEY MARKET PORTFOLIO - INITIAL CLASS)
TAX-EXEMPT FUND -DAILY MONEY CLASS
(FORMERLY DAILY TAX-EXEMPT MONEY FUND - INITIAL CLASS)
CROSS REFERENCE SHEET
Form N-1A Item Number
Part B Statement of Additional Information
10 a,b Cover Page
11 Table of Contents
12 Description of Trust
13 a,b,c Investment Policies and Limitations
d *
14 a,b,c Trustees and Officers
15 a *
b *
c Trustees and Officers
16 a(i) FMR
a(ii) Trustees and Officers
a(iii),b Management Contracts
c *
d Management Contracts
e *
f Distribution and Service Plans
g *
h Description of the Trust
i Contracts with FMR Affiliates
17 a Portfolio Transactions
b *
c Portfolio Transactions
d,e *
18 a Description of the Trust
b *
19 a Additional Purchase, Exchange, and
Redemption Information
b Valuation
c *
20 Distributions and Taxes
21 a(i,ii) Contracts with FMR Affiliates;
Distribution and Service Plans
a(iii),b,c *
22 Performance
23 Financial Statements
_______________
*Not Applicable
TREASURY FUND - DAILY MONEY CLASS (FORMERLY U.S. TREASURY PORTFOLIO -
INITIAL CLASS)
PRIME FUND - DAILY MONEY CLASS (FORMERLY MONEY MARKET PORTFOLIO - INITIAL
CLASS)
TAX-EXEMPT MONEY FUND - DAILY MONEY CLASS (FORMERLY DAILY TAX-EXEMPT MONEY
FUND)
FUNDS OF DAILY TAX-EXEMPT MONEY FUND
STATEMENT OF ADDITIONAL INFORMATION
MAY 30, 1997
This Statement of Additional Information (SAI) is not a prospectus but
should be read in conjunction with the funds' current Prospectus for Daily
Money Class shares (dated May 30, 1997). Please retain this document for
future reference. The funds' Annual Report is a separate document
supplied with this SAI . To obtain an additional copy of the Prospectus
or an Annual Report, please call Fidelity Client Services at
1-800-843-3001 or your investment professional.
TABLE OF CONTENTS PAGE
Investment Policies and Limitations
Portfolio Transactions
Valuation
Performance
Additional Purchase, Exchange, and Redemption Information
Distributions and Taxes
FMR
Trustees and Officers 18
Management Contracts
Contracts with FMR Affiliates
Distribution and Service Plans
Description of the Trusts
Financial Statements
Appendix
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
SUB-ADVISER
FMR Texas Inc. (FMR Texas)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT FOR TREASURY FUND AND PRIME FUND (THE TAXABLE FUNDS)
Fidelity Investments Institutional Operations Company , Inc. (FIIOC)
TRANSFER AGENT FOR TAX-EXEMPT FUND
UMB Bank, n.a. (UMB)
DMFI-ptb-0597
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in the
Prospectus. Unless otherwise noted, whenever an investment policy or
limitation states a maximum percentage of a fund's assets that may be
invested in any security or other asset, or sets forth a policy regarding
quality standards, such standard or percentage limitation will be
determined immediately after and as a result of the fund's acquisition of
such security or other asset. Accordingly, any subsequent change in values,
net assets, or other circumstances will not be considered when determining
whether the investment complies with a fund's investment policies and
limitations.
A fund's fundamental investment policies and limitations cannot be changed
without approval by a "majority of the outstanding voting securities" (as
defined in the Investment Company Act of 1940 (the 1940 Act)) of the fund.
However, except for the fundamental investment limitations listed below,
the investment policies and limitations described in this SAI are not
fundamental and may be changed without shareholder approval.
INVESTMENT LIMITATIONS OF TREASURY FUND
THE FOLLOWING ARE TREASURY FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed by the
U.S. Government or any of its agencies or instrumentalities, or securities
of other investment companies) if, as a result, (a) more than 5% of the
fund's total assets would be invested in the securities of that issuer, or
(b) the fund would hold more than 10% of the outstanding voting securities
of that issuer;
(2) issue senior securities except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may (i) borrow money for temporary
or emergency purposes (not for leveraging or investment) and (ii) engage in
reverse repurchase agreements for any purpose; provided that (i) and (ii)
in combination do not exceed 33 1/3% of the fund's total assets (including
the amount borrowed) less liabilities (other than borrowings). Any
borrowings that come to exceed this amount will be reduced within three
days (not including Sundays and holidays) to the extent necessary to comply
with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments;
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements; or
(9) The fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company with substantially the same
fundamental investment objectives, policies and limitations as the fund.
THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT
SHAREHOLDER APPROVAL:
(i) The fund does not currently intend to purchase a security (other than
securities issued or guaranteed by the U.S. government or any of its
agencies or instrumentalities) if, as a result, more than 5% of its total
assets would be invested in securities of a single issuer; provided that
the fund may invest up to 25% of its total assets in the first tier
securities of a single issuer for up to three business days. (This limit
does not apply to securities of other open-end investment companies managed
by FMR or a successor or affiliate purchased pursuant to an exemptive order
granted by the SEC.)
(ii) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(iii) Subject to revision upon 60 days' notice to shareholders, the fund
does not currently intend to purchase securities on margin, except that the
fund may obtain such short-term credits as are necessary for the clearance
of transactions, and provided that margin payments in connection with
futures contracts and options on futures contracts shall not constitute
purchasing securities on margin.
(iv) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party. The fund will not purchase any security while borrowings
(excluding reverse repurchase agreements) representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(v) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(vi) The fund does not currently intend to purchase or sell futures
contracts or call options. This limitation does not apply to options
attached to, or acquired or traded together with, their underlying
securities, and does not apply to securities that incorporate features
similar to options or futures contracts.
(vii) The fund does not currently intend to make loans, but this limitation
does not apply to purchases of debt securities or to repurchase agreements.
(viii) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
INVESTMENT LIMITATIONS OF PRIME FUND
THE FOLLOWING ARE PRIME FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed by the
U.S. Government or any of its agencies or instrumentalities, or securities
of other investment companies) if, as a result, (a) more than 5% of the
fund's total assets would be invested in the securities of that issuer, or
(b) the fund would hold more than 10% of the outstanding voting securities
of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may (i) borrow money for temporary
or emergency purposes (not for leveraging or investment) and (ii) engage in
reverse repurchase agreements for any purpose; provided that (i) and (ii)
in combination do not exceed 33 1/3% of the fund's total assets (including
the amount borrowed) less liabilities (other than borrowings). Any
borrowings that come to exceed this amount will be reduced within three
days (not including Sundays and holidays) to the extent necessary to comply
with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry, except that the fund will
invest more than 25% of its total assets in the financial services
industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments;
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements;
(9) The fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company with substantially the same
fundamental investment objectives, policies and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to purchase a security (other
than securities issued or guaranteed by the U.S. government or any of its
agencies or instrumentalities) if, as a result, more than 5% of its total
assets would be invested in securities of a single issuer; provided that
the fund may invest up to 25% of its total assets in the first tier
securities of a single issuer for up to three business days. (This limit
does not apply to securities of other open-end investment companies managed
by FMR or a successor or affiliate purchased pursuant to an exemptive order
granted by the SEC.)
(ii) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(iii) Subject to revision upon 60 days notice to shareholders, the fund
does not currently intend to purchase securities on margin, except that the
fund may obtain such short-term credits as are necessary for the clearance
of transactions, and provided that margin payments in connection with
futures contracts and options on futures contracts shall not constitute
purchasing securities on margin.
(iv) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party. The fund will not purchase any security while borrowings
(excluding reverse repurchase agreements) representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(v) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(vi) The fund does not currently intend to purchase or sell futures
contracts or call options. This limitation does not apply to options
attached to, or acquired or traded together with, their underlying
securities, and does not apply to securities that incorporate features
similar to options or futures contracts.
(vii) The fund does not currently intend to lend assets other than
securities to other parties, except by lending money (up to 10% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser. (This limitation
does not apply to purchases of debt securities or to repurchase
agreements.)
(viii) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
INVESTMENT LIMITATIONS OF TAX-EXEMPT FUND
THE FOLLOWING ARE TAX-EXEMPT FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S.
Government , or any of its agencies or instrumentalities, or securities
of other investment companies) if, as a result, (a) more than 5% of the
fund's total assets would be invested in the securities of that issuer, or
(b) the fund would hold more than 10% of the outstanding voting securities
of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) make short sales of securities;
(4) purchase any securities on margin, except for such short-term credits
as are necessary for the clearance of transactions;
(5) borrow money, except for temporary or emergency purposes (not for
leveraging or investment) in an amount not exceeding 33 1/3% of the value
of its total assets (including the amount borrowed) less liabilities (other
than borrowings). Any borrowings that come to exceed the 33 1/3% of the
fund's assets by reason of a decline in net assets will be reduced within
three days (exclusive of Sundays and holidays) to the extent necessary to
comply with the 33 1/3% limitation;
(6) underwrite any issue of securities; except to the extent that the
purchase of municipal bonds in accordance with the fund's investment
objective, policies, and restrictions, either directly from the issuer, or
from an underwriter for an issuer, may be deemed underwriting;
(7) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities, or tax-exempt obligations issued or guaranteed by a U.S.
territory or possession or a state or local government, or a political
subdivision of any of the foregoing) if, as a result, more than 25% of the
fund's total assets would be invested in securities of companies whose
principal business activities are in the same industry;
(8) purchase or sell real estate, but this shall not prevent the fund from
investing in municipal bonds or other obligations secured by real estate or
interests therein;
(9) purchase or sell commodities or commodity (futures) contracts;
(10) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements; or
(11) invest in oil, gas or other mineral exploration or development
programs.
(12) The fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company with substantially the same
fundamental investment objective, policies, and limitations as the fund.
For purposes of limitation (1), certain securities subject to credit
guarantees or puts from third parties are not considered securities of
their issuer in accordance with industry standard requirements for money
market funds. For purposes of limitations (1) and (7), FMR identifies the
issuer of a security depending on its terms and conditions. In the case of
identifying the issuer, FMR will consider the entity or entities
responsible for payment of interest and repayment of principal and the
source of such payments; the way in which assets and revenues of an issuing
political subdivision are separated from those of other political entities;
and whether a government or other entity is guaranteeing the security.
THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT
SHAREHOLDER APPROVAL.
(i) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (5)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(ii) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(iii) The fund does not currently intend to invest in interests in real
estate investment trusts that are not readily marketable, or to invest in
interests in real estate limited partnerships that are not listed on the
New York Stock Exchange or the American Stock Exchange or traded on the
NASDAQ National Market System.
(iv) The fund does not currently intend to purchase or sell futures
contracts or call options. This limitation does not apply to options
attached to, or acquired or traded together with, their underlying
securities, and does not apply to securities that incorporate features
similar to options or futures contracts.
(v) The fund does not currently intend to engage in repurchase agreements
or make loans, but this limitation does not apply to purchases of debt
securities.
(vi) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
For the funds' policies on quality and maturity, see the section entitled
"Quality and Maturity" on page .
SHAREHOLDER NOTICE. Treasury Fund invests only in U.S. Treasury securities
and repurchase agreements for those securities. This operating policy may
be changed only upon 90 days notice to shareholders. Each of Treasury Fund
and Prime Fund do not intend to purchase futures contracts or options on
futures contracts. This operating policy may be changed only upon approval
by the Board of Trustees and 60 days.
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related risks.
FMR may not buy all of these instruments or use all of these techniques
unless it believes that doing so will help the fund achieve its goal.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be, "affiliated
persons" of the fund under the 1940 Act. These transactions may include
repurchase agreements with custodian banks; short-term obligations of, and
repurchase agreements with, the 50 largest U.S. banks (measured by
deposits); municipal securities; U.S. Government securities with affiliated
financial institutions that are primary dealers in these securities;
short-term currency transactions; and short-term borrowings. In accordance
with exemptive orders issued by the Securities and Exchange Commission
(SEC), the Board of Trustees has established and periodically reviews
procedures applicable to transactions involving affiliated financial
institutions.
ASSET-BACKED SECURITIES include pools of mortgages, loans, receivables, or
other assets. Payment of principal and interest may be largely dependent
upon the cash flows generated by the assets backing the securities and, in
certain cases, supported by letters of credit, surety bonds, or other
credit enhancements. The value of asset-backed securities may also be
affected by the creditworthiness of the servicing agent for the pool, the
originator of the loans or receivables, or the entities providing the
credit support.
DELAYED-DELIVERY TRANSACTIONS. Each fund may buy and sell securities on a
delayed-delivery or when-issued basis. These transactions involve a
commitment by a fund to purchase or sell specific securities at a
predetermined price or yield, with payment and delivery taking place after
the customary settlement period for that type of security. Typically, no
interest accrues to the purchaser until the security is delivered.
When purchasing securities on a delayed-delivery basis, each fund assumes
the rights and risks of ownership, including the risk of price and yield
fluctuations. Because a fund is not required to pay for securities until
the delivery date, these risks are in addition to the risks associated with
the fund's other investments. If a fund remains substantially fully
invested at a time when delayed-delivery purchases are outstanding, the
delayed-delivery purchases may result in a form of leverage. When
delayed-delivery purchases are outstanding, the fund will set aside
appropriate liquid assets in a segregated custodial account to cover its
purchase obligations. When a fund has sold a security on a delayed-delivery
basis, the fund does not participate in further gains or losses with
respect to the security. If the other party to a delayed-delivery
transaction fails to deliver or pay for the securities, the fund could miss
a favorable price or yield opportunity, or could suffer a loss.
Each fund may renegotiate delayed-delivery transactions after they are
entered into, and may sell underlying securities before they are delivered,
which may result in capital gains or losses.
DOMESTIC AND FOREIGN ISSUERS. Investments may be made in U.S.
dollar-denominated time deposits, certificates of deposit, and bankers'
acceptances of U.S. banks and their branches located outside of the United
States, U.S. branches and agencies of foreign banks, and foreign branches
of foreign banks. A fund may also invest in U.S. dollar-denominated
securities issued or guaranteed by other U.S. or foreign issuers, including
U.S. and foreign corporations or other business organizations, foreign
governments, foreign government agencies or instrumentalities, and U.S. and
foreign financial institutions, including savings and loan institutions,
insurance companies, mortgage bankers, and real estate investment trusts,
as well as banks.
The obligations of foreign branches of U.S. banks may be general
obligations of the parent bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation and by governmental
regulation. Payment of interest and principal on these obligations may also
be affected by governmental action in the country of domicile of the branch
(generally referred to as sovereign risk). In addition, evidence of
ownership of portfolio securities may be held outside of the United States
and a fund may be subject to the risks associated with the holding of such
property overseas. Various provisions of federal law governing the
establishment and operation of U.S. branches do not apply to foreign
branches of U.S. banks.
Obligations of U.S. branches and agencies of foreign banks may be general
obligations of the parent bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation and by federal and state
regulation, as well as by governmental action in the country in which the
foreign bank has its head office.
Obligations of foreign issuers involve certain additional risks. These
risks may include future unfavorable political and economic developments,
withholding taxes, seizures of foreign deposits, currency controls,
interest limitations, or other governmental restrictions that might affect
payment of principal or interest, or the ability to honor a credit
commitment. Additionally, there may be less public information available
about foreign entities. Foreign issuers may be subject to less governmental
regulation and supervision than U.S. issuers. Foreign issuers also
generally are not bound by uniform accounting, auditing, and financial
reporting requirements comparable to those applicable to U.S. issuers.
FEDERALLY TAXABLE OBLIGATIONS. Under normal conditions, Tax-Exempt Fund
does not intend to invest in securities whose interest is federally
taxable. However, from time to time on a temporary basis, the fund may
invest a portion of its assets in fixed-income obligations whose interest
is subject to federal income tax.
Should Tax-Exempt Fund invest in federally taxable obligations, it would
purchase securities that, in FMR's judgment, are of high quality. These
obligations would include those issued or guaranteed by the U.S. Government
or its agencies or instrumentalities and repurchase agreements backed by
such obligations.
Proposals to restrict or eliminate the federal income tax exemption for
interest on municipal obligations are introduced before Congress from time
to time. Proposals also may be introduced before state legislatures that
would affect the state tax treatment of Tax-Exempt Fund's distributions. If
such proposals were enacted, the availability of municipal obligations and
the value of the fund's holdings would be affected and the Trustees would
reevaluate the fund's investment objectives and policies.
ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they
are valued. Under the supervision of the Board of Trustees, FMR determines
the liquidity of a fund's investments and, through reports from FMR, the
Board monitors investments in illiquid instruments. In determining the
liquidity of a fund's investments, FMR may consider various factors,
including (1) the frequency of trades and quotations, (2) the number of
dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, (4) the nature of the security (including
any demand or tender features), and (5) the nature of the marketplace for
trades (including the ability to assign or offset the fund's rights and
obligations relating to the investment).
Investments currently considered by the funds to be illiquid include
repurchase agreements not entitling the holder to payment of principal and
interest within seven days. Also, FMR may determine some restricted
securities, municipal lease obligations, and time deposits to be illiquid.
In the absence of market quotations, illiquid investments are valued for
purposes of monitoring amortized cost valuation at fair value as determined
in good faith by a committee appointed by the Board of Trustees. If through
a change in values, net assets, or other circumstances, a fund were in a
position where more than 10% of its net assets were invested in illiquid
securities, it would seek to take appropriate steps to protect liquidity.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive order
issued by the SEC, each fund has received permission to lend money to, and
borrow money from, other funds advised by FMR or its affiliates. Treasury
Fund and Tax-Exempt Fund currently intend to participate in this program
only as borrowers. A fund will borrow through the program only when the
costs are equal to or lower than the cost of bank loans. Interfund loans
and borrowings normally extend overnight, but can have a maximum duration
of seven days. Loans may be called on one day's notice. A fund will lend
through the program only when the returns are higher than those available
from an investment in repurchase agreements. A fund may have to borrow from
a bank at a higher interest rate if an interfund loan is called or not
renewed. Any delay in repayment to a lending fund could result in a lost
investment opportunity or additional borrowing costs.
MONEY MARKET SECURITIES are high-quality, short-term obligations. Some
money market securities employ a trust or other similar structure to modify
the maturity, price characteristics, or quality of financial assets. For
example, put features can be used to modify the maturity of a security, or
interest rate adjustment features can be used to enhance price stability.
If the structure does not perform as intended, adverse tax or investment
consequences may result. Neither the Internal Revenue Service (IRS) nor any
other regulatory authority has ruled definitively on certain legal issues
presented by structured securities. Future tax or other regulatory
determinations could adversely affect the value, liquidity, or tax
treatment of the income received from these securities or the nature and
timing of distributions made by the funds.
MUNICIPAL LEASES and participation interests therein may take the form of a
lease, an installment purchase, or a conditional sale contract and are
issued by state and local governments and authorities to acquire land or a
wide variety of equipment and facilities. Generally, the funds will not
hold such obligations directly as a lessor of the property, but will
purchase a participation interest in a municipal obligation from a bank or
other third party. A participation interest gives a fund a specified,
undivided interest in the obligation in proportion to its purchased
interest in the total amount of the obligation.
Municipal leases frequently have risks distinct from those associated with
general obligation or revenue bonds. State constitutions and statutes set
forth requirements that states or municipalities must meet to incur debt.
These may include voter referenda, interest rate limits, or public sale
requirements. Leases, installment purchases, or conditional sale contracts
(which normally provide for title to the leased asset to pass to the
governmental issuer) have evolved as a means for governmental issuers to
acquire property and equipment without meeting their constitutional and
statutory requirements for the issuance of debt. Many leases and contracts
include "non-appropriation clauses" providing that the governmental issuer
has no obligation to make future payments under the lease or contract
unless money is appropriated for such purposes by the appropriate
legislative body on a yearly or other periodic basis. Non-appropriation
clauses free the issuer from debt issuance limitations.
MUNICIPAL MARKET DISRUPTION RISK. The value of municipal securities may be
affected by uncertainties in the municipal market related to legislation or
litigation involving the taxation of municipal securities or the rights of
municipal securities holders in the event of a bankruptcy. Municipal
bankruptcies are relatively rare, and certain provisions of the U.S.
Bankruptcy Code governing such bankruptcies are unclear and remain
untested. Further, the application of state law to municipal issuers could
produce varying results among the states or among municipal securities
issuers within a state. These legal uncertainties could affect the
municipal securities market generally, certain specific segments of the
market, or the relative credit quality of particular securities. Any of
these effects could have a significant impact on the prices of some or all
of the municipal securities held by a fund, making it more difficult for
the fund to maintain a stable net asset value per share.
MUNICIPAL SECTORS:
ELECTRIC UTILITIES INDUSTRY. The electric utilities industry has been
experiencing, and will continue to experience, increased competitive
pressures. Federal legislation in the last two years will open transmission
access to any electricity supplier, although it is not presently known to
what extent competition will evolve. Other risks include: (a) the
availability and cost of fuel, (b) the availability and cost of capital,
(c) the effects of conservation on energy demand, (d) the effects of
rapidly changing environmental, safety, and licensing requirements, and
other federal, state, and local regulations, (e) timely and sufficient rate
increases, and (f) opposition to nuclear power.
HEALTH CARE INDUSTRY. The health care industry is subject to regulatory
action by a number of private and governmental agencies, including federal,
state, and local governmental agencies. A major source of revenues for the
health care industry is payments from the Medicare and Medicaid programs.
As a result, the industry is sensitive to legislative changes and
reductions in governmental spending for such programs. Numerous other
factors may affect the industry, such as general and local economic
conditions; demand for services; expenses (including malpractice insurance
premiums); and competition among health care providers. In the future, the
following elements may adversely affect health care facility operations:
adoption of legislation proposing a national health insurance program;
other state or local health care reform measures; medical and technological
advances which dramatically alter the need for health services or the way
in which such services are delivered; changes in medical coverage which
alter the traditional fee-for-service revenue stream; and efforts by
employers, insurers, and governmental agencies to reduce the costs of
health insurance and health care services.
HOUSING. Housing revenue bonds are generally issued by a state, county,
city, local housing authority, or other public agency. They generally are
secured by the revenues derived from mortgages purchased with the proceeds
of the bond issue. It is extremely difficult to predict the supply of
available mortgages to be purchased with the proceeds of an issue or the
future cash flow from the underlying mortgages. Consequently, there are
risks that proceeds will exceed supply, resulting in early retirement of
bonds, or that homeowner repayments will create an irregular cash flow.
Many factors may affect the financing of multi-family housing projects,
including acceptable completion of construction, proper management,
occupancy and rent levels, economic conditions, and changes to current laws
and regulations.
EDUCATION. In general, there are two types of education-related bonds;
those issued to finance projects for public and private colleges and
universities, and those representing pooled interests in student loans.
Bonds issued to supply educational institutions with funds are subject to
the risk of unanticipated revenue decline, primarily the result of
decreasing student enrollment or decreasing state and federal funding.
Among the factors that may lead to declining or insufficient revenues are
restrictions on students' ability to pay tuition, availability of state and
federal funding, and general economic conditions. Student loan revenue
bonds are generally offered by state (or substate) authorities or
commissions and are backed by pools of student loans. Underlying student
loans may be guaranteed by state guarantee agencies and may be subject to
reimbursement by the United States Department of Education through its
guaranteed student loan program. Others may be private, uninsured loans
made to parents or students which are supported by reserves or other forms
of credit enhancement. Recoveries of principal due to loan defaults may be
applied to redemption of bonds or may be used to re-lend, depending on
program latitude and demand for loans. Cash flows supporting student loan
revenue bonds are impacted by numerous factors, including the rate of
student loan defaults, seasoning of the loan portfolio, and student
repayment deferral during periods of forbearance. Other risks associated
with student loan revenue bonds include potential changes in federal
legislation regarding student loan revenue bonds, state guarantee agency
reimbursement and continued federal interest and other program subsidies
currently in effect.
WATER AND SEWER. Water and sewer revenue bonds are often considered to have
relatively secure credit as a result of their issuer's importance, monopoly
status, and generally unimpeded ability to raise rates. Despite this, lack
of water supply due to insufficient rain, run-off, or snow pack is a
concern that has led to past defaults. Further, public resistance to rate
increases, costly environmental litigation, and Federal environmental
mandates are challenges faced by issuers of water and sewer bonds.
TRANSPORTATION. Transportation debt may be issued to finance the
construction of airports, toll roads, highways, or other transit
facilities. Airport bonds are dependent on the general stability of the
airline industry and on the stability of a specific carrier who uses the
airport as a hub. Air traffic generally follows broader economic trends and
is also affected by the price and availability of fuel. Toll road bonds are
also affected by the cost and availability of fuel as well as toll levels,
the presence of competing roads, and the general economic health of an
area. Fuel costs and availability also affect other transportation-related
securities, as does the presence of alternate forms of transportation, such
as public transportation.
PUT FEATURES entitle the holder to sell a security back to the issuer or a
third party at any time or at specified intervals. They are subject to the
risk that the put provider is unable to honor the put feature (purchase the
security). Put providers often support their ability to buy securities on
demand by obtaining letters of credit or other guarantees from other
entities. Demand features, standby commitments, and tender options are
types of put features.
QUALITY AND MATURITY. Pursuant to procedures adopted by the Board of
Trustees, the funds may purchase only high-quality securities that FMR
believes present minimal credit risks. To be considered high-quality, a
security must be rated in accordance with applicable rules in one of the
two highest categories for short-term securities by at least two nationally
recognized rating services (or by one, if only one rating service has rated
the security); or, if unrated, judged to be of equivalent quality by FMR.
High-quality securities are divided into "first tier" and "second tier"
securities. First tier securities are those deemed to be in the highest
rating category (e.g., Standard & Poor's A-1 or SP-1), and second tier
securities are those deemed to be in the second highest rating category
(e.g., Standard & Poor's A-2 or SP-2). Split-rated securities may be
determined to be either first or second tier based on applicable
regulations.
The Taxable funds may not invest more than 5% of its total assets in second
tier securities. In addition, the Taxable funds may not invest more than 1%
of its total assets or $1 million (whichever is greater) in the second tier
securities of a single issuer.
A fund currently intends to limit its investments to securities with
remaining maturities of 397 days or less, and to maintain a dollar-weighted
average maturity of 90 days or less. When determining the maturity of a
security, a fund may look to an interest rate reset or demand feature.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a
security and simultaneously commits to sell that security back to the
original seller at an agreed-upon price. The resale price reflects the
purchase price plus an agreed-upon incremental amount which is unrelated to
the coupon rate or maturity of the purchased security. To protect a fund
from the risk that the original seller will not fulfill its obligation, the
securities are held in an account of the fund at a bank, marked-to-market
daily, and maintained at a value at least equal to the sale price plus the
accrued incremental amount. While it does not presently appear possible to
eliminate all risks from these transactions (particularly the possibility
that the value of the underlying security will be less than the resale
price, as well as delays and costs to a fund in connection with bankruptcy
proceedings), it is a fund's current policy to engage in repurchase
agreement transactions with parties whose creditworthiness has been
reviewed and found satisfactory by FMR.
RESTRICTED SECURITIES generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the
Securities Act of 1933, or in a registered public offering. Where
registration is required, a fund may be obligated to pay all or part of the
registration expense and a considerable period may elapse between the time
it decides to seek registration and the time it may be permitted to sell a
security under an effective registration statement. If, during such a
period, adverse market conditions were to develop, a fund might obtain a
less favorable price than prevailed when it decided to seek registration of
the security. However, in general, each fund anticipates holding restricted
securities to maturity or selling them in an exempt transaction.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the instrument
at a particular price and time. While a reverse repurchase agreement is
outstanding, the fund will maintain appropriate liquid assets in a
segregated custodial account to cover its obligation under the agreement. A
fund will enter into reverse repurchase agreements only with parties whose
creditworthiness has been found satisfactory by FMR. Such transactions may
increase fluctuations in the market value of the fund's assets and may be
viewed as a form of leverage.
SHORT SALES "AGAINST THE BOX." A fund may sell securities short when it
owns or has the right to obtain securities equivalent in kind or amount to
the securities sold short. Short sales could be used to protect the net
asset value per share of the fund in anticipation of increased interest
rates, without sacrificing the current yield of the securities sold short.
If a fund enters into a short sale against the box, it will be required to
set aside securities equivalent in kind and amount to the securities sold
short (or securities convertible or exchangeable into such securities) and
will be required to hold such securities while the short sale is
outstanding. The fund will incur transaction costs, including interest
expenses, in connection with opening, maintaining, and closing short sales
against the box.
SOURCES OF CREDIT OR LIQUIDITY SUPPORT. FMR may rely on its evaluation of
the credit of a bank or other entity in determining whether to purchase a
security supported by a letter of credit guarantee, put or demand feature,
insurance or other source of credit or liquidity. In evaluating the credit
of a foreign bank or other foreign entities, FMR will consider whether
adequate public information about the entity is available and whether the
entity may be subject to unfavorable political or economic developments,
currency controls, or other government restrictions that might affect its
ability to honor its commitment.
STRIPPED GOVERNMENT SECURITIES. Stripped government securities are created
by separating the income and principal components of a U.S. Government
security and selling them separately. STRIPS (Separate Trading of
Registered Interest and Principal of Securities) are created when the
coupon payments and the principal payment are stripped from an outstanding
Treasury security by a Federal Reserve Bank.
Privately stripped government securities are created when a dealer deposits
a U.S. Treasury security or other U.S. Government security with a custodian
for safekeeping. The custodian issues separate receipts for the coupon
payments and principal payment, which the dealer then sells. Proprietary
receipts, such as Certificates of Accrual on Treasury Securities (CATS) and
Treasury Investment Growth Receipts (TIGRS), and generic receipts, such as
Treasury Receipts (TRs), are privately stripped U.S. Treasury securities.
Because the SEC does not consider privately stripped government securities
to be U.S. Government securities for purposes of Rule 2a-7, a fund must
evaluate them as it would non-government securities pursuant to regulatory
guidelines applicable to all money market funds.
VARIABLE AND FLOATING RATE SECURITIES provide for periodic adjustments of
the interest rate paid on the security. Variable rate securities provide
for a specified periodic adjustment in the interest rate, while floating
rate securities have interest rates that change whenever there is a change
in a designated benchmark rate. Some variable or floating rate securities
have put features.
ZERO COUPON BONDS do not make regular interest payments. Instead, they are
sold at a deep discount from their face value and are redeemed at face
value when they mature. Because zero coupon bonds do not pay current
income, their prices can be very volatile when interest rates change. In
calculating its daily dividend, a fund takes into account as income a
portion of the difference between a zero coupon bond's purchase price and
its face value.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of each fund by FMR pursuant to authority contained in the
management contract. FMR has granted investment management authority to the
sub-adviser (see the section entitled "Management Contracts"), and the
sub-adviser is authorized to place orders for the purchase and sale of
portfolio securities, and will do so in accordance with the policies
described below. FMR is also responsible for the placement of transaction
orders for other investment companies and accounts for which it or its
affiliates act as investment adviser. Securities purchased and sold by a
fund generally will be traded on a net basis (i.e., without commission). In
selecting broker-dealers, subject to applicable limitations of the federal
securities laws, FMR considers various relevant factors, including, but not
limited to, the size and type of the transaction; the nature and character
of the markets for the security to be purchased or sold; the execution
efficiency, settlement capability, and financial condition of the
broker-dealer firm; the broker-dealer's execution services rendered on a
continuing basis; and the reasonableness of any commissions.
The funds may execute portfolio transactions with broker-dealers who
provide research and execution services to the funds or other accounts over
which FMR or its affiliates exercise investment discretion. Such services
may include advice concerning the value of securities; the advisability of
investing in, purchasing, or selling securities; and the availability of
securities or the purchasers or sellers of securities. In addition, such
broker-dealers may furnish analyses and reports concerning issuers,
industries, securities, economic factors and trends, portfolio strategy,
and performance of accounts; effect securities transactions, and perform
functions incidental thereto (such as clearance and settlement). FMR
maintains a listing of broker-dealers who provide such services on a
regular basis. However, as many transactions on behalf of the funds are
placed with broker-dealers (including broker-dealers on the list) without
regard to the furnishing of such services, it is not possible to estimate
the proportion of such transactions directed to such broker-dealers solely
because such services were provided. The selection of such broker-dealers
generally is made by FMR (to the extent possible consistent with execution
considerations) based upon the quality of research and execution services
provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the funds may be useful to FMR in rendering investment management
services to the funds or its other clients, and conversely, such research
provided by broker-dealers who have executed transaction orders on behalf
of other FMR clients may be useful to FMR in carrying out its obligations
to the funds. The receipt of such research has not reduced FMR's normal
independent research activities; however, it enables FMR to avoid the
additional expenses that could be incurred if FMR tried to develop
comparable information through its own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause
each fund to pay such higher commissions, FMR must determine in good faith
that such commissions are reasonable in relation to the value of the
brokerage and research services provided by such executing broker-dealers,
viewed in terms of a particular transaction or FMR's overall
responsibilities to the funds and its other clients. In reaching this
determination, FMR will not attempt to place a specific dollar value on the
brokerage and research services provided, or to determine what portion of
the compensation should be related to those services.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided assistance
in the distribution of shares of the funds, or shares of other Fidelity
funds to the extent permitted by law. FMR may use research services
provided by and place agency transactions with Fidelity Brokerage Services,
Inc. (FBSI), a subsidiary of FMR Corp., if the commissions are fair,
reasonable, and comparable to commissions charged by non-affiliated,
qualified brokerage firms for similar services. From September 1992 through
December 1994, FBS operated under the name Fidelity Brokerage Services
Limited. (FBSL). As of January 1995, FBSL was converted to an unlimited
liability company and assumed the name FBS.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members of
national securities exchanges from executing exchange transactions for
accounts which they or their affiliates manage, unless certain requirements
are satisfied. Pursuant to such requirements, the Board of Trustees has
authorized FBSI to execute portfolio transactions on national securities
exchanges in accordance with approved procedures and applicable SEC rules.
Each fund's Trustees periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio transactions
on behalf of the funds and review the commissions paid by each fund over
representative periods of time to determine if they are reasonable in
relation to the benefits to the fund.
For the fiscal years ended October 31, 1996, 1995, and 1994, Tax-Exempt
Fund paid no brokerage commissions. For the fiscal period ended October 31,
1996, and the fiscal years ended July 31, 1996, 1995, and 1994, Treasury
Fund and Prime Fund paid no brokerage commissions.
From time to time the Trustees will review whether the recapture for the
benefit of the funds of some portion of the brokerage commissions or
similar fees paid by the funds on portfolio transactions is legally
permissible and advisable. Each fund seeks to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at present no
other recapture arrangements are in effect. The Trustees intend to continue
to review whether recapture opportunities are available and are legally
permissible and, if so, to determine in the exercise of their business
judgment whether it would be advisable for each fund to seek such
recapture.
Although the Trustees and officers of each fund are substantially the same
as those of other funds managed by FMR, investment decisions for each fund
are made independently from those of other funds managed by FMR or accounts
managed by FMR affiliates. It sometimes happens that the same security is
held in the portfolio of more than one of these funds or accounts.
Simultaneous transactions are inevitable when several funds and accounts
are managed by the same investment adviser, particularly when the same
security is suitable for the investment objective of more than one fund or
account.
When two or more funds are simultaneously engaged in the purchase or sale
of the same security, the prices and amounts are allocated in accordance
with procedures believed to be appropriate and equitable for each fund. In
some cases this system could have a detrimental effect on the price or
value of the security as far as each fund is concerned. In other cases,
however, the ability of the funds to participate in volume transactions
will produce better executions and prices for the funds. It is the current
opinion of the Trustees that the desirability of retaining FMR as
investment adviser to each fund outweighs any disadvantages that may be
said to exist from exposure to simultaneous transactions.
VALUATION
Fidelity Ser vice Company, Inc. (FSC) normally determines a class's
net asset value per share (NAV) at 2:00 p.m. and 4:00 p.m. Eastern time for
Treasury Fund and Prime Fund, and at 12:00 noon and 4:00 p.m. Eastern time
for Tax-Exempt Fund. The valuation of portfolio securities is determined as
of these times for the purpose of computing each class's NAV.
Portfolio securities and other assets are valued on the basis of amortized
cost. This technique involves initially valuing an instrument at its cost
as adjusted for amortization of premium or accretion of discount rather
than its current market value. The amortized cost value of an instrument
may be higher or lower than the price a fund would receive if it sold the
instrument.
During periods of declining interest rates, a class's yield based on
amortized cost valuation may be higher than would result if the class fund
used market valuations to determine its NAV. The converse would apply
during periods of rising interest rates.
Valuing each fund's investments on the basis of amortized cost and use of
the term "money market fund" are permitted pursuant to Rule 2a-7 under the
1940 Act. Each fund must adhere to certain conditions under Rule 2a-7, as
summarized in the section entitled "Quality and Maturity" on page .
The Board of Trustees oversees FMR's adherence to the provisions of Rule
2a-7 and has established procedures designed to stabilize each class's NAV
at $1.00. At such intervals as they deem appropriate, the Trustees consider
the extent to which NAV calculated by using market valuations would deviate
from $1.00 per share. If the Trustees believe that a deviation from a
fund's amortized cost per share may result in material dilution or other
unfair results to shareholders, the Trustees have agreed to take such
corrective action, if any, as they deem appropriate to eliminate or reduce,
to the extent reasonably practicable, the dilution or unfair results. Such
corrective action could include selling portfolio instruments prior to
maturity to realize capital gains or losses or to shorten average portfolio
maturity; withholding dividends; redeeming shares in kind; establishing NAV
by using available market quotations; and such other measures as the
Trustees may deem appropriate.
PERFORMANCE
The funds may quote performance in various ways. All performance
information supplied by the funds in advertising is historical and is not
intended to indicate future returns. Each class's yield and total return
fluctuate in response to market conditions and other factors.
YIELD CALCULATIONS. To compute a class's yield for a period, the net change
in value of a hypothetical account containing one share reflects the value
of additional shares purchased with dividends from the one original share
and dividends declared on both the original share and any additional
shares. The net change is then divided by the value of the account at the
beginning of the period to obtain a base period return. This base period
return is annualized to obtain a current annualized yield. A fund also may
calculate an effective yield by compounding the base period return over a
one-year period. In addition to the current yield, the funds may quote
yields in advertising based on any historical seven-day period. Yields for
Daily Money Class of the funds are calculated on the same basis as other
money market funds, as required by applicable regulations.
Yield information may be useful in reviewing a class's performance and in
providing a basis for comparison with other investment alternatives.
However, each class's yield fluctuates, unlike investments that pay a fixed
interest rate over a stated period of time. When comparing investment
alternatives, investors should also note the quality and maturity of the
portfolio securities of respective investment companies they have chosen to
consider.
Investors should recognize that in periods of declining interest rates a
class's yield will tend to be somewhat higher than prevailing market rates,
and in periods of rising interest rates the class's yield will tend to be
somewhat lower. Also, when interest rates are falling, the inflow of net
new money to a fund from the continuous sale of its shares will likely be
invested in instruments producing lower yields than the balance of the
fund's holdings, thereby reducing the fund's current yield. In periods of
rising interest rates, the opposite can be expected to occur.
A class's tax-equivalent yield is the rate an investor would have to earn
from a fully taxable investment before taxes to equal the class's tax-free
yield. Tax-equivalent yields are calculated by dividing a class's yield by
the result of one minus a stated federal income tax rate. If only a portion
of a class's yield is tax-exempt, only that portion is adjusted in the
calculation.
The following table shows the effect of a shareholder's tax status on
effective yield under federal income tax laws for 1997. It shows the
approximate yield a taxable security must provide at various income
brackets to produce after-tax yields equivalent to those of hypothetical
tax-exempt obligations yielding from 2% to 7%. Of course, no assurance can
be given that a class will achieve any specific tax-exempt yield. While
Tax-Exempt Fund invests principally in obligations whose interest is exempt
from federal income tax, other income received by the funds may be taxable.
1997 TAX RATES AND TAX-EQUIVALENT YIELDS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Federal If individual tax-exempt yield is:
Taxable Income* Marginal 2% 3% 4% 5% 6% 7%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Single Return Joint Return Rate** Then taxable-equivalent yield is:
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0 - $ 24,650 $ 0 - $ 41,200 15.0% 2.35% 3.53% 4.71% 5.88% 7.06% 8.24%
$ 24,651 - $ 59,750 $ 41,201 - $ 99,600 28.0% 2.78% 4.17% 5.56% 6.94% 8.33% 9.72%
$ 59,750 - $ 124,650 $ 99,601 - $ 151,750 31.0% 2.90% 4.35% 5.80% 7.25% 8.70% 10.14%
$ 124,651 - $ 271,050 $ 151,750 - $ 271,050 36.0% 3.13% 4.69% 6.25% 7.81% 9.38% 10.94%
$ 271,050 + $ 271,050 + 39.6% 3.31% 4.97% 6.62% 8.28% 9.93% 11.59%
</TABLE>
* Net amount subject to federal income tax after deductions and exemptions.
Assumes ordinary income only.
** Excludes the impact of the phaseout of personal exemptions, limitations
on itemized deductions, and other credits, exclusions, and adjustments
which may increase a taxpayer's marginal tax rate. An increase in a
shareholder's marginal tax rate would increase that shareholder's
tax-equivalent yield.
Tax-Exempt Fund may invest a portion of its assets in obligations that are
subject to federal income tax. When a fund invests in these obligations,
its tax-equivalent yields will be lower. In the table above, tax-equivalent
yields are calculated assuming investments are 100% federally tax-free.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of a class's return, including the effect of reinvesting dividends
and capital gain distributions, and any change in the class's NAV over a
stated period. Average annual total returns are calculated by determining
the growth or decline in value of a hypothetical historical investment in a
class over a stated period, and then calculating the annually compounded
percentage rate that would have produced the same result if the rate of
growth or decline in value had been constant over the period. For example,
a cumulative total return of 100% over ten years would produce an average
annual total return of 7.18%, which is the steady annual rate of return
that would equal 100% growth on a compounded basis in ten years. While
average annual total returns are a convenient means of comparing investment
alternatives, investors should realize that a class's performance is not
constant over time, but changes from year to year, and that average annual
total returns represent averaged figures as opposed to the actual
year-to-year performance of the class.
In addition to average annual total returns, a fund may quote unaveraged or
cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total
returns may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a series of
redemptions, over any time period. Total returns may be broken down into
their components of income and capital (including capital gains and changes
in share price) in order to illustrate the relationship of these factors
and their contributions to total return. Total returns may be quoted on a
before-tax or after-tax basis. Total returns, yields, and other performance
information may be quoted numerically or in a table, graph, or similar
illustration.
HISTORICAL FUND RESULTS. The following table shows 7-day yields and total
returns for Daily Money Class of each fund and tax-equivalent yield for
Daily Money Class of Tax-Exempt Fund for the period ended October 31, 1996.
The tax-equivalent yield is based on a 36% federal income tax rate. Note
that each fund may invest in securities whose income is subject to the
federal alternative minimum tax.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Average Annual Total Returns Cumulative Total Returns
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Seven-Day Tax- One Five Ten One Five Ten
Yield Equivalent Year Years Years Year Years Years
Yield
Treasury Fund - 4.72% N/A 4.92% 3.97% 5.54% 4.92% 21.50% 71.50%
Daily Money
Class
Prime Fund - 4.83% N/A 5.01% 4.04% 5.66% 5.01% 21.87% 73.47%
Daily Money
Class
Tax-Exempt Fund 3.02% 4.72% 3.02% 2.73% 3.76% 3.02% 14.39% 44.64%
- - Daily Money
Class
</TABLE>
Note: If FMR had not reimbursed certain fund expenses during these periods,
the funds' total returns would have been lower and yields would have been:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
7-day Yield Tax-Equivalent Yield
Treasury Fund -Daily Money Class 4.68% N/A
Prime Fund -Daily Money Class 4.70% N/A
Tax-Exempt Fund -Daily Money Class 2.92% 4.56%
</TABLE>
The following tables show the income and capital elements of each fund's
Daily Money Class cumulative total return. The table compares each fund's
Daily Money Class return to the record of the Standard & Poor's 500 Index
(S&P 500), the Dow Jones Industrial Average (DJIA), and the cost of living
as measured by the Consumer Price Index (CPI), over the same period. The
CPI information is as of the month end closest to the initial investment
date for each fund. The S&P 500 and DJIA comparisons are provided to show
how each fund's Daily Money Class total return compared to the record of a
broad unmanaged index of common stocks and a narrower set of stocks of
major industrial companies, respectively, over the same period. Because
each fund invests in short-term fixed-income securities, common stocks
represent a different type of investment from the funds. Common stocks
generally offer greater growth potential than the funds, but generally
experience greater price volatility, which means greater potential for
loss. In addition, common stocks generally provide lower income than
fixed-income investments such as the funds. The S&P 500 and DJIA returns
are based on the prices of unmanaged groups of stocks and, unlike each
funds' Daily Money Class returns, do not include the effect of brokerage
commissions or other costs of investing.
The following tables show the growth in value of a hypothetical $10,000
investment in Daily Money Class of each fund during the 10-year period
ended October 31, 1996, assuming all distributions were reinvested. The
figures below reflect the fluctuating interest rates of the specified
periods and should not be considered representative of the dividend income
or capital gain or loss that could be realized from an investment in a
class today. Tax consequences of different investments have not been
factored into the figures below.
TREASURY FUND - DAILY MONEY CLASS
HISTORICAL FUND RESULTS
During the 10- year period ended October 31, 1996, a hypothetical
$10,000 investment in Daily Money Class of Treasury Fund would have
grown to $ 17,150.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Period Value of Value of Value of Total S&P 500 DJIA Cost of
Ended Initial Reinvested Reinvested Value Living
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1996 $ 10,000 $ 7,150 $ 0 $ 17,150 $ 39,291 $ 43,713 $ 14,352
1995 $ 10,000 $ 6,345 $ 0 $ 16,345 $ 31,662 $ 33,740 $ 13,935
1994 $ 10,000 $ 5,517 $ 0 $ 15,517 $ 25,041 $ 27,043 $ 13,554
1993 $ 10,000 $ 5,028 $ 0 $ 15,028 $ 24,109 $ 24,786 $ 13,209
1992 $ 10,000 $ 4,633 $ 0 $ 14,633 $ 20,974 $ 21,104 $ 12,856
1991 $ 10,000 $ 4,116 $ 0 $ 14,116 $ 19,071 $ 19,495 $ 12,457
1990 $ 10,000 $ 3,311 $ 0 $ 13,311 $ 14,284 $ 14,987 $ 12,103
1989 $ 10,000 $ 2,325 $ 0 $ 12,325 $ 15,441 $ 15,617 $ 11,387
1988 $ 10,000 $ 1,315 $ 0 $ 11,315 $ 12,216 $ 12,225 $ 10,898
1987 $ 10,000 $ 597 $ 0 $ 10,597 $ 10,641 $ 10,943 $ 10,453
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Daily Money
Class of Treasury Fund on October 31, 1987, the net amount invested in
Daily Money Class shares was $10,000. The cost of the initial investment
($10,000) together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at
the time they were reinvested) amounted to $ 17,150. If distributions
had not been reinvested, the amount of distributions earned from the
class fund over time would have been smaller, and cash payments for
the period would have amounted to $ 5,408 . The class did not
distribute any capital gains during the period.
PRIME FUND - DAILY MONEY CLASS
HISTORICAL FUND RESULTS
During the ten year period ended October 31, 1996, a hypothetical $10,000
investment in Daily Money Class of Money Market would have grown to
$ 17,347.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Period Value of Value of Value of Total S&P 500 DJIA Cost of
Ended Initial Reinvested Reinvested Value Living
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1996 $ 10,000 $ 7,347 $ 0 $ 17,347 $ 39,291 $ 43,713 $ 14,352
1995 $ 10,000 $ 6,519 $ 0 $ 16,519 $ 31,662 $ 33,740 $ 13,935
1994 $ 10,000 $ 5,666 $ 0 $ 15,666 $ 25,041 $ 27,043 $ 13,554
1993 $ 10,000 $ 5,151 $ 0 $ 15,151 $ 24,109 $ 24,786 $ 13,209
1992 $ 10,000 $ 4,747 $ 0 $ 14,747 $ 20,974 $ 21,104 $ 12,856
1991 $ 10,000 $ 4,233 $ 0 $ 14,233 $ 19,071 $ 19,495 $ 12,457
1990 $ 10,000 $ 3,393 $ 0 $ 13,393 $ 14,284 $ 14,987 $ 12,103
1989 $ 10,000 $ 2,389 $ 0 $ 12,389 $ 15,441 $ 15,617 $ 11,387
1988 $ 10,000 $ 1,361 $ 0 $ 11,361 $ 12,216 $ 12,225 $ 10,898
1987 $ 10,000 $ 611 $ 0 $ 10,611 $ 10,641 $ 10,943 $ 10,453
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Daily Money
Class of Prime Fund on October 31, 1987, the net amount invested in
Daily Money Class shares was $10,000. The cost of the initial investment
($10,000) together with the aggregate cost of reinvested dividends and
capital gain distribution for the period covered (their cash value at
the time they were reinvested), amounted to $ 17,347 . If
distributions had not been reinvested, the amount of distributions earned
from the class fund over time would have been smaller, and cash
payments for the period would have amounted to $ 5,522 for dividends .
The fund did not distribute any capital gains during the period.
TAX-EXEMPT FUND - DAILY MONEY CLASS
HISTORICAL FUND RESULTS
During the 10- year period ended October 31, 1996, a hypothetical
$10,000 investment in Daily Money Class of Tax-Exempt Fund would have
grown to 14,464.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Period Value of Value of Value of Total S&P 500 DJIA Cost of
Ended Initial Reinvested Reinvested Value Living
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1996 $ 10,000 $ 4,464 $ 0 $ 14,464 $ 39,291 $ 43,713 $ 14,352
1995 $ 10,000 $ 4,039 $ 0 $ 14,039 $ 10,641 $ 33,740 $ 13,935
1994 $ 10,000 $ 3,583 $ 0 $ 13,583 $ 31,662 $ 27,043 $ 13,554
1993 $ 10,000 $ 3,289 $ 0 $ 13,289 $ 25,041 $ 24,786 $ 13,209
1992 $ 10,000 $ 3,015 $ 0 $ 13,015 $ 24,109 $ 21,104 $ 12,856
1991 $ 10,000 $ 2,644 $ 0 $ 12,644 $ 20,974 $ 19,495 $ 12,457
1990 $ 10,000 $ 2,104 $ 0 $ 12,104 $ 19,071 $ 14,987 $ 12,103
1989 $ 10,000 $ 1,486 $ 0 $ 11,486 $ 14,284 $ 15,617 $ 11,387
1988 $ 10,000 $ 865 $ 0 $ 10,865 $ 15,441 $ 12,225 $ 10,898
1987 $ 10,000 $ 393 $ 0 $ 10,393 $ 12,216 $ 10,943 $ 10,453
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Daily Money
Class of Daily Tax- Exempt Money Fund on October 31, 1987, the net
amount invested in Daily Money Class shares was $10,000. The cost of the
initial investment ($10,000) together with the aggregate cost of reinvested
dividends for the period covered (their cash value at the time they were
reinvested) amounted to $ 14,464 . If distributions had not been
reinvested, the amount of distributions earned from the class over
time would have been smaller, and cash payments for the period would have
amounted to $ 3,697 for dividends . The fund did not distribute any
capital gains during the period.
PERFORMANCE COMPARISONS. A fund's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed as
mutual fund rankings prepared by Lipper Analytical Services, Inc. (Lipper),
an independent service located in Summit, New Jersey that monitors the
performance of mutual funds. Generally, Lipper rankings are based on total
return, assume reinvestment of distributions, do not take sales charges or
redemption fees into consideration, and are prepared without regard to tax
consequences. Lipper may also rank funds based on yield. In addition to the
mutual fund rankings, a fund's performance may be compared to stock, bond,
and money market mutual fund performance indices prepared by Lipper or
other organizations. When comparing these indices, it is important to
remember the risk and return characteristics of each type of investment.
For example, while stock mutual funds may offer higher potential returns,
they also carry the highest degree of share price volatility. Likewise,
money market funds may offer greater stability of principal, but generally
do not offer the higher potential returns available from stock mutual
funds.
From time to time, a fund's performance may also be compared to other
mutual funds tracked by financial or business publications and periodicals.
For example, the fund may quote Morningstar, Inc. in its advertising
materials. Morningstar, Inc. is a mutual fund rating service that rates
mutual funds on the basis of risk-adjusted performance. Rankings that
compare the performance of Fidelity funds to one another in appropriate
categories over specific periods of time may also be quoted in advertising.
A fund may be compared in advertising to Certificates of Deposit (CDs) or
other investments issued by banks or other depository institutions. Mutual
funds differ from bank investments in several respects. For example, a fund
may offer greater liquidity or higher potential returns than CDs, a fund
does not guarantee your principal or your return, and fund shares are not
FDIC insured.
Fidelity may provide information designed to help individuals understand
their investment goals and explore various financial strategies. Such
information may include information about current economic, market, and
political conditions; materials that describe general principles of
investing, such as asset allocation, diversification, risk tolerance, and
goal setting; questionnaires designed to help create a personal financial
profile; worksheets used to project savings needs based on assumed rates of
inflation and hypothetical rates of return; and action plans offering
investment alternatives. Materials may also include discussions of
Fidelity's asset allocation funds and other Fidelity funds, products, and
services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the CPI), and combinations of
various capital markets. The performance of these capital markets is based
on the returns of different indices.
Fidelity funds may use the performance of these capital markets in order to
demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any
of these capital markets. The risks associated with the security types in
any capital market may or may not correspond directly to those of the
funds. Ibbotson calculates total returns in the same method as the funds.
The funds may also compare performance to that of other compilations or
indices that may be developed and made available in the future.
A fund may compare its performance or the performance of securities in
which it may invest to averages published by IBC Financial Data, Inc. of
Ashland, Massachusetts. These averages assume reinvestment of
distributions. IBC MONEY FUND REPORT AVERAGES(trademark)/All-Taxable, which
is reported in IBC's MONEY FUND REPORT(registered trademark), covers over
___ taxable money market funds; IBC MONEY FUND REPORT
AVERAGES(trademark)/Government, which is reported in IBC's MONEY FUND
REPORT(registered trademark), covers over ___ government money market
funds; and IBC MONEY FUND REPORT AVERAGES(trademark)/All Tax-Free, which is
reported in IBC's MONEY FUND REPORT(registered trademark), covers over ___
tax-free money market funds.
In advertising materials, Fidelity may reference or discuss its products
and services, which may include other Fidelity funds; retirement investing;
brokerage products and services; model portfolios or allocations; saving
for college or other goals; charitable giving; and the Fidelity credit
card. In addition, Fidelity may quote or reprint financial or business
publications and periodicals as they relate to current economic and
political conditions, fund management, portfolio composition, investment
philosophy, investment techniques, the desirability of owning a particular
mutual fund, and Fidelity services and products. Fidelity may also reprint,
and use as advertising and sales literature, articles from Fidelity Focus,
a quarterly magazine provided free of charge to Fidelity fund shareholders.
A fund may present its fund number, Quotron(trademark) number, and CUSIP
number, and discuss or quote its current portfolio manager.
As of March 31, 1997, FMR advised over $__ billion in tax-free fund assets,
$__ billion in money market fund assets, $___ billion in equity fund
assets, $__ billion in international fund assets, and $__ billion in
Spartan fund assets. The funds may reference the growth and variety of
money market mutual funds and the adviser's innovation and participation in
the industry. The equity funds under management figure represents the
largest amount of equity fund assets under management by a mutual fund
investment adviser in the United States, making FMR America's leading
equity (stock) fund manager. FMR, its subsidiaries, and affiliates maintain
a worldwide information and communications network for the purpose of
researching and managing investments abroad.
In addition to performance rankings, each class may compare its total
expense ratio to the average total expense ratio of similar funds tracked
by Lipper. A class's total expense ratio is a significant factor in
comparing bond and money market investments because of its effect on yield.
ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are valued in
computing a class's NAV. Shareholders receiving securities or other
property on redemption may realize a gain or loss for tax purposes, and
will incur any costs of sale, as well as the associated inconveniences.
Pursuant to Rule 11a-3 (the Rule) under the 1940 Act, each fund is required
to give shareholders at least 60 days' notice prior to terminating or
modifying its exchange privilege. Under the Rule, the 60-day notification
requirement may be waived if (i) the only effect of a modification would be
to reduce or eliminate an administrative fee, redemption fee or deferred
sales charge ordinarily payable at the time of exchange, or (ii) a fund
suspends the redemption of the shares to be exchanged as permitted under
the 1940 Act or the rules and regulations thereunder, or a fund to be
acquired suspends the sale of its shares because it is unable to invest
amounts effectively in accordance with its investment objective and
policies.
In the prospectus, each fund has notified shareholders that it reserves the
right at any time, without prior notice, to refuse exchange purchases by
any person or group if, in FMR's judgment, the fund would be unable to
invest effectively in accordance with its investment objective and
policies, or would otherwise potentially be adversely affected.
DISTRIBUTIONS AND TAXES
DIVIDENDS. Because each fund's income is primarily derived from interest,
dividends from the fund generally will not qualify for the
dividends-received deduction available to corporate shareholders. A portion
of each fund's dividends derived from certain U.S. Government obligations
may be exempt from state and local taxation.
To the extent that each fund's income is designated as federally tax-exempt
interest, the daily dividends declared by the fund are also federally
tax-exempt. Short-term capital gains are distributed as dividend income,
but do not qualify for the dividends-received deduction. These gains will
be taxed as ordinary income.
Each fund will send each shareholder a notice in January describing the tax
status of dividend and capital gain distributions (if any) for the prior
year.
Shareholders are required to report tax-exempt income on their federal tax
returns. Shareholders who earn other income, such as Social Security
benefits, may be subject to federal income tax on up to 85% of such
benefits to the extent that their income, including tax-exempt income,
exceeds certain base amounts.
Tax-Exempt Fund purchases municipal securities whose interest FMR believes
is free from federal income tax. Generally, issuers or other parties have
entered into covenants requiring continuing compliance with federal tax
requirements to preserve the tax-free status of interest payments over the
life of the security. If at any time the covenants are not complied with,
or if the IRS determines that the issuer did not comply with relevant tax
requirements, interest payments from a security could become federally
taxable retroactive to the date the security was issued. For certain types
of structured securities, the tax status of the pass-through of tax-free
income may also be based on the federal tax treatment of the structure.
As a result of the Tax Reform Act of 1986, interest on certain "private
activity" securities is subject to the federal alternative minimum tax
(AMT), although the interest continues to be excludable from gross income
for other tax purposes. Interest from private activity securities will be
considered tax-exempt for purposes of Tax-Exempt Fund's policy of investing
so that at least 80% of its income distribution is free from federal income
tax. Interest from private activity securities is a tax preference item for
the purposes of determining whether a taxpayer is subject to the AMT and
the amount of AMT to be paid, if any. Private activity securities issued
after August 7, 1986 to benefit a private or industrial user or to finance
a private facility are affected by this rule.
A portion of the gain on bonds purchased with market discount after April
30, 1993 and short-term capital gains distributed by the fund are taxable
to shareholders as dividends, not as capital gains. Dividend distributions
resulting from a recharacterization of gain from the sale of bonds
purchased with market discount after April 30, 1993 are not considered
income for the purposes of Tax-Exempt Fund's policy of investing so that at
least 80% of its income distribution is free from federal income tax.
Tax-Exempt Fund may distribute any net realized short-term capital gains
and taxable market discount once a year or more often, as necessary, to
maintain its net asset value at $1.00 per share.
It is the current position of the staff of the SEC that a fund that uses
the term "tax-exempt" in its name may not derive more than 20% of its
income from municipal obligations that pay interest that is a preference
item for purposes of the AMT. According to this position, at least 80% of
Tax-Exempt Fund's income would have to be exempt from the AMT as well as
from federal income taxes.
Corporate investors should note that a tax preference item for the purposes
of the corporate AMT is 75% of the amount by which adjusted current
earnings (which includes tax-exempt interest) exceeds the alternative
minimum taxable income of the corporation. If a shareholder receives an
exempt-interest dividend and sells shares at a loss after holding them for
a period of six months or less, the loss will be disallowed to the extent
of the amount of the exempt-interest dividend.
CAPITAL GAIN DISTRIBUTIONS. Each fund may distribute any net realized
short-term capital gains once a year or more often as necessary, to
maintain its net asset value at $1.00 per share. Treasury Fund and Prime
Fund do not anticipate earning long-term capital gains on securities held
by each fund. Tax-Exempt Fund does not anticipate distributing long-term
capital gains.
As of the fiscal period ended October 31, 1996, Treasury Fund had
capital loss carryforwards aggregating approximately $421,000. The loss
carryforward for Treasury Fund , will expire on October 31, 2001, is
available to offset future capital gains.
As of the fiscal period ended October 31, 1996, Prime Fund had
capital loss carryforwards aggregating approximately $764,000. The loss
carryforward for Prime Fund , of which $7,000, $125,000, $584,000,
and $48,000 will expire on October 31, 2000, 2001, 2002, and 2003,
respectively, is available to offset future capital gains.
As of the fiscal period ended October 31, 1996, Tax-Exempt Fund had
capital loss carryforwards aggregating approximately $98,000. The loss
carryforward for Tax-Exempt Fund , of which $24,000 and $74,000 will
expire on October 31, 2000 and 2004, respectively, is available to offset
future capital gains.
STATE AND LOCAL TAX ISSUES. For mutual funds organized as business trusts,
state law provides for a pass-through of the state and local income tax
exemption afforded to direct owners of U.S. Government securities. Some
states limit this to mutual funds that invest a certain amount in U.S.
Government securities, and some types of securities, such as repurchase
agreements and some agency backed securities, may not qualify for this
benefit. The tax treatment of your dividend distributions from a fund will
be the same as if you directly owned your proportionate share of the U.S.
Government securities in the fund's portfolio. Because the income earned on
most U.S. Government securities in which a fund invests is exempt from
state and local income taxes, the portion of your dividends from the fund
attributable to these securities will also be free from income taxes. The
exemption from state and local income taxation does not preclude states
from assessing other taxes on the ownership of U.S. Government securities.
In a number of states, corporate franchise (income) tax laws do not exempt
interest earned on U.S. Government securities whether such securities are
held directly or through a fund.
FOREIGN TAXES. Foreign governments may withhold taxes on dividends and
interest paid with respect to foreign securities. Foreign governments may
also impose taxes on other payments or gains with respect to foreign
securities. If, at the close of its fiscal year, more than 50% of a fund's
total assets are invested in securities of foreign issuers, the fund may
elect to pass through foreign taxes paid and thereby allow shareholders to
take a credit or deduction on their individual tax returns.
TAX STATUS OF THE FUNDS. Each fund intends to qualify each year as a
"regulated investment company" for tax purposes so that it will not be
liable for federal tax on income and capital gains distributed to
shareholders. In order to qualify as a regulated investment company and
avoid being subject to federal income or excise taxes at the fund level,
each fund intends to distribute substantially all of its net investment
income and net realized capital gains within each calendar year as well as
on a fiscal year basis.
Each fund is treated as a separate entity from the other funds of its
respective Trust for tax purposes.
OTHER TAX INFORMATION. The information above is only a summary of some of
the tax consequences generally affecting each fund and its shareholders,
and no attempt has been made to discuss individual tax consequences. In
addition to federal income taxes, shareholders may be subject to state and
local taxes on fund distributions, and shares may be subject to state and
local personal property taxes. Investors should consult their tax advisers
to determine whether a fund is suitable to their particular tax situation.
FMR
All of the stock of FMR is owned by FMR Corp., its parent organized in
1972. The voting common stock of FMR Corp. is divided into two classes.
Class B is held predominantly by members of the Edward C. Johnson 3d family
and is entitled to 49% of the vote on any matter acted upon by the voting
common stock. Class A is held predominantly by non-Johnson family member
employees of FMR Corp. and its affiliates and is entitled to 51% of the
vote on any such matter. The Johnson family group and all other Class B
shareholders have entered into a shareholders' voting agreement under which
all Class B shares will be voted in accordance with the majority vote of
Class B shares. Under the 1940 Act, control of a company is presumed where
one individual or group of individuals owns more than 25% of the voting
stock of that company. Therefore, through their ownership of voting common
stock and the execution of the shareholders' voting agreement, members of
the Johnson family may be deemed, under the 1940 Act, to form a controlling
group with respect to FMR Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by three of its divisions as follows: FSC, which is the transfer
and shareholder servicing agent for certain of the funds advised by FMR;
Fidelity Investments Institutional Operations Company, which performs
shareholder servicing functions for institutional customers and funds sold
through intermediaries; and Fidelity Investments Retail Marketing Company,
which provides marketing services to various companies within the Fidelity
organization.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that sets forth all employees'
fiduciary responsibilities regarding the funds, establishes procedures for
personal investing and restricts certain transactions. For example, all
personal trades in most securities require pre-clearance, and participation
in initial public offerings is prohibited. In addition, restrictions on the
timing of personal investing in relation to trades by Fidelity funds and on
short-term trading have been adopted.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the trust are listed below. Except
as indicated, each individual has held the office shown or other offices in
the same company for the last five years. All persons named as Trustees and
Members of the Advisory Board also serve in similar capacities for other
funds advised by FMR. The business address of each Trustee and officer who
is an "interested person" (as defined in the Investment Company Act of
1940) is 82 Devonshire Street, Boston, Massachusetts 02109, which is also
the address of FMR. The business address of all the other Trustees and
Members of the Advisory Board is Fidelity Investments, P.O. Box 9235,
Boston, Massachusetts 02205-9235. Those Trustees who are "interested
persons" by virtue of their affiliation with either the trust or FMR are
indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d (66), Trustee and President, is Chairman, Chief
Executive Officer and a Director of FMR Corp.; a Director and Chairman of
the Board and of the Executive Committee of FMR; Chairman and a Director of
FMR Texas Inc., Fidelity Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
*J. GARY BURKHEAD (55), Trustee and Senior Vice President, is President of
FMR; and President and a Director of FMR Texas Inc., Fidelity Management &
Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc.
RALPH F. COX (64), Trustee (1991), is a management consultant (1994).
Prior to February 1994, he was President of Greenhill Petroleum Corporation
(petroleum exploration and production). Until March 1990, Mr. Cox was
President and Chief Operating Officer of Union Pacific Resources Company
(exploration and production). He is a Director of Sanifill Corporation
(non-hazardous waste, 1993), CH2M Hill Companies (engineering), Rio Grande,
Inc. (oil and gas production), and Daniel Industries (petroleum measurement
equipment manufacturer). In addition, he is a member of advisory boards of
Texas A&M University and the University of Texas at Austin.
PHYLLIS BURKE DAVIS (65), Trustee (1992). Prior to her retirement in
September 1991, Mrs. Davis was the Senior Vice President of Corporate
Affairs of Avon Products, Inc. She is currently a Director of BellSouth
Corporation (telecommunications), Eaton Corporation (manufacturing, 1991),
and the TJX Companies, Inc. (retail stores), and previously served as a
Director of Hallmark Cards, Inc. (1985-1991) and Nabisco Brands, Inc. In
addition, she is a member of the President's Advisory Council of The
University of Vermont School of Business Administration.
ROBERT M. GATES (53), Trustee. Consultant, author, and lecturer (1993).
Mr. Gates was Director of the Central Intelligence Agency (CIA) from
1991-1993. From 1989 to 1991, Mr. Gates served as Assistant to the
President of the United States and Deputy National Security Advisor. Mr.
Gates is currently a Trustee for the Forum for International Policy, a
Board Member for the Virginia Neurological Institute, and a Senior Advisor
of the Harvard Journal of World Affairs. In addition, Mr. Gates also serves
as a member of the corporate board for Lucas Varity PLC, (automotive
components and diesel engines), Charles Stark Draper Laboratory
(non-profit), NACCO Industries, Inc. (mining and manufacturing), and
TRW Inc. (original equipment and replacement products).
E. BRADLEY JONES (69), Trustee. Prior to his retirement in 1984, Mr. Jones
was Chairman and Chief Executive Officer of LTV Steel Company. He is a
Director of TRW Inc. (original equipment and replacement products),
Cleveland-Cliffs Inc (mining), Consolidated Rail Corporation, Birmingham
Steel Corporation, and RPM, Inc. (manufacturer of chemical products), and
he previously served as a Director of NACCO Industries, Inc. (mining and
marketing, 1985-1995) and Hyster-Yale Materials Handling, Inc. (1985-1995).
In addition, he serves as a Trustee of First Union Real Estate Investments,
a Trustee and member of the Executive Committee of the Cleveland Clinic
Foundation, a Trustee and member of the Executive Committee of University
School (Cleveland), and a Trustee of Cleveland Clinic Florida.
DONALD J. KIRK (64), Trustee, is Executive-in-Residence (1995) at Columbia
University Graduate School of Business and a financial consultant. From
1987 to January 1995, Mr. Kirk was a Professor at Columbia University
Graduate School of Business. Prior to 1987, he was Chairman of the
Financial Accounting Standards Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance), and he previously served as a Director of
Valuation Research Corp. (appraisals and valuations, 1993-1995). In
addition, he serves as Chairman of the Board of Directors of the National
Arts Stabilization Fund, Chairman of the Board of Trustees of the Greenwich
Hospital Association, a Member of the Public Oversight Board of the
American Institute of Certified Public Accountants' SEC Practice Section
(1995), and as a Public Governor of the National Association of Securities
Dealers, Inc. (1996).
*PETER S. LYNCH (54), Trustee, is Vice Chairman and Director of FMR (1992).
Prior to May 31, 1990, he was a Director of FMR and Executive Vice
President of FMR (a position he held until March 31, 1991); Vice President
of Fidelity Magellan Fund and FMR Growth Group Leader; and Managing
Director of FMR Corp. Mr. Lynch was also Vice President of Fidelity
Investments Corporate Services (1991-1992). He is a Director of W.R. Grace
& Co. (chemicals) and Morrison Knudsen Corporation (engineering and
construction). In addition, he serves as a Trustee of Boston College,
Massachusetts Eye & Ear Infirmary, Historic Deerfield (1989) and Society
for the Preservation of New England Antiquities, and as an Overseer of the
Museum of Fine Arts of Boston.
WILLIAM O. McCOY (63), Trustee, is the Vice President of Finance for the
University of North Carolina (16-school system, 1995). Prior to his
retire ment in December 1994, Mr. McCoy was Vice Chairman of the Board
of BellSouth Corporation (telecommunications, 1984) and President of
BellSouth Enterprises (1986). He is currently a Director of Liberty
Corporation (holding company, 1984), Weeks Corporation of Atlanta (real
estate, 1994), Carolina Power and Light Company (electric utility, 1996),
and the Kenan Transport Co. (1996). Previously, he was a Director of First
American Corporation (bank holding company, 1979-1996). In addition, Mr.
McCoy serves as a member of the Board of Visitors for the University of
North Carolina at Chapel Hill (1994) and for the Kenan-Flager Business
School (University of North Carolina at Chapel Hill, 1988).
GERALD C. McDONOUGH (68), Trustee and Vice-Chairman of the non-interested
Trustees, is Chairman of G.M. Management Group (strategic advisory
services). Prior to his retirement in July 1988, he was Chairman and Chief
Executive Officer of Leaseway Transportation Corp. (physical distribution
services). Mr. McDonough is a Director of Brush-Wellman Inc. (metal
refining), York International Corp. (air conditioning and refrigeration),
Commercial Intertech Corp. (hydraulic systems, building systems, and metal
products, 1992), CUNO, Inc. (liquid and gas filtration products, 1996), and
Associated Estates Realty Corporation (a real estate investment trust,
1993). Mr. McDonough served as a Director of ACME-Cleveland Corp. (metal
working, telecommunications, and electronic products) from 1987-1996.
MARVIN L. MANN (64), Trustee (1993) is Chairman of the Board, President,
and Chief Executive Officer of Lexmark International, Inc. (office
machines, 1991). Prior to 1991, he held the positions of Vice President of
International Business Machines Corporation ("IBM") and President and
General Manager of various IBM divisions and subsidiaries. Mr. Mann is a
Director of M.A. Hanna Company (chemicals, 1993) and Infomart (marketing
services, 1991), a Trammell Crow Co. In addition, he serves as the Campaign
Vice Chairman of the Tri-State United Way (1993) and is a member of the
University of Alabama President's Cabinet.
THOMAS R. WILLIAMS (68), Trustee, is President of The Wales Group, Inc.
(management and financial advisory services). Prior to retiring in 1987,
Mr. Williams served as Chairman of the Board of First Wachovia Corporation
(bank holding company), and Chairman and Chief Executive Officer of The
First National Bank of Atlanta and First Atlanta Corporation (bank holding
company). He is currently a Director of BellSouth Corporation
(telecommunications), ConAgra, Inc. (agricultural products), Fisher
Business Systems, Inc. (computer software), Georgia Power Company (electric
utility), Gerber Alley & Associates, Inc. (computer software), National
Life Insurance Company of Vermont, American Software, Inc., and AppleSouth,
Inc. (restaurants, 1992).
SARAH H. ZENOBLE (47), Vice President, is Vice President of Fidelity's
money market funds (1996) and Vice President of FMR Texas Inc.
LELAND C. BARRON (37), Vice President of Treasury Fund (1991), is Vice
President of other funds advised by FMR and an employee of FMR Texas Inc.
ROBERT K. DUBY (50), Vice President of Prime Fund (1996), is Vice President
of other funds advised by FMR and an employee of FMR Texas Inc.
SCOTT A. ORR (34), Vice President of Tax-Exempt Fund (1995), is Vice
President of other funds advised by FMR and an employee of FMR Texas Inc.
ARTHUR S. LORING (49), Secretary, is Senior Vice President (1993) and
General Counsel of FMR, Vice President-Legal of FMR Corp., and Vice
President and Clerk of FDC.
KENNETH A. RATHGEBER (49), Treasurer (1995), is Treasurer of the Fidelity
funds and is an employee of FMR (1995). Before joining FMR, Mr. Rathgeber
was a Vice President of Goldman Sachs & Co. (1978-1995), where he served in
various positions, including Vice President of Proprietary Accounting
(1988-1992), Global Co-Controller (1992-1994), and Chief Operations Officer
of Goldman Sachs (Asia) LLC (1994-1995).
THOMAS D. MAHER (51), Assistant Vice President, is Assistant Vice President
of Fidelity's money market funds and municip al bond funds (1997)and
Vice President and Associate General Counsel of FMR Texas Inc.
JOHN H. COSTELLO (50), Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH (50), Assistant Treasurer (1994), is an employee of FMR
(1994). Prior to becoming Assistant Treasurer of the Fidelity funds, Mr.
Rush was Chief Compliance Officer of FMR Corp. (1993-1994) and Chief
Financial Officer of Fidelity Brokerage Services, Inc. (1990-1993).
T HOMAS J. SIMPSON (38), Assistant Treasurer (1996), is Assistant
Treasurer of Fidelity's money market funds (1996) and municip al bond
funds (1997) and an employee of FMR (1996). Prior to joining FMR, Mr.
Simpson was Vice President and Fund Controller of Liberty Investment
Services (1987-1995).
The following table sets forth information describing the compensation of
each Trustee of each fund for his or her services for the fiscal year
period October 31, 1996, or calendar year ended December 31, 1996, as
applicable.
COMPENSATION TABLE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Trustees Aggregate Aggregate Aggregate Total
Compensation Compensation Compensation Compensation
from from from from the
Treasury Fund Prime Fund Tax-Exempt Fund Fund Complex*
A
J. Gary Burkhead ** $ $ $ $
Ralph F. Cox
Phyllis Burke Davis
Richard J. Flynn***
Robert M. Gates ****
Edward C. Johnson 3d **
E. Bradley Jones
Donald J. Kirk
Peter S. Lynch **
William O. McCoy*****
Gerald C. McDonough
Edward H. Malone***
Marvin L. Mann
Thomas R. Williams
</TABLE>
* Information is as of December 31, 1996 for 235 funds in the complex.
** Interested Trustees of the fund are compensated by FMR.
*** Richard J. Flynn and Edward H. Malone served on the Board of Trustees
through December 31, 1996.
*****During the period from May 1, 1996 through May 30, 1997, William O.
McCoy served as a Member of the Advisory Board of Newbury Street Trust.
A Compensation figures include cash, a pro rata portion of benefits accrued
under the retirement program for the period ended December 30, 1996 and
required to be deferred, and may include amounts deferred at the election
of Trustees.
B Compensation figures include cash, amounts required to be deferred, a pro
rata portion of benefits accrued under the retirement program for the
period ended December 30, 1996 and required to be deferred, and may include
amounts deferred at the election of Trustees.]
C The following amounts are required to be deferred by each non-interested
Trustee, most of which is subject to vesting: Ralph F. Cox, $__, Phyllis
Burke Davis, $__, Richard J. Flynn, $0, Robert M. Gates, $__, E. Bradley
Jones, $__, Donald J. Kirk, $__, William O. McCoy, $__, Gerald C.
McDonough, $__, Edward H. Malone, $__, Marvin L. Mann, $__, and Thomas R.
Williams, $__.
D The following amounts are required to be deferred by each non-interested
Trustee, most of which is subject to vesting: Ralph F. Cox, $__, Phyllis
Burke Davis, $__, Richard J. Flynn, $0, Robert M. Gates, $__, E. Bradley
Jones, $__, Donald J. Kirk, $__, William O. McCoy, $__, Gerald C.
McDonough, $__, Edward H. Malone, $__, Marvin L. Mann, $__, and Thomas R.
Williams, $__.
E The following amounts are required to be deferred by each non-interested
Trustee, most of which is subject to vesting: Ralph F. Cox, $__, Phyllis
Burke Davis, $__, Richard J. Flynn, $0, Robert M. Gates, $__, E. Bradley
Jones, $__, Donald J. Kirk, $__, William O. McCoy, $__, Gerald C.
McDonough, $__, Edward H. Malone, $__, Marvin L. Mann, $__, and Thomas R.
Williams, $__.
F For the fiscal period ended October 31, 1996, certain of the
non-interested Trustees' aggregate compensation from a fund includes
accrued voluntary deferred compensation as follows:
.
Under a retirement program adopted in July 1988 and modified in November
1995, each non-interested Trustee may receive payments from a Fidelity
fund during his or her lifetime based on his or her basic trustee fees and
length of service. The obligation of a fund to make such payments is
neither secured nor funded. A Trustee becomes eligible to participate in
the program at the end of the calendar year in which he or she reaches age
72, provided that, at the time of retirement, he or she has served as a
Fidelity fund Trustee for at least five years. Currently, Messrs. Ralph S.
Saul, William R. Spaulding, Bertram H. Witham, and David L. Yunich, all
former non-interested Trustees, receive retirement benefits under the
program.
The non-interested Trustees may elect to defer receipt of all or a
percentage of their annual fees in accordance with the terms of a Deferred
Compensation Plan (the Plan). Under the Plan, compensation deferred by a
Trustee is periodically adjusted as though an equivalent amount had been
invested and reinvested in shares of one or more funds in the complex
designated by such Trustee (designated securities). The amount paid to the
Trustee under the Plan will be determined based upon the performance of
such investments. Deferral of Trustees' fees in accordance with the Plan
will have a negligible effect on a fund's assets, liabilities, and net
income per share, and will not obligate the fund to retain the services of
any Trustee or to pay any particular level of compensation to the Trustee.
Each fund may invest in such designated securities under the Plan without
shareholder approval.
As of December 30, 1996, the non-interested Trustees terminated the
retirement program for Trustees who retire after such date. In connection
with the termination of the retirement program, each existing
non-interested Trustee received a credit to his or her Plan account equal
to the present value of the estimated benefits that would have been payable
under the retirement program. The amounts credited to the non-interested
Trustees' Plan accounts are subject to vesting. The termination of the
retirement program and related crediting of estimated benefits to the
Trustees' Plan accounts did not result in a material cost to the funds.
As of ___________, 1997, approximately __% of Treasury Fund's, _____% of
Prime Fund's, and __% of Tax-Exempt Fund's total outstanding shares was
held by an FMR affiliate. FMR Corp. is the ultimate parent company of this
FMR affiliate. By virtue of his ownership interest in FMR Corp., as
described in the "FMR" section on page ___, Mr. Edward C. Johnson 3d,
President and Trustee of the fund, may be deemed to be a beneficial owner
of these shares. As of the above date, with the exception of Mr. Johnson
3d's deemed ownership of each fund's shares, the Trustees and officers of
the funds owned, in the aggregate, less than __% of each fund's total
outstanding shares.
As of ________________, 1997, the Trustees, Members of the Advisory Board,
and officers of each fund owned, in the aggregate, less than __% of each
fund's total outstanding shares.
: As of _____________, 1997, the following owned of record or beneficially
5% or more of outstanding shares of the funds:]
A shareholder owning of record or beneficially more than 25% of a fund's
outstanding shares may be considered a controlling person. That
shareholder's vote could have a more significant effect on matters
presented at a shareholders' meeting than votes of other shareholders.
MANAGEMENT CONTRACTS
Each fund employs FMR to furnish investment advisory and other services.
Under its management contract with each fund, FMR acts as investment
adviser and, subject to the supervision of the Board of Trustees, directs
the investments of each fund in accordance with its investment objective,
policies, and limitations. FMR also provides each fund with all necessary
office facilities and personnel for servicing each fund's investments,
compensates all officers of each fund, all Trustees who are "interested
persons" of the trusts or of FMR, and all personnel of each fund or FMR for
performing services relating to research, statistical, and investment
activities.
In addition, FMR or its affiliates, subject to the supervision of the Board
of Trustees, provide the management and administrative services necessary
for the operation of each fund. These services include providing facilities
for maintaining each fund's organization; supervising relations with
custodians, transfer and pricing agents, accountants, underwriters, and
other persons dealing with each fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining each
fund's records and the registration of each fund's shares under federal and
state laws; developing management and shareholder services for each fund;
and furnishing reports, evaluations, and analyses on a variety of subjects
to the Trustees.
In addition to the management fee payable to FMR and the fees payable to
UMB, FIIOC, and FSC, each fund or class thereof, as applicable, pays all of
its expenses, without limitation, that are not assumed by those parties.
Each fund pays for the typesetting, printing, and mailing of its proxy
materials to shareholders, legal expenses, and the fees of the custodian,
auditor and non-interested Trustees. Although each fund's current
management contract provides that the fund will pay for typesetting,
printing, and mailing prospectuses, statements of additional information,
notices and reports to shareholders, the Trusts, on behalf of each fund,
have entered into revised transfer agent agreements with FIIOC and UMB, as
applicable, pursuant to which FIIOC or UMB bears the costs of providing
these services to existing shareholders of the applicable classes. Other
expenses paid by each fund include interest, taxes, brokerage commissions,
each fund's proportionate share of insurance premiums and Investment
Company Institute dues, and the costs of registering shares under federal
and state securities laws. Each fund is also liable for such non-recurring
expenses as may arise, including costs of any litigation to which the fund
may be a party, and any obligation it may have to indemnify its officers
and Trustees with respect to litigation.
FMR is each fund's manager pursuant to management contracts dated
__________, 1997. The management contracts were approved by shareholders
of each fund on _______________, 1997. Prior to May 30, 1997, FMR was each
fund's manager pursuant to management contracts dated September 30, 1993
for Treasury Fund and Prime Fund; and December 30, 1991 for Tax-Exempt Fund
which were approved by shareholders of Treasury Fund and Prime Fund on
March 24, 1993 and shareholders of Tax-Exempt Fund on October 23, 1991.
For the services of FMR under each contract, each fund pays FMR a monthly
management fee at the annual rate of 0.25% of average net assets throughout
the month. Fees received by FMR for the last three fiscal years are shown
in the table below.
Fund Fiscal Year Ended Management Fees Paid to FMR**
Treasury Fund 10/31/96* $ 2,327,773
7/31/96 10,004,781
7/31/95 9,784,211
7/31/94 13,343,263
Prime Fund 10/31/96* 3,212,443
7/31/96 12,172,452
7/31/95 9,232,796
7/31/94 7,553,008
Tax-Exempt 10/31/96 2,607,230
10/31/95 2,432,962
10/31/94 2,592,124
* For the period August 1, 1996 through October 31, 1996. The fiscal
year - end of Treasury Fund and Prime Fund changed from
July 31 to October 31 in October 1996.
** Management fees paid to FMR reflect the management fee rate of 0.50%
that was in effect for each fund prior to May 30, 1997. Only a portion of
this fee was retained by FMR. The remainder was paid to FDC in connection
with each fund's Distribution and Service Plan.
FMR may, from time to time, voluntarily reimburse all or a portion of Daily
Money Class's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses. FMR retains the ability to be
repaid for these expense reimbursements in the amount that expenses fall
below the limit prior to the end of the fiscal year. Expense reimbursements
by FMR will increase each class's total returns and yield and repayment of
the reimbursement by each class will lower its total returns and yield.
SUB-ADVISER. FMR has entered into a sub-advisory agreement with FMR Texas
pursuant to which FMR Texas has primary responsibility for providing
portfolio investment management services to each fund.
Under the sub-advisory agreements, dated September 30, 1993 for Treasury
Fund and Prime Fund and approved by shareholders on March 24, 1993 and
dated December 30, 1991 for Tax-Exempt Fund and approved by shareholders on
October 23, 1991, FMR pays FMR Texas fees equal to 50% of the management
fees payable to FMR under its management contract with each fund, after
payments by FMR pursuant to each fund's 12b-1 plan, if any. The fees paid
to FMR Texas are not reduced by any voluntary or mandatory expense
reimbursements that may be in effect from time to time. The following table
shows fees FMR paid to FMR Texas on behalf of each fund:
Fund Fiscal Year Ended Fees Paid to FMR Texas by FMR
Treasury Fund 10/31/96* $ 521,771
7/31/96 2,098,350
7/31/95 1,886,692
7/31/94 2,367,209
Prime Fund 10/31/96* 900,563
7/31/96 3,398,817
7/31/95 2,556,301
7/31/94 1,884,963
Tax-Exempt 10/31/96 627,565
10/31/95 582,239
10/31/94 594,149
* For the period August 1, 1996 through October 31, 1996. The fiscal
year - end of Treasury Fund and Prime Fund changed from
July 31 to October 31 in October 1996.
CONTRACTS WITH FMR AFFILIATES
FIIOC, an affiliate of FMR, is the transfer, dividend disbursing, and
shareholder servicing agent for Daily Money Class shares of Treasury Fund
and Prime Fund.
Under this arrangement FIIOC receives an annual asset-based fee. This
fee is subject to increase based on postal rate changes. Prior to January
1, 1997, FIIOC received an annual account fee and an asset based fee each
based on account size and fund type for each retail account and certain
institutional accounts. With respect to certain institutional retirement
accounts, FIIOC received an annual account fee and an asset based fee based
on account type or fund type. These annual account fees were subject to
increase based on postal rate change.
UMB is the transfer agent for Daily Money Class shares of Tax-Exempt Fund.
UMB has entered into a sub-contract with FIIOC under the terms of which
FIIOC performs the processing activities associated with providing transfer
agent and shareholder servicing functions for Daily Money Class shares of
Tax-Exempt Fund.
For accounts that FIIOC maintains on behalf of UMB, FIIOC receives all such
fees.
FIIOC bears the expense of typesetting, printing, and mailing prospectuses,
statements of additional information, and all other reports, notices, and
statements to shareholders, with the exception of proxy statements. Also,
FIIOC pays out-of-pocket expenses associated with transfer agent services.
FSC, an affiliate of FMR, performs the calculations necessary to determine
NAV and dividends for Daily Money Class shares of Treasury Fund and Prime
Fund and maintains accounting records for Treasury Fund and Prime Fund. UMB
has a sub-contract with FSC, under the terms of which FSC performs the
calculations necessary to determine NAV and dividends for Daily Money Class
shares of Tax-Exempt Fund and maintains the accounting records for
Tax-Exempt Fund. The annual fee rates for pricing and bookkeeping services
are based on each fund's average net assets, specifically, .0175% of the
first $500 million of average net assets and .0075% of average net assets
in excess of $500 million. The fee is limited to a minimum of $40,000 and a
maximum of $800,000 per year.
Transfer agent fees and pricing and bookkeeping fees for Tax-Exempt Fund
are paid to FIIOC and FSC, respectively, by UMB which is entitled to
reimbursement from Daily Money Class or the fund, as applicable, for these
expenses.
Pricing and bookkeeping fees, including reimbursement for out-of-pocket
expenses, paid to FSC for the past three fiscal years were as follows:
Fund Fiscal Year Ended Fees Paid to FSC
Treasury Fund 10/31/96* $ 47,493
7/31/96 200,897
7/31/95 196,883
7/31/94 250,737
Prime Fund 10/31/96* 60,667
7/31/96 233,579
7/31/95 188,697
7/31/94 163,480
Tax-Exempt 10/31/96 107,140
10/31/95 102,002
10/31/94 102,238
* For the period August 1, 1996 through October 31, 1996. The fiscal
year - end of Treasury Fund and Prime Fund changed from
July 31 to October 31 in October 1996.
Each fund has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer registered
under the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc. The distribution agreements call
for FDC to use all reasonable efforts, consistent with its other business,
to secure purchasers for Daily Money Class shares of each fund, which are
continuously offered at NAV. Promotional and administrative expenses in
connection with the offer and sale of shares are paid by FMR.
DISTRIBUTION AND SERVICE PLANS
The Trustees have approved a Distribution and Service Plan on behalf of
Daily Money Class of the funds (the Plans) pursuant to Rule 12b-1 under the
1940 Act (the Rule). The Rule provides in substance that a mutual fund may
not engage directly or indirectly in financing any activity that is
primarily intended to result in the sale of shares of a fund except
pursuant to a plan approved on behalf of the fund under the Rule. The
Plans, as approved by the Trustees, allow Daily Money Class of the funds
and FMR to incur certain expenses that might be considered to constitute
direct or indirect payment by the funds of distribution expenses.
Pursuant to the Plans, FDC is paid a distribution fee as a percentage of
Daily Money Class's average net assets at an annual rate of 0.25% for each
of Treasury Fund, Prime Fund, and Tax-Exempt Fund determined as of the
close of business on each day throughout the month. FDC may compensate
intermediaries that provide shareholder support services, engage in the
sale of Daily Money Class shares or to pay distribution expenses at an
annual rate of up to 0.25% of average net assets they maintain.
U nder each Plan, if the payment of management fees by the funds to FMR
is deemed to be indirect financing by the funds of the distribution of
their shares, such payment is authorized by the Plans. Each Plan
specifically recognizes that FMR either directly or through FDC may use its
management fee revenue, past profits, or other resources without limitation
to pay promotional and administrative expenses in connection with the offer
and sale of shares of the applicable class of each fund. In addition, each
Plan provides that FMR may use its resources, including its management fee
revenue to make payments to third parties that assist in selling shares of
the applicable class of each fund or to third parties, including banks,
that render shareholder support services or engage in the sale of Daily
Money Class shares. The Board of Trustees has authorized su ch
payments for certain intermediaries who may be eligible to be
compensated at prior compensation amounts exceeding 0.25% (up to 0.40% of
average net assets they maintain) until January 1, 1998 .
Under the Daily Money Class Plans in effect prior to May 30, 1997,
payments made by FMR to FDC during the three month period ended October 31,
1996 were $1,284,231 for Treasury Fund and $1,411,317 for Prime
Fund , for the fiscal year ended July 31, 1996 were $5,808,081 for
Treasury Fund and $5,374,819 for Prime Fund , and for the
fiscal year ended October 31, 1996 were $1,352,100 for Tax-Exempt
Fund .
Prior to approving each Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of the Plan, and have
determined that there is a reasonable likelihood that the Plan will benefit
the applicable fund and its shareholders. To the extent that each Plan
gives FMR and FDC greater flexibility in connect ion with the
distribution of Daily Money Class shares of each fund, additional sales of
fund shares may result. Furthermore, certain shareholder support services
may be provided more effectively under the Plans by local entities with
whom shareholders have other relationships.
The Daily Money Class Plans do not provide for specific payments by Daily
Money Class of any of the expenses of FDC, or obligate FDC or FMR to
perform any specific type or level of distribution activities or incur any
specific level of expense in connection with distribution activities. After
payments by FDC for advertising, marketing and distribution, and payments
to third parties, the amounts remaining, if any, may be used as FDC may
elect.
The Daily Money Class Plans were approved by Daily Money Class shareholders
of each fund on ____________, 1997.
The Glass-Steagall Act generally prohibits federally and state chartered or
supervised banks from engaging in the business of underwriting, selling, or
distributing securities. Although the scope of this prohibition under the
Glass-Steagall Act has not been clearly defined by the courts or
appropriate regulatory agencies, FDC believes that the Glass-Steagall Act
should not preclude a bank from performing shareholder support services, or
servicing and recordkeeping functions. FDC intends to engage banks only to
perform such functions. However, changes in federal or state statutes and
regulations pertaining to the permissible activities of banks and their
affiliates or subsidiaries, as well as further judicial or administrative
decisions or interpretations, could prevent a bank from continuing to
perform all or a part of the contemplated services. If a bank were
prohibited from so acting, the Trustees would consider what actions, if
any, would be necessary to continue to provide efficient and effective
shareholder services. In such event, changes in the operation of the funds
might occur, including possible termination of any automatic investment or
redemption or other services then provided by the bank. It is not expected
that shareholders would suffer any adverse financial consequences as a
result of any of these occurrences. In addition, state securities laws on
this issue may differ from the interpretations of federal law expressed
herein, and banks and other financial institutions may be required to
register as dealers pursuant to state law.
Each fund may execute portfolio transactions with, and purchase securities
issued by, depository institutions that receive payments under the Plans.
No preference for the instruments of such depository institutions will be
shown in the selection of investments.
Independent of the Daily Money Class Plans, intermediaries that maintain
an average balance of $10 million or more in a single omnibus account may
receive an additional recordkeeping fee of up to 0.15% of the assets they
maintain. The recordkeeping fee will be paid by FMR or its affiliates, will
not be paid by the fund, and will be considered a servicing expense by
FMR.
DESCRIPTION OF THE TRUSTS
TRUST ORGANIZATION. Each fund is a fund of Newbury Street Trust, an
open-end management investment company originally organized as a
Massachusetts business trust on July 16, 1982, pursuant to a Declaration of
Trust that was amended and restated on November 1, 1989. On December 30,
1991, the trust was converted to a Delaware business trust pursuant to an
agreement approved by shareholders on October 23, 1991. The Delaware trust,
which was organized on June 20, 1991 under the name Daily Tax-Exempt Money
Fund II, succeeded to the name Daily Tax-Exempt Money Fund on December 30,
1991 and succeeded to the name Newbury Street Trust on _________, 1997.
Currently, there are three funds of the trust: Treasury Fund, Prime Fund,
and Tax-Exempt Fund. The Trust Instrument permits the Trustees to create
additional funds. Prior to May 30, 1997, Treasury Fund and Prime Fund
were funds of Daily Money Fund, an open-end management investment company
originally organized as a Massachusetts business trust on June 7, 1982,
pursuant to a Declaration of Trust that was amended and restated on
September 1, 1989. On September 29, 1993, Daily Money Fund was converted to
a Delaware business trust pursuant to an agreement approved by shareholders
on March 24, 1993. The Delaware Daily Money Fund trust, which was organized
on June 20, 1991 under the name Daily Money Fund II, succeeded to the name
Daily Money Fund on July 14, 1995.
In the event that FMR ceases to be the investment adviser to a fund, the
right of the trust or fund to use the identifying name "Fidelity" may be
withdrawn. There is a remote possibility that one fund might become liable
for any misstatement in its prospectus or statement of additional
information about another fund.
The assets of each trust received for the issue or sale of shares of each
of its funds and all income, earnings, profits, and proceeds thereof,
subject only to the rights of creditors, are especially allocated to such
fund, and constitute the underlying assets of such fund. The underlying
assets of each fund are segregated on the books of account, and are to be
charged with the liabilities with respect to such fund and with a share of
the general expenses of their respective trusts. Expenses with respect to
the trusts are to be allocated in proportion to the asset value of their
respective funds, except where allocations of direct expense can otherwise
be fairly made. The officers of the trusts, subject to the general
supervision of the Boards of Trustees, have the power to determine which
expenses are allocable to a given fund, or which are general or allocable
to all of the funds of a certain trust. In the event of the dissolution or
liquidation of a trust, shareholders of each fund of that trust are
entitled to receive as a class the underlying assets of such fund available
for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. The Delaware trust is a business trust
organized under Delaware law. Delaware law provides that shareholders shall
be entitled to the same limitations of personal liability extended to
stockholders of private corporations for profit. The courts of some states,
however, may decline to apply Delaware law on this point. The Trust
Instrument contains an express disclaimer of shareholder liability for the
debts, liabilities, obligations, and expenses of the Delaware trust and
requires that a disclaimer be given in each contract entered into or
executed by the Delaware trust or its Trustees. The Trust Instrument
provides for indemnification out of each fund's property of any shareholder
or former shareholder held personally liable for the obligations of the
fund. The Trust Instrument also provides that each fund shall, upon
request, assume the defense of any claim made against any shareholder for
any act or obligation of the fund and satisfy any judgment thereon. Thus,
the risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which Delaware law
does not apply, no contractual limitation of liability was in effect, and
the fund is unable to meet its obligations. FMR believes that, in view of
the above, the risk of personal liability to shareholders is extremely
remote.
The Trust Instrument further provides that the Trustees shall not be
personally liable to any person other than the Delaware trust or its
shareholders; moreover, the Trustees shall not be liable for any conduct
whatsoever, provided that Trustees are not protected against any liability
to which they would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence, or reckless disregard of the duties involved
in the conduct of their office. Claims asserted against one class of shares
may subject holders of another class of shares to certain liabilities.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. As a shareholder, you receive one vote for each dollar value of
net asset value you own. The shares have no preemptive or conversion
rights; voting and dividend rights, the right of redemption, and the
privilege of exchange are described in the Prospectus. Shares are fully
paid and nonassessable, except as set forth under the respective
"Shareholder and Trustee Liability" headings above. Shareholders
representing 10% or more of a trust or one of its funds may, as set forth
in the Declaration of Trust or Trust Instrument, call meetings of the trust
or fund for any purpose related to the trust or fund, as the case may be,
including, in the case of a meeting of an entire trust, the purpose on
voting on removal of one or more Trustees.
A trust or any fund may be terminated upon the sale of its assets to (or,
in the case of the Delaware trust and its funds, merger with) another
open-end management investment company or series thereof, or upon
liquidation and distribution of its assets. Gen erally such terminations
must be approved by vote of the holders of a majority of the trust or the
fund, as determined by the current value of each shareholder's
investment in the fund or trust; however, the Trustees of the Delaware
trust may, without prior shareholder approval, change the form of the
organization of the Delaware trust by merger, consolidation, or
incorporation. If not so terminated or reorganized, the trusts and their
funds will continue indefinitely.
Under the Trust Instrument, the Trustees may, without shareholder vote,
cause the Delaware trust to merge or consolidate into one or more trusts,
partnerships, or corporations, so long as the surviving entity is an
open-end management investment company that will succeed to or assume the
Delaware trust registration statement, or cause the Delaware trust to be
incorporated under Delaware law. Each fund may also invest all of its
assets in another investment company.
CUSTODIAN. The Bank of New York, 110 Washington Street, New York, New York,
is custodian of the assets of the Taxable funds. UMB Bank, n.a., 1010 Grand
Avenue, Kansas City, Missouri, is custodian of the assets of Tax-Exempt
Fund. Each custodian is responsible for the safekeeping of a fund's assets
and the appointment of any subcustodian banks and clearing agencies. A
custodian takes no part in determining the investment policies of a fund or
in deciding which securities are purchased or sold by a fund. However, a
fund may invest in obligations of its custodian and may purchase securities
from or sell securities to its custodian. The Chase Manhattan Bank,
headquartered in New York, also may serve as a special purpose custodian of
certain assets of the Taxable funds in connection with repurchase agreement
transactions.
FMR, its officers and directors, its affiliated companies, and the Board of
Trustees may, from time to time, conduct transactions with various banks,
including banks serving as custodians for certain funds advised by FMR.
Transactions that have occurred to date include mortgages and personal and
general business loans. In the judgment of FMR, the terms and conditions of
those transactions were not influenced by existing or potential custodial
or other fund relationships.
AUDITORS. Coopers & Lybrand L.L.P. serves as the Taxable funds' independent
accountant. Price Waterhouse LLP serves as Tax-Exempt Fund's independent
accountant. The auditors examine financial statements for the funds and
provide other audit, tax, and related services.
FINANCIAL STATEMENTS
Each fund's financial statements and financial highlights for the fiscal
year ended October 31, 1996 and reports of the auditors are included
in the funds ' Annual Report, which is a separate report supplied
with this SAI . The funds' financial statements, including the
financial highlights, and reports of the auditors are incorporated herein b
reference. For a free additional copy of the funds' Annual Report, contact
Fidelity Client Services at 1-800-843-3001.
APPENDIX
DESCRIPTION OF MOODY'S INVESTORS SERVICE RATINGS OF MUNICIPAL
OBLIGATIONS
Moody's ratings for short-term municipal obligations will be designated
Moody's Investment Grade ("MIG"). A two-component rating is assigned to
variable rate demand obligations. The first component represents an
evaluation of the degree of risk associated with scheduled principal
repayment and interest payments and is designated by a long-term rating,
e.g., "Aaa" or "A." The second component represents an evaluation of the
degree of risk associated with the demand feature and is designated "VMIG."
MIG 1/VMIG 1 - This designation denotes best quality. There is
present strong protection by established cash flows, superior liquidity
support, or demonstrated broad-based access to the market for refinancing.
MIG 2/VMIG 2 - This designation denotes high quality. Margins of
protection are ample although not so large as in the preceding group.
DESCRIPTION OF STANDARD & POOR'S RATINGS OF MUNICIPAL NOTES
Municipal notes maturing in three years or less will likely receive a
"note" rating symbol. Notes that have a put option or demand feature are
assigned a dual rating. The first rating addresses the likelihood of
repayment of principal and payment of interest due and for short-term
obligations is designated by a note rating symbol. The second rating
addresses only the demand feature, and is designated by a commercial paper
rating symbol, e.g., "A-1" or A-2."
SP-1 - Strong capacity to pay principal and interest. Issues
determined to possess very strong characteristics are given a plus (+)
designation.
SP-2 - Satisfactory capacity to pay principal and interest, with
some vulnerability to adverse financial and economic changes over the term
of the notes.
DESCRIPT ION OF MOODY'S INVESTORS SERVICE RATINGS OF COMMERCIAL PAPER
Moody's assigns short-term debt ratings to obligations which have an
original maturity not exceeding one year.
Issuers rated PRIME-1 (or related supporting institutions) have a superior
ability for repayment of principal and payment of interest.
Issuers rated PRIME-2 (or related supporting institutions) have a strong
ability for repayment of principal and payment of interest.
DESCRIPTION OF STANDARD & POOR'S RATINGS OF COMMERCIAL PAPER
Debt issues considered short-term in the relevant market may be assigned a
Standard & Poor's commercial paper rating.
A-1 - This highest category indicates that the degree of safety regarding
timely payment is strong. Those issues determined to possess extremely
strong safety characteristics are denoted with a plus sign (+) designation.
A-2 - Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated A-1.
TREASURY FUND - ADVISOR B CLASS
(formerly U.S. Treasury Portfolio - Class B)
CROSS REFERENCE SHEET
Form N-1A Item Number
Part A Prospectus Caption
1 Cover Page
2 Expenses
3 a Financial Highlights
b *
c Performance
d Performance
4 a(i) Charter
a(ii) Investment Principles and Risks; Securities and
Investment Practices
b Securities and Investment Practices
c Who May Want to Invest; Investment Principles
and Risks; Securities and Investment Practices
5 a Charter
b(i) Cover Page; Charter; FMR and Its Affiliates
b(ii) FMR and Its Affiliates; Charter; Breakdown of
Expenses
b(iii) Expenses; Breakdown of Expenses
c,d, Cover Page; Charter; Breakdown of Expenses;
FMR and Its Affiliates
e FMR and Its Affiliates; Other Expenses
f Expenses
g Expenses; FMR and Its Affiliates
5A
*
6 a(i) Charter
a(ii) How to Buy Shares; How to Sell Shares; Transaction Details;
Exchange Restrictions
a(iii) *
b FMR and Its Affiliates
c Exchange Restrictions; Transaction Details
d *
e Cover Page; How to Buy Shares; How to Sell Shares; Investor Services;
Exchange Restrictions
f,g Dividends, Capital Gains, and Taxes
7 a Charter; Cover page
b How to Buy Shares; Transaction Details; Expenses
c *
d How to Buy Shares
e, *
f, Expenses; Breakdown of Expenses
8 How to Sell Shares; Investor Services; Transaction Details; Exchange
Restrictions
9 *
* Not Applicable
TREASURY FUND - ADVISOR B CLASS
(FORMERLY U.S. TREASURY PORTFOLIO -
CLASS B)
(fund number 658)
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how the fund
invests and the services available to shareholders.
To learn more about the fund and its investments, you can obtain a copy of
the fund's most recent financial report and portfolio listing or a copy of
the Statement of Additional Information (SAI) dated May 30, 1997. The SAI
has been filed with the Securities and Exchange Commission (SEC) and is
available along with other related materials on the SEC's Internet Web site
(http:/www.sec.gov). The SAI is incorporated herein by reference (legally
forms a part of the prospectus). For a free copy of either document,
contact Fidelity Client Services at 1-800-843-3001, or your investment
professional.
INVESTMENTS IN THE FUND ARE NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT THE FUND WILL MAINTAIN A
STABLE $1.00 SHARE PRICE.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR
OBLIGATIONS OF, OR GUARANTEED BY, ANY
DEPOSITORY INSTITUTION. SHARES ARE NOT
INSURED BY THE FDIC, FEDERAL RESERVE
BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT
TO INVESTMENT RISKS, INCLUDING POSSIBLE
LOSS OF PRINCIPAL AMOUNT INVESTED.
LIKE ALL MUTUAL FUNDS, THESE
SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
DMFB-pro-0597
The fund seeks to obtain as high a level of current income as is consistent
with the preservation of capital and liquidity.
PROSPECTUS
DATED MAY 30, 1997
(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA 02109
CONTENTS
PROSPECTUS
<TABLE>
<CAPTION>
<S> <C> <C>
KEY FACTS 3 WHO MAY WANT TO INVEST
3 EXPENSES Class B's sales charge (load) and its
yearly operating expenses.
5 FINANCIAL HIGHLIGHTS A summary of the fund's
financial data.
6 PERFORMANCE
THE FUND IN DETAIL 7 CHARTER How the fund is organized.
7 INVESTMENT PRINCIPLES AND RISKS The fund's
overall approach to investing.
9 BREAKDOWN OF EXPENSES How operating costs
are calculated and what they include.
YOUR ACCOUNT 10 TYPES OF ACCOUNTS Different ways to set up your
account, including tax-sheltered retirement plans.
11 HOW TO BUY SHARES Opening an account and
making additional investments.
12 HOW TO SELL SHARES Taking money out and closing
your account.
14 INVESTOR SERVICES Services to help you manage
your account.
SHAREHOLDER AND ACCOUNT POLICIES 15 DIVIDENDS, CAPITAL GAINS, AND TAXES
15 TRANSACTION DETAILS Share price calculations and
the timing of purchases and redemptions.
18 EXCHANGE RESTRICTIONS
19 SALES CHARGE REDUCTIONS AND WAIVERS
</TABLE>
KEY FACTS
WHO MAY WANT TO INVEST
The fund offers investors a convenient way to invest in a professionally
managed portfolio of money market instruments.
The fund is designed for investors who would like to earn current income
while preserving the value of their investment.
The rate of income will vary from day to day, generally reflecting
short-term interest rates.
The fund is managed to keep its share price stable at $1.00 and offers an
added measure of safety with its focus on U.S. Treasury securities.
The fund does not constitute a balanced investment plan. However, because
it emphasizes stability, it could be well-suited for a portion of your
investments.
The fund is composed of two classes of shares. Both classes of the fund
have a common investment objective and investment portfolio. Daily Money
Class shares do not have a sales charge, but do pay a distribution fee.
Advisor B Class (Class B) shares do not have a front-end sales
charge, but do have a contingent deferred sales charge (CDSC) and pay a
distribution fee and a shareholder service fee. Because Daily Money
Class shares do not have a sales charge, have a lower distribution fee
and do not have a shareholder service fee, Daily Money Class shares
are expected to have a higher total return than Class B shares. You may
obtain more information about Daily Money Class shares, which are
not offered through this prospectus, from your investment professional or
by calling Fidelity Client Services at 1-800-843-3001.
Class B shares of the fund may be purchased directly in connection with the
Fidelity Advisor Systematic Exchange Program (the Program) or by exchange
from Class B shares of the Fidelity Advisor funds, see "How to Buy Shares"
on page 11 for more information.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you may pay when you buy or
sell Class B shares of the fund. See "Transaction Details," page 15 ,
for an explanation of how and when these charges apply.
A contingent deferred sales charge (CDSC) is imposed on redemptions of
Class B shares according to the schedule that was in effect when you
originally purchased the Advisor fund Class B shares that you exchanged.
See "Transaction Details," page 15 , for information about the CDSC.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Maximum CDSC (as a % of the lesser of 5 .00
original purchase price or redemption proceeds) A
</TABLE>
Maximum sales charge on reinvested distributions Non
e
Redemption fee Non
e
Exchange fee Non
e
A DECLINES OVER SIX YEARS FROM 5 .00% TO 0%.
ANNUAL OPERATING EXPENSES are paid out of the fund's assets. The fund pays
a management fee to Fidelity Management & Research Company (FMR). The fund
also incurs other expenses for services such as maintaining shareholder
records and furnishing shareholder account statements and financial
reports.
12b-1 fees include a distribution fee and a shareholder service fee.
Distribution fees are paid by Class B to the distributor for services and
expenses in connection with the distribution of Class B shares. Shareholder
service fees are paid by Class B to investment professionals for services
and expenses incurred in connection with providing personal service and/or
maintenance of Class B shareholder accounts. Long-term shareholders may pay
more than the economic equivalent of the maximum sales charges permitted by
the National Association of Securities Dealers, Inc., due to 12b-1 fees.
Class B's expenses are factored into its share price or dividends and are
not charged directly to shareholder accounts (see "Breakdown of Expenses"
on page ).
The following figures are based on historical expenses, adjusted to
reflect current fees, of Class B and are calculated as a percentage of
average net assets of Class B of the fund. A portion of the brokerage
commissions that the fund pays is used to reduce fund expenses. In
addition, each fund has entered into arrangements with its custodian and
transfer agent whereby interest earned on uninvested cash balances is used
to reduce custodian and transfer agent expenses.
Management fee 0.2 5
%
12b-1 fee (including 0.25% Shareholder Service Fee) 1.00
%
Other expenses (after reimbursement) 0.1 5
%
Total operating expenses 1.40
%
EXPENSE TABLE EXAMPLE: You would pay the following expenses, including the
maximum front-end sales charge or CDSC, as applicable, on a $1,000
investment, assuming a 5% annual return and either (1) full redemption or
(2) no redemption, at the end of each time period:
If you purchased Class B shares directly in connection with the Program or
by exchange from a Fidelity Advisor equity or long-term bond fund.
1 Year 3 5 10
Years Years Years
B
(1) $ 64A $ 74A $ 97A $ 129
(2) $ 14 $ 44 $ 77 $ 129
A REFLECTS DEDUCTION OF APPLICABLE CDSC.
B REFLECTS CONVERSION TO DAILY MONEY CLASS SHARES AFTER SEVEN YEARS.
If you purchased Class B shares by exchange from a Fidelity Advisor
intermediate-term bond fund.
1 Year 3 Years 5 YearsB 10 Years
(1) $ 44A $ 54A $ 68 $ 111
(2) $ 14 $ 44 $ 68 $111
A REFLECTS DEDUCTION OF APPLICABLE CDSC.
B REFLECTS CONVERSION TO DAILY MONEY CLASS SHARES AFTER FOUR YEARS.
THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO
SUGGEST ACTUAL OR EXPECTED COSTS OR RETURNS, ALL OF WHICH MAY VARY.
FMR has voluntarily agreed to reimburse Class B to the extent that total
operating expenses exceed 1.40% of its average net assets. If this
agreement were not in effect, other expenses and total operating expenses,
as a percentage of average net assets, of Class B of the fund would have
been, ____ % and ____ %, respectively. Expenses eligible for
reimbursement do not include interest, taxes, brokerage commissions, and
extraordinary expenses.
FINANCIAL HIGHLIGHTS
The financial highlights table that follows has been audited by
Coopers & Lybrand L.L.P. , independent accountants. The fund's
financial highlights, financial statements, and report of the auditor are
included in the fund's Annual Report, and are incorporated by reference
into (are legally a part of) the fund's SAI. Contact Fidelity Client
Services (Client Services) or your investment professional for a free copy
of the Annual Report or the SAI.
SELECTED PER-SHARE DATA
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Years ended July 31 1996A 1996 1995 1994E
Net asset value, beginning of period $ 1.000 $ 1.000 $ 1.000 $ 1.000
Income from Investment Operations
Net interest income .010 .043 .042 .002
Less Distributions
From net interest income (.010) (.043) (.042) (.002)
Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000
Total returnB 1.01% 4.33% 4.28% .25%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 20,411 $ 39,956 $ 3,154 $ 628
Ratio of expenses to average net asset 1.35%C 1.35% 1.35% 1.35%C
,D C C ,D
Ratio of net interest income to average net assets 3.96%D 4.13% 4.22% 3.03%D
</TABLE>
A THREE MONTHS ENDED OCTOBER 31, 1996
B TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE LEVIED
ON CLASS B SHARES AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
C FMR AGREED TO REIMBURSE A PORTION OF THE CLASS'S EXPENSES DURING THE
PERIODS SHOWN. WITHOUT THIS REIMBURSEMENT THE CLASS'S EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
D ANNUALIZED
E FROM JULY 1, 1994 (COMMENCEMENT OF OPERATIONS)
PERFORMANCE
Money market fund performance can be measured as TOTAL RETURN or YIELD.
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment over a given period,
assuming reinvestment of any dividends and capital gains. A CUMULATIVE
TOTAL RETURN reflects actual performance over a stated period of time. An
AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that, if
achieved annually, would have produced the same cumulative total return if
performance had been constant over the entire period. Average annual total
returns smooth out variations in performance; they are not the same as
actual year-by-year results.
Average annual and cumulative total returns usually will include the effect
of paying the maximum applicable sales charge.
YIELD refers to the income generated by an investment in the fund over a
given period of time, expressed as an annual percentage rate. When a yield
assumes that income earned is reinvested, it is called an EFFECTIVE YIELD.
SEVEN-DAY YIELD illustrates the income earned by an investment in a money
market fund over a recent seven-day period. Since money market funds
maintain a stable $1.00 share price, current seven-day yields are the most
common illustration of money market fund performance.
The fund's performance and holdings are detailed twice a year in financial
reports, which are sent to all shareholders. For current performance call
Client Services at 1-800-843-3001.
THE FUND IN DETAIL
CHARTER
TREASURY FUND IS A MUTUAL FUND: an investment that pools shareholders'
money and invests it toward a specified goal. The fund is a diversified
fund of Newbury Street Trust (formerly Daily Tax-Exempt Money Fund), an
open-end management investment company organized as a Delaware business
tru st December 30, 1991
THE FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet throughout the year to oversee the fund's activities,
review contractual arrangements with companies that provide services to the
fund, and review the fund's performance. The majority of trustees are not
otherwise affiliated with Fidelity.
THE FUND MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These meetings
may be called to elect or remove trustees, change fundamental policies,
approve a management contract, or for other purposes. Shareholders not
attending these meetings are encouraged to vote by proxy. The transfer
agent will mail proxy materials in advance, including a voting card and
information about the proposals to be voted on. The number of votes you are
entitled to is based upon the dollar value of your investment.
Separate votes are taken by each class of shares, fund, or trust, if a
matter affects just that class of shares, fund, or trust, respectively.
FMR AND ITS AFFILIATES
Fidelity Investments is one of the largest investment management
organizations in the United States and has its principal business address
at 82 Devonshire Street, Boston, Massachusetts 02109. It includes a number
of different subsidiaries and divisions which provide a variety of
financial services and products. The fund employs various Fidelity
companies to perform activities required for its operation.
The fund is managed by FMR, which handles the fund's business affairs. FMR
Texas Inc. (FMR Texas), located in Irving, Texas, has primary
responsibility for providing investment management services.
As of March 31, 1997, FMR advised funds having approximately __ million
shareholder accounts with a total value of more than $___ billion.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets Fidelity's
funds and services. Fidelity Investments Institutional Operations Company,
Inc. (FIIOC) performs transfer agent servicing functions for Class B shares
of the fund.
FMR Corp. is the ultimate parent company of FMR and FMR Texas. Members of
the Edward C. Johnson 3d family are the predominant owners of a class of
shares of common stock representing approximately 49% of the voting power
of FMR Corp. Under the Investment Company Act of 1940 (the 1940 Act),
control of a company is presumed where one individual or group of
individuals owns more than 25% of the voting stock of that company;
therefore, the Johnson family may be deemed under the 1940 Act to form a
controlling group with respect to FMR Corp.
To carry out the fund's transactions, FMR may use its broker-dealer
affiliates and other firms that sell fund shares, provided that the fund
receives services and commission rates comparable to those of other
broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
THE FUND'S INVESTMENT APPROACH
The fund invests only in U.S. Treasury securities and repurchase agreements
for these securities. The fund does not enter into reverse repurchase
agreements.
When you sell your shares, they should be worth the same amount as when you
bought them. Of course, there is no guarantee that the fund will maintain a
stable $1.00 share price. The fund follows industry-standard guidelines on
the quality, maturity, and diversification of its investments, which are
designed to help maintain a stable $1.00 share price. The fund will
purchase only high-quality securities that FMR believes present minimal
credit risks and will observe maturity restrictions on securities it buys.
In general, securities with longer maturities are more vulnerable to price
changes, although they may provide higher yields. It is possible that a
major change in interest rates or a default on the fund's investments could
cause its share price (and the value of your investment) to change.
The fund earns income at current money market rates. It stresses
preservation of capital, liquidity, and income and does not seek the higher
yields or capital appreciation that more aggressive investments may
provide. The fund's yield will vary from day to day and generally reflects
current short-term interest rates and other market conditions. It is
important to note that neither the fund nor its yield is guaranteed by the
U.S. Government.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which the fund may invest, strategies FMR may employ in
pursuit of the fund's investment objective, and a summary of related risks.
Any restrictions listed supplement those discussed earlier in this section.
A complete listing of the fund's limitations and more detailed information
about the fund's investments are contained in the fund's SAI. Policies and
limitations are considered at the time of purchase; the sale of instruments
is not required in the event of a subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these techniques
unless it believes that they are consistent with the fund's investment
objective and policies and that doing so will help the fund achieve its
goal. Fund holdings are detailed in the fund's financial reports, which are
sent to shareholders twice a year. For a free SAI or financial report, call
Client Services at 1-800-843-3001 or your investment professional.
U.S. TREASURY MONEY MARKET SECURITIES are short-term debt obligations
issued by the U.S. Treasury and include bills, notes, and bonds. U.S.
Treasury securities are backed by the full faith and credit of the United
States.
VARIABLE AND FLOATING RATE SECURITIES have interest rates that are
periodically adjusted either at specific intervals or whenever a benchmark
rate changes. These interest rate adjustments are designed to help
stabilize the security's price.
STRIPPED SECURITIES are the separate income or principal components of a
debt security. The risks associated with stripped securities are similar to
those of other money market securities, although stripped securities may be
more volatile. U.S. Treasury securities that have been stripped by a
Federal Reserve Bank are obligations issued by the U.S. Treasury.
REPURCHASE AGREEMENTS. In a repurchase agreement, the fund buys a security
at one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults
or becomes insolvent.
PUT FEATURES entitle the holder to put (sell back) a security to the issuer
or another party. In exchange for this benefit, the fund may accept a lower
interest rate.
WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS are trading practices in
which payment and delivery for the securities take place at a future date.
The market value of a security could change during this period.
CASH MANAGEMENT. The fund may invest in money market securities, in
repurchase agreements, and in a money market fund available only to funds
and accounts managed by FMR or its affiliates, whose goal is to seek a high
level of current income while maintaining a stable $1.00 share price. A
major change in interest rates or a default on the money market fund's
investments could cause its share price to change.
RESTRICTIONS: The fund does not currently intend to invest in a money
market fund.
BORROWING. The fund may borrow from banks or from other funds advised by
FMR, or through reverse repurchase agreements, and may make additional
investments while borrowings are outstanding.
RESTRICTIONS: The fund may borrow only for temporary or emergency purposes,
but not in an amount exceeding 331/3% of its total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraph restates all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraph, can be changed without shareholder approval.
The fund seeks to obtain as high a level of current income as is consistent
with the preservation of capital and liquidity.
BREAKDOWN OF EXPENSES
Like all mutual funds, the fund pays fees related to its daily operations.
Expenses paid out of Class B's assets are reflected in its share price or
dividends; they are neither billed directly to shareholders nor deducted
from shareholder accounts.
The fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs. FMR in turn pays fees to an affiliate who provides
assistance with these services. The fund also pays OTHER EXPENSES, which
are explained at right.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month. The fund pays
the fee at the annual rate of 0.25% of its average net assets.
FMR Texas is the fund's sub-adviser and has primary responsibility for
managing its investments. FMR is responsible for providing other management
services. FMR pays FMR Texas 50% of its management fee (before expense
reimbursements but after payments made by FMR pursuant to the fund's
Distribution and Service Plan) for FMR Texas's services. FMR paid FMR Texas
a fee equal to 0.11% of the fund's average net assets for the three month
period ended October 31, 1996.
OTHER EXPENSES
While the management fee is a significant component of the fund's annual
operating costs, the fund has other expenses as well.
FIIOC performs certain transfer agency, dividend disbursing and shareholder
services for Class B. Fidelity Service Co, Inc. (FSC) calculates the NAV
and dividends for Class B, and maintains the fund's general accounting
records. For the three month period ended October 31, 1996, fees paid by
Class B to FIIOC amounted to 0.27% of Class B's average net assets, and
fees paid by the fund to FSC amounted to 0.01% of the fund's average net
assets.
Class B shares have adopted a DISTRIBUTION AND SERVICE PLAN. Under the
Plan, Class B is authorized to pay FDC a monthly distribution fee as
compensation for its services and expenses in connection with the
distribution of Class B shares. Class B of the fund currently pays FDC a
monthly distribution fee at an annual rate of 0.75% of its average net
assets throughout the month.
In addition, pursuant to the Class B Plan, investment professionals are
compensated at an annual rate of 0.25% of Class B's average net assets
throughout the month for providing personal service to and/or maintenance
of Class B shareholder accounts.
The Plan specifically recognizes that FMR may make payments from its
management fee revenue, past profits or other resources to FDC for expenses
incurred in connection with the distribution of Class B shares, including
payments made to investment professionals that provide shareholder support
services or engage in the sale of the Class B's shares. The Board of
Trustees has authorized such payments.
The fund also pays other expenses, such as legal, audit, and custodian
fees; in some instances, proxy solicitation costs; and the compensation of
trustees who are not affiliated with Fidelity.
YOUR ACCOUNT
TYPES OF ACCOUNTS
When you invest through an investment professional, your investment
professional, including a broker-dealer or financial institution, may
charge you a transaction fee with respect to the purchase and sale of fund
shares. Read your investment professional's program materials in
conjunction with this prospectus for additional service features or fees
that may apply. Certain features of the fund, such as minimum initial or
subsequent investment amounts, may be modified.
The different ways to set up (register) your account by exchange with
Fidelity are listed at right.
The account guidelines that follow may not apply to certain retirement
accounts. If you are investing through a retirement account or if your
employer offers the fund through a retirement program, you may be subject
to additional fees. For more information, please refer to your program
materials, contact your employer, or call your retirement benefits number
or Client Services at 1-800-843-3001 or your investment professional
directly, as appropriate.
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have two or
more owners (tenants).
RETIREMENT
TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES
Retirement plans allow individuals to shelter investment income and
capital gains from current taxes. In addition, contributions to these
accounts may be tax deductible. Retirement accounts require special
applications and typically have lower minimums.
(solid bullet) INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow anyone of legal
age under 701/2 with earned income to invest up to $2,000 per tax year.
Individuals can also invest in a spouse's IRA if the spouse has earned
income of less than $250.
(solid bullet) ROLLOVER IRAS retain special tax advantages for certain
distributions from employer-sponsored retirement plans.
(solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide small
business owners or those with self-employed income (and their eligible
employees) with many of the same advantages as a Keogh, but with fewer
administrative requirements.
(solid bullet) 401(K) PLANS allow employees of corporations of all sizes to
contribute a percentage of their wages on a tax-deferred basis. These
accounts need to be established by the trustee of the plan.
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and obtain
tax benefits. An individual can give up to $10,000 a year per child without
paying federal gift tax. Depending on state laws, you can set up a
custodial account under the Uniform Gifts to Minors Act (UGMA) or the
Uniform Transfers to Minors Act (UTMA). Contact your investment
professional.
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened by exchange.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER
GROUPS
Contact your investment professional.
HOW TO BUY SHARES
Class B shares of the fund may be purchased directly in connection with the
Program or by exchange from Class B shares of the Fidelity Advisor funds.
Class B shares purchased in connection with the Program must be exchanged
into Class B shares of Fidelity Advisor funds within 18 months of purchase.
For more information regarding the Program, see "Regular Investment Plans"
on page 14 .
CLASS B'S SHARE PRICE, called NAV, is calculated every business day. Class
B shares are sold without a front-end sales charge but may be subject to a
CDSC upon redemption. For information on how the CDSC is calculated, see
"Transaction Details," page 15 . The fund is managed to keep its
share price stable at $1.00.
Shares are purchased at the next NAV calculated after your order is
received and accepted. NAV is normally calculated at 2:00 p.m. and 4:00
p.m. Eastern time.
It is the responsibility of your investment professional to transmit your
order to buy shares to Fidelity before the close of business on the day you
place your order.
Share certificates are not available for Class B shares.
IF YOU ARE NEW TO FIDELITY, an initial investment must be preceded or
accompanied by a completed, signed application, which should be forwarded
to:
Fidelity Investments
P.O. Box 770002
Cincinnati, OH 45277-0081
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Mail an account application with a check,
(small solid bullet) Place an order and wire money into your account,
(small solid bullet) Open your account by exchanging from Class B of a
Fidelity Advisor fund, or
(small solid bullet) Contact your investment professional or call Fidelity
Client Services.
BY MAIL. You or your investment professional must send a check payable to
Newbury Street Trust : Treasury Fund - Advisor B Class. When
making subsequent investments by check, please write your fund account
number on the check. All investments by check should be sent to the address
at left.
BY WIRE. You must sign up for the wire feature before using it. For wiring
information and instructions, you should call the investment professional
through which you trade or if you trade directly through Fidelity, call
Client Services. There is no fee imposed by the fund for wire purchases.
However, if you buy shares through an investment professional, the
investment professional may impose a fee for wire purchases.
Fidelity Client Services:
Nationwide 1-800-843-3001
Your wire must be received and accepted by the transfer agent at the fund's
designated wire bank.
You are advised to wire funds as early in the day as possible, and to
provide advance notice to Client Services for large purchases.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT
By Exchange from:
(small solid bullet) Fidelity Advisor fund $1,000
(small solid bullet) Fidelity Advisor retirement accounts $500
Program account $10,000
TO ADD TO AN ACCOUNT
By Exchange from:
(small solid bullet) Fidelity Advisor fund $250
(small solid bullet) Fidelity Advisor retirement accounts $100
Program account None
MINIMUM BALANCE
By Exchange from:
(small solid bullet) Fidelity Advisor fund $500
(small solid bullet) Fidelity Advisor retirement accounts None
Program account $10,000
HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares. Your shares will be sold at
the next NAV calculated after your order is received and accepted, less any
applicable CDSC. NAV is normally calculated at 2:00 p.m. and 4:00 p.m.
Eastern time.
It is the responsibility of your investment professional to transmit your
order to redeem shares to Fidelity before the close of business on the day
you place your order.
TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the methods
described on these pages.
TO SELL SHARES IN A FIDELITY RETIREMENT ACCOUNT, your request must be made
in writing, except for exchanges to Class B shares of a Fidelity Advisor
fund, which can be requested by phone or in writing.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR NON-RETIREMENT ACCOUNT SHARES,
please leave at least $500 worth of shares in your account opened by
exchange from Fidelity Advisor Class B shares (non-Program account) or
$10,000 worth of shares in your Program account to keep it open.
TO SELL SHARES BY BANK WIRE, you will need to sign up for this service in
advance.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to
protect you and Fidelity from fraud. Your request must be made in writing
and include a signature guarantee if any of the following situations apply:
(small solid bullet) You wish to redeem more than $100,000 worth of shares,
(small solid bullet) Your account registration has changed within the last
30 days,
(small solid bullet) The check is being mailed to a different address than
the one on your account (record address),
(small solid bullet) The check is being made payable to someone other than
the account owner,
(small solid bullet) The redemption proceeds are being transferred to a
Fidelity Advisor account with a different registration, or
(small solid bullet) You wish to have redemption proceeds wired to a
non-predesignated bank account.
You should be able to obtain a signature guarantee from a bank, broker,
dealer, credit union (if authorized under state law), securities exchange
or association, clearing agency, or savings association. A notary public
cannot provide a signature guarantee.
SELLING SHARES IN WRITING
Deliver your letter to your investment professional, or mail it to the
following address:
Fidelity Investments
P.O. Box 770002
Cincinnati, OH 45277-0081
Unless otherwise instructed, the transfer agent will send a check to the
record address.
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ACCOUNT TYPE SPECIAL REQUIREMENTS
PHONE All account types except (small solid bullet) Maximum check request: $100,000.
YOUR INVESTMENT retirement (small solid bullet) You may exchange to Class B of Fidelity
PROFESSIONAL All account types Advisor funds if both accounts are
registered with the same name(s),
address, and taxpayer ID number.
(phone_graphic)
Mail or in Person
(mail_graphic)(hand_graphic) Individual, Joint Tenant, (small solid bullet) The letter of instruction (with signature
Sole Proprietorship, guaranteed) must be signed by all persons
UGMA, UTMA required to sign for transactions, exactly as
their names appear on the account and
sent to your investment professional.
Retirement account (small solid bullet) The account owner should complete a
retirement distribution form. Contact your
investment professional or, if you
purchased your shares through a
broker-dealer or insurance representative,
call 1-800-522-7297. If you purchased your
shares through a bank representative, call
1-800-843-3001.
Trust (small solid bullet) The trustee must sign the letter indicating
capacity as trustee. If the trustee's name is
not in the account registration, provide a
copy of the trust document certified within
the last 60 days.
Business or Organization (small solid bullet) At least one person authorized by
corporate resolution to act on the account
must sign the letter (with signature
guaranteed).
Executor, Administrator, (small solid bullet) For instructions, contact your investment
Conservator/Guardian professional or, if you purchased your
shares through a broker-dealer or
insurance representative, call
1-800-522-7297. If you purchased your
shares through a bank representative, call
1-800-843-3001.
Wire (wire_graphic) All account types (small solid bullet) You must sign up for the wire feature
before using it. To verify that it is in place,
contact your investment professional or, if
you purchased your shares through a
broker-dealer or insurance representative,
call 1-800-522-7297. If you purchased your
shares through a bank representative, call
1-800-843-3001. Minimum wire: $500.
(small solid bullet) Redemption proceeds will be wired via the
Federal Reserve Wire System to your bank
account of record.
(small solid bullet) Your wire redemption request must be
received by the transfer agent before 4:00
p.m. Eastern time for money to be wired on
the next business day.
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INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your account.
INFORMATION SERVICES
FIDELITY'S TELEPHONE REPRESENTATIVES are available Monday through Friday,
8:30 a.m. to 6:00 p.m. Eastern time.
STATEMENTS AND REPORTS that Fidelity sends to you include the following:
(small solid bullet) Confirmation statements (after every transaction,
except a reinvestment, that affects your account balance or your account
registration)
(small solid bullet) Account statements (monthly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed, even if you have more than one account in the
fund. Call your investment professional or Client Services if you need
additional copies of financial reports, prospectuses, or historical account
information.
One easy way to pursue your financial goals is to invest money regularly.
The fund offers a convenient service that lets you transfer money between
fund accounts, automatically. While regular investment plans do not
guarantee a profit and will not protect you against loss in a declining
market, they can be an excellent way to invest for retirement, a home,
educational expenses, and other long-term financial goals. Certain
restrictions apply for retirement accounts. Call your investment
professional for more information.
REGULAR INVESTMENT PLANS
FIDELITY ADVISOR SYSTEMATIC EXCHANGE PROGRAM
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO A FIDELITY ADVISOR FUND
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MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly, quarterly, (small solid bullet) To establish, call your investment professional after
semi-annually, or both accounts are opened.
annually (small solid bullet) To change the amount or frequency of your
investment, contact your investment professional
directly or, if you purchased your shares through a
broker-dealer or insurance representative, call
1-800-522-7297. If you purchased your shares
through a bank representative, call 1-800-843-3001.
(small solid bullet) The account from which the exchanges are to be
processed must have a minimum balance of
$10,000. The account into which the exchange is
being processed must have a minimum of $1,000.
(small solid bullet) Both accounts must have the same registrations
and taxpayer ID numbers.
(small solid bullet) Call at least 2 business days prior to your next
scheduled exchange date.
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SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
The fund distributes substantially all of its net investment income and
capital gains, if any, to shareholders each year. Income dividends are
declared daily and paid monthly.
Income dividends declared are accrued daily throughout the month and are
normally distributed on the first business day of the following month.
Based on prior approval of the fund, dividends relating to Class B shares
redeemed during the month can be distributed on the day of redemption. The
fund reserves the right to limit this service.
DISTRIBUTION OPTIONS
When you open an account, specify on your account application how you want
to receive your distributions. Class B offers two options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions, if
any, will be automatically reinvested in additional shares of the same
class of the fund. If you do not indicate a choice on your application, you
will be assigned this option.
2. CASH OPTION. You will be sent a check or wire for your dividend and
capital gain distributions, if any.
For retirement accounts, all distributions are automatically reinvested.
When you are over 59 years old, you can receive distributions in cash.
Shares purchased through reinvestment of dividend and capital gain
distributions are not subject to a sales charge.
Dividends will be reinvested at the fund's Class B NAV on the last day of
the month. Capital gain distributions, if any, will be reinvested at the
NAV as of the record date of the distribution. The mailing of distribution
checks will begin within seven days.
TAXES
As with any investment, you should consider how your investment in the fund
will be taxed. If your account is not a tax-deferred retirement account,
you should be aware of these tax implications.
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax,
and may also be subject to state or local taxes. If you live outside the
United States, your distributions could also be taxed by the country in
which you reside. Your distributions are taxable when they are paid,
whether you take them in cash or reinvest them. However, distributions
declared in December and paid in January are taxable as if they were paid
on December 31.
For federal tax purposes, the fund's income and short-term capital gain
distributions are taxed as dividends; long-term capital gain distributions,
if any, are taxed as long-term capital gains.
Mutual fund dividends from U.S. Government securities are generally free
from state and local income taxes. However, particular states may limit
this benefit, and some types of securities, such as repurchase agreements
and some agency-backed securities, may not qualify for the benefit. In
addition, some states may impose intangible property taxes. You should
consult your own tax adviser for details and up-to-date information on the
tax laws in your state.
For the three month period ended October 31, 1996, 18.96% of Treasury
Fund 's income distributions was derived from interest on U.S.
Government securities which is generally exempt from state income tax.
Every January, Fidelity will send you and the IRS a statement showing the
taxable distributions paid to you in the previous year.
There are tax requirements that all funds must follow in order to avoid
federal taxation. In its effort to adhere to these requirements, the fund
may have to limit its investment activity in some types of instruments.
TRANSACTION DETAILS
THE FUND IS OPEN FOR BUSINESS and its NAV is normally calculated each day
that both the Federal Reserve Bank of New York (New York Fed) and the New
York Stock Exchange (NYSE) are open. The following holiday closings have
been scheduled for 1997: New Year's Day, Martin Luther King's Birthday,
Washington's Birthday, Good Friday, Memorial Day, Independence Day, Labor
Day, Columbus Day, Veterans Day, Thanksgiving Day, and Christmas Day.
Although FMR expects the same holiday schedule to be observed in the
future, the New York Fed or the NYSE may modify its holiday schedule at any
time. On any day that the New York Fed or the NYSE closes early, the
principal government securities markets close early (such as on days in
advance of holidays generally observed by participants in such markets), or
as permitted by the SEC, the right is reserved to advance the time on that
day by which purchase and redemption orders must be received.
To the extent that portfolio securities are traded in other markets on days
when the New York Fed or the NYSE is closed, Class B's NAV may be affected
on days when investors do not have access to the fund to purchase or redeem
shares. Certain Fidelity funds may follow different holiday closing
schedules.
A CLASS'S NAV is the value of a single share. The NAV of Class B is
computed by adding Class B's pro rata share of the value of the fund's
investments, cash, and other assets, subtracting Class B's pro rata share
of the value of the fund's liabilities, subtracting the liabilities
allocated to Class B, and dividing the result by the number of Class B
shares outstanding. The fund values its portfolio securities on the basis
of amortized cost. This method minimizes the effect of changes in a
security's market value and helps the fund maintain a stable $1.00 share
price.
THE OFFERING PRICE (price to buy one share)is Class B's NAV. The REDEMPTION
PRICE (price to sell one share) is Class B's NAV, minus any applicable
CDSC.
Class B shares purchased by exchange retain the CDSC schedule that was in
effect when you originally purchased the Fidelity Advisor fund Class B
shares that you exchanged for Class B shares of the fund.
Class B shares purchased directly in connection with the Program will be
assessed a CDSC based on the following schedule:
From Date of Purchase Contingent
Deferred
Sales Charge
Less than 1 year 5 %
1 year to less than 2 years 4 %
2 years to less than 3 years 3%
3 years to less than 4 years 3%
4 years to less than 5 years 2%
5 years to less than 6 years 1%
6 years to less than 7 years A 0%
A AFTER A MAXIMUM HOLDING PERIOD OF S EVEN YEARS, CLASS B SHARES WILL
CONVERT AUTOMATICALLY TO DAILY MONEY CLASS SHARES OF THE FUND.
Investment professionals with whom FDC has agreements receive as
compensation from FDC a concession equal to 4 .00% of the amount of
your direct purchase of Class B shares.
The CDSC will be calculated based on the lesser of the cost of Class B
shares at the initial date of purchase or the value of Class B shares at
redemption, not including any reinvested dividends or capital gains, if
any. Class B shares acquired through distributions (dividends or capital
gains) will not be subject to a CDSC. In determining the applicability and
rate of any CDSC at redemption, Class B shares representing reinvested
dividends and capital gains, if any, will be redeemed first, followed by
Class B shares that have been held for the longest period of time.
CONVERSION FEATURE. After a maximum holding period of s even years
from the initial date of purchase, Class B shares convert automatically to
Daily Money Class shares of the fund. Conversion to Daily Money
Class shares will be made at NAV. At the time of conversion, a portion
of the Class B shares purchased through the reinvestment of dividends or
capital gains (Dividend Shares) will also convert to Daily Money
Class shares. The portion of Dividend Shares that will convert is
determined by the ratio of your converting Class B non-Dividend Shares to
your total Class B non-Dividend Shares.
DAILY MONEY CLASS SHARES. The fund offers Daily Money Class
shares to individual, institutional and corporate investors at NAV.
Daily Money Class shares may be exchanged for shares of other
Fidelity funds. If Daily Money Class shares were purchased in
connection with a Fidelity Advisor fund program, those Daily Money
Class shares may be exchanged for Class A or Class T shares, as
applicable, of Fidelity Advisor funds. Transfer agency, dividend disbursing
and shareholder services for Daily Money Class shares are performed
by FIIOC. Daily Money Class shares have adopted a Distribution and
Service Plan. Under the Plan, Daily Money Class shares of the fund
currently pays FDC a monthly distribution fee of 0.25% of its average net
assets. The Daily Money Class Plan recognizes that FMR may make payments
from its management fee revenue, past profits, or other resources to FDC
for expenses incurred in connection with the distribution of Daily Money
Class's shares, including payments made to investment professionals that
provide shareholder support services or engage in the sale of the Daily
Money Class's shares. The Board of Trustees of each fund has authorized
such payments. For the three month period ended October 31, 1996, total
operating expenses for Daily Money Class were 0.65 % of
average net assets, after voluntary expense reimbursements of 0.04 %
by FMR which reflect the expense structure in effect on that date .
For more information about the CDSC, including the conversion feature and
the permitted circumstances for CDSC waivers, contact your investment
professional.
REINSTATEMENT PRIVILEGE. If you have sold all or part of your Class B
shares, you may reinvest an amount equal to all or a portion of the
redemption proceeds in Class B shares of the fund or Class B shares of a
Fidelity Advisor fund, at the NAV next determined after receipt of your
investment order, provided that such reinvestment is made within 30 days of
redemption. Under these circumstances, the dollar amount of the CDSC you
paid will be reimbursed to you by reinvesting that amount in Class B shares
of the fund or Class B shares of the Fidelity Advisor fund, as applicable.
You must reinstate your Class B shares into an account with the same
registration. This privilege may be exercised only once by a shareholder
with respect to the fund and certain restrictions may apply. For purposes
of the CDSC schedule, the holding period will continue as if the Class B
shares had not been redeemed.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that
your social security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require the fund to
withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity may only be
liable for losses resulting from unauthorized transactions if it does not
follow reasonable procedures designed to verify the identity of the caller.
Fidelity will request personalized security codes or other information, and
may also record calls. You should verify the accuracy of the confirmation
statements immediately after receipt. If you do not want the ability to
redeem and exchange by telephone, call Fidelity for instructions.
Additional documentation may be required from corporations, associations,
and certain fiduciaries.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods
of unusual market activity), consider placing your order by mail.
TO ALLOW FMR TO MANAGE THE FUND MOST EFFECTIVELY, you are urged to initiate
all trades as early in the day as possible and to notify Client Services in
advance of large transactions.
THE FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. The fund also reserves the right to reject any specific purchase
by exchange. See "Exchange Restrictions" on page 19 . Purchase by
exchange may be refused if, in FMR's opinion, they would disrupt management
of the fund.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased at the
next NAV calculated after your order is received and accepted. Note the
following:
(small solid bullet) All of your purchases must be made in U.S. dollars and
checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check, each
check must have a value of at least $50.
(small solid bullet) The fund reserves the right to limit the number of
checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will be
canceled and you could be liable for any losses or fees a fund or Fidelity
has incurred.
(small solid bullet) You begin to earn dividends as of the first business
day following the day your funds are received and accepted by the transfer
agent.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your order is received and accepted. Note the
following:
(small solid bullet) Shares will earn dividends through the day of
redemption; however, shares redeemed on a Friday or prior to a holiday will
continue to earn dividends until the next business day.
(small solid bullet) The fund may withhold redemption proceeds until it is
reasonably assured that investments credited to your account have been
received and collected.
When the NYSE or the New York Fed is closed (or when trading is restricted)
for any reason other than its customary weekend or holiday closings, or
under any emergency circumstances as determined by the SEC to merit such
action, the fund may suspend redemption or postpone payment dates. In cases
of suspension of the right of redemption, the request for redemption may
either be withdrawn or payment may be made based on the NAV next determined
after the termination of the suspension.
IF YOUR ACCOUNT BALANCE FALLS BELOW $500 (for non-Program accounts) or
$10,000 (for Program accounts) due to redemption, the account may be closed
and the proceeds, less any applicable CDSC, may be mailed or wired to your
address or bank account of record, as applicable. You will be given 30
days' notice that your account will be closed unless it is increased to the
minimum.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
EXCHANGE RESTRICTIONS
As a shareholder you have the privilege of exchanging Class B shares for
Class B shares of a Fidelity Advisor fund seven calendar days after
purchase. Currently, there is no limit on the number of exchanges out of
the fund.
Exchange instructions may be given by you in writing or by telephone
directly to the transfer agent or through your investment professional. For
more information on entering an exchange transaction, please consult your
investment professional.
An exchange involves the redemption of all or a portion of the shares of
one fund and the purchase of shares of another fund.
BY TELEPHONE. Exchanges may be requested on any day a fund is open for
business by contacting your investment professional or calling Client
Services at 1-800-843-3001 between 8:30 a.m. and 4:00 p.m. Eastern time.
BY MAIL. You may exchange shares on any business day by submitting written
instructions with an authorized signature which is on file for that
account. Written requests for exchanges should contain the fund name, class
name, account number, the number of shares to be redeemed, and the name of
the fund to be purchased. Written requests for exchange should be mailed to
Fidelity Client Services at the address on page 11 .
WHEN YOU PLACE AN ORDER TO EXCHANGE SHARES, Class B shares will be redeemed
at the next determined NAV after your order is received and accepted.
Shares of the fund to be acquired will be purchased at its next determined
NAV after redemption proceeds are made available. You should note that,
under certain circumstances, the fund may take up to seven days to make
redemption proceeds available for the exchange purchase of shares of
another fund. In addition, please note the following:
(small solid bullet) Exchanges will not be permitted until a completed and
signed account application is on file.
(small solid bullet) The fund you are exchanging into must be available for
sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification number.
(small solid bullet) Before exchanging into a fund, read its prospectus.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Currently, there is no limit on the number of
exchanges out of a fund, nor are there any administrative or redemption
fees applicable to exchanges out of a fund.
(small solid bullet) The fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would be
unable to invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
(small solid bullet) Your exchanges may be restricted or refused if the
fund receives or anticipates simultaneous orders affecting significant
portions of the fund's assets. In particular, a pattern of exchanges that
coincides with a "market timing" strategy may be disruptive to the fund.
(small solid bullet) Any exchanges of Class B shares are not subject to a
CDSC.
Although the fund will attempt to give you prior notice whenever it is
reasonably able to do so, it may impose these restrictions at any time. The
fund reserves the right to terminate or modify the exchange privilege in
the future.
SALES CHARGE REDUCTIONS AND WAIVERS
THE CDSC ON CLASS B SHARES MAY BE WAIVED:
1. In cases of disability or death, provided that Class B shares are
redeemed within one year following the death or the initial determination
of disability; or
2. In connection with a total or partial redemption related to certain
distributions from retirement plans or accounts.
No dealer, sales representative, or any other person has been authorized to
give any information or to make any representations, other than those
contained in this Prospectus and in the related SAI, in connection with the
offer contained in this Prospectus. If given or made, such other
information or representations must not be relied upon as having been
authorized by the fund or FDC. This Prospectus and the related SAI do not
constitute an offer by the fund or by FDC to sell or to buy shares of the
fund to any person to whom it is unlawful to make such offer.
TREASURY FUND - ADVISOR B CLASS
(formerly U.S. Treasury Portfolio - Class B)
CROSS REFERENCE SHEET
Form N-1A Item Number
Part B Statement of Additional Information
10 a,b Cover Page
11 Table of Contents
12 Description of the Trust
13 a,b,c Investment Policies and Limitations
d *
14 a,b,c Trustees and Officers
15 a *
b *
c Trustees and Officers
16 a(i) FMR
a(ii) Trustees and Officers
a(iii),b Management Contract
c *
d Management Contract
e *
f Distribution and Service Plan
g *
h Description of the Trust
i Contracts with FMR Affiliates
17 a Portfolio Transactions
b *
c Portfolio Transactions
d, e *
18 a Description of the Trust
b *
19 a Additional Purchase and Redemption Information
b Valuation
c *
20 Distributions and Taxes
21 a(i,ii) Contracts with FMR Affiliates, Distribution and Service Plan
a(iii),b,c *
22 Performance
23 Financial Statements
* Not Applicable
TREASURY FUND -ADVISOR B CLASS
(FORMERLY U.S. TREASURY PORTFOLIO -INITIAL CLASS)
A FUND OF DAILY TAX-EXEMPT MONEY FUND
STATEMENT OF ADDITIONAL INFORMATION
MAY 30, 1997
This Statement of Additional Information (SAI) is not a prospectus but
should be read in conjunction with the fund's current Prospectus for
Advisor B Class shares (dated May 30, 1997). Please retain
this document for future reference. The fund's Annual Report is a
separate document supplied with this SAI . To obtain an additional copy
of the Prospectus or an Annual Report, please call Fidelity Client
Services at 1-800-843-3001 or your investment professional.
TABLE OF CONTENTS PAGE
Investment Policies and Limitations
Portfolio Transactions 4
Valuation
Performance 6
Additional Purchase, Exchange, and Redemption Information
Distributions and Taxes
FMR 10
Trustees and Officers
Management Contract
Contracts with FMR Affiliates
Distribution and Service Plan
Description of the Trust
Financial Statements 17
Appendix
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
SUB-ADVISER
FMR Texas Inc. (FMR Texas)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
Fidelity Investments Institutional Operations Company , Inc. (FIIOC)
CUSTODIAN
The Bank of New York
DMFB-ptb-0597
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in the
Prospectus. Unless otherwise noted, whenever an investment policy or
limitation states a maximum percentage of the fund's assets that may be
invested in any security or other asset, or sets forth a policy regarding
quality standards, such standard or percentage limitation will be
determined immediately after and as a result of the fund's acquisition of
such security or other asset. Accordingly, any subsequent change in values,
net assets, or other circumstances will not be considered when determining
whether the investment complies with the fund's investment policies and
limitations.
The fund's fundamental investment policies and limitations cannot be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940 (the 1940
Act)) of the fund. However, except for the fundamental investment
limitations listed below, the investment policies and limitations described
in this SAI are not fundamental and may be changed without shareholder
approval.
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed by the
U.S. Government or any of its agencies or instrumentalities, or securities
of other investment companies) if, as a result, (a) more than 5% of the
fund's total assets would be invested in the securities of that issuer, or
(b) the fund would hold more than 10% of the outstanding voting securities
of that issuer;
(2) issue senior securities except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the fund may (i) borrow money for temporary
or emergency purposes (not for leveraging or investment) and (ii) engage in
reverse repurchase agreements for any purpose; provided that (i) and (ii)
in combination do not exceed 33 1/3% of the fund's total assets (including
the amount borrowed) less liabilities (other than borrowings). Any
borrowings that come to exceed this amount will be reduced within three
days (not including Sundays and holidays) to the extent necessary to comply
with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments;
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements; or
(9) The fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company with substantially the same
fundamental investment objectives, policies and limitations as the fund.
THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT
SHAREHOLDER APPROVAL:
(i) The fund does not currently intend to purchase a security (other
than securities issued or guaranteed by the U.S. government or any of its
agencies or instrumentalities) if, as a result, more than 5% of its total
assets would be invested in securities of a single issuer; provided that
the fund may invest up to 25% of its total assets in the first tier
securities of a single issuer for up to three business days. (This limit
does not apply to securities of other open-end investment companies managed
by FMR or a successor or affiliate purchased pursuant to an exemptive order
granted by the SEC.)
(ii) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(iii) Subject to revision upon 60 days' notice to shareholders, the fund
does not currently intend to purchase securities on margin, except that the
fund may obtain such short-term credits as are necessary for the clearance
of transactions, and provided that margin payments in connection with
futures contracts and options on futures contracts shall not constitute
purchasing securities on margin.
(iv) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party. The fund will not purchase any security while borrowings
(excluding reverse repurchase agreements) representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(v) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(vi) The fund does not currently intend to purchase or sell futures
contracts or call options. This limitation does not apply to options
attached to, or acquired or traded together with, their underlying
securities, and does not apply to securities that incorporate features
similar to options or futures contracts.
(vii) The fund does not currently intend to make loans, but this limitation
does not apply to purchases of debt securities or to repurchase agreements.
( viii ) The fund does not currently intend to invest all of its
assets in the securities of a single open-end management investment company
with substantially the same fundamental investment objective, policies, and
limitations as the fund.
For the fund's policies on quality and maturity, see section entitled
"Quality and Maturity" on page .
SHAREHOLDER NOTICE. The fund invests only in U.S. Treasury securities and
repurchase agreements for these securities. This operating policy may be
changed upon 90 days' notice to shareholders.
The fund does not intend to purchase futures contracts or options on
futures contracts. This operating policy may be changed only upon approval
by the Board of Trustees and 60 days' notice to shareholders.
AFFILIATED BANK TRANSACTIONS. The fund may engage in transactions with
financial institutions that are, or may be considered to be, "affiliated
persons" of the fund under the 1940 Act. These transactions may include
repurchase agreements with custodian banks; short-term obligations of, and
repurchase agreements with, the 50 largest U.S. banks (measured by
deposits); municipal securities; U.S. Government securities with affiliated
financial institutions that are primary dealers in these securities;
short-term currency transactions; and short-term borrowings. In accordance
with exemptive orders issued by the SEC, the Board of Trustees has
established and periodically reviews procedures applicable to transactions
involving affiliated financial institutions.
DELAYED-DELIVERY TRANSACTIONS. The fund may buy and sell securities on a
delayed-delivery or when-issued basis. These transactions involve a
commitment by the fund to purchase or sell specific securities at a
predetermined price or yield, with payment and delivery taking place after
the customary settlement period for that type of security. Typically, no
interest accrues to the purchaser until the security is delivered.
When purchasing securities on a delayed-delivery basis, the fund assumes
the rights and risks of ownership, including the risk of price and yield
fluctuations. Because the fund is not required to pay for securities until
the delivery date, these risks are in addition to the risks associated with
the fund's other investments. If the fund remains substantially fully
invested at a time when delayed-delivery purchases are outstanding, the
delayed-delivery purchases may result in a form of leverage. When
delayed-delivery purchases are outstanding, the fund will set aside
appropriate liquid assets in a segregated custodial account to cover its
purchase obligations. When the fund has sold a security on a
delayed-delivery basis, the fund does not participate in further gains or
losses with respect to the security. If the other party to a
delayed-delivery transaction fails to deliver or pay for the securities,
the fund could miss a favorable price or yield opportunity, or could suffer
a loss.
The fund may renegotiate delayed-delivery transactions after they are
entered into, and may sell underlying securities before they are delivered,
which may result in capital gains or losses.
ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they
are valued. Under the supervision of the Board of Trustees, FMR determines
the liquidity of the fund's investments and, through reports from FMR, the
Board monitors investments in illiquid instruments. In determining the
liquidity of the fund's investments, FMR may consider various factors,
including (1) the frequency of trades and quotations, (2) the number of
dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, (4) the nature of the security (including
any demand or tender features), and (5) the nature of the marketplace for
trades (including the ability to assign or offset the fund's rights and
obligations relating to the investment).
Investments currently considered by the fund to be illiquid include
repurchase agreements not entitling the holder to payment of principal and
interest within seven days.
In the absence of market quotations, illiquid investments are valued for
purposes of monitoring amortized cost valuation at fair value as determined
in good faith by a committee appointed by the Board of Trustees. If through
a change in values, net assets, or other circumstances, the fund were in a
position where more than 10% of its net assets was invested in illiquid
securities, it would seek to take appropriate steps to protect liquidity.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive order
issued by the SEC, the fund has received permission to lend money to, and
borrow money from, other funds advised by FMR or its affiliates, but it
currently intends to participate in this program only as a borrower.
Interfund borrowings normally extend overnight, but can have a maximum
duration of seven days. The fund will borrow through the program only when
the costs are equal to or lower than the costs of bank loans. Loans may be
called on one day's notice, and the fund may have to borrow from a bank at
a higher interest rate if an interfund loan is called or not renewed.
PUT FEATURES entitle the holder to sell a security back to the issuer at
any time or at specified intervals. They are subject to the risk that the
put provider is unable to honor the put feature (purchase the security).
QUALITY AND MATURITY. Pursuant to procedures adopted by the Board of
Trustees, the fund may purchase only high-quality securities that FMR
believes present minimal credit risks. To be considered high-quality, a
security must be rated in accordance with applicable rules in one of the
two highest categories for short-term securities by at least two nationally
recognized rating services (or by one, if only one rating service has rated
the security); or, if unrated, judged to be of equivalent quality by FMR.
The fund may not invest more than 5% of its total assets in second tier
securities. In addition, the fund may not invest more than 1% of its total
assets or $1 million (whichever is greater) in the second tier securities
of a single issuer.
The fund currently intends to limit its investments to securities with
remaining maturities of 397 days or less, and to maintain a dollar-weighted
average maturity of 90 days or less. When determining the maturity of a
security, the fund may look to an interest rate reset or demand feature.
REPURCHASE AGREEMENTS. In a repurchase agreement, the fund purchases a
security and simultaneously commits to sell that security back to the
original seller at an agreed-upon price. The resale price reflects the
purchase price plus an agreed-upon incremental amount which is unrelated to
the coupon rate or maturity of the purchased security. To protect the fund
from the risk that the original seller will not fulfill its obligation, the
securities are held in an account of the fund at a bank, marked-to-market
daily, and maintained at a value at least equal to the sale price plus the
accrued incremental amount. While it does not presently appear possible to
eliminate all risks from these transactions (particularly the possibility
that the value of the underlying security will be less than the resale
price, as well as delays and costs to the fund in connection with
bankruptcy proceedings), it is the fund's current policy to engage in
repurchase agreement transactions with parties whose creditworthiness has
been reviewed and found satisfactory by FMR.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, the fund
sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the instrument
at a particular price and time. While a reverse repurchase agreement is
outstanding, the fund will maintain appropriate liquid assets in a
segregated custodial account to cover its obligation under the agreement.
The fund will enter into reverse repurchase agreements only with parties
whose creditworthiness has been found satisfactory by FMR. Such
transactions may increase fluctuations in the market value of the fund's
assets and may be viewed as a form of leverage.
SHORT SALES "AGAINST THE BOX." The fund may sell securities short when it
owns or has the right to obtain securities equivalent in kind or amount to
the securities sold short. Short sales could be used to protect the net
asset value per share (NAV) of the fund in anticipation of increased
interest rates, without sacrificing the current yield of the securities
sold short. If the fund enters into a short sale against the box, it will
be required to set aside securities equivalent in kind and amount to the
securities sold short (or securities convertible or exchangeable into such
securities) and will be required to hold such securities while the short
sale is outstanding. The fund will incur transaction costs, including
interest expenses, in connection with opening, maintaining, and closing
short sales against the box.
STRIPPED GOVERNMENT SECURITIES. Stripped government securities are created
by separating the income and principal components of a U.S. Government
security and selling them separately. STRIPS (Separate Trading of
Registered Interest and Principal of Securities) are created when the
coupon payments and the principal payment are stripped from an outstanding
Treasury security by a Federal Reserve Bank.
VARIABLE AND FLOATING RATE SECURITIES provide for periodic adjustments of
the interest rate paid on the security. Variable rate securities provide
for a specified periodic adjustment in the interest rate, while floating
rate securities have interest rates that change whenever there is a change
in a designated benchmark rate. Some variable or floating rate securities
have put features.
ZERO COUPON BONDS do not make regular interest payments. Instead, they are
sold at a deep discount from their face value and are redeemed at face
value when they mature. Because zero coupon bonds do not pay current
income, their prices can be very volatile when interest rates change. In
calculating its daily dividend, a fund takes into account as income a
portion of the difference between a zero coupon bond's purchase price and
its face value.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of the fund by FMR pursuant to authority contained in the management
contract. FMR has granted investment management authority to the
sub-adviser (see the section entitled "Management Contracts"), and the
sub-adviser is authorized to place orders for the purchase and sale of
portfolio securities, and will do so in accordance with the policies
described below. FMR is also responsible for the placement of transaction
orders for other investment companies and accounts for which it or its
affiliates act as investment adviser. Securities purchased and sold by the
fund generally will be traded on a net basis (i.e., without commission). In
selecting broker-dealers, subject to applicable limitations of the federal
securities laws, FMR considers various relevant factors, including, but not
limited to, the size and type of the transaction; the nature and character
of the markets for the security to be purchased or sold; the execution
efficiency, settlement capability, and financial condition of the
broker-dealer firm; the broker-dealer's execution services rendered on a
continuing basis; and the reasonableness of any commissions.
The fund may execute portfolio transactions with broker-dealers who provide
research and execution services to the fund or other accounts over which
FMR or its affiliates exercise investment discretion. Such services may
include advice concerning the value of securities; the advisability of
investing in, purchasing, or selling securities; and the availability of
securities or the purchasers or sellers of securities. In addition, such
broker-dealers may furnish analyses and reports concerning issuers,
industries, securities, economic factors and trends, portfolio strategy,
and performance of accounts; effect securities transactions, and perform
functions incidental thereto (such as clearance and settlement). FMR
maintains a listing of broker-dealers who provide such services on a
regular basis. However, as many transactions on behalf of the fund are
placed with broker-dealers (including broker-dealers on the list) without
regard to the furnishing of such services, it is not possible to estimate
the proportion of such transactions directed to such broker-dealers solely
because such services were provided. The selection of such broker-dealers
generally is made by FMR (to the extent possible consistent with execution
considerations) based upon the quality of research and execution services
provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the fund may be useful to FMR in rendering investment management
services to the fund or its other clients, and conversely, such research
provided by broker-dealers who have executed transaction orders on behalf
of other FMR clients may be useful to FMR in carrying out its obligations
to the fund. The receipt of such research has not reduced FMR's normal
independent research activities; however, it enables FMR to avoid the
additional expenses that could be incurred if FMR tried to develop
comparable information through its own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause the
fund to pay such higher commissions, FMR must determine in good faith that
such commissions are reasonable in relation to the value of the brokerage
and research services provided by such executing broker-dealers, viewed in
terms of a particular transaction or FMR's overall responsibilities to the
fund and its other clients. In reaching this determination, FMR will not
attempt to place a specific dollar value on the brokerage and research
services provided, or to determine what portion of the compensation should
be related to those services.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided assistance
in the distribution of shares of the fund or shares of other Fidelity funds
to the extent permitted by law. FMR may use research services provided by
and place agency transactions with Fidelity Brokerage Services, Inc. (FBSI)
and Fidelity Brokerage Services (FBS), subsidiaries of FMR Corp., if the
commissions are fair, reasonable, and comparable to commissions charged by
non-affiliated, qualified brokerage firms for similar services. From
September 1992 through December 1994, FBS operated under the name Fidelity
Brokerage Services Limited. (FBSL).
Section 11(a) of the Securities Exchange Act of 1934 prohibits members of
national securities exchanges from executing exchange transactions for
accounts which they or their affiliates manage, unless certain requirements
are satisfied. Pursuant to such requirements, the Board of Trustees has
authorized FBSI to execute portfolio transactions on national securities
exchanges in accordance with approved procedures and applicable SEC rules.
The Trustees periodically review FMR's performance of its responsibilities
in connection with the placement of portfolio transactions on behalf of the
fund and review the commissions paid by the fund over representative
periods of time to determine if they are reasonable in relation to the
benefits to the fund.
During the three month period ended October 31, 1996 and the fiscal years
ended July 31, 1996, 1995, and 1994, the fund paid no brokerage
commissions.
From time to time the Trustees will review whether the recapture for the
benefit of the fund of some portion of the brokerage commissions or similar
fees paid by the fund on portfolio transactions is legally permissible and
advisable. The fund seeks to recapture soliciting broker-dealer fees on the
tender of portfolio securities, but at present no other recapture
arrangements are in effect. The Trustees intend to continue to review
whether recapture opportunities are available and are legally permissible
and, if so, to determine in the exercise of their business judgment whether
it would be advisable for the fund to seek such recapture.
Although the Trustees and officers of the fund are substantially the same
as those of other funds managed by FMR, investment decisions for the fund
are made independently from those of other funds managed by FMR or accounts
managed by FMR affiliates. It sometimes happens that the same security is
held in the portfolio of more than one of these funds or accounts.
Simultaneous transactions are inevitable when several funds and accounts
are managed by the same investment adviser, particularly when the same
security is suitable for the investment objective of more than one fund or
account.
When two or more funds are simultaneously engaged in the purchase or sale
of the same security, the prices and amounts are allocated in accordance
with procedures believed to be appropriate and equitable for each fund. In
some cases this system could have a detrimental effect on the price or
value of the security as far as the fund is concerned. In other cases,
however, the ability of the fund to participate in volume transactions will
produce better executions and prices for the fund. It is the current
opinion of the Trustees that the desirability of retaining FMR as
investment adviser to the fund outweighs any disadvantages that may be said
to exist from exposure to simultaneous transactions.
VALUATION
Fidelity Servi ce Comp any, Inc. (FSC) normally determines the class's
net asset value per share (NAV) at 2:00 p.m. and 4:00 p.m. Eastern time.
The valuation of portfolio securities is determined as of these times for
the purpose of computing the class's NAV.
Portfolio securities and other assets are valued on the basis of amortized
cost. This technique involves initially valuing an instrument at its cost
as adjusted for amortization of premium or accretion of discount rather
than its current market value. The amortized cost value of an instrument
may be higher or lower than the price the fund would receive if it sold the
instrument.
During periods of declining interest rates, the class's yield based on
amortized cost valuation may be higher than would result if the fund used
market valuations to determine its NAV. The converse would apply during
periods of rising interest rates.
Valuing the fund's investments on the basis of amortized cost and use of
the term "money market fund" are permitted pursuant to Rule 2a-7 under the
1940 Act. The fund must adhere to certain conditions under Rule 2a-7, as
summarized in the section entitled "Quality and Maturity" on page .
The Board of Trustees oversees FMR's adherence to the provisions of Rule
2a-7 and has established procedures designed to stabilize the class's NAV
at $1.00. At such intervals as they deem appropriate, the Trustees consider
the extent to which NAV calculated by using market valuations would deviate
from $1.00 per share. If the Trustees believe that a deviation from the
fund's amortized cost per share may result in material dilution or other
unfair results to shareholders, the Trustees have agreed to take such
corrective action, if any, as they deem appropriate to eliminate or reduce,
to the extent reasonably practicable, the dilution or unfair results. Such
corrective action could include selling portfolio instruments prior to
maturity to realize capital gains or losses or to shorten average portfolio
maturity; withholding dividends; redeeming shares in kind; establishing NAV
by using available market quotations; and such other measures as the
Trustees may deem appropriate.
PERFORMANCE
The fund may quote performance in various ways. All performance information
supplied by the fund in advertising is historical and is not intended to
indicate future returns. A class's yield and total return fluctuate in
response to market conditions and other factors.
YIELD CALCULATIONS. To compute the class's yield for a period, the net
change in value of a hypothetical account containing one share reflects the
value of additional shares purchased with dividends from the one original
share and dividends declared on both the original share and any additional
shares. The net change is then divided by the value of the account at the
beginning of the period to obtain a base period return. This base period
return is annualized to obtain a current annualized yield. The class also
may calculate an effective yield by compounding the base period return over
a one-year period. In addition to the current yield, the fund may quote
yields in advertising based on any historical seven-day period. Yields for
the class are calculated on the same basis as other money market funds, as
required by applicable regulations.
Yield information may be useful in reviewing the class's performance and in
providing a basis for comparison with other investment alternatives.
However, the class's yield fluctuates, unlike investments that pay a fixed
interest rate over a stated period of time. When comparing investment
alternatives, investors should also note the quality and maturity of the
portfolio securities of respective investment companies they have chosen to
consider.
Investors should recognize that in periods of declining interest rates the
class's yield will tend to be somewhat higher than prevailing market rates,
and in periods of rising interest rates a class's yield will tend to be
somewhat lower. Also, when interest rates are falling, the inflow of net
new money to the fund from the continuous sale of its shares will likely be
invested in instruments producing lower yields than the balance of the
fund's holdings, thereby reducing the class's current yield. In periods of
rising interest rates, the opposite can be expected to occur.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of the class's return, including the effect of reinvesting
dividends and capital gain distributions, and any change in the class's NAV
over a stated period. Average annual total returns are calculated by
determining the growth or decline in value of a hypothetical historical
investment in the class over a stated period, and then calculating the
annually compounded percentage rate that would have produced the same
result if the rate of growth or decline in value had been constant over the
period. For example, a cumulative total return of 100% over ten years would
produce an average annual total return of 7.18%, which is the steady annual
rate of return that would equal 100% growth on a compounded basis in ten
years. While average annual total returns are a convenient means of
comparing investment alternatives, investors should realize that the
class's performance is not constant over time, but changes from year to
year, and that average annual total returns represent averaged figures as
opposed to the actual year-to-year performance of the class.
In addition to average annual total returns, the fund may quote unaveraged
or cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total
returns may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a series of
redemptions, over any time period. Total returns may be broken down into
their components of income and capital (including capital gains and changes
in share price) in order to illustrate the relationship of these factors
and their contributions to total return. Total returns may be quoted on a
before-tax or after-tax basis. Total returns, yields, and other performance
information may be quoted numerically or in a table, graph, or similar
illustration.
HISTORICAL FUND RESULTS. The following table shows the fund's 7-day yield,
and total returns for the period ended October 31, 1996.
Treasury Fund
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Average Annual Total Returns Cumulative Total Returns
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Seven-Day One Five Ten One Five Ten
Yield Year Years Years Year Years Years
Advisor B Class * 4.06% 0.20% 3.46% 5.37% 0.20% 18.53% 68.73%
</TABLE>
* Average annual and cumulative total returns include the effect of
applicable contingent deferred sales charges (CDSC) of 4% and 1% for one
and five year periods, respectively.
Initial offering of Advisor B Class shares took place on July 1,
1994. Returns prior to that date are those of Initial Class, the original
class of the fund and do not reflect Advisor B Class 's 1.00% 12b-1
fee. Initial Class shares are sold to eligible investors without a sales
load, but with a 12b-1 fee of 0.25%.
Note: If FMR had not reimbursed certain fund expenses during these periods
Advisor B Class 's seven-day yield would have been 3.71 % and
total returns would have been lower.
The following table shows the income and capital elements of the class's
cumulative total return. The table compares the class's return to the
record of the Standard & Poor's 500 Index (S&P 500), the Dow Jones
Industrial Average (DJIA), and the cost of living, as measured by the
Consumer Price Index (CPI), over the same period. The CPI information is as
of the month end closest to the initial investment date for the class. The
S&P 500 and DJIA comparisons are provided to show how the class's total
return compared to the record of a broad unmanaged index of common stocks
and a narrower set of stocks of major industrial companies, respectively,
over the same period. Because the fund invests in short-term fixed-income
securities, common stocks represent a different type of investment from the
fund. Common stocks generally offer greater growth potential than the fund,
but generally experience greater price volatility, which means greater
potential for loss. In addition, common stocks generally provide lower
income than fixed-income investments such as the fund. The S&P 500 and DJIA
returns are based on the prices of unmanaged groups of stocks and, unlike
the fund's returns, do not include the effect of brokerage commissions or
other costs of investing.
During the 10-year period ended October 31 , 1996, a hypothetical
$10,000 investment in Class B of T reasu ry Fund would have grown to
$ ______ , including the effect of the class's 5 % CDSC and
assuming all distributions were reinvested. This was a period of
fluctuating interest rates and the figures below should not be considered
representative of the dividend income or capital gain or loss that could be
realized from an investment in the class today. Tax consequences of
different investments have not been factored into the figures below.
TREASURY FUND INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Year Value of Value of Value of Total S&P 500 DJIA Cost of
Ended Initial Reinvested Reinvested Value Living
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1996 $ 10,000 $ 6,873 $ 0 $ 16,873 $ 39,291 $ 43,713 $ 14,352
1995 $ 10,000 $ 6,193 $ 0 $ 16,193 $ 31,662 $ 33,740 $ 13,935
1994 $ 10,000 $ 5,482 $ 0 $ 15,482 $ 25,041 $ 27,043 $ 13,554
1993 $ 10,000 $ 5,028 $ 0 $ 15,028 $ 24,109 $ 24,786 $ 13,209
1992 $ 10,000 $ 4,633 $ 0 $ 14,633 $ 20,974 $ 21,104 $ 12,856
1991 $ 10,000 $ 4,116 $ 0 $ 14,116 $ 19,071 $ 19,495 $ 12,457
1990 $ 10,000 $ 3,311 $ 0 $ 13,311 $ 14,284 $ 14,987 $ 12,103
1989 $ 10,000 $ 2,325 $ 0 $ 12,325 $ 15,441 $ 15,617 $ 11,387
1988 $ 10,000 $ 1,315 $ 0 $ 11,315 $ 12,216 $ 12,225 $ 10,898
1987 $ 10,000 $ 597 $ 0 $ 10,597 $ 10,641 $ 10,943 $ 10,453
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Advisor B
Class of the fund on October 31, 1986, assuming the 5 % CDSC had
been in effect, the net amount invested in Advisor B Class shares
was $10,000. The cost of the initial investment ($10,000) together with the
aggregate cost of reinvested dividends and capital gain distribution for
the period covered (their cash value at the time they were reinvested)
amounted to $ ______ . If distributions had not been reinvested, the
amount of distributions earned from the fund over time would have been
smaller, and cash payments (dividends) for the period would have amounted
to $ _____ . The class did not distribute any capital gains during the
period. Initial offering of Advisor B Class shares took place on
July 1, 1994. Returns prior to that date are those of Initial Class, the
original class of the fund and do not reflect Advisor B Class 's
1.00% 12b-1 fee. Initial Class shares are sold to eligible investors
without a sales load, but with a 12b-1 fee of up to 0. 25 %. If FMR
had not reimbursed certain fund expenses during the periods shown, total
returns would have been lower.
PERFORMANCE COMPARISONS. The fund's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed as
mutual fund rankings prepared by Lipper Analytical Services, Inc. (Lipper),
an independent service located in Summit, New Jersey that monitors the
performance of mutual funds. Generally, Lipper rankings are based on total
return, assume reinvestment of distributions, do not take sales charges or
redemption fees into consideration, and are prepared without regard to tax
consequences. Lipper may also rank funds based on yield. In addition to the
mutual fund rankings, the fund's performance may be compared to stock,
bond, and money market mutual fund performance indices prepared by Lipper
or other organizations. When comparing these indices, it is important to
remember the risk and return characteristics of each type of investment.
For example, while stock mutual funds may offer higher potential returns,
they also carry the highest degree of share price volatility. Likewise,
money market funds may offer greater stability of principal, but generally
do not offer the higher potential returns available from stock mutual
funds.
From time to time, the fund's performance may also be compared to other
mutual funds tracked by financial or business publications and periodicals.
For example, the fund may quote Morningstar, Inc. in its advertising
materials. Morningstar, Inc. is a mutual fund rating service that rates
mutual funds on the basis of risk-adjusted performance. Rankings that
compare the performance of Fidelity funds to one another in appropriate
categories over specific periods of time may also be quoted in advertising.
The fund may be compared in advertising to Certificates of Deposit (CDs) or
other investments issued by banks or other depository institutions. Mutual
funds differ from bank investments in several respects. For example, the
fund may offer greater liquidity or higher potential returns than CDs, the
fund does not guarantee your principal or your return, and fund shares are
not FDIC insured.
Fidelity may provide information designed to help individuals understand
their investment goals and explore various financial strategies. Such
information may include information about current economic, market, and
political conditions; materials that describe general principles of
investing, such as asset allocation, diversification, risk tolerance, and
goal setting; questionnaires designed to help create a personal financial
profile; worksheets used to project savings needs based on assumed rates of
inflation and hypothetical rates of return; and action plans offering
investment alternatives. Materials may also include discussions of
Fidelity's asset allocation funds and other Fidelity funds, products, and
services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the CPI), and combinations of
various capital markets. The performance of these capital markets is based
on the returns of different indices.
Fidelity funds may use the performance of these capital markets in order to
demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any
of these capital markets. The risks associated with the security types in
any capital market may or may not correspond directly to those of the
funds. Ibbotson calculates total returns in the same method as the funds.
The funds may also compare performance to that of other compilations or
indices that may be developed and made available in the future.
The fund may compare its performance or the performance of securities in
which it may invest to averages published by IBC Financial Data, Inc. of
Ashland, Massachusetts. These averages assume reinvestment of
distributions. IBC MONEY FUND REPORT AVERAGES(trademark)/Government, which
is reported in IBC's MONEY FUND REPORT(registered trademark), covers over
___ government money market funds.
In advertising materials, Fidelity may reference or discuss its products
and services, which may include other Fidelity funds; retirement investing;
brokerage products and services; model portfolios or allocations; saving
for college or other goals; charitable giving; and the Fidelity credit
card. In addition, Fidelity may quote or reprint financial or business
publications and periodicals as they relate to current economic and
political conditions, fund management, portfolio composition, investment
philosophy, investment techniques, the desirability of owning a particular
mutual fund, and Fidelity services and products. Fidelity may also reprint,
and use as advertising and sales literature, articles from Fidelity Focus,
a quarterly magazine provided free of charge to Fidelity fund shareholders.
The fund may present its fund number, Quotron(trademark) number, and CUSIP
number, and discuss or quote its current portfolio manager.
As of M arch 31, 1997, FMR advised over $__ billion in tax-free fund
assets, $__ billion in money market fund assets, $___ billion in equity
fund assets, $__ billion in international fund assets, and $__ billion in
Spartan fund assets. The fund may reference the growth and variety of money
market mutual funds and the adviser's innovation and participation in the
industry. The equity funds under management figure represents the largest
amount of equity fund assets under management by a mutual fund investment
adviser in the United States, making FMR America's leading equity (stock)
fund manager. FMR, its subsidiaries, and affiliates maintain a worldwide
information and communications network for the purpose of researching and
managing investments abroad.
In addition to performance rankings, each class may compare its total
expense ratio to the average total expense ratio of similar funds tracked
by Lipper. A class's total expense ratio is a significant factor in
comparing bond and money market investments because of its effect on yield.
ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are valued in
computing the NAV of the Advisor B Class Shares. Shareholders
receiving securities or other property on redemption may realize a gain or
loss for tax purposes, and will incur any costs of sale, as well as the
associated inconveniences.
Pursuant to Rule 11a-3 (the Rule) under the 1940 Act, the fund is required
to give shareholders at least 60 days' notice prior to terminating or
modifying its exchange privilege. Under the Rule, the 60-day notification
requirement may be waived if (i) the only effect of a modification would be
to reduce or eliminate an administrative fee, redemption fee or deferred
sales charge ordinarily payable at the time of exchange, or (ii) the fund
suspends the redemption of the shares to be exchanged as permitted under
the 1940 Act or the rules and regulations thereunder, or the fund to be
acquired suspends the sale of its shares because it is unable to invest
amounts effectively in accordance with its investment objective and
policies.
In the prospectus, the fund has notified shareholders that it reserves the
right at any time, without prior notice, to refuse exchange purchases by
any person or group if, in FMR's judgment, the fund would be unable to
invest effectively in accordance with its investment objective and
policies, or would otherwise potentially be adversely affected.
ADVISOR B CLASS WAIVERS. The contingent deferred sales charge (CDSC)
on Advisor B Class shares may be waived in the case of (1)
disability or death, provided that the redemption is made within one year
following the death or initial determination of disability, or (2) in
connection with a total or partial redemption made in connection with
distributions from retirement plan accounts at age 70 1/2 which are
permitted without penalty pursuant to the Internal Revenue Code.
DISTRIBUTIONS AND TAXES
DIVIDENDS. Because the fund's income is primarily derived from interest,
dividends from the fund generally will not qualify for the
dividends-received deduction available to corporate shareholders.
Short-term capital gains are distributed as dividend income, but do not
qualify for the dividends-received deduction. A portion of the fund's
dividends derived from certain U.S. Government obligations may be exempt
from state and local taxation. The fund will send each shareholder a notice
in January describing the tax status of dividend and capital gain
distributions (if any) for the prior year.
CAPITAL GAIN DISTRIBUTIONS. The fund may distribute any net realized
short-term capital gains once a year or more often as necessary, to
maintain its NAV at $1.00 per share. The fund does not anticipate earning
long-term capital gains on securities held by the fund.
As of the fiscal period ended October 31, 1996, the fund had a capital loss
carryforward aggregating approximately $ 421,000 . This loss
carryforward will expire on the fiscal year ended October 31, 2001 and is
available to offset future capital gains.
STATE AND LOCAL TAX ISSUES. For mutual funds organized as business trusts,
state laws provide for a pass-through of the state and local income tax
exemption afforded to direct owners of U.S. Government securities. Some
states limit this to mutual funds that invest a certain amount in U.S.
Government securities, and some types of securities, such as repurchase
agreements and some agency backed securities, may not qualify for this
benefit. The tax treatment of your dividend distributions from the fund
will be the same as if you directly owned your proportionate share of the
U.S. Government securities in the fund's portfolio. Because the income
earned on most U.S. Government securities in which the fund invests is
exempt from state and local income taxes, the portion of your dividends
from the fund attributable to these securities will also be free from
income taxes. The exemption from state and local income taxation does not
preclude states from assessing other taxes on the ownership of U.S.
Government securities. In a number of states, corporate franchise (income)
tax laws do not exempt interest earned on U.S. Government securities
whether such securities are held directly or through a fund.
TAX STATUS OF THE FUND. The fund intends to qualify each year as a
"regulated investment company" for tax purposes so that it will not be
liable for federal tax on income and capital gains distributed to
shareholders. In order to qualify as a regulated investment company and
avoid being subject to federal income or excise taxes at the fund level,
the fund intends to distribute substantially all of its net investment
income and net realized capital gains within each calendar year as well as
on a fiscal year basis.
The fund is treated as a separate entity from the other funds of Daily
Money Fund for tax purposes.
OTHER TAX INFORMATION. The information above is only a summary of some of
the tax consequences generally affecting the fund and its shareholders, and
no attempt has been made to discuss individual tax consequences. In
addition to federal income taxes, shareholders may be subject to state and
local taxes on fund distributions, and shares may be subject to state and
local personal property taxes. Investors should consult their tax advisers
to determine whether the fund is suitable to their particular tax
situation.
FMR
All of the stock of FMR is owned by FMR Corp., its parent organized in
1972. The voting common stock of FMR Corp. is divided into two classes.
Advisor B Class is held predominantly by members of the Edward C.
Johnson 3d family and is entitled to 49% of the vote on any matter acted
upon by the voting common stock. Class A is held predominantly by
non-Johnson family member employees of FMR Corp. and its affiliates and is
entitled to 51% of the vote on any such matter. The Johnson family group
and all other Advisor B Class shareholders have entered into a
shareholders' voting agreement under which all Advisor B Class
shares will be voted in accordance with the majority vote of Advisor B
Class shares. Under the 1940 Act, control of a company is presumed
where one individual or group of individuals owns more than 25% of the
voting stock of that company. Therefore, through their ownership of voting
common stock and the execution of the shareholders' voting agreement,
members of the Johnson family may be deemed, under the 1940 Act, to form a
controlling group with respect to FMR Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by three of its divisions as follows: FSC, which is the transfer
and shareholder servicing agent for certain of the funds advised by FMR;
Fidelity Investments Institutional Operations Company, which performs
shareholder servicing functions for institutional customers and funds sold
through intermediaries; and Fidelity Investments Retail Marketing Company,
which provides marketing services to various companies within the Fidelity
organization.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that sets forth all employees'
fiduciary responsibilities regarding the funds, establishes procedures for
personal investing and restricts certain transactions. For example, all
personal trades in most securities require pre-clearance, and participation
in initial public offerings is prohibited. In addition, restrictions on the
timing of personal investing in relation to trades by Fidelity funds and on
short-term trading have been adopted.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the trust are listed below. Except
as indicated, each individual has held the office shown or other offices in
the same company for the last five years. All persons named as Trustees and
Members of the Advisory Board also serve in similar capacities for other
funds advised by FMR. The business address of each Trustee and officer who
is an "interested person" (as defined in the Investment Company Act of
1940) is 82 Devonshire Street, Boston, Massachusetts 02109, which is also
the address of FMR. The business address of all the other Trustees and
Members of the Advisory Board is Fidelity Investments, P.O. Box 9235,
Boston, Massachusetts 02205-9235. Those Trustees who are "interested
persons" by virtue of their affiliation with either the trust or FMR are
indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d (66), Trustee and President, is Chairman, Chief
Executive Officer and a Director of FMR Corp.; a Director and Chairman of
the Board and of the Executive Committee of FMR; Chairman and a Director of
FMR Texas Inc., Fidelity Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
*J. GARY BURKHEAD (55), Trustee and Senior Vice President, is President of
FMR; and President and a Director of FMR Texas Inc., Fidelity Management &
Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc.
RALPH F. COX (64), Trustee (1991), is a management consultant (1994).
Prior to February 1994, he was President of Greenhill Petroleum Corporation
(petroleum exploration and production). Until March 1990, Mr. Cox was
President and Chief Operating Officer of Union Pacific Resources Company
(exploration and production). He is a Director of Sanifill Corporation
(non-hazardous waste, 1993), CH2M Hill Companies (engineering), Rio Grande,
Inc. (oil and gas production), and Daniel Industries (petroleum measurement
equipment manufacturer). In addition, he is a member of advisory boards of
Texas A&M University and the University of Texas at Austin.
PHYLLIS BURKE DAVIS (65), Trustee (1992). Prior to her retirement in
September 1991, Mrs. Davis was the Senior Vice President of Corporate
Affairs of Avon Products, Inc. She is currently a Director of BellSouth
Corporation (telecommunications), Eaton Corporation (manufacturing, 1991),
and the TJX Companies, Inc. (retail stores), and previously served as a
Director of Hallmark Cards, Inc. (1985-1991) and Nabisco Brands, Inc. In
addition, she is a member of the President's Advisory Council of The
University of Vermont School of Business Administration.
ROBERT M. GATES (53), Trustee. Consultant, author, and lecturer (1993).
Mr. Gates was Director of the Central Intelligence Agency (CIA) from
1991-1993. From 1989 to 1991, Mr. Gates served as Assistant to the
President of the United States and Deputy National Security Advisor. Mr.
Gates is currently a Trustee for the Forum for International Policy, a
Board Member for the Virginia Neurological Institute, and a Senior Advisor
of the Harvard Journal of World Affairs. In addition, Mr. Gates also serves
as a member of the corporate board for Lucas Varity PLC, (automotive
components and diesel engines), Charles Stark Draper Laboratory
(non-profit), NACCO Industries, Inc. (mining and manufacturing), and
TRW Inc. (original equipment and replacement products).
E. BRADLEY JONES (69), Trustee. Prior to his retirement in 1984, Mr. Jones
was Chairman and Chief Executive Officer of LTV Steel Company. He is a
Director of TRW Inc. (original equipment and replacement products),
Cleveland-Cliffs Inc (mining), Consolidated Rail Corporation, Birmingham
Steel Corporation, and RPM, Inc. (manufacturer of chemical products), and
he previously served as a Director of NACCO Industries, Inc. (mining and
marketing, 1985-1995) and Hyster-Yale Materials Handling, Inc. (1985-1995).
In addition, he serves as a Trustee of First Union Real Estate Investments,
a Trustee and member of the Executive Committee of the Cleveland Clinic
Foundation, a Trustee and member of the Executive Committee of University
School (Cleveland), and a Trustee of Cleveland Clinic Florida.
DONALD J. KIRK (64), Trustee, is Executive-in-Residence (1995) at Columbia
University Graduate School of Business and a financial consultant. From
1987 to January 1995, Mr. Kirk was a Professor at Columbia University
Graduate School of Business. Prior to 1987, he was Chairman of the
Financial Accounting Standards Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance), and he previously served as a Director of
Valuation Research Corp. (appraisals and valuations, 1993-1995). In
addition, he serves as Chairman of the Board of Directors of the National
Arts Stabilization Fund, Chairman of the Board of Trustees of the Greenwich
Hospital Association, a Member of the Public Oversight Board of the
American Institute of Certified Public Accountants' SEC Practice Section
(1995), and as a Public Governor of the National Association of Securities
Dealers, Inc. (1996).
*PETER S. LYNCH (54), Trustee, is Vice Chairman and Director of FMR (1992).
Prior to May 31, 1990, he was a Director of FMR and Executive Vice
President of FMR (a position he held until March 31, 1991); Vice President
of Fidelity Magellan Fund and FMR Growth Group Leader; and Managing
Director of FMR Corp. Mr. Lynch was also Vice President of Fidelity
Investments Corporate Services (1991-1992). He is a Director of W.R. Grace
& Co. (chemicals) and Morrison Knudsen Corporation (engineering and
construction). In addition, he serves as a Trustee of Boston College,
Massachusetts Eye & Ear Infirmary, Historic Deerfield (1989) and Society
for the Preservation of New England Antiquities, and as an Overseer of the
Museum of Fine Arts of Boston.
WILLIAM O. McCOY (63), Trustee, is the Vice President of Finance for the
University of North Carolina (16-school system, 1995). Prior to his
retire ment in December 1994, Mr. McCoy was Vice Chairman of the Board
of BellSouth Corporation (telecommunications, 1984) and President of
BellSouth Enterprises (1986). He is currently a Director of Liberty
Corporation (holding company, 1984), Weeks Corporation of Atlanta (real
estate, 1994), Carolina Power and Light Company (electric utility, 1996),
and the Kenan Transport Co. (1996). Previously, he was a Director of First
American Corporation (bank holding company, 1979-1996). In addition, Mr.
McCoy serves as a member of the Board of Visitors for the University of
North Carolina at Chapel Hill (1994) and for the Kenan-Flager Business
School (University of North Carolina at Chapel Hill, 1988).
GERALD C. McDONOUGH (68), Trustee and Vice-Chairman of the non-interested
Trustees, is Chairman of G.M. Management Group (strategic advisory
services). Prior to his retirement in July 1988, he was Chairman and Chief
Executive Officer of Leaseway Transportation Corp. (physical distribution
services). Mr. McDonough is a Director of Brush-Wellman Inc. (metal
refining), York International Corp. (air conditioning and refrigeration),
Commercial Intertech Corp. (hydraulic systems, building systems, and metal
products, 1992), CUNO, Inc. (liquid and gas filtration products, 1996), and
Associated Estates Realty Corporation (a real estate investment trust,
1993). Mr. McDonough served as a Director of ACME-Cleveland Corp. (metal
working, telecommunications, and electronic products) from 1987-1996.
MARVIN L. MANN (64), Trustee (1993) is Chairman of the Board, President,
and Chief Executive Officer of Lexmark International, Inc. (office
machines, 1991). Prior to 1991, he held the positions of Vice President of
International Business Machines Corporation ("IBM") and President and
General Manager of various IBM divisions and subsidiaries. Mr. Mann is a
Director of M.A. Hanna Company (chemicals, 1993) and Infomart (marketing
services, 1991), a Trammell Crow Co. In addition, he serves as the Campaign
Vice Chairman of the Tri-State United Way (1993) and is a member of the
University of Alabama President's Cabinet.
THOMAS R. WILLIAMS (68), Trustee, is President of The Wales Group, Inc.
(management and financial advisory services). Prior to retiring in 1987,
Mr. Williams served as Chairman of the Board of First Wachovia Corporation
(bank holding company), and Chairman and Chief Executive Officer of The
First National Bank of Atlanta and First Atlanta Corporation (bank holding
company). He is currently a Director of BellSouth Corporation
(telecommunications), ConAgra, Inc. (agricultural products), Fisher
Business Systems, Inc. (computer software), Georgia Power Company (electric
utility), Gerber Alley & Associates, Inc. (computer software), National
Life Insurance Company of Vermont, American Software, Inc., and AppleSouth,
Inc. (restaurants, 1992).
SARAH H. ZENOBLE (47), Vice President, is Vice President of Fidelity's
money market funds (1996) and Vice President of FMR Texas Inc.
LELAN D C. BARRON (37), Vice President of Treasury Fund (1991), is
Vice President of other funds advised by FMR and an employee of FMR Texas
Inc.
ROBERT K . DUBY (50), Vice President of Prime Fund (formerly Money
Market Portfolio) (1996), is Vice President of other funds advised by
FMR and an employee of FMR Texas Inc.
SCOTT A. ORR (34), Vice President of Tax -Exempt Fund (formerly Daily
Tax-Exempt Money Fund) (1995), is Vice President of other funds advised by
FMR and an employee of FMR Texas Inc.
ARTHUR S. LORING (49), Secretary, is Senior Vice President (1993) and
General Counsel of FMR, Vice President-Legal of FMR Corp., and Vice
President and Clerk of FDC.
KENNETH A. RATHGEBER (49), Treasurer (1995), is Treasurer of the Fidelity
funds and is an employee of FMR (1995). Before joining FMR, Mr. Rathgeber
was a Vice President of Goldman Sachs & Co. (1978-1995), where he served in
various positions, including Vice President of Proprietary Accounting
(1988-1992), Global Co-Controller (1992-1994), and Chief Operations Officer
of Goldman Sachs (Asia) LLC (1994-1995).
THOM AS D. MAHER (51), Assistant Vice President, is Assistant Vice
President of Fidelity's money market funds and municipal bond fun ds
(1997) and Vice President and Associate General Counsel of FMR Texas Inc.
JOHN H. COSTELLO (50), Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH (50), Assistant Treasurer (1994), is an employee of FMR
(1994). Prior to becoming Assistant Treasurer of the Fidelity funds, Mr.
Rush was Chief Compliance Officer of FMR Corp. (1993-1994) and Chief
Financial Officer of Fidelity Brokerage Services, Inc. (1990-1993).
THO MAS J. SIMPSON (38), Assistant Treasurer (1996), is Assistant
Treasurer of Fidelity's money market funds (1996) and municipal bo nd
funds (1997) and an employee of FMR (1996). Prior to joining FMR, Mr.
Simpson was Vice President and Fund Controller of Liberty Investment
Services (1987-1995).
The following table sets forth information describing the compensation of
each Trustee of the fund for his or her services for the fiscal year
period October 31, 1996, or calendar year ended December 31, 1996, as
applicable.
COMPENSATION TABLE
Trustees Aggregate
Total
Compensation
Compensation
from
from the
Treasury Fund Fund Complex*
A
J. Gary Burkhead ** $
Ralph F. Cox
Phyllis Burke Davis
Richard J. Flynn***
Robert M. Gates ****
Edward C. Johnson 3d **
E. Bradley Jones
Donald J. Kirk
Peter S. Lynch **
William O. McCoy*****
Gerald C. McDonough
Edward H. Malone***
Marvin L. Mann
Thomas R. Williams
* Information is as of December 31, 1996 for 235 funds in the complex.
** Interested Trustees of the fund are compensated by FMR.
*** Richard J. Flynn and Edward H. Malone served on the Board of Trustees
through December 31, 1996.
*****During the period from May 1, 1996 through May 30, 1997, William O.
McCoy served as a Member of the Advisory Board of Newbury Street Trust.
A Compensation figures include cash, a pro rata portion of benefits accrued
under the retirement program for the period ended December 30, 1996 and
required to be deferred, and may include amounts deferred at the election
of Trustees.]
B Compensation figures include cash, amounts required to be deferred, a pro
rata portion of benefits accrued under the retirement program for the
period ended December 30, 1996 and required to be deferred, and may include
amounts deferred at the election of Trustees.]
C The following amounts are required to be deferred by each non-interested
Trustee, most of which is subject to vesting: Ralph F. Cox, $__, Phyllis
Burke Davis, $__, Richard J. Flynn, $0, Robert M. Gates, $__, E. Bradley
Jones, $__, Donald J. Kirk, $__, William O. McCoy, $__, Gerald C.
McDonough, $__, Edward H. Malone, $__, Marvin L. Mann, $__, and Thomas R.
Williams, $__.
D The following amounts are required to be deferred by each non-interested
Trustee, most of which is subject to vesting: Ralph F. Cox, $__, Phyllis
Burke Davis, $__, Richard J. Flynn, $0, Robert M. Gates, $__, E. Bradley
Jones, $__, Donald J. Kirk, $__, William O. McCoy, $__, Gerald C.
McDonough, $__, Edward H. Malone, $__, Marvin L. Mann, $__, and Thomas R.
Williams, $__.
E The following amounts are required to be deferred by each non-interested
Trustee, most of which is subject to vesting: Ralph F. Cox, $__, Phyllis
Burke Davis, $__, Richard J. Flynn, $0, Robert M. Gates, $__, E. Bradley
Jones, $__, Donald J. Kirk, $__, William O. McCoy, $__, Gerald C.
McDonough, $__, Edward H. Malone, $__, Marvin L. Mann, $__, and Thomas R.
Williams, $__.
F For the fiscal period ended October 31, 1996, certain of the
non-interested Trustees' aggregate compensation from a fund includes
accrued voluntary deferred compensation as follows:
.
Under a retirement program adopted in July 1988 and modified in November
1995, each non-interested Trustee may receive payments from a Fidelity
fund during his or her lifetime based on his or her basic trustee fees and
length of service. The obligation of a fund to make such payments is
neither secured nor funded. A Trustee becomes eligible to participate in
the program at the end of the calendar year in which he or she reaches age
72, provided that, at the time of retirement, he or she has served as a
Fidelity fund Trustee for at least five years. Currently, Messrs. Ralph S.
Saul, William R. Spaulding, Bertram H. Witham, and David L. Yunich, all
former non-interested Trustees, receive retirement benefits under the
program.
The non-interested Trustees may elect to defer receipt of all or a
percentage of their annual fees in accordance with the terms of a Deferred
Compensation Plan (the Plan). Under the Plan, compensation deferred by a
Trustee is periodically adjusted as though an equivalent amount had been
invested and reinvested in shares of one or more funds in the complex
designated by such Trustee (designated securities). The amount paid to the
Trustee under the Plan will be determined based upon the performance of
such investments. Deferral of Trustees' fees in accordance with the Plan
will have a negligible effect on a fund's assets, liabilities, and net
income per share, and will not obligate the fund to retain the services of
any Trustee or to pay any particular level of compensation to the Trustee.
Each fund may invest in such designated securities under the Plan without
shareholder approval.
As of December 30, 1996, the non-interested Trustees terminated the
retirement program for Trustees who retire after such date. In connection
with the termination of the retirement program, each existing
non-interested Trustee received a credit to his or her Plan account equal
to the present value of the estimated benefits that would have been payable
under the retirement program. The amounts credited to the non-interested
Trustees' Plan accounts are subject to vesting. The termination of the
retirement program and related crediting of estimated benefits to the
Trustees' Plan accounts did not result in a material cost to the funds.
As of _ __________, 1997, approximately __% of Treasury Fund's, _____%
of Prime Fund's, and __% of Daily Tax-Exempt Money Fund's total outstanding
shares was held by an FMR affiliate. FMR Corp. is the ultimate parent
company of this FMR affiliate. By virtue of his ownership interest in FMR
Corp., as described in the "FMR" section on page ___, Mr. Edward C. Johnson
3d, President and Trustee of the fund, may be deemed to be a beneficial
owner of these shares. As of the above date, with the exception of Mr.
Johnson 3d's deemed ownership of each fund's shares, the Trustees and
officers of the funds owned, in the aggregate, less than __% of each fund's
total outstanding shares.
As of ________________, 1997, the Trustees, Members of the Advisory Board,
and officers of each fund owned, in the aggregate, less than __% of each
fund's total outstanding shares.
: As of _____________, 1997, the following owned of record or beneficially
5% or more of outstanding shares of the funds:]
A shareholder owning of record or beneficially more than 25% of a fund's
outstanding shares may be considered a controlling person. That
shareholder's vote could have a more significant effect on matters
presented at a shareholders' meeting than votes of other shareholders.
MANAGEMENT CONTRACT
The fund employs FMR to furnish investment advisory and other services.
Under its management contract with the fund, FMR acts as investment adviser
and, subject to the supervision of the Board of Trustees, directs the
investments of the fund in accordance with its investment objective,
policies, and limitations. FMR also provides the fund with all necessary
office facilities and personnel for servicing the fund's investments,
compensates all officers of the fund and all Trustees who are "interested
persons" of the trust or of FMR, and all personnel of the fund or FMR
performing services relating to research, statistical, and investment
activities.
In addition, FMR or its affiliates, subject to the supervision of the Board
of Trustees, provide the management and administrative services necessary
for the operation of the fund. These services include providing facilities
for maintaining the fund's organization; supervising relations with
custodians, transfer and pricing agents, accountants, underwriters, and
other persons dealing with the fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining the fund's
records and the registration of the fund's shares under federal and state
laws; developing management and shareholder services for the fund; and
furnishing reports, evaluations, and analyses on a variety of subjects to
the Trustees.
In addition to the management fee payable to FMR and the fees payable to
FIIOC and FSC, the fund or class thereof, as applicable, pays all of its
expenses, without limitation, that are not assumed by those parties. The
fund pays for the typesetting, printing, and mailing of its proxy materials
to shareholders, legal expenses, and the fees of the custodian, auditor and
non-interested Trustees. Although the fund's current management contract
provides that the fund will pay for typesetting, printing, and mailing
prospectuses, statements of additional information, notices and reports to
shareholders, the trust, on behalf of the fund, has entered into a revised
transfer agent agreement with FIIOC, pursuant to which FIIOC bears the
costs of providing these services to existing shareholders of the
applicable class. Other expenses paid by the fund include interest, taxes,
brokerage commissions, the fund's proportionate share of insurance premiums
and Investment Company Institute dues, and the costs of registering shares
under federal and state securities laws. The fund is also liable for such
non-recurring expenses as may arise, including costs of any litigation to
which the fund may be a party, and any obligation it may have to indemnify
its officers and Trustees with respect to litigation.
FMR is the fund's manager pursuant to a management contract dated
___________, 1997, which was approved by shareholders on _________,
1997. Prior to May 30, 1997, FMR was the fund's manager pursuant to a
management contract dated September 30, 1993, which was approved by
shareholders on March 24, 1993.
Under contract currently in effect, the fund pays FMR a monthly management
fee at an annual rate of 0.25%. For the services of FMR under the contract
in effect prior to May 30, 1997, the fund paid FMR a monthly management fee
at the annual rate of 0.50% of the average net assets of the fund
throughout the month. For the fiscal period ended October 31, 1996 and the
fiscal years ended July 31, 1996, 1995 and 1994, FMR received $2,327,773,
$10,004,781, $9,784,211 and $13,343,263 respectively. Only a portion of
this fee was retained by FMR. The remainder was paid to FDC in connection
with each fund's Distribution and Service Plan.
FMR may, from time to time, voluntarily reimburse all or a portion of the
class's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). FMR retains the ability to be
repaid for these expense reimbursements in the amount that expenses fall
below the limit prior to the end of the fiscal year. Expense reimbursements
by FMR will increase the class's total returns and yield and repayment of
the reimbursement by the class's will lower its total returns and yield.
SUB-ADVISER. FMR has entered into a sub-advisory agreement with FMR Texas
pursuant to which FMR Texas has primary responsibility for providing
portfolio investment management services to the fund.
Under the sub-advisory agreement dated September 30, 1993, which was
approved by shareholders on March 24, 1993, FMR pays FMR Texas fees equal
to 50% of the management fee payable to FMR under its management contract
with the fund, after payments by FMR pursuant to each class's 12b-1 plan,
if any. The fees paid to FMR Texas are not reduced by any voluntary or
mandatory expense reimbursements that may be in effect from time to time.
On behalf of the fund for the fiscal period ended October 31, 1996 and the
fiscal years ended July 31, 1996, 1995, and 1994, FMR paid FMR Texas fees
of $521,771, $2,098,350, $1,886,692, and $2,367,209, respectively.
CONTRACTS WITH FMR AFFILIATES
FIIOC, an affiliate of FMR, is the transfer, dividend disbursing, and
shareholder servicing agent for Advisor B Class shares of the fund.
Under this arrangement and effective January 1, 1997 FIIOC receives an
annual asset-based fee. This fee is subject to increase based on postal
rate changes. Effective through December 31, 1996, FIIOC received an annual
account fee and an asset based fee each based on account size and fund type
for each retail account and certain institutional accounts. With respect to
certain institutional retirement accounts, FIIOC received an annual account
fee and an asset based fee based on account type or fund type. These annual
account fees were subject to increase based on postal rate change.
FIIOC bears the expense of typesetting, printing, and mailing prospectuses,
statements of additional information, and all other reports, notices, and
statements to shareholders, with the exception of proxy statements. Also,
FIIOC pays out-of-pocket expenses associated with transfer agent services.
FSC, an affiliate of FMR, performs the calculations necessary to determine
NAV and dividends for Advisor B Class shares of the fund and
maintains the fund's accounting records. The annual fee rates for pricing
and bookkeeping services are based on each fund's average net assets,
specifically, .0175% of the first $500 million of average net assets and
.0075% of average net assets in excess of $500 million. The fee is limited
to a minimum of $40,000 and a maximum of $800,000 per year.
Pricing and bookkeeping fees, including reimbursement for out-of-pocket
expenses, paid to FSC for the fiscal period ended October 31, 1996, and the
fiscal years ended July 31, 1996, 1995, and 1994 were $47,493, $200,897,
$196,883, and $250,737, respectively.
The fund has a distribution agreement with FDC, a Massachusetts corporation
organized on July 18, 1960. FDC is a broker-dealer registered under the
Securities Exchange Act of 1934 and is a member of the National Association
of Securities Dealers, Inc. The distribution agreements call for FDC to use
all reasonable efforts, consistent with its other business, to secure
purchasers for shares of the fund, which are continuously offered at NAV.
Promotional and administrative expenses in connection with the offer and
sale of shares are paid by FMR. The table below shows the sales charge
revenue paid to, and retained by FDC, for the following fiscal periods
ending:
CDSC Revenue
$ Paid to FDC $ Retained by FDC
October 31, 1996 $ 26,013 $ 26,013
July 31, 1996 33,539 33,539
July 31, 1995 8,806 8,806
July 31, 1994 0 0
DISTRIBUTION AND SERVICE PLAN
The Trustees have approved a Distribution and Serv i ce Plan on behalf
of Advisor B Class of the fund (the Plan) pursuant to Rule 12b-1
under the 1940 Act (the Rule). The Rule provides in substance that a mutual
fund may not engage directly or indirectly in financing any activity that
is primarily intended to result in the sale of shares of a fund except
pursuant to a plan approved on behalf of the fund under the Rule. The Plan,
as approved by the Trustees, allows Advisor B Class of the fund and
FMR to incur certain expenses that might be considered to constitute direct
or indirect payment by the fund of distribution expenses.
Pursuant to the Plan, FDC is paid a distribution fee at an annual rate of
0.75% of Advisor B Class 's average net assets determined as of the
close of business on each day throughout the month. Advisor B Class
also pays investment professionals a service fee at an annual rate of
0.25% of its average daily net assets determined at the close of business
on each day throughout the month for the personal service and/or
maintenance of shareholder accounts.
For the fiscal period ended October 31, 1996 and the fiscal years ended
July 31, 1996, 1995, and 1994, FDC was paid distribution fees by Advisor
B Class of $28,674, $65,060, $21,362, and $73, respectively. In
addition, for the fiscal period ended October 31, 1996 and the fiscal years
ended July 31, 1996, 1995, and 1994, Advisor B Class paid
shareholder service fees of $19,823, $25,397, $11,949, and $44,
respectively.
Under the Plan, if the payment of management fees by the fund to FMR is
deemed to be indirect financing by the fund of the distribution of its
shares, such payment is authorized by the Plan. The Plan specifically
recognizes that FMR, either directly or through FDC, may use its management
fee revenue, past profits, or without limitation to pay promotional and
administrative expenses in connection with the offer and sale of shares of
the applicable class of each fund. In addition each Plan provides that FMR
may use its resources, including it management fee to make payments to
third parties that assist in selling shares of the applicable class of each
fund or to third parties, including banks, that render shareholder
support services.
Prior to approving the Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of the Plan, and have
determined that there is a reasonable likelihood that the Plan will benefit
Advisor B Class shares and its shareholders. To the extent that the
Plan gives FMR and FDC greater flexibility in connection with the
distribution of Advisor B Class shares of the fund, additional sales
of fund shares may result. Furthermore, certain shareholder support
services may be provided more effectively under the Plan by local entities
with whom shareholders have other relationships.
The Advisor B Class Plan does not provide for specific payments by
Advisor B Class of any of the expenses of FDC, or obligate
FDC or FMR to perform any specific type or level of distribution activities
or incur any specific level of expense in connection with distribution
activities. After payments by FDC for advertising, marketing and
distribution, and payments to third parties, the amounts remaining, if any,
may be used as FDC may elect.
The Plan was approved by shareholders of Advisor B Class on
____________, 1997.
The Glass-Steagall Act generally prohibits federally and state chartered or
supervised banks from engaging in the business of underwriting, selling, or
distributing securities. Although the scope of this prohibition under the
Glass-Steagall Act has not been clearly defined by the courts or
appropriate regulatory agencies, FDC believes that the Glass-Steagall Act
should not preclude a bank from performing shareholder support services, or
servicing and recordkeeping functions. FDC intends to engage banks only to
perform such functions. However, changes in federal or state statutes and
regulations pertaining to the permissible activities of banks and their
affiliates or subsidiaries, as well as further judicial or administrative
decisions or interpretations, could prevent a bank from continuing to
perform all or a part of the contemplated services. If a bank were
prohibited from so acting, the Trustees would consider what actions, if
any, would be necessary to continue to provide efficient and effective
shareholder services. In such event, changes in the operation of the funds
might occur, including possible termination of any automatic investment or
redemption or other services then provided by the bank. It is not expected
that shareholders would suffer any adverse financial consequences as a
result of any of these occurrences. In addition, state securities laws on
this issue may differ from the interpretations of federal law expressed
herein, and banks and other financial institutions may be required to
register as dealers pursuant to state law.
The fund may execute portfolio transactions with, and purchase securities
issued by, depository institutions that receive payments under the Plan. No
preference for the instruments of such depository institutions will be
shown in the selection of investments.
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Treasury Fund is a fund of Newbury Street
Trust (formerly Daily Tax-Exempt Money Fund), an open-end management
investment company originally organized as a Massachusetts business trust
on July 16, 1982, pursuant to a Declaration of Trust that was amended and
restated on November 1, 1989. On December 30, 1991, the trust was converted
to a Delaware business trust pursuant to an agreement approved by
shareholders on October 23, 1991. The Delaware trust, which was organized
on June 20, 1991 under the name Daily Tax-Exempt Money Fund II, succeeded
to the name Daily Tax-Exempt Money Fund on December 30, 1991, and succeeded
to the name Newbury Street Trust on ___________, 1997. Currently, there are
three funds of the trust: Treasury Fund, Prime Fund, and Tax-Exempt
Fund. The Trust Instrum ent permits the Trustees to create additional
funds. Prior to May 30, 1997, Treasury Fund was a fund of Daily
Money Fund , an open-end management investment company originally
organized as a Massachusetts business trust on June 7, 1982, pursuant to a
Declaration of Trust that was amended and restated on September 1, 1989. On
September 29, 1993, Daily Money Fund was converted to a Delaware business
trust pursuant to an agreement approved by shareholders on March 24, 1993.
The Delaware Daily Money Fund trust, which was organized on June 20, 1991
under the name Daily Money Fund II, succeeded to the name Daily Money Fund
on July 14, 1995.
In the event that FMR ceases to be the investment adviser to a fund, the
right of the trust or fund to use the identifying name "Fidelity" may be
withdrawn.
The assets of each trust received for the issue or sale of shares of each
of its funds and all income, earnings, profits, and proceeds thereof,
subject only to the rights of creditors, are especially allocated to such
fund, and constitute the underlying assets of such fund. The underlying
assets of each fund are segregated on the books of account, and are to be
charged with the liabilities with respect to such fund and with a share of
the general expenses of their respective trusts. Expenses with respect to
the trusts are to be allocated in proportion to the asset value of their
respective funds, except where allocations of direct expense can otherwise
be fairly made. The officers of the trusts, subject to the general
supervision of the Boards of Trustees, have the power to determine which
expenses are allocable to a given fund, or which are general or allocable
to all of the funds of a certain trust. In the event of the dissolution or
liquidation of a trust, shareholders of each fund of that trust are
entitled to receive as a class the underlying assets of such fund available
for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. The Delaware trust is a business trust
organized under Delaware law. Delaware law provides that shareholders shall
be entitled to the same limitations of personal liability extended to
stockholders of private corporations for profit. The courts of some states,
however, may decline to apply Delaware law on this point. The Trust
Instrument contains an express disclaimer of shareholder liability for the
debts, liabilities, obligations, and expenses of the Delaware trust and
requires that a disclaimer be given in each contract entered into or
executed by the Delaware trust or its Trustees. The Trust Instrument
provides for indemnification out of each fund's property of any shareholder
or former shareholder held personally liable for the obligations of the
fund. The Trust Instrument also provides that each fund shall, upon
request, assume the defense of any claim made against any shareholder for
any act or obligation of the fund and satisfy any judgment thereon. Thus,
the risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which Delaware law
does not apply, no contractual limitation of liability was in effect, and
the fund is unable to meet its obligations. FMR believes that, in view of
the above, the risk of personal liability to shareholders is extremely
remote.
The Trust Instrument further provides that the Trustees shall not be
personally liable to any person other than the Delaware trust or its
shareholders; moreover, the Trustees shall not be liable for any conduct
whatsoever, provided that Trustees are not protected against any liability
to which they would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence, or reckless disregard of the duties involved
in the conduct of their office. Claims asserted against one class of shares
may subject holders of another class of shares to certain liabilities.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. As a shareholder, you receive one vote for each dollar value of
net asset value you own. The shares have no preemptive or conversion
rights; voting and dividend rights, the right of redemption, and the
privilege of exchange are described in the Prospectus. Shares are fully
paid and nonassessable, except as set forth under the respective
"Shareholder and Trustee Liability" headings above. Shareholders
representing 10% or more of a trust or one of its funds may, as set forth
in the Declaration of Trust or Trust Instrument, call meetings of the trust
or fund for any purpose related to the trust or fund, as the case may be,
including, in the case of a meeting of an entire trust, the purpose on
voting on removal of one or more Trustees.
A trust or any fund may be terminated upon the sale of its assets to (or,
in the case of the Delaware trust and its funds, merger with) another
open-end management investment company or series thereof, or upon
liquidation and distribution of its assets. Gen erally such terminations
must be approved by vote of the holders of a majority of the trust or the
fund, as determined by the current value of each shareholder's
investment in the fund or trust; however, the Trustees of the Delaware
trust may, without prior shareholder approval, change the form of the
organization of the Delaware trust by merger, consolidation, or
incorporation. If not so terminated or reorganized, the trusts and their
funds will continue indefinitely.
Under the Trust Instrument, the Trustees may, without shareholder vote,
cause the Delaware trust to merge or consolidate into one or more trusts,
partnerships, or corporations, so long as the surviving entity is an
open-end management investment company that will succeed to or assume the
Delaware trust registration statement, or cause the Delaware trust to be
incorporated under Delaware law. Each fund may also invest all of its
assets in another investment company.
CUSTODIAN. The Bank of New York, 110 Washington Street, New York, New York,
is custodian of the assets of the fund. The custodian is responsible for
the safekeeping of a fund's assets and the appointment of any subcustodian
banks and clearing agencies. The custodian takes no part in determining the
investment policies of a fund or in deciding which securities are purchased
or sold by a fund. However, a fund may invest in obligations of the
custodian and may purchase securities from or sell securities to the
custodian. The Chase Manhattan Bank, headquartered in New York, also may
serve as special purpose custodian of certain assets in connection with
repurchase agreement transactions.
FMR, its officers and directors, its affiliated companies, and the Board of
Trustees may, from time to time, conduct transactions with various banks,
including banks serving as custodians for certain funds advised by FMR.
Transactions that have occurred to date include mortgages and personal and
general business loans. In the judgment of FMR, the terms and conditions of
those transactions were not influenced by existing or potential custodial
or other fund relationships.
AUDITOR. Coopers & Lybrand L.L.P., 1999 Bryan Street, Dallas, Texas serves
as the fund's independent accountant. The auditor examines financial
statements for the fund and provides other audit, tax, and related
services.
FINANCIAL STATEMENTS
The fund's financial statements and financial highlights for the fiscal
period ended October 31, 1996 are included in the fund's Annual Report,
which is a separate report supplied with this SAI . The fund's
financial statements, including financial highlights, and reports of the
auditor are incorporated herein by reference. For a free additional copy of
the fund's Annual Report, contact Fidelity Client Services at
1-800-843-3001.
APPENDIX
DESCRIPTION OF MOODY'S INVESTORS SERVICE RATINGS OF COMMERCIAL
PAPER
Moody's assigns short-term debt ratings to obligations which have an
original maturity not exceeding one year.
Issuers rated PRIME-1 (or related supporting institutions) have a superior
ability for repayment of principal and payment of interest.
Issuers rated PRIME-2 (or related supporting institutions) have a strong
ability for repayment of principal and payment of interest.
DESCRIPTION OF STANDARD & POOR'S RATINGS OF COMMERCIAL PAPER
Debt issues considered short-term in the relevant market may be assigned a
Standard & Poor's commercial paper rating.
A-1 - This highest category indicates that the degree of safety regarding
timely payment is strong. Those issues determined to possess extremely
strong safety characteristics are denoted with a plus sign (+) designation.
A-2 - Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated A-1.
PART C - OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) 1. Financial Statements and Financial Highlights, included in
the Annual Report for U.S. Treasury Portfolio -Initial Class (currently
known as Treasury Fund -Daily Money Class) for the fiscal period ended
October 31, 1996, are included in the fund's prospectus, are incorporated
by reference into the fund's statement of additional information and were
filed on December 18, 1996 pursuant to Rule 30d-1 under the Investment
Company Act of 1940 and are incorporated by reference.
2. Financial Statements and Financial Highlights, included in the
Annual Report for U.S. Treasury Portfolio -Class B (currently known as
Treasury Fund - Advisor B Class) for the fiscal period ended October 31,
1996, are included in the fund's prospectus, are incorporated by reference
into the fund's statement of additional information and were filed on
December 18, 1996 pursuant to Rule 30d-1 under the Investment Company Act
of 1940 and are incorporated by reference.
3. Financial and Financial Highlights, included in the Annual
Report for Money Market Portfolio - Initial Class (currently known as Prime
Fund - Daily Money Class) for the fiscal period ended October 31, 1996, are
included in the fund's prospectus, are incorporated by reference into the
fund's statement of additional information and were filed on December 18,
1996 pursuant to Rule 30d-1 under the Investment Company Act of 1940 and
are incorporated by reference.
(b) Exhibits:
1. (a) Trust Instrument dated June 20, 1991 was electronically filed and
is incorporated herein by reference to Exhibit 1(a) to Post Effective
Amendment No. 22.
(b) Certificate of Trust of Daily Money Fund II, dated June 20, 1991 was
electronically filed and is incorporated herein by reference to Exhibit
1(b) to Post-Effective Amendment No. 30 .
(c) Certificate of Amendment of Daily Money Fund II to Daily Money Fund,
dated July 14, 1991 was electronically filed and is incorporated herein by
reference as Exhibit 1(c) to Post Effective Amendment No. 30.
2. (a) By-Laws of the Trust effective May 19, 1994 were electronically
filed and are incorporated herein by reference to Exhibit 2(a) to Fidelity
Union Street Trust II's Post-Effective Amendment No. 10.
3. Not applicable.
4. Not applicable.
5. (a) Management Contract dated September 30, 1993 between Daily Money
Fund, on behalf of U.S. Treasury Income Portfolio (currently known as
Treasury Only), and Fidelity Management & Research Company was
electronically filed and is incorporated herein by reference as Exhibit
5(a) to Post-Effective Amendment No. 25.
(b) Management Contract dated September 30, 1993 between Daily Money Fund,
on behalf of Money Market Portfolio (currently known as Prime Fund), and
Fidelity Management & Research Company was electronically filed and is
incorporated herein by reference as Exhibit 5(b) to Post-Effective
Amendment No. 25.
(c) Management Contract dated September 30, 1993 between Daily Money Fund,
on behalf of U.S. Treasury Portfolio (currently known as Treasury Fund),
and Fidelity Management & Research Company was electronically filed and is
incorporated herein by reference as Exhibit 5(c) to Post-Effective
Amendment No. 25.
(d) Management Contract dated September 30, 1993 between Daily Money Fund,
on behalf of Capital Reserves: Municipal Money Market Portfolio, and
Fidelity Management & Research Company was electronically filed and is
incorporated herein by reference as Exhibit 5(d) to Post-Effective
Amendment No. 25.
(e) Management Contract dated September 30, 1993 between Daily Money Fund,
on behalf of Capital Reserves: Money Market Portfolio, and Fidelity
Management & Research Company was electronically filed and is incorporated
herein by reference as Exhibit 5(e) to Post-Effective Amendment No. 25.
(f) Management Contract dated September 30, 1993 between Daily Money Fund,
on behalf of Capital Reserves: U.S. Government Portfolio, and Fidelity
Management & Research Company was electronically filed and is incorporated
herein by reference as Exhibit 5(f) to Post-Effective Amendment No. 25.
(g) Sub-Advisory Agreement dated September 30, 1993 between FMR Texas Inc.
and Fidelity Management & Research Company, on behalf of Money Market
Portfolio (currently known as Prime Fund), was electronically filed and is
incorporated herein by reference as Exhibit 5(g) to Post-Effective
Amendment No. 25.
(h) Sub-Advisory Agreement dated September 30, 1993 between FMR Texas Inc.
and Fidelity Management & Research Company, on behalf of U.S. Treasury
Portfolio (currently known as Treasury Fund), was electronically filed and
is incorporated herein by reference as Exhibit 5(h) to Post-Effective
Amendment No. 25.
(i) Sub-Advisory Agreement dated September 30, 1993 between FMR Texas Inc.
and Fidelity Management & Research Company, on behalf of Capital Reserves:
Money Market Portfolio, was electronically filed and is incorporated herein
by reference as Exhibit 5(i) to Post-Effective Amendment No. 25.
(j) Sub-Advisory Agreement dated September 30, 1993 between FMR Texas Inc.
and Fidelity Management & Research Company, on behalf of Capital Reserves:
U.S. Government Portfolio, was electronically filed and is incorporated
herein by reference as Exhibit 5(j) to Post-Effective Amendment No. 25.
(k) Sub-Advisory Agreement dated September 30, 1993 between FMR Texas Inc.
and Fidelity Management & Research Company, on behalf of Capital Reserves:
Municipal Money Market Portfolio, was electronically filed and is
incorporated herein by reference as Exhibit 5(k) to Post-Effective
Amendment No. 25.
(l) Sub-Advisory Agreement dated September 30, 1993 between FMR Texas Inc.
and Fidelity Management & Research Company, on behalf of U.S. Treasury
Income Portfolio (currently known as Treasury Only), was electronically
filed and is incorporated herein by reference as Exhibit 5(l) to
Post-Effective Amendment No. 25.
6. (a) General Distribution Agreement dated September 30, 1993 between
Daily Money Fund, on behalf of Money Market Portfolio (currently known as
Prime Fund), and Fidelity Distributors Corporation was electronically filed
and is incorporated herein by reference as Exhibit 6(a) to Post-Effective
Amendment No. 25.
(b) General Distribution Agreement dated September 30, 1993 between Daily
Money Fund, on behalf of U.S. Treasury Income Portfolio (currently known as
Treasury Only), and Fidelity Distributors Corporation was electronically
filed and is incorporated herein by reference as Exhibit 6(b) to
Post-Effective Amendment No. 25.
(c) General Distribution Agreement dated September 30, 1993 between Daily
Money Fund, on behalf of U.S. Treasury Income Portfolio (currently known as
Treasury Only), and Fidelity Distributors Corporation was electronically
filed and is incorporated herein by reference as Exhibit 6(c) to
Post-Effective Amendment No. 25.
(d) General Distribution Agreement dated September 30, 1993 between Daily
Money Fund, on behalf of Capital Reserves: U.S. Government Portfolio, and
National Financial Services Corporation was electronically filed and is
incorporated herein by reference as Exhibit 6(d) to Post-Effective
Amendment No. 25.
(e) General Distribution Agreement dated September 30, 1993 between Daily
Money Fund, on behalf of Capital Reserves: Municipal Money Market
Portfolio, and National Financial Services Corporation was electronically
filed and is incorporated herein by reference as Exhibit 6(e) to
Post-Effective Amendment No. 25.
(f) General Distribution Agreement dated September 30, 1993 between Daily
Money Fund, on behalf of Capital Reserves: Money Market Portfolio, and
National Financial Services Corporation was electronically filed and is
incorporated herein by reference as Exhibit 6(f) to Post-Effective
Amendment No. 25.
(g) Amendment, dated October 1, 1996, to the General Distribution
Agreement between Daily Money Fund on behalf of Fidelity U.S. Treasury
Income Portfolio (currently known as Treasury Only) and Fidelity
Distributors Corporation was electronically filed and is incorporated
herein by reference to Exhibit 6(g) to Post-Effective Amendment No. 40.
(h) Service Contract between Fidelity Distributors Corporation and
"Qualified Recipients" with respect to shares of U.S. Treasury Portfolio
(currently known as Treasury Fund) and Money Market Portfolio (currently
known as Prime Fund) was electronically filed and is incorporated herein by
reference as Exhibit 6(g) to Post-Effective Amendment No. 34.
(i) Service Contract (Administrative and Recordkeeping Services Only)
between Fidelity Distributors Corporation and " Qualified Recipients" with
respect to shares of U.S. Treasury Portfolio (currently known as Treasury
Fund) and Money Market Portfolio (currently known as Prime Fund) was
electronically filed and is incorporated herein by reference as Exhibit
6(h) to Post-Effective Amendment No. 34.
(j) Form of Selling Dealer Agreement for Bank Related Transactions (most
recently revised January, 1997) is electronically filed herein as Exhibit
6(j).
(k) Form of Selling Dealer Agreement (most recently revised January, 1997)
is electronically filed herein as Exhibit 6(k).
(l) Amendments to the General Distribution Agreement between Daily Money
Fund on behalf of U.S. Treasury Portfolio (currently known as Treasury
Fund), Money Market Portfolio (currently known as Prime Fund), and Fidelity
U.S. Treasury Income Portfolio (currently known as Treasury Only) and
Fidelity Distributors Corporation, dated March 14, 1996 and July 15, 1996,
are incorporated herein by reference to Exhibit 6(a) of Fidelity Court
Street Trust's Post-Effective Amendment No. 61 (File No. 2-58774).
(m) Form of Bank Agency Agreement (most recently revised January, 1997) is
electronically filed herein as Exhibit 6(m).
(7) (a) Retirement Plan for Non-Interested Person Trustees, Directors or
General Partners, as amended on November 16, 1995, is incorporated herein
by reference to Exhibit 7(a) of Fidelity Select Portfolio's (File No.
2-69972) Post-Effective Amendment No. 54.
(b) The Fee Deferral Plan for Non-Interested Person Directors and Trustees
of the Fidelity Funds, effective as of December 1, 1995, is incorporated
herein by reference to Exhibit 7(b) of Fidelity School Street Trust's (File
No. 2-57167) Post-Effective Amendment No. 47.
8 (a) Custodian Agreement and Appendix C, dated December 1, 1994, between
The Bank of New York and the Fidelity Daily Money Fund Trust on behalf of
Fidelity U.S. Treasury Income Portfolio (currently known as Treasury Only);
Money Market Portfolio (currently known as Prime Fund); U.S. Treasury
Portfolio (currently known as Treasury Fund); and, Capital Reserves: U.S.
Government Portfolio and Money Market Portfolio is incorporated herein by
reference to Exhibit 8(a) of Fidelity Hereford Street Trust's
Post-Effective Amendment No. 4 (File No. 33-52577).
(b) Appendix A, dated August 31, 1996, to the Custodian Agreement, dated
December 1, 1994, between The Bank of New York and Daily Money Fund on
behalf of Capital Reserves: Money Market Portfolio, Capital Reserves: U.S.
Government Portfolio, Treasury Only, Money Market Portfolio (currently
known as Prime Fund), and U.S. Treasury Portfolio (currently known as
Treasury Fund) was electronically filed and is incorporated herein by
reference to Exhibit 8(b) to Post-Effective Amendment No. 40.
(c) Appendix B, dated July 31, 1996, to the Custodian Agreement, dated
December 1, 1994, between The Bank of New York and Fidelity Daily Money
Fund Trust on behalf of Fidelity U.S. Treasury Income Portfolio (currently
known as Treasury Only); Money Market Portfolio (currently known as Prime
Fund); U.S. Treasury Portfolio (currently known as Treasury Fund); and,
Capital Reserves: U.S. Government Portfolio and Money Market Portfolio is
incorporated herein by reference to Exhibit 8(c) of Fidelity Income Fund's
Post-Effective Amendment No. 35 (File No. 2-92661).
(d) Custodian Agreement, Appendix B, and Appendix C, dated December 1,
1994, between UMB Bank, n.a. and Daily Money Fund on behalf of Capital
Reserves: Municipal Money Market Portfolio is incorporated herein by
reference to Exhibit 8 of Fidelity California Municipal Trust's
Post-Effective Amendment No. 28 (File No. 2-83367).
(e) Appendix A, dated October 17, 1996, to the Custodian Agreement, dated
December 1, 1994, between UMB Bank, n.a. and Daily Money Fund on behalf of
Capital Reserves: Municipal Money Market Portfolio is incorporated herein
by reference to Exhibit 8(a) of Fidelity Court Street Trust's
Post-Effective Amendment No. 61 (File No. 2-58774).
(f) Fidelity Group Repo Custodian Agreement among The Bank of New York, J.
P. Morgan Securities, Inc., and the Fidelity Funds, was electronically
filed and is incorporated herein by reference to Exhibit 8(d) to Fidelity
Institutional Cash Portfolio's Post-Effective Amendment No. 31.
(g) Schedule 1 to the Fidelity Group Repo Custodian Agreement among The
Bank of New York, J. P. Morgan Securities, Inc., and the Fidelity Funds was
electronically filed and is incorporated herein by reference to Exhibit
8(e) to Post-Effective Amendment No 31.
(h) Fidelity Group Repo Custodian Agreement among Chemical Bank, Greenwich
Capital Markets, Inc., and the Fidelity Funds was electronically filed and
is incorporated herein by reference to Exhibit 8(f) to Post-Effective
Amendment No. 31.
(i) Joint Trading Account Custody Agreement between the The Bank of New
York and the Fidelity Funds was electronically filed and is incorporated
herein by reference to Exhibit 8(h) to post-Effective Amendment No. 31.
(j) First Amendment to Joint Trading Account Custody Agreement between the
The Bank of New York and the Fidelity Funds was electronically filed and is
incorporated herein by reference to Exhibit 8(i) to Post-Effective
Amendment No. 31.
9. Not applicable.
10. None.
11. Consent of auditor was electronically filed and is incorporated
herein by reference to Post-Effective Amendment No. 42.
12. None.
13. None.
(14) (a) Fidelity Individual Retirement Account Custodial Agreement and
Disclosure Statement, as currently in effect, is incorporated herein by
reference to Exhibit 14(a) of Fidelity Union Street Trust's (File No.
2-50318) Post-Effective Amendment No. 87.
(b) Fidelity Institutional Individual Retirement Account Custodial
Agreement and Disclosure Statement, as currently in effect, is incorporated
herein by reference to Exhibit 14(d) of Fidelity Union Street Trust's (File
No. 2-50318) Post-Effective Amendment No. 87.
(c) National Financial Services Corporation Individual Retirement Account
Custodial Agreement and Disclosure Statement, as currently in effect, is
incorporated herein by reference to Exhibit 14(h) of Fidelity Union Street
Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(d) Fidelity Portfolio Advisory Services Individual Retirement Account
Custodial Agreement and Disclosure Statement, as currently in effect, is
incorporated herein by reference to Exhibit 14(i) of Fidelity Union Street
Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(e) Fidelity 403(b)(7) Custodial Account Agreement, as currently in
effect, is incorporated herein by reference to Exhibit 14(e) of Fidelity
Union Street Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(f) National Financial Services Corporation Defined Contribution
Retirement Plan and Trust Agreement, as currently in effect, is
incorporated herein by reference to Exhibit 14(k) of Fidelity Union Street
Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(g) The CORPORATEplan for Retirement Profit Sharing/401K Plan, as
currently in effect, is incorporated herein by reference to Exhibit 14(l)
of Fidelity Union Street Trust's (File No. 2-50318) Post-Effective
Amendment No. 87.
(h) The CORPORATEplan for Retirement Money Purchase Pension Plan, as
currently in effect, is incorporated herein by reference to Exhibit 14(m)
of Fidelity Union Street Trust's (File No. 2-50318) Post-Effective
Amendment No. 87.
(i) Fidelity Investments Section 403(b)(7) Individual Custodial Account
Agreement and Disclosure Statement, as currently in effect, is incorporated
herein by reference to Exhibit 14(f) of Fidelity Commonwealth Trust's (File
No. 2-52322) Post Effective Amendment No. 57.
(j) Plymouth Investments Defined Contribution Retirement Plan and Trust
Agreement, as currently in effect, is incorporated herein by reference to
Exhibit 14(o) of Fidelity Commonwealth Trust's (File No. 2-52322) Post
Effective Amendment No. 57.
(k) The Fidelity Prototype Defined Benefit Pension Plan and Trust Basic
Plan Document and Adoption Agreement, as currently in effect, is
incorporated herein by reference to Exhibit 14(d) of Fidelity Securities
Fund's (File No. 2-93601) Post Effective Amendment No. 33.
(l) The Institutional Prototype Plan Basic Plan Document, Standardized
Adoption Agreement, and Non-Standardized Adoption Agreement, as currently
in effect, is incorporated herein by reference to Exhibit 14(o) of Fidelity
Securities Fund's (File No. 2-93601) Post Effective Amendment No. 33.
(m) The CORPORATEplan for Retirement 100SM Profit Sharing/401(k) Basic
Plan Document, Standardized Adoption Agreement, and Non-Standardized
Adoption Agreement, as currently in effect, is incorporated herein by
reference to Exhibit 14(f) of Fidelity Securities Fund's (File No. 2-93601)
Post Effective Amendment No. 33.
(n) The Fidelity Investments 401(a) Prototype Plan for Tax-Exempt
Employers Basic Plan Document, Standardized Profit Sharing Plan Adoption
Agreement, Non-Standardized Discretionary Contribution Plan No. 002
Adoption Agreement, and Non-Standardized Discretionary Contribution Plan
No. 003 Adoption Agreement, as currently in effect, is incorporated herein
by reference to Exhibit 14(g) of Fidelity Securities Fund's (File No.
2-93601) Post Effective Amendment No. 33.
(o) Fidelity Investments 403(b) Sample Plan Basic Plan Document and
Adoption Agreement, as currently in effect, is incorporated herein by
reference to Exhibit 14(p) of Fidelity Securities Fund's (File No. 2-93601)
Post Effective Amendment No. 33.
(p) Fidelity Defined Contribution Retirement Plan and Trust Agreement, as
currently in effect, is incorporated herein by reference to Exhibit 14(c)
of Fidelity Securities Fund's (File No. 2-93601) Post Effective Amendment
No. 33.
15. (a) Service Plan dated September 30, 1993 between Daily Money Fund,
Fidelity Management & Research Company, and Fidelity Distributors
Corporation was electronically filed and is incorporated herein by
reference as Exhibit 15(a) to Post-Effective Amendment No. 25.
(b) Distribution and Service Plan dated September 30, 1993 for Daily Money
Fund: U.S. Treasury Income Portfolio (currently known as Treasury Only) was
electronically filed and incorporated herein by reference as Exhibit 15(b)
to Post-Effective Amendment No. 25.
(c) Distribution and Service Plan dated September 30, 1993 for Daily Money
Fund: Capital Reserves: Money Market Portfolio, U.S. Government Portfolio,
and Municipal Money Market Portfolio was electronically filed and is
incorporated herein by reference to Exhibit 15(c) to Post-Effective
Amendment No. 30.
(d) Distribution and Service Plan for Class B of Daily Money Fund: U.S.
Treasury Portfolio (currently known as Treasury Fund - Advisor B Class) was
electronically filed and is incorporated herein by reference as Exhibit
15(d) to Post-Effective Amendment No. 30 .
(e) Distribution and Service Plan pursuant to Rule 12b-1, for Treasury
Only Class II was electronically filed and is incorporated herein by
reference as Exhibit 15(e) to Post-Effective Amendment 31.
(f) Distribution and Service Plan pursuant to Rule 12b-1, for Treasury
Only Class III was electronically filed and is incorporated herein by
reference as Exhibit 15(f) to Post-Effective Amendment No. 31.
16. Schedules for computations of performance quotations for Daily Money
Fund: Treasury Only were electronically filed and are incorporated herein
by reference to Exhibit 16 to Post-Effective Amendment No. 30.
17. A Financial Data Schedule is electronically filed herein as Exhibit
17.
18. Rule 18f-3 Plan on behalf of U.S. Treasury Portfolio (currently known
as Treasury Fund), dated January 1, 1997, is electronically filed herein as
Exhibit 18.
Item 25. Persons Controlled by or under Common Control with Registrant
The Board of Trustees of Registrant is the same as the boards of other
funds advised by FMR, each of which has Fidelity Management & Research
Company as its investment adviser. In addition, the officers of these funds
are substantially identical. Nonetheless, Registrant takes the position
that it is not under common control with these other funds since the power
residing in the respective boards and officers arises as the result of an
official position with the respective funds.
Item 26. Number of Holders of Securities as of February 28, 1996
Title of Class Number of Record Holders
Prime Fund - Daily Money Class
(formerly Money Market Portfolio - Initial Class) 226,171
Treasury Fund - Daily Money Class
(formerly U.S. Treasury Portfolio - Initial Class) 36,433
Treasury Fund - Advisor B Class
(formerly U.S. Treasury Portfolio - Class B) 2,400
Treasury Only - Class I 2,092
Treasury Only - Class II 23
Treasury Only - Class III 193
Capital Reserves: Money Market Portfolio 172,488
Capital Reserves: U.S. Government Portfolio 14,786
Capital Reserves: Municipal Money Market Portfolio 12,283
Item 27. Indemnification
Pursuant to Del. Code Ann. title 12 (sub-section) 3817, a Delaware
business trust may provide in its governing instrument for the
indemnification of its officers and trustees from and against any and all
claims and demands whatsoever. Article X, Section 10.02 of the Trust
Instrument states that the Registrant shall indemnify any present trustee
or officer to the fullest extent permitted by law against liability, and
all expenses reasonably incurred by him or her in connection with any
claim, action, suit or proceeding in which he or she is involved by virtue
of his or her service as a trustee, officer, or both, and against any
amount incurred in settlement thereof. Indemnification will not be provided
to a person adjudged by a court or other adjudicatory body to be liable to
the Registrant or its shareholders by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of his or her duties
(collectively, "disabling conduct"), or not to have acted in good faith in
the reasonable belief that his or her action was in the best interest of
the Registrant. In the event of a settlement, no indemnification may be
provided unless there has been a determination, as specified in the Trust
Instrument, that the officer or trustee did not engage in disabling
conduct.
Pursuant to Section 11 of the Distribution Agreement, the Registrant
agrees to indemnify and hold harmless the Distributor and each of its
directors and officers and each person, if any, who controls the
Distributor within the meaning of Section 15 of the 1933 Act against any
loss, liability, claim, damages or expense arising by reason of any person
acquiring any shares, based upon the ground that the registration
statement, Prospectus, Statement of Additional Information, shareholder
reports or other information filed or made public by the Registrant
included a materially misleading statement or omission. However, the
Registrant does not agree to indemnify the Distributor or hold it harmless
to the extent that the statement or omission was made in reliance upon, and
in conformity with, information furnished to the Registrant by or on behalf
of the Distributor. The Registrant does not agree to indemnify the parties
against any liability to which they would be subject by reason of their own
disabling conduct.
Pursuant to the agreement by which Fidelity Service Company, Inc.
("Service") is appointed sub-transfer agent, the Transfer Agent agrees to
indemnify Service for Service's losses, claims, damages, liabilities and
expenses (including reasonable counsel fees and expenses) (losses) to the
extent that the Transfer Agent is entitled to and receives indemnification
from the Portfolio for the same events. Under the Transfer Agency
Agreement, the Registrant agrees to indemnify and hold the Transfer Agent
harmless against any losses, claims, damages, liabilities, or expenses
(including reasonable counsel fees and expenses) resulting from:
(1) any claim, demand, action or suit brought by any person other than the
Registrant, including by a shareholder which names the Transfer Agent
and/or the Registrant as a party and is not based on and does not result
from the Transfer Agent's willful misfeasance, bad faith or negligence or
reckless disregard of duties, and arises out of or in connection with the
Transfer Agent's performance under the Transfer Agency Agreement; or
(2) any claim, demand, action or suit (except to the extent contributed to
by the Transfer Agent's willful misfeasance, bad faith or negligence or
reckless disregard of duties) which results from the negligence of the
Registrant, or from the Transfer Agent's acting upon any instruction(s)
reasonably believed by it to have been executed or communicated by any
person duly authorized by the Registrant, or as a result of the Transfer
Agent's acting in reliance upon advice reasonably believed by the Transfer
Agent to have been given by counsel for the Registrant, or as a result of
the Transfer Agent's acting in reliance upon any instrument or stock
certificate reasonably believed by it to have been genuine and signed,
countersigned or executed by the proper person.
Pursuant to the agreement by which Fidelity Service Company, Inc.
("Service") is appointed transfer agent, the Registrant agrees to indemnify
and hold Service harmless against any losses, claims, damages, liabilities
or expenses (including reasonable counsel fees and expenses) resulting
from:
(1) any claim, demand, action or suit brought by any person other than the
Registrant, including by a shareholder, which names Service and/or the
Registrant as a party and is not based on and does not result from the
Service's willful misfeasance, bad faith or negligence or reckless
disregard of duties, and arises out of or in connection with Service's
performance under the Transfer Agency Agreement; or
(2) any claim, demand, action or suit (except to the extent contributed to
by Service's willful misfeasance, bad faith or negligence or reckless
disregard of duties) which results from the negligence of the Registrant,
or from Service's acting upon any instruction(s) reasonably believed by it
to have been executed or communicated by any person duly authorized by the
Registrant, or as a result of Service's acting in reliance upon advice
reasonably believed by Service to have been given by counsel for the
Registrant, or as a result of Service's acting in reliance upon any
instrument or stock certificate reasonably believed by it to have been
genuine and signed, countersigned or executed by the proper person.
Pursuant to the agreement by which Fidelity Investments Institutional
Operations Company, Inc. ("FIIOC") is appointed sub-transfer agent, the
Transfer Agent agrees to indemnify FIIOC for FIIOC's losses, claims,
damages, liabilities and expenses (including reasonable counsel fees and
expenses) (losses) to the extent that the Transfer Agent is entitled to and
receives indemnification from the Portfolio for the same events. Under the
Transfer Agency Agreement, the Registrant agrees to indemnify and hold the
Transfer Agent harmless against any losses, claims, damages, liabilities,
or expenses (including reasonable counsel fees and expenses) resulting
from:
(1) any claim, demand, action or suit brought by any person other than the
Registrant, including by a shareholder which names the Transfer Agent
and/or the Registrant as a party and is not based on and does not result
from the Transfer Agent's willful misfeasance, bad faith or negligence or
reckless disregard of duties, and arises out of or in connection with the
Transfer Agent's performance under the Transfer Agency Agreement; or
(2) any claim, demand, action or suit (except to the extent contributed to
by the Transfer Agent's willful misfeasance, bad faith or negligence or
reckless disregard of duties) which results from the negligence of the
Registrant, or from the Transfer Agent's acting upon any instruction(s)
reasonably believed by it to have been executed or communicated by any
person duly authorized by the Registrant, or as a result of the Transfer
Agent's acting in reliance upon advice reasonably believed by the Transfer
Agent to have been given by counsel for the Registrant, or as a result of
the Transfer Agent's acting in reliance upon any instrument or stock
certificate reasonably believed by it to have been genuine and signed,
countersigned or executed by the proper person.
Pursuant to the agreement by which Fidelity Investments Institutional
Operations Company, Inc. ("FIIOC") is appointed transfer agent, the
Registrant agrees to indemnify and hold FIIOC harmless against any losses,
claims, damages, liabilities or expenses (including reasonable counsel fees
and expenses) resulting from:
(1) any claim, demand, action or suit brought by any person other than the
Registrant, including by a shareholder, which names FIIOC and/or the
Registrant as a party and is not based on and does not result from FIIOC's
willful misfeasance, bad faith or negligence or reckless disregard of
duties, and arises out of or in connection with FIIOC's performance under
the Transfer Agency Agreement; or
(2) any claim, demand, action or suit (except to the extent contributed to
by FIIOC's willful misfeasance, bad faith or negligence or reckless
disregard of duties) which results from the negligence of the Registrant,
or from FIIOC's acting upon any instruction(s) reasonably believed by it to
have been executed or communicated by any person duly authorized by the
Registrant, or as a result of FIIOC's acting in reliance upon advice
reasonably believed by FIIOC to have been given by counsel for the
Registrant, or as a result of FIIOC's acting in reliance upon any
instrument or stock certificate reasonably believed by it to have been
genuine and signed, countersigned or executed by the proper person.
Item 28. Business and Other Connections of Investment Adviser
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY (FMR)
FMR serves as investment adviser to a number of other investment
companies. The directors and officers of the Adviser have held, during the
past two fiscal years, the following positions of a substantial nature.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman of the Executive Committee of FMR;
President and Chief Executive Officer of FMR Corp.;
Chairman of the Board and Director of FMR, FMR
Corp., FMR Texas Inc., FMR (U.K.) Inc., and FMR
(Far East) Inc.; Chairman of the Board and
Representative Director of Fidelity Investments Japan
Limited; President and Trustee of funds advised by
FMR.
J. Gary Burkhead President and Director of FMR, FMR Texas Inc., FMR
(U.K.) Inc., and FMR (Far East) Inc.; Managing
Director of FMR Corp.; Senior Vice President and
Trustee of funds advised by FMR.
Peter S. Lynch Vice Chairman of the Board and Director of FMR.
Marta Amieva Vice President of FMR.
Dwight D. Churchill Vice President of FMR.
John D. Crumrine Assistant Treasurer of FMR, FMR (U.K.) Inc., FMR
(Far East) Inc., and FMR Texas Inc.; Vice President
and Treasurer of FMR Corp.
William Danoff Vice President of FMR and of a fund advised by FMR.
Scott E. DeSano Vice President of FMR.
Craig P. Dinsell Vice President of FMR.
Penelope Dobkin Vice President of FMR and of a fund advised by FMR.
George C. Domolky Vice President of FMR.
Larry A. Domash Vice President of FMR.
Bettina Doulton Vice President of FMR and of funds advised by FMR.
Margaret L. Eagle Vice President of FMR and a fund advised by FMR.
Richard B. Fentin Senior Vice President of FMR and Vice President of a
fund advised by FMR.
Gregory Fraser Vice President of FMR and of a fund advised by FMR.
Jay Freedman Assistant Clerk of FMR; Clerk of FMR Corp., FMR
(U.K.) Inc., and FMR (Far East) Inc.; Secretary of
FMR Texas Inc.
Robert Gervis Vice President of FMR.
David L. Glancy Vice President of FMR and of a fund advised by FMR.
Kevin E. Grant Vice President of FMR and of funds advised by FMR.
Barry A. Greenfield Vice President of FMR and of a fund advised by FMR.
Boyce I. Greer Vice President of FMR.
Bart Grenier Vice President of FMR.
Robert Haber Vice President of FMR.
Richard C. Habermann Senior Vice President of FMR; Vice President of funds
advised by FMR.
William J. Hayes Senior Vice President of FMR; Vice President of
Equity funds advised by FMR.
Richard Hazlewood Vice President of FMR and of a fund advised by FMR.
Fred L. Henning Jr. Senior Vice President of FMR; Vice President of
Fixed-Income funds advised by FMR.
John R. Hickling Vice President of FMR and of a fund advised by FMR.
Robert F. Hill Vice President of FMR; Director of Technical
Research.
Curt Hollingsworth Vice President of FMR and of funds advised by FMR.
Abigail P. Johnson Vice President of FMR and of a fund advised by FMR.
Stephen P. Jonas Vice President of FMR; Treasurer of FMR, FMR
(U.K.) Inc., FMR (Far East) Inc., and FMR Texas Inc.
David B. Jones Vice President of FMR.
Steven Kaye Vice President of FMR and of a fund advised by FMR.
Francis V. Knox Vice President of FMR; Compliance Officer of FMR
(U.K.) Inc.
David P. Kurrasch Vice President of FMR.
Robert A. Lawrence Senior Vice President of FMR; Vice President of High
Income funds advised by FMR.
Alan Leifer Vice President of FMR.
Harris Leviton Vice President of FMR and of a fund advised by FMR.
Bradford E. Lewis Vice President of FMR and of funds advised by FMR.
Arthur S. Loring Senior Vice President, Clerk, and General Counsel of
FMR; Vice President/Legal, and Assistant Clerk of
FMR Corp.; Secretary of funds advised by FMR.
Richard R. Mace Jr. Vice President of FMR and of funds advised by FMR.
Malcolm W. MacNaught II Vice President of FMR and of a fund advised by FMR.
Robert H. Morrison Vice President of FMR; Director of Equity Trading.
David L. Murphy Vice President of FMR and of funds advised by FMR.
Jacques Perold Vice President of FMR.
Anne Punzak Vice President of FMR.
Kenneth A. Rathgeber Vice President of FMR; Treasurer of funds advised by
FMR.
Lee H. Sandwen Vice President of FMR.
Patricia A. Satterthwaite Vice President of FMR and of a fund advised by FMR.
Thomas T. Soviero Vice President of FMR and of a fund advised by FMR.
Richard Spillane Vice President of FMR; Senior Vice President and
Director of Operations and Compliance of FMR (U.K.)
Inc.
Robert E. Stansky Senior Vice President of FMR; Vice President of a
fund advised by FMR.
Thomas Sweeney Vice President of FMR and of a fund advised by FMR.
Beth F. Terrana Senior Vice President of FMR; Vice President of a
fund advised by FMR.
Yoko Tilley Vice President of FMR.
Joel C. Tillinghast Vice President of FMR and of a fund advised by FMR.
Robert Tuckett Vice President of FMR.
Jennifer Uhrig Vice President of FMR and of a fund advised by FMR.
George A. Vanderheiden Senior Vice President of FMR; Vice President of funds
advised by FMR.
</TABLE>
(2) FMR TEXAS INC. (FMR Texas)
FMR Texas provides investment advisory services to Fidelity Management &
Research Company. The directors and officers of the Sub-Adviser have held
the following positions of a substantial nature during the past two fiscal
years.
Edward C. Johnson 3d Chairman of the Board and Director of FMR
Texas, FMR, FMR Corp., FMR (Far East) Inc.,
and FMR (U.K.) Inc.; Chairman of the
Executive Committee of FMR; President and
Chief Executive Officer of FMR Corp.;
Chairman of the Board and Representative
Director of Fidelity Investments Japan Limited;
President and Trustee of funds advised by FMR.
J. Gary Burkhead President and Director of FMR Texas, FMR,
FMR (Far East) Inc., and FMR (U.K.) Inc.;
Managing Director of FMR Corp.; Senior Vice
President and Trustee of funds advised by FMR.
Robert H. Auld Vice President of FMR Texas.
Leland C. Barron Vice President of FMR Texas and of funds
advised by FMR.
Robert K. Duby Vice President of FMR Texas and of funds
advised by FMR.
Robert Litterst Vice President of FMR Texas and of funds
advised by FMR.
Thomas D. Maher Vice President of FMR Texas and Assistant Vice
President of Money Market funds advised by
FMR.
Scott A. Orr Vice President of FMR Texas and of funds
advised by FMR.
Burnell R. Stehman Vice President of FMR Texas and of funds
advised by FMR.
John J. Todd Vice President of FMR Texas and of funds
advised by FMR.
Sarah H. Zenoble Vice President of FMR Texas and of Money
Market funds advised by FMR.
Stephen P. Jonas Treasurer of FMR Texas, FMR (U.K.) Inc.,
FMR (Far East) Inc., and FMR; Vice President
of FMR.
John D. Crumrine Assistant Treasurer of FMR Texas, FMR (U.K.)
Inc., FMR (Far East) Inc., and FMR; Vice
President and Treasurer of FMR Corp.
Jay Freedman Secretary of FMR Texas; Clerk of FMR (U.K.)
Inc., FMR (Far East) Inc., and FMR Corp.;
Assistant Clerk of FMR.
Item 29. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for most
funds advised by FMR.
(b)
Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
Edward C. Johnson 3d Director Trustee and President
Michael Mlinac Director None
Mark Peterson Director None
Paul Hondros President None
Arthur S. Loring Vice President and Clerk Secretary
Caron Ketchum Treasurer and Controller None
Gary Greenstein Assistant Treasurer None
Jay Freedman Assistant Clerk None
Linda Holland Compliance Officer None
* 82 Devonshire Street, Boston, MA
(c) Not applicable.
Item 30. Location of Accounts and Records
All accounts, books, and other documents required to be maintained by
Section 31a of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company or Fidelity Service
Company, Inc., 82 Devonshire Street, Boston, MA 02109, or the funds'
respective custodian: The Bank of New York, 110 Washington Street, New
York, N.Y. or UMB Bank, n.a., 1010 Grand Avenue, Kansas City, MO.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 44 to the Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Boston, and Commonwealth of Massachusetts, on the 24th day of March 1997.
DAILY MONEY FUND
By /s/Edward C. Johnson 3d (dagger)
Edward C. Johnson 3d, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
(Signature) (Title) (Date)
<TABLE>
<CAPTION>
<S> <C> <C>
/s/Edward C. Johnson 3d (dagger) President and Trustee March 24, 1997
Edward C. Johnson 3d (Principal Executive Officer)
/s/Kenneth A. Rathgeber * Treasurer March 24, 1997
Kenneth A. Rathgeber
/s/J. Gary Burkhead Trustee March 24, 1997
J. Gary Burkhead
/s/Ralph F. Cox ** Trustee March 24, 1997
Ralph F. Cox
/s/Phyllis Burke Davis ** Trustee March 24, 1997
Phyllis Burke Davis
/s/Robert M. Gates *** Trustee March 24, 1997
Robert M. Gates
/s/E. Bradley Jones ** Trustee March 24, 1997
E. Bradley Jones
/s/Donald J. Kirk ** Trustee March 24, 1997
Donald J. Kirk
/s/Peter S. Lynch ** Trustee March 24, 1997
Peter S. Lynch
/s/Marvin L. Mann ** Trustee March 24, 1997
Marvin L. Mann
/s/William O. McCoy ** Trustee March 24, 1997
William O. McCoy
/s/Gerald C. McDonough ** Trustee March 24, 1997
Gerald C. McDonough
/s/Thomas R. Williams ** Trustee March 24, 1997
Thomas R. Williams
</TABLE>
(dagger) Signatures affixed by J.Gary Burkhead pursuant to a power of
attorney dated January 3, 1997 and filed herewith.
* Signature affixed by John H. Costello pursuant to a power of attorney
dated December 19, 1996 and filed herewith.
** Signature affixed by Robert C. Hacker pursuant to a power of attorney
dated December 19, 1996 and filed herewith.
*** Signature affixed by Robert C. Hacker pursuant to a power of attorney
dated March 6, 1997 and filed herewith.
POWER OF ATTORNEY
I, the undersigned President and Director, Trustee, or General Partner, as
the case may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Government Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Institutional Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Plans Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Destiny Portfolios Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Union Street Trust
Fidelity Devonshire Trust Fidelity Union Street Trust II
Fidelity Exchange Fund Fidelity Yen Performance Portfolio, L.P.
Fidelity Financial Trust Variable Insurance Products Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund II
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company or an affiliate acts as investment adviser and for which the
undersigned individual serves as President and Director, Trustee, or
General Partner (collectively, the "Funds"), hereby constitute and appoint
J. Gary Burkhead my true and lawful attorney-in-fact, with full power of
substitution, and with full power to him to sign for me and in my name in
the appropriate capacity, all Registration Statements of the Funds on Form
N-1A, Form N-8A, Form N-8B-2, or any successor thereto, any and all
subsequent Amendments, Pre-Effective Amendments, or Post-Effective
Amendments to said Registration Statements on Form N-1A or any successor
thereto, any Registration Statements on Form N-14, and any supplements or
other instruments in connection therewith, and generally to do all such
things in my name and behalf in connection therewith as said
attorney-in-fact deems necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and the Investment Company Act of
1940, and all related requirements of the Securities and Exchange
Commission. I hereby ratify and confirm all that said attorney-in-fact or
his substitutes may do or cause to be done by virtue hereof. This power of
attorney is effective for all documents filed on or after January 3, 1997.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d January 3, 1997
Edward C. Johnson 3d
POWER OF ATTORNEY
I, the undersigned Treasurer and principal financial and accounting
officer of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Government Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Institutional Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Portfolios Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity U.S. Investments-Government Securities
Portfolio, L.P. Fund, L.P.
Fidelity Devonshire Trust Fidelity Union Street Trust
Fidelity Exchange Fund Fidelity Union Street Trust II
Fidelity Financial Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Variable Insurance Products Fund II
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company or an affiliate acts as investment adviser and for which the
undersigned individual serves as President and Director, Trustee, or
General Partner (collectively, the "Funds"), hereby constitute and appoint
John H. Costello and John E. Ferris each of them singly my true and lawful
attorneys-in-fact, with full power of substitution, and with full power to
each of them to sign for me and in my name in the appropriate capacity, all
Registration Statements of the Funds on Form N-1A, Form N-8A or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration Statements on
Form N-1A or any successor thereto, any Registration Statements on Form
N-14, and any supplements or other instruments in connection therewith, and
generally to do all such things in my name and behalf in connection
therewith as said attorneys-in-fact deems necessary or appropriate, to
comply with the provisions of the Securities Act of 1933 and the Investment
Company Act of 1940, and all related requirements of the Securities and
Exchange Commission. I hereby ratify and confirm all that said
attorneys-in-fact or their substitutes may do or cause to be done by virtue
hereof. This power of attorney is effective for all documents filed on or
after January 1, 1997.
WITNESS my hand on the date set forth below.
/s/Kenneth A. Rathgeber__________ December 19, 1996
Kenneth A. Rathgeber
POWER OF ATTORNEY
We, the undersigned Directors, Trustees, or General Partners, as the case
may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Government Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Institutional Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Portfolios Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity U.S. Investments-Government Securities
Portfolio, L.P. Fund, L.P.
Fidelity Devonshire Trust Fidelity Union Street Trust
Fidelity Exchange Fund Fidelity Union Street Trust II
Fidelity Financial Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Variable Insurance Products Fund II
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company or an affiliate acts as investment adviser and for which the
undersigned individual serves as Directors, Trustees, or General Partners
(collectively, the "Funds"), hereby constitute and appoint Arthur J. Brown,
Arthur C. Delibert, Stephanie A. Djinis, Robert C. Hacker, Thomas M.
Leahey, Richard M. Phillips, and Dana L. Platt, each of them singly, our
true and lawful attorneys-in-fact, with full power of substitution, and
with full power to each of them, to sign for us and in our names in the
appropriate capacities, all Registration Statements of the Funds on Form
N-1A, Form N-8A or any successor thereto, any and all subsequent
Amendments, Pre-Effective Amendments, or Post-Effective Amendments to said
Registration Statements on Form N-1A or any successor thereto, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
our names and behalf in connection therewith as said attorneys-in-fact
deems necessary or appropriate, to comply with the provisions of the
Securities Act of 1933 and the Investment Company Act of 1940, and all
related requirements of the Securities and Exchange Commission. I hereby
ratify and confirm all that said attorneys-in-fact or their substitutes may
do or cause to be done by virtue hereof. This power of attorney is
effective for all documents filed on or after January 1, 1997.
WITNESS our hands on this nineteenth day of December, 1996.
/s/Edward C. Johnson 3d___________ /s/Peter S. Lynch________________
Edward C. Johnson 3d Peter S. Lynch
/s/J. Gary Burkhead_______________ /s/William O. McCoy______________
J. Gary Burkhead William O. McCoy
/s/Ralph F. Cox __________________ /s/Gerald C. McDonough___________
Ralph F. Cox Gerald C. McDonough
/s/Phyllis Burke Davis_____________ /s/Marvin L. Mann________________
Phyllis Burke Davis Marvin L. Mann
/s/E. Bradley Jones________________ /s/Thomas R. Williams ____________
E. Bradley Jones Thomas R. Williams
/s/Donald J. Kirk __________________
Donald J. Kirk
POWER OF ATTORNEY
I, the undersigned Director, Trustee, or General Partner, as the case may
be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Government Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Institutional Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Portfolios Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity U.S. Investments-Government Securities
Portfolio, L.P. Fund, L.P.
Fidelity Devonshire Trust Fidelity Union Street Trust
Fidelity Exchange Fund Fidelity Union Street Trust II
Fidelity Financial Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Variable Insurance Products Fund II
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company or an affiliate acts as investment adviser and for which the
undersigned individual serves as Director, Trustee, or General Partner
(collectively, the "Funds"), hereby constitute and appoint Arthur J. Brown,
Arthur C. Delibert, Stephanie A. Djinis, Robert C. Hacker, Thomas M.
Leahey, Richard M. Phillips, and Dana L. Platt, each of them singly, my
true and lawful attorneys-in-fact, with full power of substitution, and
with full power to each of them, to sign for me and in my name in the
appropriate capacities, all Registration Statements of the Funds on Form
N-1A, Form N-8A or any successor thereto, any and all subsequent
Amendments, Pre-Effective Amendments, or Post-Effective Amendments to said
Registration Statements on Form N-1A or any successor thereto, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
my name and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and the Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission. I hereby ratify
and confirm all that said attorneys-in-fact or their substitutes may do or
cause to be done by virtue hereof. This power of attorney is effective for
all documents filed on or after March 1, 1997.
WITNESS my hand on the date set forth below.
/s/Robert M. Gates March 6, 1997
Robert M. Gates
Exhibt 6(j)
FORM OF
SELLING DEALER AGREEMENT
(FOR BANK-RELATED TRANSACTIONS)
We at Fidelity Distributors Corporation invite you to distribute shares of
the mutual funds, or the separate series or classes of the mutual funds,
listed on Schedules A and B attached to this Agreement (the "Portfolios").
We may periodically change the list of Portfolios by giving you written
notice of the change. We are the Portfolios' principal underwriter and, as
agent for the Portfolios, we offer to sell Portfolio shares to you on the
following terms:
1. Certain Defined Terms: (a) You
(_____________________________________) are registered as a broker/dealer
under the Securities Exchange Act of 1934 (the "1934 Act") and have
executed a written agreement with a bank or bank affiliate to provide
brokerage services to that bank, bank affiliate and/or their customers. As
used in this Agreement, the term "Bank" means a bank as defined in Section
3(a)(6) of the 1934 Act, or an affiliate of such a bank, with which you
have entered into a written agreement to provide brokerage services; and
the term "Bank Client" means a customer of such a Bank.
(b) As used in this Agreement, the term "Prospectus" means the
applicable Portfolio's prospectus and related statement of additional
information, whether in paper format or electronic format, included in the
Portfolio's then currently effective registration statement (or
post-effective amendment thereto), and any information that we or the
Portfolio may issue to you as a supplement to such prospectus or statement
of additional information (a "sticker"), all as filed with the Securities
and Exchange Commission (the "SEC") pursuant to the Securities Act of 1933.
2. Purchases of Portfolio Shares for Sale to Customers: (a) In offering
and selling Portfolio shares to your customers, you agree to act as dealer
for your own account; you are not authorized to act as agent for us or for
any Portfolio.
(b) You agree to offer and sell Portfolio shares to your customers only
at the applicable public offering price in accordance with the Prospectus.
If your customer qualifies for a reduced sales charge pursuant to a special
purchase plan (for example, a quantity discount, letter of intent, or right
of accumulation) as described in the Prospectus, you agree to offer and
sell Portfolio shares to your customer at the applicable reduced sales
charge. You agree to deliver or cause to be delivered to each customer, at
or prior to the time of any purchase of shares, a copy of the then current
prospectus (including any stickers thereto), unless such prospectus has
already been delivered to the customer, and to each customer who so
requests, a copy of the then current statement of additional information
(including any stickers thereto).
(c) You agree to purchase Portfolio shares from us only to cover
purchase orders that you have already received from your customers, or for
your own investment. You also agree not to purchase any Portfolio shares
from your customers at a price lower than the applicable redemption price,
determined in the manner described in the Prospectus. You will not withhold
placing customers' orders so as to profit yourself as a result of such
withholding (for example, by a change in a Portfolio's net asset value from
that used in determining the offering price to your customers).
(d) We will accept your purchase orders only at the public offering
price applicable to each order, as determined in accordance with the
Prospectus. We will not accept from you a conditional order for Portfolio
shares. All orders are subject to acceptance or rejection by us in our
sole discretion. We may, without notice, suspend sales or withdraw the
offering of Portfolio shares, or make a limited offering of Portfolio
shares.
(e) The placing of orders with us will be governed by instructions that
we will periodically issue to you. You must pay for Portfolio shares in
New York or Boston clearing house funds or in federal funds in accordance
with such instructions, and we must receive your payment on or before the
settlement date established in accordance with Rule 15c6-1 under the 1934
Act. If we do not receive your payment on or before such settlement date,
we may, without notice, cancel the sale, or, at our option, sell the shares
that you ordered back to the issuing Portfolio, and we may hold you
responsible for any loss suffered by us or the issuing Portfolio as a
result of your failure to make payment as required.
(f) You agree to comply with all applicable state and federal laws and
with the rules and regulations of authorized regulatory agencies
thereunder. You agree to offer and sell Portfolio shares only in states
where you may legally offer and sell such Portfolio's shares. You will not
offer shares of any Portfolio for sale unless such shares are registered
for sale under the applicable state and federal laws and the rules and
regulations thereunder.
(g) Certificates evidencing Portfolio shares are not available; any
transaction in Portfolio shares will be effected and evidenced by
book-entry on the records maintained by Fidelity Investments Institutional
Operations Company ("FIIOC"). A confirmation statement evidencing
transactions in Portfolio shares will be transmitted to you.
(h) You may designate FIIOC to execute your customers' transactions in
Portfolio shares in accordance with the terms of any account, program,
plan, or service established or used by your customers, and to confirm each
transaction to your customers on your behalf on a fully disclosed basis.
At the time of the transaction, you guarantee the legal capacity of your
customers and any co-owners of such shares so transacting in such shares.
3. Your Compensation: (a) Your concession, if any, on your sales of
Portfolio shares will be as provided in the Prospectus or in the applicable
schedule of concessions issued by us and in effect at the time of our sale
to you. Upon written notice to you, we or any Portfolio may change or
discontinue any schedule of concessions, or issue a new schedule.
(b) If a Portfolio has adopted a plan pursuant to Rule 12b-1 under the
Investment Company Act of 1940 (a "Plan"), we may make distribution
payments or service payments to you under the Plan. If a Portfolio does
not have a currently effective Plan, we or Fidelity Management & Research
Company may make distribution payments or service payments to you from our
own funds. Any distribution payments or service payments will be made in
the amount and manner set forth in the Prospectus or in the applicable
schedule of distribution payments or service payments issued by us and then
in effect. Upon written notice to you, we or any Portfolio may change or
discontinue any schedule of distribution payments or service payments, or
issue a new schedule. A schedule of distribution payments or service
payments will be in effect with respect to a Portfolio that has a Plan only
so long as that Portfolio's Plan remains in effect.
(c) Concessions, distribution payments, and service payments apply only
with respect to (i) shares of the "Fidelity Funds" (as designated on
Schedule A attached to this Agreement) purchased or maintained for the
account of Bank Clients, and (ii) shares of the "Fidelity Advisor Funds"
(as designated on Schedule B attached to this Agreement). Anything to the
contrary notwithstanding, neither we nor any Portfolio will provide to you,
nor may you retain, concessions on your sales of shares of, or distribution
payments or service payments with respect to assets of, the Fidelity Funds
attributable to you or any of your clients, other than Bank Clients. When
you place an order in shares of the Fidelity Funds with us, you will
identify the Bank on behalf of whose Clients you are placing the order; and
you will identify as a non-Bank Client Order, any order in shares of the
Fidelity Funds placed for the account of a non-Bank Client.
(d) After the effective date of any change in or discontinuance of any
schedule of concessions, distribution payments, or service payments, or the
termination of a Plan, any concessions, distribution payments, or service
payments will be allowable or payable to you only in accordance with such
change, discontinuance, or termination. You agree that you will have no
claim against us or any Portfolio by virtue of any such change,
discontinuance, or termination. In the event of any overpayment by us of
any concession, distribution payment, or service payment, you will remit
such overpayment.
(e) If any Portfolio shares sold to you by us under the terms of this
Agreement are redeemed by the issuing Portfolio or tendered for redemption
by the customer within seven (7) business days after the date of our
confirmation of your original purchase order for such shares, you agree (i)
to refund promptly to us the full amount of any concession, distribution
payment, or service payment allowed or paid to you on such shares, and (ii)
if not yet allowed or paid to you, to forfeit the right to receive any
concession, distribution payment, or service payment allowable or payable
to you on such shares. We will notify you of any such redemption within
ten (10) days after the date of the redemption.
4. Certain Types of Accounts: (a) You may instruct FIIOC to register
purchased shares in your name and account as nominee for your customers.
If you hold Portfolio shares as nominee for your customers, all
Prospectuses, proxy statements, periodic reports, and other printed
material will be sent to you, and all confirmations and other
communications to shareholders will be transmitted to you. You will be
responsible for forwarding such printed material, confirmations, and
communications, or the information contained therein, to all customers for
whose account you hold any Portfolio shares as nominee. However, we or
FIIOC on behalf of itself or the Portfolios will be responsible for the
costs associated with your forwarding such printed material, confirmations,
and communications. You will be responsible for complying with all
reporting and tax withholding requirements with respect to the customers
for whose account you hold any Portfolio shares as nominee.
(b) With respect to accounts other than those accounts referred to in
paragraph 4(a) above, you agree to provide us with all information
(including certification of taxpayer identification numbers and back-up
withholding instructions) necessary or appropriate for us to comply with
legal and regulatory reporting requirements.
(c) Accounts opened or maintained pursuant to the NETWORKING system of
the National Securities Clearing Corporation ("NSCC") will be governed by
applicable NSCC rules and procedures and any agreement or other arrangement
with us relating to NETWORKING.
(d) If you hold Portfolio shares in an omnibus account for two or more
customers, you will be responsible for determining, in accordance with the
Prospectus, whether, and the extent to which, a CDSC is applicable to a
purchase of Portfolio shares from such a customer, and you agree to
transmit immediately to us any CDSC to which such purchase was subject.
You hereby represent that if you hold Portfolio shares subject to a CDSC,
you have the capability to track and account for such charge, and we
reserve the right, at our discretion, to verify that capability by
inspecting your tracking and accounting system or otherwise.
5. Status as Registered Broker/Dealer: (a) Each party to this Agreement
represents to the other party that (i) it is registered as a broker/dealer
under the 1934 Act, (ii) it is qualified to act as a broker/dealer in the
states where it transacts business, and (iii) it is a member in good
standing of the National Association of Securities Dealers, Inc. ("NASD").
Each party agrees to maintain its broker/dealer registration and
qualifications and its NASD membership in good standing throughout the term
of this Agreement. Each party agrees to abide by all of the NASD's rules
and regulations, including the NASD's Conduct Rules -- in particular,
Section 2830 of such Rules, which section is deemed a part of and is
incorporated by reference in this Agreement. This Agreement will terminate
automatically without notice in the event that either party's NASD
membership is terminated.
(b) Nothing in this Agreement shall cause you to be our partner,
employee, or agent, or give you any authority to act for us or for any
Portfolio. Neither we nor any Portfolio shall be liable for any of your
acts or obligations as a dealer under this Agreement.
6. Information Relating to the Portfolios: (a) No person is authorized
to make any representations concerning shares of a Portfolio other than
those contained in the Portfolio's Prospectus. In buying Portfolio shares
from us under this Agreement, you will rely only on the representations
contained in the Prospectus. Upon your request, we will furnish you with a
reasonable number of copies of the Portfolios' current prospectuses or
statements of additional information or both (including any stickers
thereto).
(b) Any printed or electronic information that we furnish you (other
than the Portfolios' Prospectuses and periodic reports) is our sole
responsibility and not the responsibility of the respective Portfolios.
You agree that the Portfolios will have no liability or responsibility to
you with respect to any such printed or electronic information. We or the
respective Portfolio will bear the expense of qualifying its shares under
the state securities laws.
(c) You may not use any sales literature or advertising material
(including material disseminated through radio, television, or other
electronic media) concerning Portfolio shares, other than the printed or
electronic information referred to in paragraph 6(b) above, in connection
with the offer or sale of Portfolio shares without obtaining our prior
written approval. You may not distribute or make available to investors
any information that we furnish you marked "FOR DEALER USE ONLY" or that
otherwise indicates that it is confidential or not intended to be
distributed to investors.
7. Indemnification: (a) We will indemnify and hold you harmless from any
claim, demand, loss, expense, or cause of action resulting from the
misconduct or negligence, as measured by industry standards, of us, our
agents and employees, in carrying out our obligations under this Agreement.
Such indemnification will survive the termination of this Agreement.
(b) You will indemnify and hold us harmless from any claim, demand,
loss, expense, or cause of action resulting from the misconduct or
negligence, as measured by industry standards, of you, your agents and
employees, in carrying out your obligations under this Agreement. Such
indemnification will survive the termination of this Agreement.
8. Customer Lists: We hereby agree that we shall not use any list of your
customers which may be obtained in connection with this Agreement for the
purpose of solicitation of any product or service without your express
written consent. However, nothing in this paragraph or otherwise shall be
deemed to prohibit or restrict us or our affiliates in any way from
solicitations of any product or service directed at, without limitation,
the general public, any segment thereof, or any specific individual,
provided such solicitation is not based upon such list.
9. Duration of Agreement: This Agreement, with respect to any Plan, will
continue in effect for one year from its effective date, and thereafter
will continue automatically for successive annual periods; provided,
however, that such continuance is subject to termination at any time
without penalty if a majority of a Portfolio's Trustees who are not
interested persons of the Portfolio (as defined in the Investment Company
Act of 1940 (the "1940 Act")), or a majority of the outstanding shares of
the Portfolio, vote to terminate or not to continue the Plan. This
Agreement, other than with respect to a Plan, will continue in effect from
year to year after its effective date, unless terminated as provided
herein.
10. Amendment and Termination of Agreement: (a) We may amend any
provision of this Agreement by giving you written notice of the amendment.
Either party to this Agreement may terminate the Agreement without cause by
giving the other party at least thirty (30) days' written notice of its
intention to terminate. This Agreement will terminate automatically in the
event of its assignment (as defined in the 1940 Act).
(b) In the event that (i) an application for a protective decree under
the provisions of the Securities Investor Protection Act of 1970 is filed
against you; (ii) you file a petition in bankruptcy or a petition seeking
similar relief under any bankruptcy, insolvency, or similar law, or a
proceeding is commenced against you seeking such relief; or (iii) you are
found by the SEC, the NASD, or any other federal or state regulatory agency
or authority to have violated any applicable federal or state law, rule or
regulation arising out of your activities as a broker/dealer or in
connection with this Agreement, this Agreement will terminate effective
immediately upon our giving notice of termination to you. You agree to
notify us promptly and to immediately suspend sales of Portfolio shares in
the event of any such filing or violation, or in the event that you cease
to be a member in good standing of the NASD.
(c) Your or our failure to terminate this Agreement for a particular
cause will not constitute a waiver of the right to terminate this Agreement
at a later date for the same or another cause. The termination of this
Agreement with respect to any one Portfolio will not cause its termination
with respect to any other Portfolio.
11. Arbitration: In the event of a dispute, such dispute will be settled
by arbitration before arbitrators sitting in Boston, Massachusetts in
accordance with the NASD's Code of Arbitration Procedure in effect at the
time of the dispute. The arbitrators will act by majority decision and
their award may allocate attorneys' fees and arbitration costs between us.
Their award will be final and binding between us, and such award may be
entered as a judgment in any court of competent jurisdiction.
12. Notices: All notices required or permitted to be given under this
Agreement shall be given in writing and delivered by personal delivery, by
postage prepaid mail, or by facsimile machine or a similar means of same
day delivery (with a confirming copy by mail). All notices to us shall be
given or sent to us at our offices located at 82 Devonshire Street, Mail
Zone L12A, Boston, Massachusetts 02109, Attn: Bank Wholesale Market. All
notices to you shall be given or sent to you at the address specified by
you below. Each of us may change the address to which notices shall be
sent by giving notice to the other party in accordance with this paragraph
11.
13. Miscellaneous: This Agreement, as it may be amended from time to time,
shall become effective as of the date when it is accepted and dated below
by us. This Agreement is to be construed in accordance with the laws of
the Commonwealth of Massachusetts. This Agreement supersedes and cancels
any prior agreement between us, whether oral or written, relating to the
sale of shares of the Portfolios or any other subject covered by this
Agreement. The captions in this Agreement are included for convenience of
reference only and in no way define or limit any of the provisions of this
Agreement or otherwise affect their construction or effect.
Very truly yours,
FIDELITY DISTRIBUTORS
CORPORATION
Please return two signed copies of this Agreement to Fidelity Distributors
Corporation. Upon acceptance, one countersigned copy will be returned to
you for your files.
_____________________________________
Name of Firm
Address: _____________________________
_____________________________________
_____________________________________
By __________________________________
Authorized Representative
_____________________________________
Name and Title (please print or type)
CRD # _______________________________
ACCEPTED AND AGREED:
FIDELITY DISTRIBUTORS CORPORATION
By __________________________________
Dated: ________________
[ATTACH REVISED SCHEDULES A AND B]
Exhibit 6(k)
FORM OF
SELLING DEALER AGREEMENT
We at Fidelity Distributors Corporation invite you
(______________________________) to distribute shares of the mutual funds,
or the separate series or classes of the mutual funds, listed on Schedule A
attached to this Agreement (the "Portfolios"). We may periodically change
the list of Portfolios by giving you written notice of the change. We are
the Portfolios' principal underwriter and, as agent for the Portfolios, we
offer to sell Portfolio shares to you on the following terms:
1. Certain Defined Terms: As used in this Agreement, the term
"Prospectus" means the applicable Portfolio's prospectus and related
statement of additional information, whether in paper format or electronic
format, included in the Portfolio's then currently effective registration
statement (or post-effective amendment thereto), and any information that
we or the Portfolio may issue to you as a supplement to such prospectus or
statement of additional information (a "sticker"), all as filed with the
Securities and Exchange Commission (the "SEC") pursuant to the Securities
Act of 1933.
2. Purchases of Portfolio Shares for Sale to Customers: (a) In offering
and selling Portfolio shares to your customers, you agree to act as dealer
for your own account; you are not authorized to act as agent for us or for
any Portfolio.
(b) You agree to offer and sell Portfolio shares to your customers only
at the applicable public offering price in accordance with the Prospectus.
If your customer qualifies for a reduced sales charge pursuant to a special
purchase plan (for example, a quantity discount, letter of intent, or right
of accumulation) as described in the Prospectus, you agree to offer and
sell Portfolio shares to your customer at the applicable reduced sales
charge. You agree to deliver or cause to be delivered to each customer, at
or prior to the time of any purchase of shares, a copy of the then current
prospectus (including any stickers thereto), unless such prospectus has
already been delivered to the customer, and to each customer who so
requests, a copy of the then current statement of additional information
(including any stickers thereto).
(c) You agree to purchase Portfolio shares from us only to cover
purchase orders that you have already received from your customers, or for
your own investment. You also agree not to purchase any Portfolio shares
from your customers at a price lower than the applicable redemption price,
determined in the manner described in the Prospectus. You will not
withhold placing customers' orders so as to profit yourself as a result of
such withholding (for example, by a change in a Portfolio's net asset value
from that used in determining the offering price to your customers).
(d) We will accept your purchase orders only at the public offering
price applicable to each order, as determined in accordance with the
Prospectus. We will not accept from you a conditional order for Portfolio
shares. All orders are subject to acceptance or rejection by us in our
sole discretion. We may, without notice, suspend sales or withdraw the
offering of Portfolio shares, or make a limited offering of Portfolio
shares.
(e) The placing of orders with us will be governed by instructions that
we will periodically issue to you. You must pay for Portfolio shares in
New York or Boston clearing house funds or in federal funds in accordance
with such instructions, and we must receive your payment on or before the
settlement date established in accordance with Rule 15c6-1 under the
Securities Exchange Act of 1934 (the "1934 Act"). If we do not receive
your payment on or before such settlement date, we may, without notice,
cancel the sale, or, at our option, sell the shares that you ordered back
to the issuing Portfolio, and we may hold you responsible for any loss
suffered by us or the issuing Portfolio as a result of your failure to make
payment as required.
(f) You agree to comply with all applicable state and federal laws and
with the rules and regulations of authorized regulatory agencies
thereunder. You agree to offer and sell Portfolio shares only in states
where you may legally offer and sell such Portfolio's shares. You will not
offer shares of any Portfolio for sale unless such shares are registered
for sale under the applicable state and federal laws and the rules and
regulations thereunder.
(g) Certificates evidencing Portfolio shares are not available; any
transaction in Portfolio shares will be effected and evidenced by
book-entry on the records maintained by Fidelity Investments Institutional
Operations Company ("FIIOC"). A confirmation statement evidencing
transactions in Portfolio shares will be transmitted to you.
(h) You may designate FIIOC to execute your customers' transactions in
Portfolio shares in accordance with the terms of any account, program,
plan, or service established or used by your customers, and to confirm each
transaction to your customers on your behalf. At the time of the
transaction, you guarantee the legal capacity of your customers and any
co-owners of such shares so transacting in such shares.
3. Your Compensation: (a) Your concession, if any, on your sales of
Portfolio shares will be as provided in the Prospectus or in the applicable
schedule of concessions issued by us and in effect at the time of our sale
to you. Upon written notice to you, we or any Portfolio may change or
discontinue any schedule of concessions, or issue a new schedule.
(b) If a Portfolio has adopted a plan pursuant to Rule 12b-1 under the
Investment Company Act of 1940 (a "Plan"), we may make distribution
payments or service payments to you under the Plan. If a Portfolio does
not have a currently effective Plan, we or Fidelity Management & Research
Company may make distribution payments or service payments to you from our
own funds. Any distribution payments or service payments will be made in
the amount and manner set forth in the Prospectus or in the applicable
schedule of distribution payments or service payments issued by us and then
in effect. Upon written notice to you, we or any Portfolio may change or
discontinue any schedule of distribution payments or service payments, or
issue a new schedule. A schedule of distribution payments or service
payments will be in effect with respect to a Portfolio that has a Plan only
so long as that Portfolio's Plan remains in effect.
(c) After the effective date of any change in or discontinuance of any
schedule of concessions, distribution payments, or service payments, or the
termination of a Plan, any concessions, distribution payments, or service
payments will be allowable or payable to you only in accordance with such
change, discontinuance, or termination. You agree that you will have no
claim against us or any Portfolio by virtue of any such change,
discontinuance, or termination. In the event of any overpayment by us of
any concession, distribution payment, or service payment, you will remit
such overpayment.
(d) If any Portfolio shares sold to you by us under the terms of this
Agreement are redeemed by the issuing Portfolio or tendered for redemption
by the customer within seven (7) business days after the date of our
confirmation of your original purchase order for such shares, you agree (i)
to refund promptly to us the full amount of any concession, distribution
payment, or service payment allowed or paid to you on such shares, and (ii)
if not yet allowed or paid to you, to forfeit the right to receive any
concession, distribution payment, or service payment allowable or payable
to you on such shares. We will notify you of any such redemption within
ten (10) days after the date of the redemption.
4. Certain Types of Accounts: (a) You may instruct FIIOC to register
purchased shares in your name and account as nominee for your customers.
If you hold Portfolio shares as nominee for your customers, all
Prospectuses, proxy statements, periodic reports, and other printed
material will be sent to you, and all confirmations and other
communications to shareholders will be transmitted to you. You will be
responsible for forwarding such printed material, confirmations, and
communications, or the information contained therein, to all customers for
whose account you hold any Portfolio shares as nominee. However, we or
FIIOC on behalf of itself or the Portfolios will be responsible for the
costs associated with your forwarding such printed material, confirmations,
and communications. You will be responsible for complying with all
reporting and tax withholding requirements with respect to the customers
for whose account you hold any Portfolio shares as nominee.
(b) With respect to accounts other than those accounts referred to in
paragraph 4(a) above, you agree to provide us with all information
(including certification of taxpayer identification numbers and back-up
withholding instructions) necessary or appropriate for us to comply with
legal and regulatory reporting requirements.
(c) Accounts opened or maintained pursuant to the NETWORKING system of
the National Securities Clearing Corporation ("NSCC") will be governed by
applicable NSCC rules and procedures and any agreement or other arrangement
with us relating to NETWORKING.
(d) If you hold Portfolio shares in an omnibus account for two or more
customers, you will be responsible for determining, in accordance with the
Prospectus, whether, and the extent to which, a CDSC is applicable to a
purchase of Portfolio shares from such a customer, and you agree to
transmit immediately to us any CDSC to which such purchase was subject.
You hereby represent that if you hold Portfolio shares subject to a CDSC,
you have the capability to track and account for such charge, and we
reserve the right, at our discretion, to verify that capability by
inspecting your tracking and accounting system or otherwise.
5. Status as Registered Broker/Dealer: (a) Each party to this Agreement
represents to the other party that (i) it is registered as a broker/dealer
under the 1934 Act, (ii) it is qualified to act as a broker/dealer in the
states where it transacts business, and (iii) it is a member in good
standing of the National Association of Securities Dealers, Inc. ("NASD").
Each party agrees to maintain its broker/dealer registration and
qualifications and its NASD membership in good standing throughout the term
of this Agreement. Each party agrees to abide by all of the NASD's rules
and regulations, including the NASD's Conduct Rules -- in particular,
Section 2830 of such Rules, which section is deemed a part of and is
incorporated by reference in this Agreement. This Agreement will terminate
automatically without notice in the event that either party's NASD
membership is terminated.
(b) Nothing in this Agreement shall cause you to be our partner,
employee, or agent, or give you any authority to act for us or for any
Portfolio. Neither we nor any Portfolio shall be liable for any of your
acts or obligations as a dealer under this Agreement.
6. Information Relating to the Portfolios: (a) No person is authorized
to make any representations concerning shares of a Portfolio other than
those contained in the Portfolio's Prospectus. In buying Portfolio shares
from us under this Agreement, you will rely only on the representations
contained in the Prospectus. Upon your request, we will furnish you with a
reasonable number of copies of the Portfolios' current prospectuses or
statements of additional information or both (including any stickers
thereto).
(b) Any printed or electronic information that we furnish you (other
than the Portfolios' Prospectuses and periodic reports) is our sole
responsibility and not the responsibility of the respective Portfolios.
You agree that the Portfolios will have no liability or responsibility to
you with respect to any such printed or electronic information. We or the
respective Portfolio will bear the expense of qualifying its shares under
the state securities laws.
(c) You may not use any sales literature or advertising material
(including material disseminated through radio, television, or other
electronic media) concerning Portfolio shares, other than the printed or
electronic information referred to in paragraph 6(b) above, in connection
with the offer or sale of Portfolio shares without obtaining our prior
written approval. You may not distribute or make available to investors
any information that we furnish you marked "FOR DEALER USE ONLY" or that
otherwise indicates that it is confidential or not intended to be
distributed to investors.
7. Indemnification: (a) We will indemnify and hold you harmless from any
claim, demand, loss, expense, or cause of action resulting from the
misconduct or negligence, as measured by industry standards, of us, our
agents and employees, in carrying out our obligations under this Agreement.
Such indemnification will survive the termination of this Agreement.
(b) You will indemnify and hold us harmless from any claim, demand,
loss, expense, or cause of action resulting from the misconduct or
negligence, as measured by industry standards, of you, your agents and
employees, in carrying out your obligations under this Agreement. Such
indemnification will survive the termination of this Agreement.
8. Customer Lists: We hereby agree that we shall not use any list of your
customers which may be obtained in connection with this Agreement for the
purpose of solicitation of any product or service without your express
written consent. However, nothing in this paragraph or otherwise shall be
deemed to prohibit or restrict us or our affiliates in any way from
solicitations of any product or service directed at, without limitation,
the general public, any segment thereof, or any specific individual,
provided such solicitation is not based upon such list.
9. Duration of Agreement: This Agreement, with respect to any Plan, will
continue in effect for one year from its effective date, and thereafter
will continue automatically for successive annual periods; provided,
however, that such continuance is subject to termination at any time
without penalty if a majority of a Portfolio's Trustees who are not
interested persons of the Portfolio (as defined in the Investment Company
Act of 1940 (the "1940 Act")), or a majority of the outstanding shares of
the Portfolio, vote to terminate or not to continue the Plan. This
Agreement, other than with respect to a Plan, will continue in effect from
year to year after its effective date, unless terminated as provided
herein.
10. Amendment and Termination of Agreement: (a) We may amend any
provision of this Agreement by giving you written notice of the amendment.
Either party to this Agreement may terminate the Agreement without cause by
giving the other party at least thirty (30) days' written notice of its
intention to terminate. This Agreement will terminate automatically in the
event of its assignment (as defined in the 1940 Act).
(b) In the event that (i) an application for a protective decree under
the provisions of the Securities Investor Protection Act of 1970 is filed
against you; (ii) you file a petition in bankruptcy or a petition seeking
similar relief under any bankruptcy, insolvency, or similar law, or a
proceeding is commenced against you seeking such relief; or (iii) you are
found by the SEC, the NASD, or any other federal or state regulatory agency
or authority to have violated any applicable federal or state law, rule or
regulation arising out of your activities as a broker/dealer or in
connection with this Agreement, this Agreement will terminate effective
immediately upon our giving notice of termination to you. You agree to
notify us promptly and to immediately suspend sales of Portfolio shares in
the event of any such filing or violation, or in the event that you cease
to be a member in good standing of the NASD.
(c) Your or our failure to terminate this Agreement for a particular
cause will not constitute a waiver of the right to terminate this Agreement
at a later date for the same or another cause. The termination of this
Agreement with respect to any one Portfolio will not cause its termination
with respect to any other Portfolio.
11. Arbitration: In the event of a dispute, such dispute will be settled
by arbitration before arbitrators sitting in Boston, Massachusetts in
accordance with the NASD's Code of Arbitration Procedure in effect at the
time of the dispute. The arbitrators will act by majority decision and
their award may allocate attorneys' fees and arbitration costs between us.
Their award will be final and binding between us, and such award may be
entered as a judgment in any court of competent jurisdiction.
12. Notices: All notices required or permitted to be given under this
Agreement shall be given in writing and delivered by personal delivery, by
postage prepaid mail, or by facsimile machine or a similar means of same
day delivery (with a confirming copy by mail). All notices to us shall be
given or sent to us at our offices located at 82 Devonshire Street, Mail
Zone L10A, Boston, Massachusetts 02109, Attn: Broker Dealer Services Group.
All notices to you shall be given or sent to you at the address specified
by you below. Each of us may change the address to which notices shall be
sent by giving notice to the other party in accordance with this paragraph
12.
13. Miscellaneous: This Agreement, as it may be amended from time to time,
shall become effective as of the date when it is accepted and dated below
by us. This Agreement is to be construed in accordance with the laws of
the Commonwealth of Massachusetts. This Agreement supersedes and cancels
any prior agreement between us, whether oral or written, relating to the
sale of shares of the Portfolios or any other subject covered by this
Agreement. The captions in this Agreement are included for convenience of
reference only and in no way define or limit any of the provisions of this
Agreement or otherwise affect their construction or effect.
Very truly yours,
FIDELITY DISTRIBUTORS
CORPORATION
Please return two signed copies of this Agreement to Fidelity Distributors
Corporation. Upon acceptance, one countersigned copy will be returned to
you for your files.
_____________________________________
Name of Firm
Address: _____________________________
_____________________________________
_____________________________________
By __________________________________
Authorized Representative
_____________________________________
Name and Title (please print or type)
CRD # _______________________________
ACCEPTED AND AGREED:
FIDELITY DISTRIBUTORS CORPORATION
By __________________________________
Dated: _________________
[ATTACH REVISED SCHEDULE A]
Exhibit 6(m)
FORM OF
BANK AGENCY AGREEMENT
We at Fidelity Distributors Corporation offer to make available to your
customers shares of the mutual funds, or the separate series or classes of
the mutual funds, listed on Schedules A and B attached to this Agreement
(the "Portfolios"). We may periodically change the list of Portfolios by
giving you written notice of the change. We are the Portfolios' principal
underwriter and act as agent for the Portfolios. You
(____________________________________) are a division or affiliate of a
bank (____________________________________) and desire to make Portfolio
shares available to your customers on the following terms:
1. Certain Defined Terms: As used in this Agreement, the term
"Prospectus" means the applicable Portfolio's prospectus and related
statement of additional information, whether in paper format or electronic
format, included in the Portfolio's then currently effective registration
statement (or post-effective amendment thereto), and any information that
we or the Portfolio may issue to you as a supplement to such prospectus or
statement of additional information (a "sticker"), all as filed with the
Securities and Exchange Commission (the "SEC") pursuant to the Securities
Act of 1933.
2. Making Portfolio Shares Available to Your Customers: (a) In all
transactions covered by this Agreement: (i) you will act as agent for your
customers; in no transaction are you authorized to act as agent for us or
for any Portfolio; (ii) you will initiate transactions only upon your
customers' orders; (iii) we will execute transactions only upon receiving
instructions from you acting as agent for your customers; and (iv) each
transaction will be for your customer's account and not for your own
account. Each transaction will be without recourse to you, provided that
you act in accordance with the terms of this Agreement.
(b) You agree to make Portfolio shares available to your customers only
at the applicable public offering price in accordance with the Prospectus.
If your customer qualifies for a reduced sales charge pursuant to a special
purchase plan (for example, a quantity discount, letter of intent, or right
of accumulation) as described in the Prospectus, you agree to make
Portfolio shares available to your customer at the applicable reduced sales
charge. You agree to deliver or cause to be delivered to each customer, at
or prior to the time of any purchase of shares, a copy of the then current
prospectus (including any stickers thereto), unless such prospectus has
already been delivered to the customer, and to each customer who so
requests, a copy of the then current statement of additional information
(including any stickers thereto).
(c) You agree to order Portfolio shares from us only to cover purchase
orders that you have already received from your customers, or for your own
investment. You will not withhold placing customers' orders so as to
profit yourself as a result of such withholding (for example, by a change
in a Portfolio's net asset value from that used in determining the offering
price to your customers).
(d) We will accept your purchase orders only at the public offering
price applicable to each order, as determined in accordance with the
Prospectus. We will not accept from you a conditional order for Portfolio
shares. All orders are subject to acceptance or rejection by us in our
sole discretion. We may, without notice, suspend sales or withdraw the
offering of Portfolio shares, or make a limited offering of Portfolio
shares.
(e) The placing of orders with us will be governed by instructions that
we will periodically issue to you. You must pay for Portfolio shares in
New York or Boston clearing house funds or in federal funds in accordance
with such instructions, and we must receive your payment on or before the
settlement date established in accordance with Rule 15c6-1 under the
Securities Exchange Act of 1934 (the "1934 Act").
(f) You agree to comply with all applicable state and federal laws and
with the rules and regulations of authorized regulatory agencies
thereunder. You agree to make Portfolio shares available to your customers
only in states where you may legally make such Portfolio's shares
available. You will not make available shares of any Portfolio unless such
shares are registered under the applicable state and federal laws and the
rules and regulations thereunder.
(g) Certificates evidencing Portfolio shares are not available; any
transaction in Portfolio shares will be effected and evidenced by
book-entry on the records maintained by Fidelity Investments Institutional
Operations Company ("FIIOC"). A confirmation statement evidencing
transactions in Portfolio shares will be transmitted to you.
(h) You may designate FIIOC to execute your customers' transactions in
Portfolio shares in accordance with the terms of any account, program,
plan, or service established or used by your customers, and to confirm each
transaction to your customers on your behalf on a fully disclosed basis.
At the time of the transaction, you guarantee the legal capacity of your
customers and any co-owners of such shares so transacting in such shares.
3. Your Compensation: (a) Your fee, if any, for acting as agent with
respect to sales of Portfolio shares will be as provided in the Prospectus
or in the applicable schedule of agency fees issued by us and in effect at
the time of the sale. Upon written notice to you, we or any Portfolio may
change or discontinue any schedule of agency fees, or issue a new schedule.
(b) If a Portfolio has adopted a plan pursuant to Rule 12b-1 under the
Investment Company Act of 1940 (a "Plan"), we may make distribution
payments or service payments to you under the Plan. If a Portfolio does
not have a currently effective Plan, we or Fidelity Management & Research
Company may make distribution payments or service payments to you from our
own funds. Any distribution payments or service payments will be made in
the amount and manner set forth in the Prospectus or in the applicable
schedule of distribution payments or service payments issued by us and then
in effect. Upon written notice to you, we or any Portfolio may change or
discontinue any schedule of distribution payments or service payments, or
issue a new schedule. A schedule of distribution payments or service
payments will be in effect with respect to a Portfolio that has a Plan only
so long as that Portfolio's Plan remains in effect.
(c) After the effective date of any change in or discontinuance of any
schedule of agency fees, distribution payments, or service payments, or the
termination of a Plan, any agency fees, distribution payments, or service
payments will be allowable or payable to you only in accordance with such
change, discontinuance, or termination. You agree that you will have no
claim against us or any Portfolio by virtue of any such change,
discontinuance, or termination. In the event of any overpayment by us of
any agency fee, distribution payment, or service payment, you will remit
such overpayment.
(d) If, within seven (7) business days after our confirmation of the
original purchase order for shares of a Portfolio, such shares are redeemed
by the issuing Portfolio or tendered for redemption by the customer, you
agree (i) to refund promptly to us the full amount of any agency fee,
distribution payment, or service payment paid to you on such shares, and
(ii) if not yet paid to you, to forfeit the right to receive any agency
fee, distribution payment, or service payment payable to you on such
shares. We will notify you of any such redemption within ten (10) days
after the date of the redemption.
4. Certain Types of Accounts: (a) You may instruct FIIOC to register
purchased shares in your name and account as nominee for your customers.
If you hold Portfolio shares as nominee for your customers, all
Prospectuses, proxy statements, periodic reports, and other printed
material will be sent to you, and all confirmations and other
communications to shareholders will be transmitted to you. You will be
responsible for forwarding such printed material, confirmations, and
communications, or the information contained therein, to all customers for
whose account you hold any Portfolio shares as nominee. However, we or
FIIOC on behalf of itself or the Portfolios will be responsible for the
costs associated with your forwarding such printed material, confirmations,
and communications. You will be responsible for complying with all
reporting and tax withholding requirements with respect to the customers
for whose account you hold any Portfolio shares as nominee.
(b) With respect to accounts other than those accounts referred to in
paragraph 4(a) above, you agree to provide us with all information
(including certification of taxpayer identification numbers and back-up
withholding instructions) necessary or appropriate for us to comply with
legal and regulatory reporting requirements.
(c) Accounts opened or maintained pursuant to the NETWORKING system of
the National Securities Clearing Corporation ("NSCC") will be governed by
applicable NSCC rules and procedures and any agreement or other arrangement
with us relating to NETWORKING.
(d) If you hold Portfolio shares in an omnibus account for two or more
customers, you will be responsible for determining, in accordance with the
Prospectus, whether, and the extent to which, a CDSC is applicable to a
purchase of Portfolio shares from such a customer, and you agree to
transmit immediately to us any CDSC to which such purchase was subject.
You hereby represent that if you hold Portfolio shares subject to a CDSC,
you have the capability to track and account for such charge, and we
reserve the right, at our discretion, to verify that capability by
inspecting your tracking and accounting system or otherwise.
5. Status as Registered Broker/Dealer or "Bank": (a) Each party to this
Agreement represents to the other party that it is either (i) a registered
broker/dealer under the 1934 Act, or (ii) a "bank" as defined in Section
3(a)(6) of the 1934 Act.
(b) If a party is a registered broker/dealer, such party represents that
it is qualified to act as a broker/dealer in the states where it transacts
business, and it is a member in good standing of the National Association
of Securities Dealers, Inc. ("NASD"). It agrees to maintain its
broker/dealer registration and qualifications and its NASD membership in
good standing throughout the term of this Agreement. It agrees to abide by
all of the NASD's rules and regulations, including the NASD's Conduct Rules
- -- in particular, Section 2830 of such Rules, which section is deemed a
part of and is incorporated by reference in this Agreement. This Agreement
will terminate automatically without notice in the event that a party's
NASD membership is terminated.
(c) If you are a "bank", you represent that you are duly authorized to
engage in the transactions to be performed under this Agreement, and you
agree to comply with all applicable federal and state laws, including the
rules and regulations of all applicable federal and state bank regulatory
agencies and authorities. This Agreement will terminate automatically
without notice in the event that you cease to be a "bank" as defined in
Section 3(a)(6) of the 1934 Act.
(d) Nothing in this Agreement shall cause you to be our partner,
employee, or agent, or give you any authority to act for us or for any
Portfolio. Neither we nor any Portfolio shall be liable for any of your
acts or obligations as a dealer under this Agreement.
6. Information Relating to the Portfolios: (a) No person is authorized
to make any representations concerning shares of a Portfolio other than
those contained in the Portfolio's Prospectus. In ordering Portfolio
shares from us under this Agreement, you will rely only on the
representations contained in the Prospectus. Upon your request, we will
furnish you with a reasonable number of copies of the Portfolios' current
prospectuses or statements of additional information or both (including any
stickers thereto).
(b) Any printed or electronic information that we furnish you (other
than the Portfolios' Prospectuses and periodic reports) is our sole
responsibility and not the responsibility of the respective Portfolios.
You agree that the Portfolios will have no liability or responsibility to
you with respect to any such printed or electronic information. We or the
respective Portfolio will bear the expense of qualifying its shares under
the state securities laws.
(c) You may not use any sales literature or advertising material
(including material disseminated through radio, television, or other
electronic media) concerning Portfolio shares, other than the printed or
electronic information referred to in paragraph 6(b) above, in connection
with making Portfolio shares available to your customers without obtaining
our prior written approval. You may not distribute or make available to
investors any information that we furnish you marked "FOR DEALER USE ONLY"
or that otherwise indicates that it is confidential or not intended to be
distributed to investors.
7. Indemnification: (a) We will indemnify and hold you harmless from any
claim, demand, loss, expense, or cause of action resulting from the
misconduct or negligence, as measured by industry standards, of us, our
agents and employees, in carrying out our obligations under this Agreement.
Such indemnification will survive the termination of this Agreement.
(b) You will indemnify and hold us harmless from any claim, demand,
loss, expense, or cause of action resulting from the misconduct or
negligence, as measured by industry standards, of you, your agents and
employees, in carrying out your obligations under this Agreement. Such
indemnification will survive the termination of this Agreement.
8. Customer Lists: We hereby agree that we shall not use any list of your
customers which may be obtained in connection with this Agreement for the
purpose of solicitation of any product or service without your express
written consent. However, nothing in this paragraph or otherwise shall be
deemed to prohibit or restrict us or our affiliates in any way from
solicitations of any product or service directed at, without limitation,
the general public, any segment thereof, or any specific individual,
provided such solicitation is not based upon such list.
9. Duration of Agreement: This Agreement, with respect to any Plan, will
continue in effect for one year from its effective date, and thereafter
will continue automatically for successive annual periods; provided,
however, that such continuance is subject to termination at any time
without penalty if a majority of a Portfolio's Trustees who are not
interested persons of the Portfolio (as defined in the Investment Company
Act of 1940 (the "1940 Act")), or a majority of the outstanding shares of
the Portfolio, vote to terminate or not to continue the Plan. This
Agreement, other than with respect to a Plan, will continue in effect from
year to year after its effective date, unless terminated as provided
herein.
10. Amendment and Termination of Agreement: (a) We may amend any
provision of this Agreement by giving you written notice of the amendment.
Either party to this Agreement may terminate the Agreement without cause by
giving the other party at least thirty (30) days' written notice of its
intention to terminate. This Agreement will terminate automatically in the
event of its assignment (as defined in the 1940 Act).
(b) In the event that (i) an application for a protective decree under
the provisions of the Securities Investor Protection Act of 1970 is file
against you; (ii) you file a petition in bankruptcy or a petition seeking
similar relief under any bankruptcy, insolvency, or similar law, or a
proceeding is commenced against you seeking such relief; or (iii) you are
found by the SEC, the NASD, or any other federal or state regulatory agency
or authority to have violated any applicable federal or state law, rule or
regulation arising out of your activities as a broker/dealer or in
connection with this Agreement, this Agreement will terminate effective
immediately upon our giving notice of termination to you. You agree to
notify us promptly and to immediately suspend making Portfolio shares
available to your customers in the event of any such filing or violation,
or in the event that you cease to be a member in good standing of the NASD
or you cease to be a "bank" as defined in Section 3(a)(6) of the 1934 Act.
(c) Your or our failure to terminate this Agreement for a particular
cause will not constitute a waiver of the right to terminate this Agreement
at a later date for the same or another cause. The termination of this
Agreement with respect to any one Portfolio will not cause its termination
with respect to any other Portfolio.
11. Arbitration: In the event of a dispute, such dispute will be settled
by arbitration before arbitrators sitting in Boston, Massachusetts in
accordance with the NASD's Code of Arbitration Procedure in effect at the
time of the dispute. The arbitrators will act by majority decision and
their award may allocate attorneys' fees and arbitration costs between us.
Their award will be final and binding between us, and such award may be
entered as a judgment in any court of competent jurisdiction.
12. Notices: All notices required or permitted to be given under this
Agreement shall be given in writing and delivered by personal delivery, by
postage prepaid mail, or by facsimile machine or a similar means of same
day delivery (with a confirming copy by mail). All notices to us shall be
given or sent to us at our offices located at 82 Devonshire Street, Mail
Zone L12A, Boston, Massachusetts 02109, Attn: Bank Wholesale Market. All
notices to you shall be given or sent to you at the address specified by
you below. Each of us may change the address to which notices shall be
sent by giving notice to the other party in accordance with this paragraph
12.
13. Miscellaneous: This Agreement, as it may be amended from time to time,
shall become effective as of the date when it is accepted and dated below
by us. This Agreement is to be construed in accordance with the laws of
the Commonwealth of Massachusetts. This Agreement supersedes and cancels
any prior agreement between us, whether oral or written, relating to the
sale of shares of the Portfolios or any other subject covered by this
Agreement. The captions in this Agreement are included for convenience of
reference only and in no way define or limit any of the provisions of this
Agreement or otherwise affect their construction or effect.
Very truly yours,
FIDELITY DISTRIBUTORS
CORPORATION
Please return two signed copies of this Agreement to Fidelity Distributors
Corporation. Upon acceptance, one countersigned copy will be returned to
you for your files.
_____________________________________
Name of Firm
Address: _____________________________
_____________________________________
_____________________________________
By __________________________________
Authorized Representative
_____________________________________
Name and Title (please print or type)
ACCEPTED AND AGREED:
FIDELITY DISTRIBUTORS CORPORATION
By __________________________________
Dated: ________________
[ATTACH REVISED SCHEDULES A AND B ]
Exhibit 18
MULTIPLE CLASS OF SHARES PLAN
FOR
DAILY MONEY FUND: U.S. TREASURY PORTFOLIO
DATED JANUARY 1, 1997
This Amended and Restated Multiple Class of Shares Plan (the "Plan"), when
effective in accordance with its provisions, shall be the written plan
contemplated by Rule 18f-3 under the Investment Company Act of 1940 (the
"1940 Act") for Daily Money Fund: U.S. Treasury Portfolio (the "Fund"), a
portfolio of Daily Money Fund (the "Trust").
1. Classes Offered. The Fund offers two classes of its shares: Initial
Class and Class B.
2. Distribution and Shareholder Service Fees. Distribution fees and/or
shareholder service fees shall be calculated and paid in accordance with
the terms of the then-effective plan pursuant to Rule 12b-l under the 1940
Act for the applicable class. Distribution and shareholder service fees
currently authorized are as set forth in Schedule I to this Plan.
3. Conversion Privilege. After a maximum holding period of seven years
from the initial date of purchase, Class B shares convert automatically to
Initial Class shares of the Fund. Simultaneously, a portion of the Class
B shares purchased through the reinvestment of Class B dividends or capital
gains distributions ("Dividend Shares") will also convert to Initial Class
shares. The portion of Dividend Shares that will convert at that time is
determined by the ratio of converting Class B non-Dividend Shares held by a
shareholder to that shareholder's total Class B non-Dividend Shares. All
conversions pursuant to this paragraph 3 shall be made on the basis of the
relative net asset values of the two classes, without the imposition of any
sales load, fee, or other charge.
4. Exchange Privileges.
Initial Class: Initial Class shares purchased through the Fidelity Advisor
Funds program may be exchanged for shares of (i) any Fidelity Advisor Fund:
Class A or Class T; (ii) Daily Money Fund: Money Market Portfolio: Initial
Class; and (iii) Daily Tax-Exempt Money Fund. Other Initial Class shares
may be exchanged for shares of (i) any Fidelity Retail Fund offering an
exchange privilege to other Fidelity Retail Funds; (ii) Daily Money Fund:
Money Market Portfolio: Initial Class; and (iii) Daily Tax-Exempt Money
Fund.
Class B: Shares of Class B may be exchanged for shares of any Fidelity
Advisor Fund: Class B.
5. Expense Allocations. Expenses shall be allocated under this Plan as
follows:
A. Class expenses: The following expenses shall be allocated exclusively
to the applicable specific class of shares: (i) distribution and
shareholder service fees; (ii) transfer agent fees; and (iii) Blue Sky
fees.
B. Fund expenses: Expenses not allocated to specific classes as specified
above shall be charged to the Fund and allocated daily to each class on the
basis of relative net assets (settled shares). For purposes of this
paragraph, "relative net assets (settled shares)" are net assets valued in
accordance with generally accepted accounting principles but excluding the
value of subscriptions receivable, in relation to the net assets of the
Fund.
6. Voting Rights. Each class of shares governed by this Plan (i) shall
have exclusive voting rights on any matter submitted to shareholders that
relates solely to its arrangement; and (ii) shall have separate voting
rights on any matter submitted to shareholders in which the interests of
one class differ from the interests of any other class.
7. Effective Date of Plan. This Plan shall become effective upon the
first business day of the month following approval by a vote of at least a
majority of the Trustees of the Trust, and a majority of the Trustees of
the Trust who are not "interested persons" of the Trust, which vote shall
have found that this Plan as proposed to be adopted, including expense
allocations, is in the best interests of each class individually and of the
Fund as a whole; or upon such other date as the Trustees shall determine.
8. Amendment of Plan. Any material amendment to this Plan shall become
effective upon the first business day of the month following approval by a
vote of at least a majority of the Trustees of the Trust, and a majority of
the Trustees of the Trust who are not "interested persons" of the Trust,
which vote shall have found that this Plan as proposed to be amended,
including expense allocations, is in the best interests of each class
individually and of the Fund as a whole; or upon such other date as the
Trustees shall determine.
9. Severability. If any provision of this Plan shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of
the Plan shall not be affected thereby.
10. Limitation of Liability. Consistent with the limitation of
shareholder liability as set forth in the Trust's Declaration of Trust or
other organizational document, any obligations assumed by any Fund or class
thereof, and any agreements related to this Plan shall be limited in all
cases to the relevant Fund and its assets, or class and its assets, as the
case may be, and shall not constitute obligations of any other Fund or
class of shares. All persons having any claim against the Fund, or any
class thereof, arising in connection with this Plan, are expressly put on
notice of such limitation of shareholder liability, and agree that any such
claim shall be limited in all cases to the relevant Fund and its assets, or
class and its assets, as the case may be, and such person shall not seek
satisfaction of any such obligation from the shareholders or any
shareholder of the Trust, class or Fund; nor shall such person seek
satisfaction of any such obligation from the Trustees or any individual
Trustee of the Trust.
SCHEDULE I DATED NOVEMBER 1, 1996 TO MULTIPLE CLASS OF SHARES PLAN
FOR DAILY MONEY FUND: U.S. TREASURY PORTFOLIO DATED JANUARY 1, 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FUND/CLASS SALES CHARGE DISTRIBUTION FEE SHAREHOLDER
(AS A PERCENTAGE OF SERVICE FEE
AVERAGE NET ASSETS) (AS A PERCENTAGE OF
AVERAGE NET ASSETS)
DMF: U.S. Treasury Portfolio
Initial Class none 0.25-0.40* none
Class B contingent deferred 0.75** 0.25
</TABLE>
* Pursuant to the Distribution and Service Plan for the Initial Class, FMR
is required to make distribution payments from its management fee, its past
profits or any other source available. FMR makes such payments at the
annual rate of 0.25% or 0.40% of Initial Class average net assets.
** Pursuant to the Distribution and Service Plan for Class B, FMR may make
distribution payments from its management fee, its past profits or any
other source available. FMR may make such payments at the annual rate of
up to 0.40% of Class B average net assets. The balance of Class B's
distribution fee is paid directly out of Class B assets.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000028540
<NAME> Daily Money Fund
<SERIES>
<NUMBER> 11
<NAME> Money Market Portfolio
<MULTIPLIER> 1,000
<S>
<C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> jul-31-1997
<PERIOD-END> oct-31-1996
<INVESTMENTS-AT-COST> 2,654,039
<INVESTMENTS-AT-VALUE> 2,654,039
<RECEIVABLES> 9,607
<ASSETS-OTHER> 26,957
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,690,603
<PAYABLE-FOR-SECURITIES> 25,001
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,193
<TOTAL-LIABILITIES> 27,194
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,664,173
<SHARES-COMMON-STOCK> 2,664,173
<SHARES-COMMON-PRIOR> 2,581,329
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (764)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 2,663,409
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 35,247
<OTHER-INCOME> 0
<EXPENSES-NET> 4,176
<NET-INVESTMENT-INCOME> 31,071
<REALIZED-GAINS-CURRENT> 58
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 31,129
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 31,071
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,213,789
<NUMBER-OF-SHARES-REDEEMED> 3,159,726
<SHARES-REINVESTED> 28,781
<NET-CHANGE-IN-ASSETS> 82,902
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (822)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,212
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,995
<AVERAGE-NET-ASSETS> 2,549,004
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> .012
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> .012
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000028540
<NAME> Daily Money Fund
<SERIES>
<NUMBER> 21
<NAME> U.S. Treasury Portfolio
<MULTIPLIER> 1,000
<S>
<C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> jul-31-1997
<PERIOD-END> oct-31-1996
<INVESTMENTS-AT-COST> 1,810,324
<INVESTMENTS-AT-VALUE> 1,810,324
<RECEIVABLES> 274
<ASSETS-OTHER> 14,264
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,824,862
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3,544
<TOTAL-LIABILITIES> 3,544
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,801,274
<SHARES-COMMON-STOCK> 1,801,274
<SHARES-COMMON-PRIOR> 1,801,422
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (371)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,821,318
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 24,710
<OTHER-INCOME> 0
<EXPENSES-NET> 3,074
<NET-INVESTMENT-INCOME> 21,636
<REALIZED-GAINS-CURRENT> 18
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 21,654
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 21,367
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,052,601
<NUMBER-OF-SHARES-REDEEMED> 2,065,231
<SHARES-REINVESTED> 12,482
<NET-CHANGE-IN-ASSETS> (19,680)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (388)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,328
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,267
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> .012
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> .012
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000028540
<NAME> Daily Money Fund
<SERIES>
<NUMBER> 22
<NAME> U.S. Treasury Portfolio - Class B
<MULTIPLIER> 1,000
<S>
<C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> jul-31-1997
<PERIOD-END> oct-31-1996
<INVESTMENTS-AT-COST> 1,810,324
<INVESTMENTS-AT-VALUE> 1,810,324
<RECEIVABLES> 274
<ASSETS-OTHER> 14,264
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,824,862
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3,544
<TOTAL-LIABILITIES> 3,544
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 20,415
<SHARES-COMMON-STOCK> 20,415
<SHARES-COMMON-PRIOR> 39,964
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (371)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,821,318
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 24,710
<OTHER-INCOME> 0
<EXPENSES-NET> 3,074
<NET-INVESTMENT-INCOME> 21,636
<REALIZED-GAINS-CURRENT> 18
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 21,654
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 269
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 10,395
<NUMBER-OF-SHARES-REDEEMED> 30,201
<SHARES-REINVESTED> 257
<NET-CHANGE-IN-ASSETS> (19,680)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (388)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,328
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,267
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> .010
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> .010
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 135
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
