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PROSPECTUS MAY 2, 1994
DREYFUS LIQUID ASSETS, INC.
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DREYFUS LIQUID ASSETS, INC. (THE "FUND") IS AN OPEN-END,
DIVERSIFIED, MANAGEMENT INVESTMENT COMPANY, KNOWN AS A MONEY
MARKET MUTUAL FUND. ITS GOAL IS TO PROVIDE YOU WITH AS HIGH A LEVEL
OF CURRENT INCOME AS IS CONSISTENT WITH THE PRESERVATION OF
CAPITAL.
YOU CAN INVEST, REINVEST OR REDEEM SHARES AT ANY TIME WITHOUT
CHARGE OR PENALTY. THE FUND PROVIDES FREE REDEMPTION CHECKS, WHICH
YOU CAN USE IN AMOUNTS OF $500 OR MORE FOR CASH OR TO PAY BILLS.
YOU CONTINUE TO EARN INCOME ON THE AMOUNT OF THE CHECK UNTIL IT
CLEARS. YOU CAN PURCHASE OR REDEEM SHARES BY TELEPHONE USING
DREYFUS TELETRANSFER.
THE DREYFUS CORPORATION PROFESSIONALLY MANAGES THE FUND'S
PORTFOLIO.
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY
THE U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE FUND WILL
BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE
FUND THAT YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND
RETAINED FOR FUTURE REFERENCE.
PART B (ALSO KNOWN AS THE STATEMENT OF ADDITIONAL INFORMATION),
DATED MAY 2, 1994, WHICH MAY BE REVISED FROM TIME TO TIME,
PROVIDES A FURTHER DISCUSSION OF CERTAIN AREAS IN THIS PROSPECTUS
AND OTHER MATTERS WHICH MAY BE OF INTEREST TO SOME INVESTORS. IT
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND IS
INCORPORATED HEREIN BY REFERENCE. FOR A FREE COPY, WRITE TO THE
FUND AT 144 GLENN CURTISS BOULEVARD, UNIONDALE, NEW YORK 11556-
0144, OR CALL 1-800-645-6561. WHEN TELEPHONING, ASK FOR OPERATOR
666.
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TABLE OF CONTENTS
PAGE
ANNUAL FUND OPERATING EXPENSES............................. 2
CONDENSED FINANCIAL INFORMATION............................ 2
YIELD INFORMATION.......................................... 3
DESCRIPTION OF THE FUND.................................... 3
MANAGEMENT OF THE FUND..................................... 6
HOW TO BUY FUND SHARES..................................... 6
SHAREHOLDER SERVICES....................................... 8
HOW TO REDEEM FUND SHARES.................................. 11
SHAREHOLDER SERVICES PLAN.................................. 13
DIVIDENDS, DISTRIBUTIONS AND TAXES......................... 13
GENERAL INFORMATION........................................ 14
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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.
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ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees ........................................... .47%
Other Expenses............................................. .30%
Total Fund Operating Expenses.............................. .77%
EXAMPLE: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
You would pay the following expenses on
a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the
end of each time period: $8 $25 $43 $95
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THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES
MAY BE GREATER OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE
EXAMPLE ASSUMES A 5% ANNUAL RETURN, THE FUND'S ACTUAL
PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL RETURN GREATER
OR LESS THAN 5%.
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The purpose of the foregoing table is to assist you in understanding the
various costs and expenses borne by the Fund, and therefore indirectly by
investors, the payment of which will reduce investors' return on an annual
basis. The information in the foregoing table does not reflect any fee
waivers or expense reimbursement arrangements that may be in effect.
You can purchase Fund shares without charge directly from Dreyfus
Service Corporation; you may be charged a nominal fee if you effect
transactions in Fund shares through a securities dealer, bank or other
financial institution. See "Management of the Fund" and "Shareholder
Services Plan."
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Ernst &
Young, the Fund's independent auditors, whose report thereon appears in
the Statement of Additional Information. Further financial data and
related notes are included in the Statement of Additional Information,
available upon request.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each year indicated. This
information has been derived from information provided in the Fund's
financial statements.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------------------------------
1984 1985 1986 1987 1988 1989 1990 1991 1992 1993
------ ------ ------ ----- ------ ----- ----- ----- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value,
beginning of year... $1.0000 $.9998 $.9999 $.9999 $.9994 $.9997 $.9997 $.9992 $.9991 $.9991
------- ------ ------ ------- ------- ------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income-net.... .0989 .0783 .0629 .0609 .0691 .0871 .0764 .0570 .0341 .0261
Net realized gain (loss)
on investments........ -- .0001 -- (.0005) .0001 (.0002) -- (.0001) -- (.0001)
TOTAL FROM INVESTMENT
------- ------ ------ ------- ------- ------ ------ ------ ------ ------
OPERATIONS......... .0989 .0784 .0629 .0604 .0692 .0869 .0764 .0569 .0341 .0260
------- ------ ------ ------- ------- ------ ------ ------ ------ ------
DISTRIBUTIONS:
Dividends from investment
income-net........... (.0991) (.0783) (.0629) (.0609) (.0689) (.0869) (.0769) (.0570) (.0341) (.0261)
------- ------ ------ ------- ------- ------ ------ ------ ------ ------
Net asset value,
end of year.......... $.9998 $.9999 $.9999 $.9994 $.9997 $.9997 $.9992 $.9991 $.9991 $.9990
======== ======= ======= ====== ====== ====== ======= ====== ====== =======
TOTAL INVESTMENT RETURN 10.42% 8.14% 6.50% 6.28% 7.11% 9.07% 7.99% 5.87% 3.47% 2.64%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to
average net assets..... .69% .66% .65% .67% .69% .66% .65% .67% .72% .77%
Ratio of net investment
income to
average net assets... 9.91% 7.84% 6.32% 6.11% 6.92% 8.72% 7.66% 5.75% 3.43% 2.62%
Net Assets end of year
(000's Omitted).. $8,318,939 $7,991,133 $7,388,400 $7,446,635 $7,304,277 $7,835,754 $7,521,291 $6,200,255 $5,502,100 $4,828,134
</TABLE>
Page 2
YIELD INFORMATION
From time to time, the Fund advertises its yield and effective yield.
Both yield figures are based on historical earnings and are not intended to
indicate future performance. It can be expected that these yields will
fluctuate substantially. The yield of the Fund refers to the income
generated by an investment in the Fund over a seven-day period (which
period will be stated in the advertisement). This income is then
annualized. That is, the amount of income generated by the investment
during that week is assumed to be generated each week over a 52-week
period and is shown as a percentage of the investment. The effective yield
is calculated similarly, but, when annualized, the income earned by an
investment in the Fund is assumed to be reinvested. The effective yield
will be slightly higher than the yield because of the compounding effect of
this assumed reinvestment. The Fund's yield and effective yield may
reflect absorbed expenses pursuant to any undertaking that may be in
effect. See "Management of the Fund."
Yield information is useful in reviewing the Fund's performance, but
because yields will fluctuate, under certain conditions such information
may not provide a basis for comparison with domestic bank deposits,
other investments which pay a fixed yield for a stated period of time, or
other investment companies which may use a different method of
computing yield.
Comparative performance information may be used from time to time in
advertising or marketing the Fund's shares, including data from Lipper
Analytical Services, Inc., IBC/Donoghue's Money Fund Report, Morningstar,
Inc., Bank Rate Monitor trademark, N. Palm Beach, Fla. 33408 and other
industry publications.
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE - The Fund's goal is to provide you with as high a
level of current income as is consistent with the preservation of capital.
The Fund's investment objective cannot be changed without approval by
the holders of a majority (as defined in the Investment Company Act of
1940) of the Fund's outstanding voting shares. There can be no assurance
that the Fund's objective will be achieved. Securities in which the Fund
will invest may not earn as high a level of current income as long-term or
lower quality securities which generally have less liquidity, greater
market risk and more fluctuation in market value.
MANAGEMENT POLICIES - To achieve its goal, the Fund invests in short-
term money market instruments, consisting exclusively of securities
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities, certificates of deposit, time deposits, bankers'
acceptances and other short-term obligations issued by domestic banks
and London branches of domestic banks, repurchase agreements, high grade
commercial paper and other short-term corporate obligations. The Fund
will invest at least 25% of its assets in bank obligations. See "Investment
Considerations" below.
The Fund seeks to maintain a net asset value of $1.00 per share for
purchases and redemptions. To do so, the Fund uses the amortized cost
method of valuing its securities pursuant to Rule 2a-7 under the
Investment Company Act of 1940, certain requirements of which are
summarized below.
In accordance with Rule 2a-7, the Fund will maintain a dollar-weighted
average portfolio maturity of 90 days or less, purchase only instruments
having remaining maturities of 13 months or less and invest only in U.S.
dollar denominated securities determined in accordance with procedures
established by the Board of Directors to present minimal credit risks and
which are rated in one of the two highest rating categories for debt
obligations by at least two nationally recognized statistical rating
organizations (or one rating organization if the instrument was rated by
only one such organization) or, if unrated, are of comparable quality as
determined in accordance with procedures established by the Board of
Directors. Moreover, the Fund will purchase only securities so rated in the
highest rating category or, if unrated, of comparable quality as
determined in accordance with such procedures. The nationally recognized
statistical rating organizations currently rating instruments of the type
the Fund may purchase are Moody's Investors Service, Inc., Standard &
Poor's Corporation, Duff & Phelps, Inc., Fitch Investors Service, Inc., IBCA
Limited and IBCA Inc. and Thomson BankWatch, Inc. and their rating
criteria are described in the Appendix to the Fund's Statement of
Additional Information.
Page 3
In addition, the Fund will not invest more than 5% of its total assets in
the securities (including the securities collateralizing a repurchase
agreement) of, or subject to puts issued by, a single issuer, except that (i)
the Fund may invest more than 5% of its total assets in a single issuer for
a period of up to three business days in certain limited circumstances, (ii)
the Fund may invest in obligations issued or guaranteed by the U.S.
Government without any such limitation, and (iii) the limitation with
respect to puts does not apply to unconditional puts if no more than 10%
of the Fund's total assets is invested in securities issued or guaranteed by
the issuer of the unconditional put. As to each security, these percentages
are measured at the time the Fund purchases the security. For further
information regarding the amortized cost method of valuing securities,
see "Determination of Net Asset Value" in the Fund's Statement of
Additional Information. There can be no assurance that the Fund will be
able to maintain a stable net asset value of $1.00 per share.
PORTFOLIO SECURITIES - Securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities include U.S. Treasury
securities, which differ in their interest rates, maturities and times of
issuance. Treasury Bills have initial maturities of one year or less;
Treasury Notes have initial maturities of one to ten years; and Treasury
Bonds generally have initial maturities of greater than ten years. Some
obligations issued or guaranteed by U.S. Government agencies and
instrumentalities, for example, Government National Mortgage Association
pass-through certificates, are supported by the full faith and credit of the
U.S. Treasury; others, such as those of the Federal Home Loan Banks, by the
right of the issuer to borrow from the Treasury; others, such as those
issued by the Federal National Mortgage Association, by discretionary
authority of the U.S. Government to purchase certain obligations of the
agency or instrumentality; and others, such as those issued by the Student
Loan Marketing Association, only by the credit of the agency or
instrumentality. These securities bear fixed, floating or variable rates of
interest. Interest may fluctuate based on generally recognized reference
rates or the relationship of rates. While the U.S. Government provides
financial support to such U.S. Government-sponsored agencies or
instrumentalities, no assurance can be given that it will always do so
since it is not so obligated by law. The Fund will invest in such securities
only when the Fund is satisfied that the credit risk with respect to the
issuer is minimal.
Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period
of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time (in no event longer than seven
days) at a stated interest rate. Investments in time deposits generally are
limited to London branches of domestic banks that have total assets in
excess of one billion dollars. Time deposits which may be held by the Fund
will not benefit from insurance from the Bank Insurance Fund or the
Savings Association Insurance Fund administered by the Federal Deposit
Insurance Corporation.
Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments
reflect the obligation both of the bank and of the drawer to pay the face
amount of the instrument upon maturity. The other short-term obligations
may include uninsured, direct obligations bearing fixed, floating or
variable rates of interest.
Repurchase agreements involve the acquisition by the Fund of an
underlying debt instrument, subject to an obligation of the seller to
repurchase, and the Fund to resell, the instrument at a fixed price usually
not more than one week after its purchase. The Fund's custodian will have
custody of, and will hold in a segregated account, securities acquired by
the Fund under a repurchase agreement. Repurchase agreements are
considered by the staff of the Securities and Exchange Commission to be
loans by the Fund. In an attempt to reduce the risk of incurring a loss on a
repurchase agreement, the Fund will enter into repurchase agreements
only with domestic banks with total assets in excess of one billion
dollars or primary government securities dealers reporting to the Federal
Reserve Bank of New York, with respect to securities of the type in which
the Fund may invest, and will require that additional securities be
deposited with it if the value of the securities purchased should decrease
below resale price. The Dreyfus Corporation will monitor on an ongoing
basis the value of the collateral to assure that it always equals or
exceeds the repurchase price. Certain costs may be incurred by the Fund in
connection with the sale of the securities if the seller does not
repurchase them in accordance with the repurchase agreement. In addition,
if bankruptcy proceedings are commenced with respect to the seller of the
Paage 4
securities, realization on the securities by the Fund may be delayed or
limited. The Fund will consider on an ongoing basis the creditworthiness
of the institutions with which it enters into repurchase agreements.
Commercial paper consists of short-term, unsecured promissory notes
issued to finance short-term credit needs. The commercial paper
purchased by the Fund will consist only of direct obligations issued by
domestic entities. The other corporate obligations in which the Fund may
invest consist of high quality, short-term bonds and notes issued by
domestic corporations.
CERTAIN FUNDAMENTAL POLICIES - The Fund (i) may borrow money from
banks for temporary or emergency (not leveraging) purposes in an amount
up to 5% of the value of the Fund's total assets (including the amount
borrowed) valued at the lesser of cost or market, less liabilities (not
including the amount borrowed) at the time the borrowing is made; (ii)
may pledge its assets in an amount up to 15% of the value of its total
assets but only to secure borrowings for temporary or emergency
purposes; (iii) may invest up to 5% of its assets in the commercial paper
of any one issuer; (iv) as to 25% of its assets, may invest up to 15% of its
assets in the obligations of any one bank and, as to the remainder, may
invest not more than 5% of its assets in the obligations of any one bank (in
each case, subject to the provisions of Rule 2a-7); and (v) will invest at
least 25% of its assets in obligations issued by banks and may invest up to
25% of its assets in the securities of issuers in a single industry,
provided that there shall be no limitation on the purchase of obligations
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities. This paragraph describes fundamental policies of the
Fund which cannot be changed without approval by the holders of a
majority (as defined in the Investment Company Act of 1940) of the Fund's
outstanding voting shares. See "Investment Objective and Management
Policies - Investment Restrictions" in the Statement of Additional
Information.
While not fundamental policies, the Fund may not invest more than 10%
of its total assets in time deposits maturing from two business days
through seven calendar days or more than 10% of its net assets in
repurchase agreements providing for settlement in more than seven days
after notice.
INVESTMENT CONSIDERATIONS - Since the Fund's portfolio may contain
securities issued by London branches of domestic banks, the Fund may be
subject to additional investment risks with respect to such securities
that are different in some respects from those incurred by a fund which
invests only in debt obligations of U.S. domestic issuers. Such risks
include future political and economic developments, the possible
imposition of United Kingdom withholding taxes on interest income
payable on the securities, the possible establishment of exchange
controls, the possible seizure or nationalization of foreign deposits or the
adoption of other foreign governmental restrictions which might
adversely affect the payment of principal and interest on such securities.
To the extent the Fund's investments are concentrated in the banking
industry, the Fund will have correspondingly greater exposure to the risk
factors which are characteristic of such investments. Sustained increases
in interest rates can adversely affect the availability or liquidity and cost
of capital funds for a bank's lending activities, and a deterioration in
general economic conditions could increase the exposure to credit losses.
In addition, the value of and the investment return on the Fund's shares
could be affected by economic or regulatory developments in or related to
the banking industry, which industry also is subject to the effects of the
concentration of loan portfolios in leveraged transactions and in
particular businesses, and competition within the banking industry as
well as with other types of financial institutions. The Fund, however, will
seek to minimize its exposure to such risks by investing only in debt
securities which are determined to be of the highest quality.
The Fund attempts to increase yields by trading to take advantage of
short-term market variations. This policy is expected to result in high
portfolio turnover but should not adversely affect the Fund since the Fund
usually does not pay brokerage commissions when it purchases short-term
debt obligations. The value of the portfolio securities held by the Fund
will vary inversely to changes in prevailing interest rates. Thus, if
interest rates have increased from the time a security was purchased,
such security, if sold, might be sold at a price less than its purchase cost.
Similarly, if interest rates have declined from the time a security was
purchased, such security, if sold, might be sold at a price greater than its
purchase cost. In either instance, if the security was purchased at face
value and held to maturity, no gain or loss would be realized.
Page 5
Investment decisions for the Fund are made independently from those of
other investment companies advised by The Dreyfus Corporation. However,
if such other investment companies are prepared to invest in, or desire to
dispose of, money market instruments at the same time as the Fund,
available investments or opportunities for sales will be allocated
equitably to each investment company. In some cases, this procedure may
adversely affect the price paid or received by the Fund or the size of the
position obtained for or disposed of by the Fund.
MANAGEMENT OF THE FUND
The Dreyfus Corporation, located at 200 Park Avenue, New York, New
York 10166, was formed in 1947 and serves as the Fund's investment
adviser. As of March 31, 1994, The Dreyfus Corporation managed or
administered approximately $74 billion in assets for more than 1.9
million investor accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of the Fund's affairs under a Management Agreement with the
Fund, subject to the authority of the Fund's Board of Directors in
accordance with Maryland law.
For the fiscal year ended December 31, 1993, the Fund paid The Dreyfus
Corporation a monthly management fee at the annual rate of .47 of 1% of
the value of the Fund's average daily net assets. From time to time, The
Dreyfus Corporation may waive receipt of its fees and/or voluntarily
assume certain expenses of the Fund, which would have the effect of
lowering the overall expense ratio of the Fund and increasing yield to
investors at the time such amounts are waived or assumed, as the case
may be. The Fund will not pay The Dreyfus Corporation at a later time for
any amounts it may waive, nor will the Fund reimburse The Dreyfus
Corporation for any amounts it may assume.
The Dreyfus Corporation may pay Dreyfus Service Corporation for
shareholder and distribution services from The Dreyfus Corporation's own
assets, including past profits but not including the management fee paid
by the Fund. Dreyfus Service Corporation may use part or all of such
payments to pay Service Agents in respect to these services.
The Shareholder Services Group, Inc., a subsidiary of First Data
Corporation, P.O. Box 9671, Providence, Rhode Island 02940-9671, is the
Fund's Transfer and Dividend Disbursing Agent (the "Transfer Agent"). The
Bank of New York, 110 Washington Street, New York, New York 10286, is
the Fund's Custodian.
HOW TO BUY FUND SHARES
The Fund's distributor is Dreyfus Service Corporation, a wholly-owned
subsidiary of The Dreyfus Corporation, located at 200 Park Avenue, New
York, New York 10166. The shares it distributes are not deposits or
obligations of The Dreyfus Security Savings Bank, F.S.B. and therefore are
not insured by the Federal Deposit Insurance Corporation.
You can purchase Fund shares without a sales charge directly from
Dreyfus Service Corporation; you may be charged a nominal fee if you
effect transactions in Fund shares through a securities dealer, bank or
other financial institution. Stock certificates are issued only upon your
written request. No certificates are issued for fractional shares. The Fund
reserves the right to reject any purchase order.
The minimum initial investment is $2,500, or $1,000 if you are a client
of a securities dealer, bank or other financial institution which has made
an aggregate minimum initial purchase for its customers of $2,500.
Subsequent investments must be at least $100. The initial investment
must be accompanied by the Fund's Account Application. For full-time or
part-time employees of The Dreyfus Corporation or any of its affiliates or
subsidiaries, directors of The Dreyfus Corporation, Board members of a
fund advised by The Dreyfus Corporation, including members of the Fund's
Board, or the spouse or minor child of any of the foregoing, the minimum
initial investment is $1,000. For full-time or part-time employees of The
Dreyfus Corporation or any of its affiliates or subsidiaries who elect to
have a portion of their pay directly deposited into their Fund account, the
minimum initial investment is $50. In addition, the Fund reserves the
right to offer Fund shares without regard to minimum purchase
requirements to employees participating in certain qualified and non-
qualified employee benefit plans or other programs where contributions or
account information may be transmitted in a manner and form acceptable
to the Fund. The Fund reserves the right to vary further the initial and
subsequent minimum investment requirements at any time.
Page 6
You may purchase Fund shares by check or wire, or through the Dreyfus
TELETRANSFER Privilege described below. Checks should be made payable
to "The Dreyfus Family of Funds," or, if for Dreyfus retirement plan
accounts, to "The Dreyfus Trust Company, Custodian." Payments to open
new accounts which are mailed should be sent to The Dreyfus Family of
Funds, P.O. Box 9387, Providence, Rhode Island 02940-9387, together with
your Account Application. For subsequent investments, your Fund account
number should appear on the check and an investment slip should be
enclosed and sent to The Dreyfus Family of Funds, P.O. Box 105, Newark,
New Jersey 07101-0105. For Dreyfus retirement plan accounts, both
initial and subsequent investments should be sent to The Dreyfus Trust
Company, Custodian, P.O. Box 6427, Providence, Rhode Island 02940-6427.
Neither initial nor subsequent investments should be made by third party
check. Purchase orders may be delivered in person only to a Dreyfus
Financial Center. THESE ORDERS WILL BE FORWARDED TO THE FUND AND
WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For the location of the
nearest Dreyfus Financial Center, please call one of the telephone numbers
listed under "General Information."
Wire payments may be made if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank
having a correspondent bank in New York City. Immediately available funds
may be transmitted by wire to The Bank of New York, DDA
#8900051795/Dreyfus Liquid Assets, Inc., for purchase of shares in your
name. The wire must include your Fund account number (for new accounts,
your taxpayer identification number ("TIN") should be included instead),
account registration and dealer number, if applicable. If your initial
purchase of Fund shares is by wire, please call 1-800-645-6561 after
completing your wire payment to obtain your Fund account number. Please
include your Fund account number on the Fund's Account Application and
promptly mail the Account Application to the Fund, as no redemptions will
be permitted until the Account Application is received. You may obtain
further information about remitting funds in this manner from your bank.
All payments should be made in U.S. dollars and, to avoid fees and delays,
should be drawn only on U.S. banks. A charge will be imposed if any check
used for investment in your account does not clear. The Fund makes
available to certain large institutions the ability to issue purchase
instructions through compatible computer facilities.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct
the institution to transmit immediately available funds through the
Automated Clearing House to The Bank of New York with instructions to
credit your Fund account. The instructions must specify your Fund account
registration and your Fund account number PRECEDED BY THE DIGITS
"1111."
Dreyfus Service Corporation may pay dealers a fee of up to .5% of the
amount invested through such dealers in Fund shares by employees
participating in qualified and non-qualified employee benefit plans or
other programs where (i) the employers or affiliated employers
maintaining such plans or programs have a minimum of 250 employees
eligible for participation in such plans or programs, or (ii) such plan's or
program's aggregate investment in the Dreyfus Family of Funds or certain
other products made available by Dreyfus Service Corporation to such
plans or programs exceeds one million dollars. All present holdings of
shares of funds in the Dreyfus Family of Funds by such employee benefit
plans or programs will be aggregated to determine the fee payable with
respect to each such purchase of Fund shares. Dreyfus Service Corporation
reserves the right to cease paying these fees at any time. Dreyfus Service
Corporation will pay such fees from its own funds, other than amounts
received from the Fund, including past profits or any other source
available to it.
Fund shares are sold on a continuous basis at the net asset value per
share next determined after an order in proper form is received by the
Transfer Agent or other agent or entity subject to the direction of such
agents. Net asset value per share is determined as of the close of trading
on the floor of the New York Stock Exchange (currently 4:00 p.m., New York
time) on each day the New York Stock Exchange or the Transfer Agent is
open for business. Net asset value per share is computed by dividing the
value of the Fund's net assets (i.e., the value of its assets less liabilities)
by the total number of shares outstanding. See "Determination of Net
Asset Value" in the Fund's Statement of Additional Information.
Page 7
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes"
and the Fund's Account Application for further information concerning this
requirement. Failure to furnish a certified TIN to the Fund could subject
you to a $50 penalty imposed by the Internal Revenue Service (the "IRS").
DREYFUS TELETRANSFER PRIVILEGE - You may purchase Fund shares
(minimum $500, maximum $150,000 per day) by telephone if you have
checked the appropriate box and supplied the necessary information on the
Fund's Account Application or have filed a Shareholder Services Form with
the Transfer Agent. The proceeds will be transferred between the bank
account designated in one of these documents and your Fund account. Only
a bank account maintained in a domestic financial institution which is an
Automated Clearing House member may be so designated. The Fund may
modify or terminate this Privilege at any time or charge a service fee
upon notice to shareholders. No such fee currently is contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER purchase of Fund shares by telephoning
1-800-221-4060 or, if you are calling from overseas, call 1-401-455-
3306.
SHAREHOLDER SERVICES
EXCHANGE PRIVILEGE - The Exchange Privilege enables you to purchase, in
exchange for shares of the Fund, shares of certain other funds managed or
administered by The Dreyfus Corporation, to the extent such shares are
offered for sale in your state of residence. These funds have different
investment objectives which may be of interest to you. If you desire to
use this Privilege, you should consult Dreyfus Service Corporation to
determine if it is available and whether any conditions are imposed on its
use.
To use this Privilege, you must give exchange instructions to the
Transfer Agent in writing, by wire or by telephone. If you previously have
established the Telephone Exchange Privilege, you may telephone exchange
instructions by calling 1-800-221-4060 or, if you are calling from
overseas, call 1-401-455-3306. See "How to Redeem Fund Shares -
Procedures." Before any exchange, you must obtain and should review a
copy of the current prospectus of the fund into which an exchange is being
made. Prospectuses may be obtained from Dreyfus Service Corporation.
Except in the case of Personal Retirement Plans, the shares being
exchanged must have a current value of at least $500; furthermore, when
establishing a new account by exchange, the shares being exchanged must
have a value of at least the minimum initial investment required for the
fund into which the exchange is being made. Telephone exchanges may be
made only if the appropriate "YES" box has been checked on the Account
Application, or a separate signed Shareholder Services Form is on file
with the Transfer Agent. Upon an exchange into a new account the
following shareholder services and privileges, as applicable and where
available, will be automatically carried over to the fund into which the
exchange is made: Exchange Privilege, Check Redemption Privilege, Wire
Redemption Privilege, Telephone Redemption Privilege, Dreyfus
TELETRANSFER Privilege and the dividend/capital gain distribution option
(except for Dreyfus Dividend Sweep) selected by the investor.
Shares will be exchanged at the next determined net asset value;
however, a sales load may be charged with respect to exchanges into funds
sold with a sales load. If you are exchanging into a fund that charges a
sales load, you may qualify for share prices which do not include the sales
load or which reflect a reduced sales load, if the shares of the fund from
which you are exchanging were: (a) purchased with a sales load, (b)
acquired by a previous exchange from shares purchased with a sales load,
or (c) acquired through reinvestment of dividends or distributions paid
with respect to the foregoing categories of shares. To qualify, at the time
of your exchange you must notify the Transfer Agent. Any such
qualification is subject to confirmation of your holdings through a check
of appropriate records. See "Shareholder Services" in the Statement of
Additional Information. No fees currently are charged shareholders
directly in connection with exchanges, although the Fund reserves the
right, upon not less than 60 days' written notice, to charge shareholders a
nominal fee in accordance with rules promulgated by the Securities and
Exchange Commission. The Fund reserves the right to reject any exchange
request in whole or in part. The Exchange Privilege may be modified or
terminated at any time upon notice to shareholders.
Page 8
The exchange of shares of one fund for shares of another is treated for
Federal income tax purposes as a sale of the shares given in exchange by
the shareholder and, therefore, an exchanging shareholder may realize a
taxable gain or loss.
DREYFUS AUTO-EXCHANGE PRIVILEGE - Dreyfus Auto-Exchange Privilege
enables you to invest regularly (on a semi-monthly, monthly, quarterly or
annual basis), in exchange for shares of the Fund, in shares of other funds
in the Dreyfus Family of Funds of which you are currently an investor. The
amount you designate, which can be expressed either in terms of a
specific dollar or share amount ($100 minimum), will be exchanged
automatically on the first and/or fifteenth of the month according to the
schedule you have selected. Shares will be exchanged at the then-current
net asset value; however, a sales load may be charged with respect to
exchanges into funds sold with a sales load. See "Shareholder Services" in
the Statement of Additional Information. The right to exercise this
Privilege may be modified or cancelled by the Fund or the Transfer Agent.
You may modify or cancel your exercise of this Privilege at any time by
writing to The Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode
Island 02940-9671. The Fund may charge a service fee for the use of this
Privilege. No such fee currently is contemplated. The exchange of shares
of one fund for shares of another is treated for Federal income tax
purposes as a sale of the shares given in exchange by the shareholder and,
therefore, an exchanging shareholder may realize a taxable gain or loss.
For more information concerning this Privilege and the funds in the
Dreyfus Family of Funds eligible to participate in this Privilege, or to
obtain a Dreyfus Auto-Exchange Authorization Form, please call toll free
1-800-645-6561.
DREYFUS-AUTOMATIC ASSET BUILDER - Dreyfus-AUTOMATIC Asset Builder
permits you to purchase Fund shares (minimum of $100 and maximum of
$150,000 per transaction) at regular intervals selected by you. Fund
shares are purchased by transferring funds from the bank account
designated by you. At your option, the bank account designated by you will
be debited in the specified amount, and Fund shares will be purchased,
once a month, on either the first or fifteenth day, or twice a month, on
both days. Only an account maintained at a domestic financial institution
which is an Automated Clearing House member may be so designated. To
establish a Dreyfus-AUTOMATIC Asset Builder account, you must file an
authorization form with the Transfer Agent. You may obtain the necessary
authorization form from Dreyfus Service Corporation. You may cancel your
participation in this Privilege or change the amount of purchase at any
time by mailing written notification to The Dreyfus Family of Funds, P.O.
Box 9671, Providence, Rhode Island 02940-9671, or, if for Dreyfus
retirement plan accounts, to The Dreyfus Trust Company, Custodian, P.O.
Box 6427, Providence, Rhode Island 02940-6427, and the notification will
be effective three business days following receipt. The Fund may modify
or terminate this Privilege at any time or charge a service fee. No such
fee currently is contemplated.
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE - Dreyfus Government
Direct Deposit Privilege enables you to purchase Fund shares (minimum of
$100 and maximum of $50,000 per transaction) by having Federal salary,
Social Security, or certain veterans', military or other payments from the
Federal government automatically deposited into your Fund account. You
may deposit as much of such payments as you elect. To enroll in Dreyfus
Government Direct Deposit, you must file with the Transfer Agent a
completed Direct Deposit Sign-Up Form for each type of payment that you
desire to include in this Privilege. The appropriate form may be obtained
from Dreyfus Service Corporation. Death or legal incapacity will
terminate your participation in this Privilege. You may elect at any time
to terminate your participation by notifying in writing the appropriate
Federal agency. Further, the Fund may terminate your participation upon
30 days' notice to you.
MONTHLY OR QUARTERLY DISTRIBUTION PLANS - The Distribution Plans
permit you to receive monthly or quarterly payments from the Fund
consisting of proceeds from the redemption of shares purchased for your
account through the automatic reinvestment of dividends declared on your
account during the preceding month or calendar quarter.
You may open a Distribution Plan by submitting a request to the
Transfer Agent. A Plan may be ended at any time by you, the Fund or the
Transfer Agent. Shares for which certificates have been issued must be
presented before redemption under the Plans.
Page 9
AUTOMATIC WITHDRAWAL PLAN - The Automatic Withdrawal Plan permits
you to request withdrawal of a specified dollar amount (minimum of $50)
on either a monthly or quarterly basis if you have a $5,000 minimum
account. An application for Automatic Withdrawal can be obtained from
Dreyfus Service Corporation. There is a service charge of 50 cents for
each withdrawal check. The Automatic Withdrawal Plan may be ended at
any time by you, the Fund or the Transfer Agent. Shares for which stock
certificates have been issued may not be redeemed through the Automatic
Withdrawal Plan.
DREYFUS DIVIDEND OPTIONS - Dreyfus Dividend Sweep enables you to
invest automatically dividends or dividends and capital gain distributions,
if any, paid by the Fund in shares of another fund in the Dreyfus Family of
Funds of which you are a shareholder. Shares of the other fund will be
purchased at the then-current net asset value; however, a sales load may
be charged with respect to investments in shares of a fund sold with a
sales load. If you are investing in a fund that charges a sales load, you may
qualify for share prices which do not include the sales load or which
reflect a reduced sales load. If you are investing in a fund that charges a
contingent deferred sales charge, the shares purchased will be subject on
redemption to the contingent deferred sales charge, if any, applicable to
the purchased shares. See "Shareholder Services" in the Statement of
Additional Information. Dreyfus Dividend ACH permits a shareholder to
transfer electronically on the payment date their dividends or dividends
and capital gain distributions, if any, from the Fund to a designated bank
account. Only an account maintained at a domestic financial institution
which is an Automated Clearing House member may be so designated.
Banks may charge a fee for this service.
For more information concerning these privileges or to request a
Dividend Options Form, please call toll free 1-800-645-6561. You may
cancel these privileges by mailing written notification to The Dreyfus
Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671.
Enrollment in or cancellation of these privileges is effective three
business days following receipt. These privileges are available only for
existing accounts and may not be used to open new accounts. Minimum
subsequent investments do not apply for Dreyfus Dividend Sweep. The Fund
may modify or terminate these privileges at any time or charge a service
fee. No such fee currently is contemplated. Shares of the Fund held under
Keogh Plans, IRAs or other retirement plans are not eligible for these
privileges.
DREYFUS PAYROLL SAVINGS PLAN - Dreyfus Payroll Savings Plan permits
you to purchase Fund shares (minimum of $100 per transaction)
automatically on a regular basis. Depending upon your employer's direct
deposit program, you may have part or all of your paycheck transferred to
your existing Dreyfus account electronically through the Automated
Clearing House system at each pay period. To establish a Dreyfus Payroll
Savings Plan account, you must file an authorization form with your
employer's payroll department. Your employer must complete the reverse
side of the form and return it to The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671. You may obtain the necessary
authorization form from Dreyfus Service Corporation. You may change the
amount of purchase or cancel the authorization only by written
notification to your employer. It is the sole responsibility of your
employer, not Dreyfus Service Corporation, The Dreyfus Corporation, the
Fund, the Transfer Agent or any other person, to arrange for transactions
under the Dreyfus Payroll Savings Plan. The Fund may modify or terminate
this Privilege at any time or charge a service fee. No such fee currently is
contemplated. Shares of the Fund held under Keogh Plans, IRAs or other
retirement plans are not eligible for this Privilege.
RETIREMENT PLANS - The Fund offers a variety of pension and profit-
sharing plans, including Keogh Plans, IRAs, SEP-IRAs and IRA "Rollover
Accounts," 401(k) Salary Reduction Plans and 403(b)(7) Plans. Plan
support services also are available. You can obtain details on the various
plans by calling the following numbers: for Keogh Plans, please call 1-
800-358-5566; for IRAs and IRA "Rollover Accounts," please call 1-800-
645-6561; and for SEP-IRAs, 401(k) Salary Reduction Plans and 403(b)(7)
Plans, please call 1-800-322-7880.
Page 10
HOW TO REDEEM FUND SHARES
GENERAL - You may request redemption of your shares at any time.
Redemption requests should be transmitted to the Transfer Agent as
described below. When a request is received in proper form, the Fund will
redeem the shares at the next determined net asset value.
The Fund imposes no charges when shares are redeemed directly through
Dreyfus Service Corporation. Securities dealers, banks and other financial
institutions may charge a nominal fee for effecting redemptions of Fund
shares. Any stock certificates representing Fund shares being redeemed
must be submitted with the redemption request. The value of the shares
redeemed may be more or less than their original cost, depending upon the
Fund's then-current net asset value.
The Fund ordinarily will make payment for all shares redeemed within
seven days of receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities and
Exchange Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY
CHECK, BY DREYFUS TELETRANSFER PRIVILEGE OR THROUGH DREYFUS-
AUTOMATIC ASSET BUILDER AND SUBSEQUENTLY SUBMIT A WRITTEN
REDEMPTION REQUEST TO THE TRANSFER AGENT, YOUR REDEMPTION WILL BE
EFFECTIVE AND THE REDEMPTION PROCEEDS WILL BE TRANSMITTED TO YOU
PROMPTLY UPON BANK CLEARANCE OF YOUR PURCHASE CHECK, DREYFUS
TELETRANSFER PURCHASE OR DREYFUS-AUTOMATIC ASSET BUILDER ORDER,
WHICH MAY TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN ADDITION, THE
FUND WILL NOT HONOR REDEMPTION CHECKS UNDER THE CHECK REDEMPTION
PRIVILEGE, AND WILL REJECT REQUESTS TO REDEEM SHARES BY WIRE OR
TELEPHONE OR PURSUANT TO THE DREYFUS TELETRANSFER PRIVILEGE, FOR
A PERIOD OF EIGHT BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER
AGENT OF THE PURCHASE CHECK, THE DREYFUS TELETRANSFER PURCHASE
OR THE DREYFUS-AUTOMATIC ASSET BUILDER ORDER AGAINST WHICH SUCH
REDEMPTION IS REQUESTED. THESE PROCEDURES WILL NOT APPLY IF YOUR
SHARES WERE PURCHASED BY WIRE PAYMENT, OR IF YOU OTHERWISE HAVE A
SUFFICIENT COLLECTED BALANCE IN YOUR ACCOUNT TO COVER THE
REDEMPTION REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS EFFECTIVE,
DIVIDENDS ON SUCH SHARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL
BE ENTITLED TO EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP.
Fund shares will not be redeemed until the Transfer Agent has received
your Account Application.
Ordinarily the Fund will initiate payment for all shares redeemed
pursuant to the regular redemption procedure, by wire or telephone or
through the Dreyfus TELETRANSFER Privilege on the next business day
after receipt by the Transfer Agent of a redemption request in proper
form.
The Fund reserves the right to redeem your account at its option upon
not less than 45 days' written notice if your account's net asset value is
$500 or less and remains so during the notice period.
PROCEDURES - You may redeem shares by using the regular redemption
procedure through the Transfer Agent, the Check Redemption Privilege, the
Wire Redemption Privilege, the Telephone Redemption Privilege, or the
Dreyfus TELETRANSFER Privilege. The Fund makes available to certain
large institutions the ability to issue redemption instructions through
compatible computer facilities.
If you select a telephone redemption or exchange privilege, you
authorize the Transfer Agent to act on telephone instructions from any
person representing himself or herself to be you and reasonably believed
by the Transfer Agent to be genuine. The Fund will require the Transfer
Agent to employ reasonable procedures, such as requiring a form of
personal identification, to confirm that instructions are genuine and, if it
does not follow such procedures, the Fund or the Transfer Agent may be
liable for any losses due to unauthorized or fraudulent instructions.
Neither the Fund nor the Transfer Agent will be liable for following
telephone instructions reasonably believed to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption or exchange of Fund shares. In such cases, you should
consider using the other redemption procedures described herein. Use of
these other redemption procedures may result in your redemption request
being processed at a later time than it would have been if telephone
redemption had been used.
Page 11
REGULAR REDEMPTION - Under the regular redemption procedure, you may
redeem your shares by written request mailed to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. Redemption
requests may be delivered in person only to a Dreyfus Financial Center.
THESE REQUESTS WILL BE FORWARDED TO THE FUND AND WILL BE
PROCESSED ONLY UPON RECEIPT THEREBY. For the location of the nearest
Dreyfus Financial Center, please call one of the telephone numbers listed
under "General Information." Redemption requests must be signed by each
shareholder, including each owner of a joint account, and each signature
must be guaranteed. The Transfer Agent has adopted standards and
procedures pursuant to which signature-guarantees in proper form
generally will be accepted from domestic banks, brokers, dealers, credit
unions, national securities exchanges, registered securities associations,
clearing agencies and savings associations, as well as from participants
in the New York Stock Exchange Medallion Signature Program, the
Securities Transfer Agents Medallion Program ("STAMP") and the Stock
Exchanges Medallion Program. If you have any questions with respect to
signature-guarantees, please call one of the telephone numbers listed
under "General Information."
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
CHECK REDEMPTION PRIVILEGE - You may request on the Account
Application, Shareholder Services Form or by later written request that the
Fund provide Redemption Checks drawn on the Fund's account. Redemption
Checks may be made payable to the order of any person in the amount of
$500 or more. Redemption Checks should not be used to close your account.
Redemption Checks are free, but the Transfer Agent will impose a fee for
stopping payment of a Redemption Check upon your request or if the
Transfer Agent cannot honor a Redemption Check due to insufficient funds
or other valid reason. You should date your Redemption Checks with the
current date when you write them. Please do not postdate your Redemption
Checks. If you do, the Transfer Agent will honor, upon presentment, even if
presented before the date of the check, all postdated Redemption Checks
which are dated within six months of presentment for payment, if they are
otherwise in good order. Shares for which stock certificates have been
issued may not be redeemed by Redemption Check. Shares held under Keogh
Plans, IRAs or other retirement plans are not eligible for this Privilege.
This Privilege may be modified or terminated at any time by the Fund or
the Transfer Agent upon notice to shareholders.
WIRE REDEMPTION PRIVILEGE - You may request by wire or telephone that
redemption proceeds (minimum $1,000 ) be wired to your account at a
bank which is a member of the Federal Reserve System, or a correspondent
bank if your bank is not a member. To establish the Wire Redemption
Privilege, you must check the appropriate box and supply the necessary
information on the Fund's Account Application or file a Shareholder
Services Form with the Transfer Agent. You may direct that redemption
proceeds be paid by check (maximum $150,000 per day) made out to the
owners of record and mailed to your address. Redemption proceeds of less
than $1,000 will be paid automatically by check. Holders of jointly
registered Fund or bank accounts may have redemption proceeds of only up
to $250,000 wired within any 30-day period. You may telephone
redemption requests by calling 1-800-221-4060 or, if you are calling
from overseas, call 1-401-455-3306. You also may telephone redemption
requests by calling the Los Angeles office of Dreyfus Service Corporation
at 1-213-380-0010. The Fund reserves the right to refuse any redemption
request, including requests made shortly after a change of address, and
may limit the amount involved or the number of such requests. This
Privilege may be modified or terminated at any time by the Transfer Agent
or the Fund. The Fund's Statement of Additional Information sets forth
instructions for transmitting redemption requests by wire. Shares of the
Fund held under Keogh Plans, IRAs or other retirement plans, and shares
for which certificates have been issued, are not eligible for this Privilege.
TELEPHONE REDEMPTION PRIVILEGE __ You may redeem shares of the Fund
(maximum $150,000 per day) by telephone if you have checked the
appropriate box on the Fund's Account Application or have filed a
Shareholder Services Form with the Transfer Agent. The redemption
proceeds will be paid by check and mailed to your address. You may
telephone redemption instructions by calling 1-800-221-4060 or, if you
are calling from overseas, call 1-401-455-3306. The Fund reserves the
right to refuse any request made by telephone, including
Page 12
requests made
shortly after a change of address, and may limit the amount involved or
the number of telephone redemption requests. This Privilege may be
modified or terminated at any time by the Transfer Agent or the Fund.
Shares of the Fund held under Keogh Plans, IRAs or other retirement plans,
and shares for which certificates have been issued, are not eligible for
this Privilege.
DREYFUS TELETRANSFER PRIVILEGE - You may redeem shares of the Fund
(minimum $500 per day) by telephone if you have checked the appropriate
box and supplied the necessary information on the Fund's Account
Application or have filed a Shareholder Services Form with the Transfer
Agent. The proceeds will be transferred between your Fund account and the
bank account designated in one of these documents. Only a bank account
maintained in a domestic financial institution which is an Automated
Clearing House member may be so designated. Redemption proceeds will be
on deposit in your account at an Automated Clearing House member bank
ordinarily two days after receipt of the redemption request or, at your
request, paid by check (maximum $150,000 per day) and mailed to your
address. Holders of jointly registered Fund or bank accounts may redeem
through the Dreyfus TELETRANSFER Privilege for transfer to their bank
account only up to $250,000 within any 30-day period. The Fund reserves
the right to refuse any request made by telephone, including requests
made shortly after a change of address, and may limit the amount involved
or the number of such requests. The Fund may modify or terminate this
Privilege at any time or charge a service fee upon notice to shareholders.
No such fee is currently contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER redemption of Fund shares by calling 1-
800-221-4060 or, if you are calling from overseas, call 1-401-455-3306.
Shares of the Fund held under Keogh Plans, IRAs or other retirement plans,
and shares issued in certificate form, are not eligible for this Privilege.
SHAREHOLDER SERVICES PLAN
The Fund has adopted a Shareholder Services Plan pursuant to which the
Fund reimburses Dreyfus Service Corporation an amount not to exceed an
annual rate of .25 of 1% of the value of the average daily net assets for
certain allocated expenses of providing personal services and/or
maintaining shareholder accounts. The services provided may include
personal services relating to shareholder accounts, such as answering
shareholder inquiries regarding the Fund and providing reports and other
information, and services related to the maintenance of shareholder
accounts.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily declares and pays dividends from its net investment
income on each day the New York Stock Exchange or the Transfer Agent is
open for business. The Fund's earnings for Saturdays, Sundays and holidays
are paid as dividends on the next business day. Shares begin accruing
dividends on the day following the date of purchase. Distributions from
net realized securities gains, if any, generally are declared and paid once
a year, but the Fund may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code of
1986, as amended (the "Code"), in all events in a manner consistent with
the provisions of the Investment Company Act of 1940. The Fund will not
make distributions from net realized securities gains unless capital loss
carryovers, if any, have been utilized or have expired. You may choose
whether to receive dividends and distributions in cash or to reinvest in
additional Fund shares at net asset value. All expenses are accrued daily
and deducted before declaration of dividends to investors.
Dividends derived from net investment income, together with
distributions from any net realized short-term securities gains and all or
a portion of any gain realized from the sale or other disposition of certain
market discount bonds, paid by the Fund will be taxable to shareholders as
ordinary income whether received in cash or reinvested in additional Fund
shares. No dividend will qualify for the dividends received deduction
allowable to certain U.S. corporations. Distributions from net realized
long-term securities gains of the Fund will be taxable to U.S. shareholders
as long-term capital gains regardless of how long shareholders have held
their Fund shares and whether such distributions are received in cash or
reinvested in additional Fund shares.
Page 13
The Code provides that the net
capital gains of an individual generally will not be subject to Federal
income tax at a rate in excess of 28%. Dividends and distributions may be
subject to certain state and local taxes.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gain and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, paid by the Fund to a foreign investor generally are
subject to U.S. nonresident withholding taxes at the rate of 30%, unless
the investor claims the benefit of a lower rate specified in a tax treaty.
Distributions from net realized long-term securities gains paid by the
Fund to a foreign investor generally will not be subject to U.S. nonresident
withholding tax. However, such distributions may be subject to backup
withholding, as described below, unless the foreign investor certifies his
non-U.S. residency status.
Notice as to the tax status of your dividends and distributions will be
mailed to you annually. You also will receive periodic summaries of your
account which will include information as to dividends and distributions
from securities gains, if any, paid during the year.
Federal regulations generally require the Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of dividends and
distributions from net realized securities gains of the Fund paid to a
shareholder if such shareholder fails to certify either that the TIN
furnished in connection with opening an account is correct, or that such
shareholder has not received notice from the IRS of being subject to
backup withholding as a result of a failure to properly report taxable
dividend or interest income on a Federal income tax return. Furthermore,
the IRS may notify the Fund to institute backup withholding if the IRS
determines that a shareholder's TIN is incorrect or if a shareholder has
failed to properly report taxable dividend and interest income on a Federal
income tax return.
A TIN is either the Social Security number or employer identification
number of the record owner of the account. Any tax withheld as a result of
backup withholding does not constitute an additional tax imposed on the
record owner of the account, and may be claimed as a credit on the record
owner's Federal income tax return.
Management believes that the Fund has qualified for the fiscal year
ended December 31, 1993 as a "regulated investment company" under the
Code. The Fund intends to continue to so qualify if such qualification is in
the best interests of its shareholders. Such qualification relieves the Fund
of any liability for Federal income taxes to the extent its earnings are
distributed in accordance with applicable provisions of the Code. The Fund
is subject to a nondeductible 4% excise tax, measured with respect to
certain undistributed amounts of taxable income and capital gains, if any.
You should consult your tax adviser regarding specific questions as to
Federal, state or local taxes.
GENERAL INFORMATION
The Fund was incorporated under Maryland law on September 6, 1973,
and commenced operations on January 28, 1974. The Fund is authorized to
issue 25 billion shares of Common Stock, par value $.10 per share. Each
share has one vote.
Unless otherwise required by the Investment Company Act of 1940,
ordinarily it will not be necessary for the Fund to hold annual meetings of
shareholders. As a result, Fund shareholders may not consider each year
the election of Directors or the appointment of auditors. However,
pursuant to the Fund's By-Laws, the holders of at least 10% of the shares
outstanding and entitled to vote may require the Fund to hold a special
meeting of shareholders for the purpose of removing a Director from
office and the holders of at least 25% of such shares may require the Fund
to hold a special meeting of shareholders for any other purpose. Fund
shareholders may remove a Director by the affirmative vote of a majority
of the Fund's outstanding voting shares. In addition, the Board of Directors
will call a meeting of shareholders for the purpose of electing Directors
if, at any time, less than a majority of the Directors then holding office
have been elected by shareholders.
The Transfer Agent maintains a record of your ownership and sends you
confirmations and statements of account.
Page 14
Shareholder inquiries may be made by writing to the Fund at 144 Glenn
Curtiss Boulevard, Uniondale, New York 11556-0144, or by calling toll
free 1-800-645-6561. In New York City, call 1-718-895-1206; on Long
Island, call 794-5452.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND IN THE FUND'S OFFICIAL SALES LITERATURE IN
CONNECTION WITH THE OFFER OF THE FUND'S SHARES, AND, IF GIVEN OR
MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUNDS. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR
TO ANY PERSON TO WHOM, SUCH OFFERING MAY NOT LAWFULLY BE MADE.
Page 15
DREYFUS
LIQUID
ASSETS, INC.
PROSPECTUS
(DREYFUS LION LOGO)
copyright Dreyfus Service Corporation, 1994
Distributor
DREYFUS LIQUID ASSETS, INC.
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
MAY 2, 1994
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus of
Dreyfus Liquid Assets, Inc. (the "Fund"), dated May 2, 1994, as it may be
revised from time to time. To obtain a copy of the Fund's Prospectus,
please write to the Fund at 144 Glenn Curtiss Boulevard, Uniondale,
New York 11556-0144, or call the following numbers:
Call Toll Free 1-800-645-6561
In New York City -- Call 1-718-895-1206
On Long Island -- Call 794-5452
The Dreyfus Corporation (the "Manager") serves as the Fund's investment
adviser.
Dreyfus Service Corporation (the "Distributor"), a wholly-owned
subsidiary of the Manager, is the distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies. . . . . . . . .B-2
Management of the Fund. . . . . . . . . . . . . . . . . . . .B-4
Management Agreement. . . . . . . . . . . . . . . . . . . . .B-6
Purchase of Fund Shares . . . . . . . . . . . . . . . . . . .B-8
Shareholder Services Plan . . . . . . . . . . . . . . . . . .B-9
Redemption of Fund Shares . . . . . . . . . . . . . . . . . .B-9
Shareholder Services. . . . . . . . . . . . . . . . . . . . .B-11
Determination of Net Asset Value. . . . . . . . . . . . . . .B-14
Dividends, Distributions and Taxes. . . . . . . . . . . . . .B-15
Yield Information . . . . . . . . . . . . . . . . . . . . . .B-16
Portfolio Transactions. . . . . . . . . . . . . . . . . . . .B-16
Information About the Fund. . . . . . . . . . . . . . . . . .B-17
Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors . . . . . . . . . . . .B-17
Financial Statements. . . . . . . . . . . . . . . . . . . . .B-18
Report of Independent Auditors. . . . . . . . . . . . . . . .B-26
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Description of the
Fund."
Portfolio Securities. Investments in time deposits ("TDs") and
certificates of deposit ("CDs") are limited to domestic banks having total
assets in excess of one billion dollars and London branches of such domestic
banks; investments in bankers' acceptances are limited to domestic banks
having total assets in excess of one billion dollars. The Fund also is
authorized to buy CDs issued by banks, savings and loan associations and
similar institutions with less than one billion dollars in assets, the
deposits of which are insured by the Federal Deposit Insurance Corporation
("FDIC"), provided the Fund purchases any such CD in the principal amount of
no more than $100,000, which amount would be fully insured by the Bank
Insurance Fund or the Savings Association Insurance Fund administered by the
FDIC. Interest payments on such a CD are not insured by the FDIC. The Fund
would not own more than one such CD per such issuer.
Both domestic banks and London branches of domestic banks are subject
to extensive but different governmental regulations which may limit both the
amount and types of loans which may be made and interest rates which may be
charged. In addition, the profitability of the banking industry is
dependent largely upon the availability and cost of funds for the purpose of
financing lending operations under prevailing money market conditions.
General economic conditions as well as exposure to credit losses arising
from possible financial difficulties of borrowers play an important part in
the operations of the banking industry.
As a result of Federal or state laws and regulations, domestic banks
are, among other things, required to maintain specified levels of reserves,
limited in the amounts which they can loan to a single borrower and subject
to other regulations designed to promote financial soundness. However, not
all of such laws and regulations apply to the foreign branches of domestic
banks.
CDs held by the Fund, other than those issued by banks with less than
one billion dollars in assets as described above, do not benefit materially,
and TDs do not benefit at all, from insurance from the Bank Insurance Fund
or the Savings Association Insurance Fund administered by the FDIC.
Investment Restrictions. The Fund has adopted the following
restrictions as fundamental policies. These restrictions cannot be changed
without approval by the holders of a majority (as defined in the Investment
Company Act of 1940, as amended (the "Act")) of the outstanding voting
shares of the Fund. The Fund may not:
1. Purchase common stocks, preferred stocks, warrants, other equity
securities, corporate bonds or debentures, state bonds, municipal bonds or
industrial revenue bonds (except through the purchase of debt obligations
referred to above and in the Prospectus).
2. Borrow money except from banks for temporary or emergency (not
leveraging) purposes in an amount up to 5% of the value of the Fund's total
assets (including the amount borrowed) valued at the lesser of cost or
market, less liabilities (not including the amount borrowed) at the time the
borrowing is made.
3. Pledge its assets except in an amount up to 15% of the value of its
total assets but only to secure borrowings for temporary or emergency
purposes.
4. Sell securities short.
5. Write or purchase put or call options.
6. Underwrite the securities of other issuers, purchase securities
subject to restrictions on disposition under the Securities Act of 1933 (so
called "restricted securities") or purchase securities which are not freely
marketable.
7. Purchase or sell real estate, real estate investment trust
securities, commodities, or oil and gas interests.
8. Make loans to others, except through the purchase of debt
obligations and through repurchase agreements referred to in the Prospectus.
9. Invest more than 15% of its assets in the obligations of any one
bank or invest more than 5% of its assets in the commercial paper of any one
issuer. Notwithstanding the foregoing, to the extent required by rules of
the Securities and Exchange Commission, the Fund will not invest more than
5% of its assets in the obligations of any one bank.
10. Invest less than 25% of its assets in obligations issued by banks
or invest more than 25% of its assets in the securities of issuers in any
other industry.
11. Invest in companies for the purpose of exercising control.
12. Invest in securities of other investment companies, except as they
may be acquired as part of a merger, consolidation or acquisition of assets.
If a percentage restriction is adhered to at the time of investment, a
later increase or decrease in percentage resulting from a change in values
or assets will not constitute a violation of that restriction.
The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Fund shares in certain states.
Should the Fund determine that a commitment is no longer in the best
interests of the Fund and its shareholders, the Fund reserves the right to
revoke the commitment by terminating the sale of Fund shares in the state
involved.
MANAGEMENT OF THE FUND
Directors and officers of the Fund, together with information as to
their principal business occupations during at least the last five years,
are shown below. Each Director who is deemed to be an "interested person"
of the Fund, as defined in the Act, is indicated by an asterisk.
Directors and Officers of the Fund
*DAVID W. BURKE, Director. Vice President and Chief Administrative Officer
of the Manager since October 1990, and a director or trustee of other
investment companies advised and administered by the Manager. During
the period from 1977 to 1990, Mr. Burke was involved in the management
of national television news, as Vice President and Executive Vice
President of ABC News, and subsequently as President of CBS News. His
address is 200 Park Avenue, New York, New York 10166.
LUCY WILSON BENSON, Director. President of Benson and Associates,
consultants to business and government. Mrs. Benson is a director
ofCommunications Satellite Corporation, General RE Corporation, The
Grumman Corporation and Logistics Management Institute. She is also a
Trustee of the Alfred P. Sloan Foundation, Vice Chairman of the Board
of Trustees of Lafayette College, Vice Chairman of the Citizens Network
for Foreign Affairs and a member of the Council on Foreign Relations.
Mrs. Benson served as a consultant to the U.S. Department of State and
to SRI International from 1980 to 1981. From 1977 to 1980, she was
Under Secretary of State for Security Assistance, Science and
Technology. Her address is 46 Sunset Avenue, Amherst, Massachusetts
01002.
*JOSEPH S. DiMARTINO, President, Director and Investment Officer.
President, Chief Operating Officer and a Director of the Manager,
Executive Vice President and a Director of the Distributor and an
officer, director or trustee of other investment companies advised or
administered by the Manager. He is also a director of Noel Group, Inc.,
director and Corporate Member of the Muscular Dystrophy Association and
a Trustee of Bucknell University. His address is 200 Park Avenue, New
York, New York 10166.
MARTIN D. FIFE, Director. President of Fife Associates, Inc. and other
companies engaged in the chemical and plastics industries. His address
is 30 Rockefeller Plaza, New York, New York 10112.
WHITNEY I. GERARD, Director. Partner of the New York City law firm of
Chadbourne & Parke. His address is 30 Rockefeller Plaza, New York, New
York 10112.
ARTHUR A. HARTMAN, Director. Senior consultant with APCO Associates Inc.
From 1981 to 1987, he was United States Ambassador to the former Soviet
Union. He is also a director of the Hartford Insurance Group, Ford
Meter Box Corporation and a member of the advisory councils of several
other companies, research institutes and foundations. He is President
of the Harvard Board of Overseers. His address is 2738 McKinley
Street, N.W., Washington, D.C. 20015.
GEORGE L. PERRY, Director. An economist and Senior Fellow at the Brookings
Institution since 1969. He is co-director of the Brookings Panel on
Economic Activity and editor of its journal, The Brookings Papers. He
is also a director of the State Farm Mutual Automobile Association,
State Farm Life Insurance Company and Federal Realty Investment Trust.
His address is 1775 Massachusetts Avenue, N.W., Washington, D.C. 20036.
*HOWARD STEIN, Director. Chairman of the Board and Chief Executive Officer
of the Manager, Chairman of the Board of the Distributor and an
officer, director, general partner or trustee of other investment
companies advised or administered by the Manager. His address is 200
Park Avenue, New York, New York 10166.
PAUL D. WOLFOWITZ, Director. Dean of The Paul H. Nitze School of Advanced
International Studies at Johns Hopkins University. From 1989 to 1993,
he was Under Secretary of Defense for Policy. From 1986 to 1989, he
was the U.S. Ambassador to the Republic of Indonesia. From 1982 to
1986, he was Assistant Secretary of State for East Asian and Pacific
Affairs of the Department of State. His address is 1740 Massachusetts
Avenue, N.W., Washington, D.C. 20036.
The "non-interested" Directors are also directors of The Dreyfus Fund
Incorporated, Dreyfus California Municipal Income, Inc., Dreyfus Municipal
Income, Inc., Dreyfus New York Municipal Income, Inc., Dreyfus Short-Term
Income Fund, Inc., Dreyfus Asset Allocation Fund, Inc. and The 401(k) Fund
and trustees of Dreyfus Short-Intermediate Government Fund and Dreyfus
Short-Intermediate Municipal Bond Fund. Each of the "non-interested"
Directors, except Mr. Wolfowitz, is also a director of Dreyfus Worldwide
Dollar Money Market Fund, Inc. Mrs. Benson also is a director of The
Dreyfus Third Century Fund, Inc. and The Dreyfus Socially Responsible Growth
Fund, Inc.
The Fund does not pay any remuneration to its officers and Directors
other than fees and expenses to Directors who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of
the Manager, which totaled $43,102 for the fiscal year ended December 31,
1993 for all such Directors as a group.
Officers of the Fund Not Listed Above
MARK N. JACOBS, Vice President. Secretary and Deputy General Counsel of the
Manager and an officer of other investment companies advised or
administered by the Manager.
JEFFREY N. NACHMAN, Vice President-Financial. Vice President-Mutual Fund
Accounting of the Manager and an officer of other investment companies
advised or administered by the Manager.
JOHN J. PYBURN, Treasurer. Assistant Vice President of the Manager and an
officer of other investment companies advised or administered by the
Manager.
DANIEL C. MACLEAN, Secretary. Vice President and General Counsel of the
Manager, Secretary of the Distributor and an officer of other
investment companies advised or administered by the Manager.
PAUL R. CASTI, JR., Controller. Senior Accounting Manager in the Fund
Accounting Department of the Manager and an officer of other investment
companies advised or administered by the Manager.
STEVEN F. NEWMAN, Assistant Secretary. Associate General Counsel of the
Manager and an officer of other investment companies advised or
administered by the Manager.
CHRISTINE PAVALOS, Assistant Secretary. Assistant Secretary of the Manager,
the Distributor and other investment companies advised or administered
by the Manager.
The address of each officer of the Fund is 200 Park Avenue, New York,
New York 10166.
Directors and officers of the Fund, as a group, owned less than 1% of
the Fund's Common Stock outstanding on March 31, 1994.
The following persons are also officers and/or directors of the
Manager: Julian M. Smerling, Vice Chairman of the Board of Directors; Alan
M. Eisner, Vice President and Chief Financial Officer; Robert F. Dubuss,
Vice President; Elie M. Genadry, Vice President -- Institutional Sales;
Peter A. Santoriello, Vice President; Robert H. Schmidt, Vice President;
Kirk V. Stumpp, Vice President -- New Product Development; Philip L. Toia,
Vice President; Katherine C. Wickham, Assistant Vice President -- Human
Resources; Maurice Bendrihem, Controller; and Mandell L. Berman, Alvin E.
Friedman, Lawrence M. Greene, Abigail Q. McCarthy and David B. Truman,
directors.
MANAGEMENT AGREEMENT
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Management of the Fund."
The Manager provides management services pursuant to the Management
Agreement (the "Agreement") dated October 14, 1981 with the Fund, which is
subject to annual approval by (i) the Fund's Board of Directors or (ii) vote
of a majority (as defined in the Act) of the outstanding voting securities
of the Fund, provided that in either event the continuance also is approved
by a majority of the Directors who are not "interested persons" (as defined
in the Act) of the Fund or the Manager, by vote cast in person at a meeting
called for the purpose of voting on such approval. The Board of Directors,
including a majority of the Directors who are not "interested persons" of
any party to the Agreement, last voted to renew the Agreement at a meeting
held on August 26, 1993. Shareholders last approved the Agreement on
October 14, 1981. The Agreement is terminable without penalty on 60 days'
notice by the Fund's Board of Directors, by vote of a majority of the
outstanding voting securities of the Fund or by the Manager. The Agreement
will terminate automatically in the event of its assignment (as defined in
the Act).
The Manager manages the Fund's portfolio of investments in accordance
with the stated policies of the Fund, subject to the approval of the Fund's
Board of Directors. The Manager is responsible for investment decisions,
and provides the Fund with investment officers who are authorized by the
Board to execute purchases and sales of securities. The Fund's Investment
Officers are Patricia A. Cuddy, Joseph S. DiMartino and Barbara L.
Kenworthy. The Manager also maintains a research department with a
professional staff of portfolio managers and securities analysts who provide
research services for the Fund as well as for other funds advised by the
Manager. All purchases and sales of securities are reported for the Board's
review at the meeting subsequent to such transactions.
All expenses incurred in the Fund's operations are borne by the Fund,
except to the extent specifically assumed by the Manager. The expenses
borne by the Fund include: taxes, interest, brokerage fees and commissions,
if any, fees of Directors who are not officers, directors, employees or
holders of 5% or more of the outstanding voting securities of the Manager,
Securities and Exchange Commission fees, state Blue Sky qualification fees,
advisory fees, charges of custodians, registrar, transfer and dividend
disbursing agents' fees, certain insurance premiums, industry association
fees, outside auditing and legal expenses, costs of investor services
(including allocable telephone and personnel expenses), costs of shareholder
reports and meetings, costs of maintaining corporate existence, costs of
printing prospectuses and statements of additional information used for
regulatory purposes and for distribution to existing shareholders, and any
extraordinary expenses.
The Manager pays the salaries of all officers and employees employed by
both it and the Fund, maintains office facilities, and furnishes statistical
and research data, clerical help, accounting, data processing, bookkeeping
and internal auditing services, and certain other required services. The
Fund does not bear any of its advertising or promotional costs.
The Manager, from time to time, from its own funds, other than the
management fee paid by the Fund, but including past profits, may make
payments for shareholder servicing and distribution services to the
Distributor. The Distributor in turn may pay part or all of such
compensation to securities dealers or other persons for their servicing or
distribution assistance.
As compensation for its services to the Fund, the Fund has agreed to
pay the Manager a monthly management fee, as provided in the Agreement, at
the following annual rate: 1/2 of 1% of the Fund's average daily net assets
up to $1.5 billion; 48/100ths of 1% of such net assets between $1.5 billion
and $2 billion; 47/100ths of 1% of such net assets between $2 billion and
$2.5 billion; and 45/100ths of 1% of average net assets over $2.5 billion.
All fees and expenses are accrued daily and deducted before payment of
dividends to investors. The management fees paid by the Fund for the fiscal
years ended 1991, 1992 and 1993 were $32,017,179, $27,854,105 and
$24,284,199, respectively.
The Manager has agreed that if in any fiscal year the Fund's aggregate
expenses, exclusive of taxes, brokerage, interest and (with the prior
written consent of the necessary state securities commissions) extraordinary
expenses, but including the management fee, exceed 1% of the value of the
Fund's average net assets for the fiscal year, the Manager will refund to
the Fund, or bear, the excess over 1%. Such expense reimbursement, if any,
will be estimated, reconciled and paid on a monthly basis. No expense
reimbursement was required as a result of the expense limitation for the
fiscal years ended 1991, 1992 or 1993.
PURCHASE OF FUND SHARES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Buy Fund Shares."
The Distributor. The Distributor serves as the Fund's distributor
pursuant to an agreement which is renewable annually. The Distributor also
acts as distributor for the other funds in the Dreyfus Family of Funds and
for certain other investment companies.
Dreyfus TeleTransfer Privilege. Dreyfus TeleTransfer purchase orders
may be made between the hours of 8:00 A.M. and 4:00 P.M., New York time, on
any business day that The Shareholder Services Group, Inc., the Fund's
transfer and dividend disbursing agent
(the "Transfer Agent"), and the New York Stock Exchange are open. Such
purchases will be credited to the shareholder's Fund account on the next
bank business day. To qualify to use Dreyfus TeleTransfer Privilege, the
initial payment for purchase of Fund shares must be drawn on, and redemption
proceeds paid to, the same bank and account as are designated on the Account
Application or Shareholder Services Form on file. If the proceeds of a
particular redemption are to be wired to an account at any other bank, the
request must be in writing and signature-guaranteed. See "Redemption of
Fund Shares--Dreyfus TeleTransfer Privilege."
Transactions Through Securities Dealers. Fund shares may be purchased
and redeemed through securities dealers which may charge a nominal
transaction fee for such services. Some dealers will place the Fund's
shares in an account with their firm. Dealers also may require that the
customer invest more than the $1,000 minimum investment; the customer not
take physical delivery of stock certificates; the customer not request
redemption checks to be issued in the customer's name; fractional shares not
be purchased; monthly income distributions be taken in cash; or other
conditions.
There is no sales or service charge by the Fund or the Distributor,
although investment dealers, banks and other institutions may make
reasonable charges to investors for their services. The services provided
and the applicable fees are established by each dealer or other institution
acting independently of the Fund. The Fund has been given to understand
that fees may be charged for customer services including, but not limited
to, same-day investment of client funds; same-day access to client funds;
advice to customers about the status of their accounts, yield currently
being paid or income earned to date; provision of periodic account
statements showing security and money market positions; other services
available from the dealer, bank or other institution; and assistance with
inquiries related to their investment. Any such fees will be deducted
monthly from the investor's account, which on smaller accounts could
constitute a substantial portion of distributions. Small, inactive,
long-term accounts involving monthly service charges may not be in the best
interest of investors. Investors should be aware that they may purchase
shares of the Fund directly from the Fund without imposition of any
maintenance or service charges, other than those already described herein.
In some states, banks or other institutions effecting transactions in Fund
shares may be required to register as dealers pursuant to state law.
Reopening an Account. An investor may reopen an account with a minimum
investment of $100 without filing a new Account Application during the
calendar year the account is closed or during the following calendar year,
provided the information on the old Account Application is still applicable.
SHAREHOLDER SERVICES PLAN
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Shareholder Services
Plan."
The Fund has adopted a Shareholder Services Plan pursuant to which the
Fund reimburses the Distributor for certain allocated expenses of providing
personal services and/or maintaining shareholder accounts. The services
provided may include personal services related to shareholder accounts, such
as answering shareholder inquiries regarding the Fund and providing reports
and other information, and services related to the maintenance of
shareholder accounts.
A quarterly report of the amounts expended under the Shareholder
Services Plan, and the purposes for which such expenditures were incurred,
must be made to the Directors for their review. In addition, the
Shareholder Services Plan provides that material amendments of the
Shareholder Services Plan must be approved by the Board of Directors, and by
the Directors who are not "interested persons" (as defined in the Act) of
the Fund and have no direct or indirect financial interest in the operation
of the Shareholder Services Plan by vote cast in person at a meeting called
for the purpose of considering such amendments. The Shareholder Services
Plan is subject to annual approval by such vote of the Directors cast in
person at a meeting called for the purpose of voting on the Shareholder
Services Plan. The Shareholder Services Plan is terminable at any time by
vote of a majority of the Directors who are not "interested persons" and
have no direct or indirect financial interest in the operation of the
Shareholder Services Plan.
For the fiscal year ended December 31, 1993, the Fund reimbursed the
Distributor $3,894,273 pursuant to the Shareholder Services Plan.
REDEMPTION OF FUND SHARES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Redeem Fund
Shares."
Check Redemption Privilege. An investor may indicate on the Account
Application or by later written request that the Fund provide Redemption
Checks ("Checks") drawn on the Fund's account. Checks will be sent only to
the registered owner(s) of the account and only to the address of record.
The Account Application or later written request must be manually signed by
the registered owner(s). Checks may be made payable to the order of any
person in an amount of $500 or more. When a Check is presented to the
Transfer Agent for payment, the Transfer Agent, as the investor's agent,
will cause the Fund to redeem a sufficient number of shares in the
investor's account to cover the amount of the Check. Dividends are earned
until the Check clears. After clearance, a copy of the Check will be
returned to the investor. Investors generally will be subject to the same
rules and regulations that apply to checking accounts, although the election
of this Privilege creates only a shareholder-transfer agent relationship
with the Transfer Agent.
If the amount of the Check is greater than the value of the shares in
the investor's account, the Check will be returned marked insufficient
funds.
Wire Redemption Privilege. By using this Privilege, an investor
authorizes the Transfer Agent to act on wire or telephone redemption
instructions from any person representing himself or herself to be the
investor and reasonably believed by the Transfer Agent to be genuine.
Ordinarily, the Fund will initiate payment for shares redeemed pursuant to
this Privilege on the next business day after receipt by the Transfer Agent
of a redemption request in proper form. Redemption proceeds will be
transferred by Federal Reserve wire only to the commercial bank account
specified by the investor on the Account Application or Shareholder Services
Form. Redemption proceeds, if wired, must be in the amount of $1,000 or
more and will be wired to the investor's account at the bank of record
designated in the investor's file at the Transfer Agent, if the investor's
bank is a member of the Federal Reserve System, or to a correspondent bank
if the investor's bank is not a member. Fees ordinarily are imposed by such
bank and usually are borne by the investor. Immediate notification by the
correspondent bank to the investor's bank is necessary to avoid a delay in
crediting the funds to the investor's bank account.
Investors with access to telegraphic equipment may wire redemption
requests to the Transfer Agent by employing the following transmittal code
which may be used for domestic or overseas transmissions:
Transfer Agent's
Transmittal Code Answer Back Sign
144295 144295 TSSG PREP
Investors who do not have direct access to telegraphic equipment may
have the wire transmitted by contacting a TRT Cables operator at
1-800-654-7171, toll free. Investors should advise the operator that the
above transmittal code must be used and should also inform the operator of
the Transfer Agent's answer back sign.
To change the commercial bank or account designated to receive
redemption proceeds, a written request must be sent to the Transfer Agent.
This request must be signed by each shareholder, with each signature
guaranteed as described below under "Stock Certificates; Signatures."
Dreyfus TeleTransfer Privilege. Investors should be aware that if they
also have selected the Dreyfus TeleTransfer Privilege, any request for a
wire redemption will be effected as a Dreyfus TeleTransfer transaction
through the Automated Clearing House ("ACH") system unless more prompt
transmittal specifically is requested. Redemption proceeds will be on
deposit in the investor's account at an ACH member bank ordinarily two
business days after receipt of the redemption request. See "Purchase of
Fund Shares--Dreyfus TeleTransfer Privilege."
Stock Certificates; Signatures. Any certificates representing Fund
shares to be redeemed must be submitted with the redemption request.
Written redemption requests must be signed by each shareholder, including
each holder of a joint account, and each signature must be guaranteed.
Signatures on endorsed certificates submitted for redemption also must be
guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies
and savings associations, as well as from participants in the New York Stock
Exchange Medallion Program, the Securities Transfer Agents Medallion Program
("STAMP") and the Stock Exchange's Medallion Program. Guarantees must be
signed by an authorized signatory of the guarantor and
"Signature-Guaranteed" must appear with the signature. The Transfer Agent
may request additional documentation from corporations, executors, ad-
ministrators, trustees or guardians, and may accept other suitable
verification arrangements from foreign investors, such as consular
verification. For more information with respect to signature-guarantees,
please call one of the telephone numbers listed on the cover.
Redemption Commitment. The Fund has committed itself to pay in cash
all redemption requests by any shareholder of record, limited in amount
during any 90-day period to the lesser of $250,000 or 1% of the value of the
Fund's net assets at the beginning of such period. Such commitment is
irrevocable without the prior approval of the Securities and Exchange
Commission. In the case of requests for redemption in excess of such
amount, the Board of Directors reserves the right to make payments in whole
or in part in securities or other assets of the Fund in case of an emergency
or any time a cash distribution would impair the liquidity of the Fund to
the detriment of the existing shareholders. In such event, the securities
would be valued in the same manner as the Fund's portfolio is valued. If
the recipient sold such securities, brokerage charges would be incurred.
Suspension of Redemption. The right of redemption may be suspended or
the date of payment postponed (a) during any period when the New York Stock
Exchange is closed (other than customary weekend and holiday closings), (b)
when trading in the markets the Fund ordinarily utilizes is restricted, or
when an emergency exists as determined by the Securities and Exchange
Commission so that disposal of the Fund's investments or determination of
its net asset value is not reasonably practicable, or (c) for such other
periods as the Securities and Exchange Commission by order may permit to
protect the Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Shareholder Services."
Exchange Privilege. Shares of other funds purchased by exchange will
be purchased on the basis of relative net asset value per share as follows:
A. Exchanges for shares of funds that are offered without a sales
load will be made without a sales load.
B. Shares of funds purchased without a sales load may be exchanged
for shares of other funds sold with a sales load, and the applicable sales
load will be deducted.
C. Shares of funds purchased with a sales load may be exchanged
without a sales load for shares of other funds sold without a sales load.
D. Shares of funds purchased with a sales load, shares of funds
acquired by a previous exchange from shares purchased with a sales load, and
additional shares acquired through reinvestment of dividends or
distributions of any such funds (collectively referred to herein as
"Purchased Shares") may be exchanged for shares of other funds sold with a
sales load (referred to herein as "Offered Shares"), provided that, if the
sales load applicable to the Offered Shares exceeds the maximum sales load
that could have been imposed in connection with the Purchased Shares (at the
time the Purchased Shares were acquired), without giving effect to any
reduced loads, the difference will be deducted.
To accomplish an exchange under item D above, shareholders must notify
the Transfer Agent of their prior ownership of fund shares and their account
number.
To use this Privilege, an investor must give exchange instructions to
the Transfer Agent in writing, by wire or by telephone. Telephone exchanges
may be made only if the appropriate "YES" box has been checked on the
Account Application, or a separate signed Shareholder Services Form is on
file with the Transfer Agent. By using this Privilege, the investor
authorizes the Transfer Agent to act on exchange instructions from any
person representing himself or herself to be the investor, and reasonably
believed by the Transfer Agent to be genuine. Telephone exchanges may be
subject to limitations as to the amount involved or the number of telephone
exchanges permitted. Shares issued in certificate form are not eligible for
telephone exchange.
To establish a Personal Retirement Plan by exchange, shares of the fund
being exchanged must have a value of at least the minimum initial investment
required for the fund into which the exchange is being made. For
Dreyfus-sponsored Keogh Plans, IRAs and IRAs set up under a Simplified
Employee Pension Plan ("SEP-IRAs") with only one participant, the minimum
initial investment is $750. To exchange shares held in Corporate Plans,
403(b)(7) Plans and SEP-IRAs with more than one participant, the minimum
initial investment is $100 if the plan has at least $2,500 invested among
the funds in the Dreyfus Family of Funds. To exchange shares held in
Personal Retirement Plans, the shares exchanged must have a current value of
at least $100.
Dreyfus Auto-Exchange Privilege. Dreyfus Auto-Exchange Privilege
permits an investor to purchase, in exchange for shares of the Fund, shares
of another fund in the Dreyfus Family of Funds. This privilege is available
only for existing accounts. Shares will be exchanged on the basis of
relative net asset value as described above under "Exchange Privilege."
Investors may cancel this Privilege at any time by writing to The Dreyfus
Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671.
Enrollment in or modification or cancellation of this Privilege is effective
three business days following notification by the investor. An investor
will be notified if his account falls below the amount designated to be
exchanged under this Privilege. In this case, an investor's account will
fall to zero unless additional investments are made in excess of the
designated amount prior to the next Auto-Exchange transaction. Shares held
under IRA and other retirement plans are eligible for this Privilege.
Exchanges of IRA shares may be made between IRA accounts and from regular
accounts to IRA accounts, but not from IRA accounts to regular accounts.
With respect to all other retirement accounts, exchanges may be made only
among those accounts.
The Exchange Privilege and Dreyfus Auto-Exchange Privilege are
available to shareholders resident in any state in which shares of the fund
being acquired may legally be sold. Shares may be exchanged only between
accounts having identical names and other identifying designations.
Shareholder Services Forms and prospectuses of the other funds may be
obtained from the Distributor, 144 Glenn Curtiss Boulevard, Uniondale, New
York 11556-0144. The Fund reserves the right to reject any exchange request
in whole or in part. The Exchange Privilege or Dreyfus Auto-Exchange
Privilege may be modified or terminated at any time upon notice to
shareholders.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits an
investor with a $5,000 minimum account to request withdrawal of a specified
dollar amount (minimum of $50) on either a monthly or quarterly basis.
Withdrawal payments are the proceeds from sales of Fund shares, not the
yield on the shares. If withdrawal payments exceed reinvested dividends and
distributions, the investor's shares will be reduced and eventually may be
depleted. An Automatic Withdrawal Plan may be established by completing the
appropriate application available from the Distributor. There is a service
charge of $.50 for each withdrawal check. Automatic Withdrawal may be
terminated at any time by the investor, the Fund or the Transfer Agent.
Shares for which stock certificates have been issued may not be redeemed
through the Automatic Withdrawal Plan.
Dreyfus Dividend Sweep. Dreyfus Dividend Sweep allows investors to
invest automatically on the payment date their dividends or dividends and
capital gain distributions, if any, from the Fund in shares of another fund
in the Dreyfus Family of Funds of which the investor is a shareholder.
Shares of funds purchased pursuant to the Privilege will be purchased on the
basis of relative net asset value per share as follows:
A. Dividends and distributions paid by a fund may be
invested without imposition of a sales load in shares of other funds that
are offered without a sales load.
B. Dividends and distributions paid by a fund which
does not charge a sales load may be invested in shares of other funds sold
with a sales load, and the applicable sales load will be deducted.
C. Dividends and distributions paid by a fund which
charges a sales load may be invested in shares of other funds sold with a
sales load (referred to herein as "Offered Shares"), provided that, if the
sales load applicable to the Offered Shares exceeds the maximum sales load
charged by the fund from which dividends or distributions are being swept,
without giving effect to any reduced loads, the difference will be deducted.
D. Dividends and distributions paid by a fund may be
invested in shares of other funds that impose a contingent deferred sales
charge ("CDSC") and the applicable CDSC, if any, will be imposed upon
redemption of such shares.
Corporate Pension, Profit-Sharing and Personal Retirement Plans. The
Fund makes available to corporations a variety of prototype pension and
profit-sharing plans including a 401(k) Salary Reduction Plan. In addition,
the Fund makes available Keogh Plans, IRAs, including SEP-IRAs and IRA
"Rollover Accounts," and 403(b)(7) Plans. Plan support Investors can obtain
details on the various plans by calling the following numbers toll free:
for Keogh Plans, please call 1-800-358-5566; for IRAs and IRA "Rollover
Accounts," please call 1-800-645-6561; and for SEP-IRAs, 401(k) Salary
Reduction Plans and 403(b)(7) Plans, please call 1-800-322-7880.
Investors who wish to purchase Fund shares in conjunction with a Keogh
Plan, a 403(b)(7) Plan or an IRA, including a SEP-IRA, may request from the
Distributor forms for adopting such plans.
A fee may be charged by the entity acting as custodian for Keogh Plans,
403(b)(7) Plans or IRAs, payment of which could require the liquidation of
shares. All fees charged are described in the appropriate form.
Shares may be purchased in connection with these plans only by direct
remittance to the entity which acts as custodian. Purchases for these plans
may not be made in advance of receipt of funds.
The minimum initial investment for corporate plans, Salary Reduction
Plans, 403(b)(7) Plans, and SEP-IRAs, with more than one participant, is
$2,500, with no minimum on subsequent purchases. The minimum initial
investment for Dreyfus-sponsored Keogh Plans, IRAs, SEP-IRAs and 403(b)(7)
Plans, with only one participant, is normally $750, with no minimum on
subsequent purchases. Individuals who open an IRA also may open a
non-working spousal IRA with a minimum investment of $250.
The investor should read the Prototype Retirement Plan and the
appropriate form of Custodial Agreement for further details as to
eligibility, service fees and tax implications, and should consult a tax
adviser.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Buy Fund Shares."
Amortized Cost Pricing. The valuation of the Fund's portfolio
securities is based upon their amortized cost which does not take into
account unrealized gains or losses. This involves valuing an instrument at
its cost and thereafter assuming a constant amortization to maturity of any
discount or premium, regardless of the impact of fluctuating interest rates
on the market value of the instrument. While this method provides certainty
in valuation, it may result in periods during which value, as determined by
amortized cost, is higher or lower than the price the Fund would receive if
it sold the instrument.
The Board of Directors has established, as a particular responsibility
within the overall duty of care owed to the Fund's investors, procedures
reasonably designed, taking into account current market conditions and the
Fund's investment objective, to stabilize the Fund's price per share as
computed for purposes of purchases and redemptions at $1.00. Such
procedures include review of the Fund's portfolio holdings by the Board of
Directors, at such intervals as it may deem appropriate, to determine
whether the Fund's net asset value calculated by using available market
quotations or market equivalents deviates from $1.00 per share based on
amortized cost. In such review, investments for which market quotations are
readily available are valued at the most recent bid price or yield
equivalent for such securities or for securities of comparable maturity,
quality and type, as obtained from one or more of the major market makers
for the securities to be valued. Other investments and assets are valued at
fair value as determined in good faith by the Board of Directors.
The extent of any deviation between the Fund's net asset value based
upon available market quotations or market equivalents and $1.00 per share
based on amortized cost will be examined by the Board of Directors. If such
deviation exceeds 1/2 of 1%, the Board of Directors will consider promptly
what action, if any, will be initiated. In the event the Board of Directors
determines that a deviation exists which may result in material dilution or
other unfair results to investors or existing shareholders, it has agreed to
take such corrective action as it regards as necessary and appropriate,
including: selling portfolio instruments prior to maturity to realize
capital gains or losses or to shorten average portfolio maturity;
withholding dividends or paying distributions from capital or capital gains;
redeeming shares in kind; or establishing a net asset value per share by
using available market quotations or market equivalents.
New York Stock Exchange and Transfer Agent Closings. The holidays (as
observed) on which the New York Stock Exchange and the Transfer Agent are
closed currently are: New Year's Day, Presidents' Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in conjunction
with the section in Fund's Prospectus entitled "Dividends, Distributions and
Taxes."
Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gain or loss. However, all or a portion of any gain
realized from the sale or other disposition of certain market discount bonds
will be treated as ordinary income under Section 1276 of the Internal
Revenue Code of 1986, as amended.
YIELD INFORMATION
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Yield Information."
For the seven-day period ended December 31, 1993, the Fund's yield was
2.57% and effective yield was 2.60%. Yield is computed in accordance with a
standardized method which involves determining the net change in the value
of a hypothetical pre-
existing Fund account having a balance of one share at the beginning of a
seven calendar day period for which yield is to be quoted, dividing the net
change by the value of the account at the beginning of the period to obtain
the base period return, and annualizing the results (i.e., multiplying the
base period return by 365/7). The net change in the value of the account
reflects the value of additional shares purchased with dividends declared on
the original share and any such additional shares and fees that may be
charged to shareholder accounts, in proportion to the length of the base
period and the Fund's average account size, but does not include realized
gains and losses or unrealized appreciation and depreciation. Effective
yield is computed by adding one to the base period return (calculated as
described above), raising that sum to a power equal to 365 divided by 7, and
subtracting 1 from the result.
Yields will fluctuate and are not necessarily representative of future
results. An investor should remember that yield is a function of the type
and quality of the instruments in the portfolio, portfolio maturity and
operating expenses. An investor's principal in the Fund
is not guaranteed. See "Determination of Net Asset Value" for a discussion
of the manner in which the Fund's price per share is determined.
PORTFOLIO TRANSACTIONS
Portfolio securities ordinarily are purchased directly from the issuer
or an underwriter or a market maker for the securities. Ordinarily no
brokerage commissions are paid by the Fund for such purchases. Purchases
from underwriters of portfolio securities include a concession paid by the
issuer to the underwriter and the purchase price paid to market makers for
the securities may include the spread between the bid and asked price. No
brokerage commissions have been paid by the Fund to date.
Transactions are allocated to various dealers by the Fund's Investment
Officers in their best judgment. The primary consideration is prompt and
effective execution of orders at the most favorable price. Subject to that
primary consideration, dealers may be selected for research, statistical or
other services to enable the Manager to supplement its own research and
analysis with the views and information of other securities firms.
Securities transactions are not directed to securities firms in
consideration of sales of Fund shares or of shares of other funds advised by
the Manager.
Research services furnished by brokers through which the Fund effects
securities transactions may be used by the Manager in advising other funds
it advises and, conversely, research services furnished to the Manager by
brokers in connection with other funds the Manager advises may be used by
the Manager in advising the Fund. Although it is not possible to place a
dollar value on these services, it is the opinion of the Manager that the
receipt and study of such services should not reduce the overall expenses of
its research department.
INFORMATION ABOUT THE FUND
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "General Information."
In 1973, the Fund was incorporated as a money market mutual fund and it
commenced operations in 1974 as the first money market fund to be widely
offered on a retail basis. Money market mutual funds have subsequently
grown into a multibillion dollar industry.
Each share has one vote and, when issued and paid for in accordance
with the terms of the offering, is fully paid and non-assessable. Fund
shares are of one class and have equal rights as to dividends and in
liquidation. Shares have no preemptive, subscription or conversion rights
and are freely transferable.
The Fund sends annual and semi-annual financial statements to all its
shareholders.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT,
COUNSEL AND INDEPENDENT AUDITORS
The Bank of New York, 110 Washington Street, New York, New York 10286,
is the Fund's custodian. The Shareholder Services Group, Inc., a subsidiary
of First Data Corporation, P.O. Box 9671, Providence, Rhode Island
02940-9671, is the Fund's transfer and dividend disbursing agent. Neither
The Bank of New York nor The Shareholder Services Group, Inc. has any part
in determining the investment policies of the Fund or which securities are
to be purchased or sold by the Fund.
Stroock & Stroock & Lavan, 7 Hanover Square, New York, New York
10004-2696, as counsel for the Fund, has rendered its opinion as to certain
legal matters regarding the due authorization and valid issuance of the
shares of Common Stock being sold pursuant to the Fund's Prospectus.
Ernst & Young, independent auditors, 787 Seventh Avenue, New York, New
York 10019, have been selected as the Fund's auditors.
<PAGE>
DREYFUS LIQUID ASSETS, INC.
STATEMENT OF INVESTMENTS DECEMBER 31, 1993
<TABLE>
<CAPTION>
PRINCIPAL
NEGOTIABLE BANK CERTIFICATES OF DEPOSIT--4.0% AMOUNT VALUE
- --------------------------------------------- -------------- --------------
<S> <C> <C>
Chemical Bank (London)
2.70%, 5/13/94(a) ............................... $ 50,000,000 $ 50,000,000
NationsBank of North Carolina NA (London)
3.38%-3.60%, 2/8/94-6/27/94 ..................... 145,000,000 145,000,000
--------------
TOTAL NEGOTIABLE BANK CERTIFICATES OF DEPOSIT
(cost $195,000,000).............................. $ 195,000,000
==============
COMMERCIAL PAPER--60.3%
ABN-Amro North America Finance Inc.
3.28%, 1/5/94 ................................... $ 16,000,000 $ 15,994,204
Bankers Trust New York Corp.
3.50%-3.55%, 2/25/94-9/16/94 .................... 240,000,000 236,961,891
Bear Stearns Companies Inc.
3.44%-3.54%, 3/25/94-3/31/94 .................... 70,000,000 69,426,820
CS First Boston Group Inc.
3.40%, 2/4/94-2/7/94 ............................ 50,000,000 49,833,594
Central Hispano North American Capital Corp.
3.25%-3.39%, 1/4/94-3/28/94 ..................... 74,900,000 74,603,902
Corporate Asset Funding Co. Inc.
3.43%, 4/4/94 ................................... 18,075,000 17,918,576
Credito Italiano (Delaware) Inc.
3.34%-3.46%, 1/20/94-4/14/94 .................... 37,000,000 36,775,174
Den Danske Corp. Inc.
3.29%-3.45%, 1/7/94-6/13/94 ..................... 200,000,000 198,576,217
General Electric Capital Corp.
3.25%-3.40%, 1/3/94-4/15/94 ..................... 160,000,000 159,026,041
General Electric Capital Services Inc.
3.23%-3.52%, 1/3/94-4/22/94 ..................... 178,000,000 177,057,691
General Motors Acceptance Corp.
3.34%-3.44%, 1/10/94-2/23/94 .................... 241,000,000 240,265,002
Generale Bank Inc.
3.30%, 1/4/94 ................................... 115,000,000 114,968,567
Goldman Sachs Group L.P.
3.40%-3.54%, 2/25/94-9/23/94 .................... 180,000,000 176,866,390
Hypo U.S. Finance Inc.
3.25%, 2/24/94 .................................. 23,000,000 22,889,255
ITT Corp.
3.30%, 1/3/94 ................................... 200,000,000 199,963,333
Internationale Nederlanden (U.S.) Funding Corp.
3.42%-3.54%, 2/1/94-5/10/94 ..................... 130,000,000 128,799,717
Kreditbank N.A. Finance Corp.
3.39%, 1/10/94 .................................. 75,000,000 74,936,813
Lehman Brothers Holdings Inc.
3.41%-3.43%, 1/5/94-1/13/94 ..................... 100,000,000 99,925,445
Merrill Lynch & Co. Inc.
3.27%-3.43%, 1/7/94-5/23/94 ..................... 115,000,000 114,098,265
</TABLE>
<PAGE>
DREYFUS LIQUID ASSETS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1993
<TABLE>
<CAPTION>
PRINCIPAL
COMMERCIAL PAPER (CONTINUED) AMOUNT VALUE
- ---------------------------- -------------- --------------
<S> <C> <C>
Morgan Stanley Group Inc.
3.30%-3.40%, 1/3/94-1/18/94 .................... $ 185,000,000 $ 184,754,165
NationsBank Corp.
3.39%-3.63%, 2/28/94-5/20/94 ................... 165,000,000 163,635,573
Santander Finance (Delaware) Inc.
3.30%-3.39%, 1/10/94-1/28/94 ................... 110,000,000 109,810,725
Societe Generale N.A. Inc.
3.49%, 4/18/94 ................................. 15,000,000 14,848,417
SwedBank Inc.
3.33%-3.60%, 2/24/94-3/30/94 ................... 140,000,000 139,046,683
UBS Finance (Delaware) Inc.
3.25%, 1/3/94 .................................. 90,000,000 89,983,750
--------------
TOTAL COMMERCIAL PAPER (cost $2,910,966,210)..... $2,910,966,210
==============
CORPORATE NOTES--8.3%
Bear Stearns Companies Inc.
3.49%, 9/13/94-9/20/94(a) ...................... $ 125,000,000 $ 125,000,000
Ford Motor Credit Co.
3.38%, 2/11/94 ................................. 20,000,000 20,056,461
Merrill Lynch & Co. Inc.
3.02%-3.33%, 4/22/94-9/30/94(a) ................ 125,000,000 124,992,398
Morgan Stanley Group Inc.
3.49%, 9/29/94 ................................. 35,000,000 34,996,752
Northern Trust Co.
3.72%, 1/14/94 ................................. 70,000,000 69,998,778
Pepsico Inc.
3.53%, 1/31/94 ................................. 25,000,000 24,998,073
--------------
TOTAL CORPORATE NOTES (cost $400,042,462)........ $ 400,042,462
==============
SHORT-TERM BANK NOTES--15.7%
Bank of New York
3.52%, 5/24/94 ................................. $ 10,000,000 $ 9,997,354
Comerica Bank
3.30%-3.50%, 2/14/94-9/30/94 ................... 98,000,000 97,929,068
First National Bank of Chicago
3.25%-3.62%, 7/28/94-10/26/94(a) ............... 75,000,000 75,000,000
Huntington National Bank
3.69%, 1/19/94 ................................. 100,000,000 100,000,722
Morgan (J.P.) Delaware
3.72%, 1/14/94 ................................. 107,200,000 107,199,258
NationsBank of North Carolina NA
3.41%-3.66%, 8/2/94-8/18/94 .................... 98,000,000 98,034,148
Old Kent Bank & Trust
3.49%, 9/9/94 .................................. 25,000,000 24,984,165
PNC Bank NA
3.34%-3.60%, 7/8/94-9/12/94 .................... 243,100,000 243,468,609
--------------
TOTAL SHORT-TERM BANK NOTES (cost $756,613,324) . $ 756,613,324
==============
</TABLE>
<PAGE>
DREYFUS LIQUID ASSETS, INC.
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1993
<TABLE>
<CAPTION>
PRINCIPAL
U.S. GOVERNMENT AGENCY--3.9% AMOUNT VALUE
-------------- --------------
<S> <C> <C> <C>
Federal National Mortgage Association
Discount Notes;
3.48%, 9/19/94.................................... $ 175,000,000 $ 170,698,938
3.51%, 9/30/94.................................... 20,000,000 19,483,200
--------------
TOTAL U.S. GOVERNMENT AGENCY (cost $190,182,138)... $ 190,182,138
==============
TIME DEPOSIT--1.1%
Republic National Bank of New York (London)
2.38%, 1/3/94
(cost $52,800,000)................................ $ 52,800,000 $ 52,800,000
==============
REPURCHASE AGREEMENT--6.6%
Kidder Peabody & Co. Inc., 2.66%
dated 12/31/93, due 1/3/94 in the amount of
$320,070,933
(fully collateralized by $195,490,000 U.S.
Treasury
Notes 4.25%-9.50%, due from 5/31/94 to 11/30/94,
and $123,480,000 U.S.
Treasury Bills due 6/2/94, value $324,923,675)
(cost $320,000,000)............................... $ 320,000,000 $ 320,000,000
==============
TOTAL INVESTMENTS (cost $4,825,604,134).... 99.9% $4,825,604,134
======= ==============
CASH AND RECEIVABLES (NET)................. .1% $ 2,529,703
======= ==============
NET ASSETS................................. 100.0% $4,828,133,837
======= ==============
NOTE TO STATEMENT OF INVESTMENTS;
</TABLE>
(a) Variable interest rate--subject to periodic change.
See notes to financial statements.
<PAGE>
DREYFUS LIQUID ASSETS, INC.
STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1993
<TABLE>
<S> <C> <C>
ASSETS:
Investments in securities, at value--Note 1(a,b)..... $4,825,604,134
Cash................................................. 41,192,804
Interest receivable.................................. 16,826,487
Prepaid expenses and other assets.................... 2,521,933
--------------
4,886,145,358
LIABILITIES:
Due to The Dreyfus Corporation....................... $ 1,986,096
Payable for Common Stock redeemed.................... 53,563,029
Accrued expenses..................................... 2,462,396 58,011,521
----------- --------------
NET ASSETS............................................ $4,828,133,837
==============
REPRESENTED BY:
Paid-in capital...................................... $4,832,015,851
Accumulated net realized (loss) on investments....... (3,882,014)
--------------
NET ASSETS at value applicable to 4,832,891,489 shares
outstanding
(25 billion shares of $.10 par value Common Stock
authorized).......................................... $4,828,133,837
==============
NET ASSET VALUE, offering and redemption price per
share $1.00
($4,828,133,837/4,832,891,489 shares)................ =====
STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1993
INVESTMENT INCOME:
INTEREST INCOME...................................... $ 174,985,157
EXPENSES:
Management fee--Note 2(a)............................ $24,284,199
Shareholder servicing costs--Note 2(b)............... 13,881,619
Prospectus and shareholders' reports................. 516,183
Custodian fees....................................... 399,292
Professional fees.................................... 102,532
Directors' fees and expenses--Note 2(c).............. 43,102
Registration fees.................................... 39,280
Miscellaneous........................................ 345,067
-----------
TOTAL EXPENSES..................................... 39,611,274
--------------
INVESTMENT INCOME--NET................................ 135,373,883
NET REALIZED GAIN ON INVESTMENTS--Note 1(b)........... 178,144
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.. $ 135,552,027
==============
</TABLE>
See notes to financial statements.
<PAGE>
DREYFUS LIQUID ASSETS, INC.
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------
1992 1993
--------------- ---------------
<S> <C> <C>
OPERATIONS:
Investment income--net...................... $ 204,963,180 $ 135,373,883
Net realized gain on investments............ 522,930 178,144
--------------- ---------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS................................ 205,486,110 135,552,027
--------------- ---------------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income--net...................... (204,963,180) (135,373,883)
--------------- ---------------
CAPITAL STOCK TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold............... 13,227,343,759 15,561,021,427
Dividends reinvested........................ 204,428,380 134,811,058
Cost of shares redeemed..................... (14,130,449,895) (16,369,977,245)
--------------- ---------------
(DECREASE) IN NET ASSETS FROM CAPITAL STOCK
TRANSACTIONS.............................. (698,677,756) (674,144,760)
--------------- ---------------
TOTAL (DECREASE) IN NET ASSETS............ (698,154,826) (673,966,616)
NET ASSETS:
Beginning of year........................... 6,200,255,279 5,502,100,453
--------------- ---------------
End of year................................. $ 5,502,100,453 $ 4,828,133,837
=============== ===============
</TABLE>
See notes to financial statements.
<PAGE>
DREYFUS LIQUID ASSETS, INC.
FINANCIAL HIGHLIGHTS
Reference is made to page 2 of the Prospectus dated May 2, 1994.
See notes to financial statements.
<PAGE>
DREYFUS LIQUID ASSETS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a diversified open-end management investment company. Dreyfus Service
Corporation ("Distributor") acts as the exclusive distributor of the
Fund's shares, which are sold to the public without a sales charge. The
Distributor is a wholly-owned subsidiary of The Dreyfus Corporation
("Manager").
It is the Fund's policy to maintain a continuous net asset value per
share of $1.00; the Fund has adopted certain investment, portfolio
valuation and dividend and distribution policies to enable it to do so.
(A) PORTFOLIO VALUATION: Investments are valued at amortized cost,
which has been determined by the Fund's Board of Directors to represent
the fair value of the Fund's investments.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss
from securities transactions are recorded on the identified cost basis.
Interest income is recognized on the accrual basis. Cost of investments
represents amortized cost.
The Fund may enter into repurchase agreements with financial
institutions, deemed to be creditworthy by the Fund's Manager, subject to
the seller's agreement to repurchase and the Fund's agreement to resell
such securities at a mutually agreed upon price. Securities purchased
subject to repurchase agreements are deposited with the Fund's custodian
and, pursuant to the terms of the repurchase agreement, must have an
aggregate market value greater than or equal to the repurchase price plus
accrued interest at all times. If the value of the underlying securities
falls below the value of the repurchase price plus accrued interest, the
Fund will require the seller to deposit additional collateral by the next
business day. If the request for additional collateral is not met, or the
seller defaults on its repurchase obligation, the Fund maintains the
right to sell the underlying securities at market value and may claim any
resulting loss against the seller.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare
and pay dividends from investment income--net on each business day.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code.
To the extent that net realized capital gain can be offset by capital
loss carryovers, it is the policy of the Fund not to distribute such
gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in
the best interests of its shareholders, by complying with the provisions
available to certain investment companies, as defined in applicable
sections of the Internal Revenue Code, and to make distributions of
taxable income sufficient to relieve it from all, or substantially all,
Federal income taxes.
The Fund has an unused capital loss carryover of approximately
$3,882,000 available for Federal income tax purposes to be applied
against future net securities profits, if any, realized subsequent to
December 31, 1993. If not applied, $1,685,000 of the carryover expires in
1995, $2,126,000 expires in 1997 and $71,000 expires in 1998.
At December 31, 1993, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
<PAGE>
DREYFUS LIQUID ASSETS, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2--MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is based on the average daily value of the Fund's net
assets and is computed at the following annual rates: 1/2 of 1% of the
first $1.5 billion; 48/100ths of 1% of the next $500 million; 47/100ths
of 1% of the next $500 million; and 45/100ths of 1% over $2.5 billion.
The fee is payable monthly.
The Agreement provides for an expense reimbursement from the Manager
should the Fund's aggregate expenses, exclusive of taxes, interest on
borrowings, brokerage commissions and extraordinary expenses, exceed 1%
of the average value of the Fund's net assets for any full year. No
expense reimbursement was required pursuant to the Agreement for the year
ended December 31, 1993.
(B) Pursuant to the Fund's Shareholder Services Plan, the Fund
reimburses the Distributor an amount not to exceed an annual rate of .25
of 1% of the value of the Fund's average daily net assets for servicing
shareholder accounts. The services provided may include personal services
relating to shareholder accounts, such as answering shareholder inquiries
regarding the Fund and providing reports and other information, and
services related to the maintenance of shareholder accounts. During the
year ended December 31, 1993, the Fund was charged an aggregate of
$3,894,273 pursuant to the Shareholder Services Plan.
(C) Certain officers and directors of the Fund are "affiliated
persons," as defined in the Act, of the Manager and/or the Distributor.
Each director who is not an "affiliated person" receives an annual fee of
$6,500 and an attendance fee of $500 per meeting.
(D) On December 5, 1993, the Manager entered into an Agreement and Plan
of Merger providing for the merger of the Manager with a subsidiary of
Mellon Bank Corporation ("Mellon").
Following the merger, it is planned that the Manager will be a direct
subsidiary of Mellon Bank, N.A. Closing of this merger is subject to a
number of contingencies, including the receipt of certain regulatory
approvals and the approvals of the stockholders of the Manager and of
Mellon. The merger is expected to occur in mid-1994, but could occur
significantly later.
Because the merger will constitute an "assignment" of the Fund's
Management Agreement with the Manager under the Investment Company Act of
1940, and thus a termination of such Agreement, the Manager will seek
prior approval from the Fund's Board and shareholders.
<PAGE>
DREYFUS LIQUID ASSETS, INC.
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS LIQUID ASSETS, INC.
We have audited the accompanying statement of assets and liabilities of
Dreyfus Liquid Assets, Inc., including the statement of investments, as
of December 31, 1993, and the related statement of operations for the
year then ended, the statement of changes in net assets for each of the
two years in the period then ended, and financial highlights for each of
the years indicated therein. These financial statements and financial
highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 1993 by
correspondence with the custodian and brokers. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Dreyfus Liquid Assets, Inc. at December 31, 1993, the results
of its operations for the year then ended, the changes in its net assets
for each of the two years in the period then ended, and the financial
highlights for each of the indicated years, in conformity with generally
accepted accounting principles.
[ERNST & YOUNG LOGO]
New York, New York
January 31, 1994
