DREYFUS
INSTITUTIONAL
MONEY MARKET
FUND
(Dreyfus `D' logo)
* NO SALES CHARGE
* NO REDEMPTION FEE
* FREE EXCHANGE BETWEEN
DREYFUS FUNDS BY PHONE
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PROSPECTUS
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MAY 1, 1995
TABLE OF CONTENTS PAGE
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ANNUAL FUND OPERATING EXPENSES................... 2
CONDENSED FINANCIAL INFORMATION.................. 3
YIELD INFORMATION................................ 4
DESCRIPTION OF THE FUND.......................... 4
MANAGEMENT OF THE FUND........................... 8
HOW TO BUY FUND SHARES........................... 8
SHAREHOLDER SERVICES............................. 10
HOW TO REDEEM FUND SHARES........................ 13
SHAREHOLDER SERVICES PLAN........................ 15
DIVIDENDS, DISTRIBUTIONS AND TAXES............... 16
GENERAL INFORMATION.............................. 17
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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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DREYFUS INSTITUTIONAL MONEY MARKET FUND (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 AND THE MAINTENANCE OF LIQUIDITY.
THE FUND PERMITS YOU TO INVEST IN TWO SEPARATE PORTFOLIOS, THE MONEY MARKET
SERIES AND THE GOVERNMENT SECURITIES SERIES. THE MONEY MARKET SERIES INVESTS
IN SHORT-TERM MONEY MARKET INSTRUMENTS CONSISTING OF SECURITIES ISSUED OR
GUARANTEED BY THE U.S. GOVERNMENT OR ITS AGENCIES OR INSTRUMENTALITIES, BANK
OBLIGATIONS, REPURCHASE AGREEMENTS AND HIGH GRADE COMMERCIAL PAPER. THE
GOVERNMENT SECURITIES SERIES INVESTS ONLY IN SHORT-TERM SECURITIES ISSUED OR
GUARANTEED AS TO PRINCIPAL AND INTEREST BY THE U.S. GOVERNMENT.
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.
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THE DREYFUS CORPORATION PROFESSIONALLY MANAGES THE FUND'S PORTFOLIOS.
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This Prospectus sets forth concisely information about the Fund that
you should know before investing. It should be read and retained for future
reference.
The Statement of Additional Information, dated May 1, 1995, 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
1-800-242-8671. When telephoning, ask for Operator 144.
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AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT EACH SERIES WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY
OTHER AGENCY.
179/195P13050195
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
MONEY GOVERNMENT
MARKET SECURITIES
SERIES SERIES
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Management Fees ...................... .50% .50%
Other Expenses........................ .13% .19%
Total Fund Operating Expenses......... .63% .69%
<TABLE>
<CAPTION>
EXAMPLE:
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:
<S> <C> <C>
1 YEAR $ 6 $ 7
3 YEARS $20 $22
5 YEARS $35 $38
10 YEARS $79 $86
</TABLE>
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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, EACH SERIES' 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 each series, and
therefore indirectly by investors, the payment of which will reduce
investors' return on an annual basis. You can purchase shares of either
series without charge directly from the Fund's distributor; you may be
charged a nominal fee if you effect transactions in shares of either series
through a securities dealer, bank or other financial institution. See
"Management of the Fund" and "Shareholder Services Plan."
Page 2
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Ernst &
Young LLP, 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 beneficial interest outstanding, total investment return, ratios to
average net assets and other supplemental data for each year indicated. This
information has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
MONEY MARKET SERIES
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YEAR ENDED DECEMBER 31,
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1985 1986 1987 1988 1989 1990 1991 1992 1993 1994
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of year $ .9999 $ .9995 $ .9996 $ .9991 $ .9992 $ .9988 $ .9987 $ .9992 $ .9993 $ .9993
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
INVESTMENT OPERATIONS:
Investment income-net .0792 .0644 .0626 .0714 .0878 .0769 .0570 .0345 .0272 .0359
Net realized and unrealized gain
(loss) on investments (.0004) .0001 (.0005) .0001 (.0004) (.0001) .0005 .0001 --- ---
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
TOTAL FROM INVESTMENT
OPERATIONS..... .0788 .0645 .0621 .0715 .0874 .0768 .0575 .0346 .0272 .0359
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
DISTRIBUTIONS;
Dividends from investment
income-net..... (.0792) (.0644) (.0626) (.0714) (.0878) (.0769) (.0570) (.0345) (.0272) (.0359)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of year $ .9995 $ .9996 $ .9991 $ .9992 $ .9988 $ .9987 $ .9992 $ .9993 $ .9993 $ .9993
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN 8.21% 6.63% 6.44% 7.37% 9.14% 7.99% 5.85% 3.51% 2.76% 3.65%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average
net assets...... .50% .50% .50% .50% .50% .50% .60% .63% .63% .63%
Ratio of net investment income
to average net assets 8.04% 6.37% 6.25% 7.16% 8.79% 7.72% 5.73% 3.48% 2.72% 3.59%
Decrease reflected in above
expense ratios due
to undertakings by
The Dreyfus Corporation .05% .06% .06% .07% .07% .08% --- --- --- ---
Net Assets,end of year
(000's omitted). $561,389 $635,085 $520,857 $707,023 $477,113 $401,461 $354,090 $329,574 $354,177 $362,825
</TABLE>
<TABLE>
<CAPTION>
GOVERNMENT SECURITIES SERIES
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YEAR ENDED DECEMBER 31,
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1985 1986 1987 1988 1989 1990 1991 1992 1993 1994
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ .9998 $ .9999 $1.0000 $ .9995 $ .9991 $ .9985 $ .9989 $ .9987 $ .9992 $ .9990
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
.0799 .0639 .0590 .0677 .0855 .0758 .0557 .0338 .0260 .0343
.0001 .0001 (.0005) (.0004) (.0006) .0004 (.0002) .0005 (.0002) ---
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
.0800 .0640 .0585 .0673 .0849 .0762 .0555 .0343 .0258 .0343
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
(.0799) (.0639) (.0590) (.0677) (.0855) (.0758) (.0557) (.0338) (.0260) (.0343)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
$ .9999 $1.0000 $ .9995 $ .9991 $ .9985 $ .9989 $ .9987 $ .9992 $ .9990 $ .9990
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
8.29% 6.58% 6.06% 6.99% 8.90% 7.85% 5.71% 3.44% 2.63% 3.49%
.50% .50% .50% .50% .50% .50% .65% .64% .65% .69%
7.97% 6.37% 5.87% 6.68% 8.54% 7.58% 5.64% 3.42% 2.61% 3.40%
.05% .05% .07% .09% .11% .10% --- --- --- ---
$1,040,339 $1,057,111 $489,909 $272,232 $214,481 $246,174 $174,173 $192,141 $134,574 $120,281
</TABLE>
Page 3
YIELD INFORMATION
From time to time, each series 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 a series refers to the income
generated by an investment in the series 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 series is
assumed to be reinvested. The effective yield will be slightly higher than
the yield because of the compounding effect of this assumed reinvestment.
Each series' 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 ReportRegistration Mark,
Bank Rate Monitortrademark, N. Palm Beach, Fla. 33408, Morningstar, Inc. and
other industry publications.
DESCRIPTION OF THE FUND
GENERAL
The Fund is a "series fund," which is a mutual fund divided into
separate portfolios. Each portfolio is treated as a separate entity for
certain matters under the Investment Company Act of 1940 and for other
purposes, and a shareholder of one series is not deemed to be a shareholder
of any other series. As described below, for certain matters Fund
shareholders vote together as a group; as to others they vote separately by
series.
INVESTMENT OBJECTIVE
The Fund seeks to provide you with as high a level of current income
as is consistent with the preservation of capital and the maintenance of
liquidity. Each of the Fund's series pursues this goal in the manner
described below. Each series' investment objective cannot be changed without
approval by the holders of a majority (as defined in the Investment Company
Act of 1940) of such series' outstanding voting shares. There can be no
assurance that the series' investment objective will be achieved. Securities
in which the series 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
Each series 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 each series' 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, each series 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 Trustees to present minimal credit
risks and, with respect to the Money Market Series, which are rated in one of
the two highest rating categories for debt obligations by at least two nationa
lly 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 Trustees. The nationally recognized statistical
rating organizations currently rating instruments of the type the Money
Market Series may purchase are Moody's Investors Service, Inc., Standard &
Poor's Corporation,
Page 4
Duff & Phelps Credit Rating Co., 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. 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 series will be able to maintain a stable net asset value of $1.00 per
share.
THE MONEY MARKET SERIES
The Money Market Series invests in short-term money market
obligations, including 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, and high
grade commercial paper and other short-term corporate obligations. Generally,
at least 25% of the value of the Money Market Series' total assets will be
invested in bank obligations. See "Risk Factors Relating to the Money Market
Series" below.
The Money Market Series 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 series 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 series 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 series' total assets is invested in securities issued or guaranteed by
the issuer of the unconditional put. Investments in rated securities not
rated in the highest category by at least two rating organizations (or one
rating organization if the instrument was rated by only one such
organization), and unrated securities not determined by the Board of Trustees
to be comparable to those rated in the highest category, will be limited to
5% of the Money Market Series' total assets, with the investment in any one
such issuer being limited to no more than the greater of 1% of the series'
total assets or $1,000,000. As to each security, these percentages are
measured at the time the Money Market Series purchases the security.
THE GOVERNMENT SECURITIES SERIES
The Government Securities Series invests only in short-term
securities issued or guaranteed as to principal and interest by the U.S.
Government (whether or not subject to repurchase agreements).
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. The Money Market
Series and the Government Securities Series may invest in Treasury Bills,
Treasury Notes and Treasury Bonds. 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. In addition, the Money Market Series may invest in obligations issued
or guaranteed by U.S. Government agencies and instrumentalities. 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 Money Market Series will invest in such securities only when it is
satisfied that the credit risk with respect to the issuer is minimal.
Page 5
The Money Market Series may purchase certificates of deposit, time
deposits, bankers' acceptances and other short-term obligations issued by
domestic banks and London branches of domestic banks. 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. Time deposits which may be held by the Money Market Series will not
benefit from insurance from the Bank Insurance Fund or the Savings
Association Insurance Fund administered by the Federal Deposit Insurance
Corporation. Investments in time deposits and certificates of deposit are
limited to domestic banks that have total assets in excess of one billion
dollars or London branches of such domestic banks. 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 bank obligations may include uninsured, direct
obligations bearing fixed, floating or variable interest rates.
Repurchase agreements involve the acquisition by a series of an
underlying debt instrument, subject to an obligation of the seller to
repurchase, and such series to resell, the instrument at a fixed price
usually not more than one week after its purchase. Certain costs may be
incurred by the series 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 securities, realization on the securities by the Fund may be
delayed or limited.
Each series may invest up to 10% of the value of its net assets in
securities as to which a liquid trading market does not exist, provided such
investments are consistent with the Fund's investment objective. Such
securities may include securities that are not readily marketable, such as
certain securities that are subject to legal or contractual restrictions on
resale, and repurchase agreements providing for settlement in more than seven
days after notice. As to these securities, the series is subject to a risk
that should the series desire to sell them when a ready buyer is not
available at a price the Fund deems representative of their value, the value
of the series' net assets could be adversely affected.
Commercial paper consists of short-term, unsecured promissory notes
issued to finance short-term credit needs. The commercial paper purchased by
the Money Market Series will consist only of direct obligations of U.S.
entities. The other corporate obligations in which the Money Market Series
may invest consist of high quality, U.S. dollar denominated short-term notes
issued by U.S. corporations, including banks.
CERTAIN FUNDAMENTAL POLICIES
Each series of the Fund may: (i) borrow money from banks, but only
for temporary or emergency (not leveraging) purposes, in an amount up to
15%of the series' total assets (including the amount borrowed) based on the
lesser of cost or market, less liabilities (not including the amount
borrowed) at the time the borrowing is made. While borrowings exceed 5% of
the series' total assets, the series will not make any additional
investments; and (ii) pledge, hypothecate, mortgage or otherwise encumber 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. In addition, the Money
Market Series: (i) may invest up to 5% of its total assets in the commercial
paper of any one issuer; (ii) as to 25% of its total assets, may invest up to
15% in the obligations of any one bank and, as to the remainder, may invest
not more than 5% of its total assets in the obligations of any one bank (in
each case, subject to the provisions of Rule 2a-7); (iii) will invest at
least 25% of its total assets in obligations issued by banks, provided that
if at some future date available yields on bank securities are significantly
lower than yields on other securities in which the Money Market Series may inv
est, the Money Market Series may invest less than 25% of its total assets in
bank obligations; and (iv) may invest up to 25% of its total 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
Page 6
describes
fundamental policies that cannot be changed, as to either series, without
approval by the holders of a majority (as defined in the Investment Company
Act of 1940) of the outstanding voting shares of such series. See "Investment
Objective and Management Policies _ Investment Restrictions" in the Fund's
Statement of Additional Information.
RISK FACTORS RELATING TO THE MONEY MARKET SERIES
Since the Money Market Series' portfolio may contain securities
issued by London branches of domestic banks, this series 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 these securities.
To the extent the Money Market Series' investments are concentrated
in the banking industry, the series 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
Money Market Series' 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 Money
Market Series, however, will seek to minimize its exposure to such risks by
investing only in debt securities which are determined to be of high quality.
OTHER INVESTMENT CONSIDERATIONS
Each series 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 series since it
usually does not pay brokerage commissions when it purchases short-term debt
obligations. The value of the portfolio securities held by the series 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 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.
From time to time, the Government Securities Series may lend
securities from its portfolio to brokers, dealers and other financial
institutions needing to borrow securities to complete certain transactions.
Such loans may not exceed 20% of the value of the Government Securities
Series' total assets. In connection with such loans, the Government
Securities Series will receive collateral consisting of cash or U.S. Treasury
securities. Such collateral will be maintained at all times in an amount
equal to at least 100% of the current market value of the loaned securities.
The Government Securities Series can increase its income through the
investment of such collateral. The Government Securities Series continues to
be entitled to payments in amounts equal to the interest or other
distributions payable on the loaned securities and receives interest on the
amount of the loan. Such loans will be terminable at any time upon specified
notice. The Government Securities Series might experience risk of loss if the
institution with which it has engaged in a portfolio loan transaction
breaches its agreement with the Fund.
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.
Page 7
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.
The Dreyfus Corporation is a wholly-owned subsidiary of Mellon Bank, N.A.,
which is a wholly-owned subsidiary of Mellon Bank Corporation ("Mellon"). As
of March 31, 1995, The Dreyfus Corporation managed or administered
approximately $72 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 overall authority of the Fund's Board of Trustees in
accordance with Massachusetts law.
Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected international
markets. Mellon is among the twenty-five largest bank holding companies in
the United States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National Association,
Mellon Bank (MD), The Boston Company, Inc., AFCOCredit Corporation and a
number of companies known as Mellon Financial Services Corporations. Through
its subsidiaries, including The Dreyfus Corporation, Mellon managed
approximately $193 billion in assets as of December 31, 1994, including $70
billion in mutual fund assets. As of December 31, 1994, Mellon, through
various subsidiaries, provided non-investment services, such as custodial or
administration services, for approximately $654 billion in assets, including
$74 billion in mutual fund assets.
For the year ended December 31, 1994, the Fund paid The Dreyfus
Corporation a monthly management fee at the annual rate of .50 of 1% of the
value of each series' average daily net assets. From time to time, The
Dreyfus Corporation may waive receipt of its fees and/or voluntarily assume
certain expenses of either series of the Fund, which would have the effect of
lowering the overall expense ratio of that series and increasing yield to
investors in the series 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 the Fund's distributor for
shareholder services from The Dreyfus Corporation's own assets, including
past profits but not including the management fee paid by the Fund. The
Fund's distributor may use part or all of such payments to pay securities
dealers or others in respect of these services.
The Fund's distributor is Premier Mutual Fund Services, Inc.
(the"Distributor"), located at One Exchange Place, Boston, Massachusetts
02109. The Distributor is a wholly-owned subsidiary of FDIDistribution
Services, Inc., a provider of mutual fund administration services, which in
turn is a wholly-owned subsidiary of FDI Holdings, Inc., the parent company
of which is Boston Institutional Group, Inc.
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, 90 Washington Street, New York, New York 10286, is the
Fund's Custodian. First Interstate Bank of California, 707 Wilshire
Boulevard, Los Angeles, California 90017, is the Fund's Sub-custodian.
HOW TO BUY FUND SHARES
Shares of each series of the Fund are sold without a sales charge.
You may be charged a nominal fee if you effect transactions in shares of
either series through a securities dealer, bank or other financial
institution. Share 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.
Page 8
The minimum initial investment in each series is $50,000, unless
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
$50,000. Subsequent investments in either series must be at least $100. The
initial investment must be accompanied by the Fund's Account Application.
You may purchase Fund shares by check or wire. Checks should be
made payable to "The Dreyfus Family of Funds." 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 indicating the name of the series being purchased. 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. 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 either to The Bank of New York or to
First Interstate Bank of California 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 for the Money Market Series to The Bank of New York, DDA
#8900051922/Dreyfus Institutional Money Market Fund/Money Market Series, or
for the Government Securities Series to The Bank of New York, DDA#8900051949/
Dreyfus Institutional Money Market Fund/Government Securities Series, for
purchase of Fund 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
redemption 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. Information about
transmitting payments by wire to First Interstate Bank of California may be
obtained by calling 1-800-346-3621; in New York City, call 1-718-895-1650.
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."
Each series' shares are sold on a continuous basis at the net asset
value per share next determined after an order and Federal Funds (monies of
member banks within the Federal Reserve System which are held on deposit at a
Federal Reserve Bank) are received by the Transfer Agent or other agent or
entity subject to the direction of such agents in written or telegraphic
form, or by First Interstate Bank of California in telegraphic form. If you
do not remit Federal Funds, your payment must be converted into Federal
Funds. This usually occurs within one day of receipt of a bank wire and
within two business days of receipt of a check drawn on a member bank of the
Federal Reserve System. Checks drawn on banks which are not members of the
Federal Reserve System may take considerably longer to convert into Federal
Funds. Prior to receipt of Federal Funds, your money will not be invested.
Page 9
The net asset value per share of each series is determined twice
each business day at 12:00 Noon, New York time/9:00 a.m., California time,
and as of the close of trading on the floor of the New York Stock Exchange
(currently 4:00 p.m., New York time/l:00 p.m., California time), on each day
the New York Stock Exchange or, with respect to the Money Market Series, the
Transfer Agent is open for business. Net asset value per share is computed by
dividing the value of the net assets of each series (i.e., the value of its
assets less liabilities) by the total number of shares of such series
outstanding. See "Determination of Net Asset Value" in the Fund's Statement
of Additional Information.
If your payments are received in or converted into Federal Funds by
12:00 Noon, New York time, by the Transfer Agent, or received in Federal
Funds by 12:00 Noon, California time, by First Interstate Bank of California,
you will receive the dividend declared on that day. If your payments are
received in or converted into Federal Funds after 12:00 Noon, New York time,
by the Transfer Agent, or received in Federal Funds after 12:00 Noon,
California time, by First Interstate Bank of California, your shares will
begin to accrue dividends on the following business day.
Qualified institutions may telephone orders for purchase of either
series' shares by telephoning the Distributor or its designee toll free at
1-800-346-3621; in New York City, call 1-718-895-1650; on Long Island, call
794-5452. A telephone order placed with the Distributor or its designee in
New York will become effective at the price determined at 12:00 Noon, New
York time, and the shares purchased will receive the dividend on such series'
shares declared on that day if such order is placed by 12:00 Noon, New York
time, and Federal Funds are received by the Transfer Agent by 4:00 p.m., New
York time. A telephone order placed with the Distributor or its designee in
California will become effective at the price determined at 1:00 p.m.,
California time, and the shares purchased will receive the dividend on such
series' shares declared on that day if such order is placed by 12:00 Noon,
California time, and Federal Funds are received by First Interstate Bank of
California by 4:00 p.m., California time.
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 ("IRS").
PROCEDURES FOR MULTIPLE ACCOUNTS
Special procedures have been designed for banks and other
institutions that wish to open multiple accounts. The institution may open a
single master account by filing one application with the Transfer Agent and
may open individual sub-accounts at the same time or at some later date. For
further information, please refer to the Statement of Additional Information.
SHAREHOLDER SERVICES
FUND EXCHANGES -- You may purchase, in exchange for shares of a series,
shares of the Fund's other series or 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 service, please call 1-800-645-6561 to determine if it is available and
whether any conditions are imposed by its use.
To request an exchange, you must give exchange instructions to the
Transfer Agent in writing or by telephone. Before any exchange, you must
obtain and should review a copy of the current prospectus of the fund into
which the exchange is being made. Prospectuses may be obtained by calling
1-800-645-6561. 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, shares being exchanged must have a
value of at least the minimum initial investment required for the fund or
series into which the exchange is being made. The ability to issue exchange
instructions by telephone is given to all shareholders automatically, unless
you check the applicable "No" box on the Account Application, indicating that
you specifically refuse this
Page 10
Privilege. The Telephone Exchange Privilege may
be established for an existing account by written request, signed by all
shareholders on the account, or by a separate signed Shareholder Services
Form, also available by calling 1-800-645-6561. If you 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 1-401-455-33
06. See "How to Redeem Fund Shares _ Procedures." 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: Telephone Exchange Privilege, Check Redemption
Privilege, Wire Redemption Privilege, Telephone Redemption 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 availability of Fund Exchanges may be modified or terminated at any
time upon notice to shareholders.
The exchange of shares of one fund or series for shares of another
fund or series 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.
Certain funds in the Dreyfus Family of Funds offer multiple classes
of shares to the public. If any investor in a fund offering multiple classes
of shares exchanges shares of such fund subject to a contingent deferred
sales charge ("CDSC") for shares of the Fund, the Fund shares obtained in the
exchange will be held in a separate Exchange Account for the investor. Shares
held in an Exchange Account may be exchanged only for shares of select funds
in the Dreyfus Family of Funds. No CDSC will be imposed on such shares at the
time of exchange; however, an investor exchanging such shares should review
carefully the current prospectus of the fund from which such shares were
exchanged and into which such shares are being exchanged to determine the
CDSC applicable on redemption. Exchange Account shares are eligible for the
Dreyfus Auto-Exchange Privilege, Dreyfus Dividend Options and the Automatic
Withdrawal Plan, and redemption proceeds on such shares will be paid only by
Federal wire or by check. Please call 1-800-645-6561 for further information.
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
either series of the Fund, in shares of the Fund's other series or 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 sche
dule 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
Page 11
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 excha
nge 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 BUILDERRegistration Mark
Dreyfus-AUTOMATIC Asset Builder permits you to purchase 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 by calling 1-800-645-6561. 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, 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
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 by
calling 1-800-645-6561. 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.
DREYFUS DIVIDEND OPTIONS
Dreyfus Dividend Sweep enables you to invest automatically dividends
or dividends and capital gain distributions, if any, paid by the series 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 sale 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. Dividend ACHpermits you
to transfer electronically on the payment date dividends or dividends and
capital gain distributions, if any, from the series to a designated bank
account. Only such an account maintained at a 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. To select a new
fund after cancellation, you must submit a new Dividend Options Form.
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
Page 12
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.
DREYFUS PAYROLL SAVINGS PLAN
Dreyfus Payroll Savings Plan permits you to purchase 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 by calling 1-800-645-6561. 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 the
Distributor, 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.
QUARTERLY DISTRIBUTION PLAN
The Quarterly Distribution Plan permits you to receive 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 calendar quarter.
You may open a Quarterly Distribution Plan by submitting a request
to the Transfer Agent. The Quarterly Distribution 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 Quarterly
Distribution Plan.
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 the Automatic
Withdrawal Plan can be obtained by calling 1-800-645-6561. There is a service
charge of 50cents 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 certificates have been issued may not be redeemed through the Automatic
Withdrawal Plan.
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. Securities
dealers, banks and other financial institutions may charge a nominal fee for
effecting redemptions of Fund shares. Any certificates representing Fund
shares being redeemed must be submitted with the redemption request. If you
own shares in both series, any redemption request must clearly state from
which series you wish to redeem the shares. The value of the shares redeemed
may be more or less than their original cost, depending upon the series'
then-current net asset value.
If a request for redemption is received in proper form by the
Transfer Agent by 12:00 Noon, New York time, or by the Los Angeles office of
the Distributor or its designee by 12:00 Noon, California time, the proceeds
of the redemption, if transfer by wire is requested, will be transmitted in
Federal Funds ordinarily on the same day and the shares will not receive the
dividend declared on that day. If the request is received later that day by
the Transfer Agent or the Los Angeles office of the Distributor or its
designee, the shares will receive the dividend on the Fund's shares declared
on that day and the proceeds of redemption, if wire transfer is requested,
will be transmitted in Federal Funds ordinarily on the next business day.
Page 13
The Fund ordinarily will make payment for all shares redeemed
within seven days after receipt by the Transfer Agent or the Distributor or
its designee, as the case may be, of a redemption request in proper form,
except as provided by the rules of the Securities and Exchange Commission. HOW
EVER, IF YOU HAVE PURCHASED FUND SHARES BY CHECK 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 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, FOR A PERIOD OF EIGHT BUSINESS DAYS AFTER
RECEIPT BY THE TRANSFER AGENT OF THE PURCHASE CHECK 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.
The Fund reserves the right to redeem your account in either series
at its option on not less than 30 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 or the Telephone Redemption Privilege. The Fund makes
available to certain large institutions the ability to issue redemption
instructions through compatible computer facilities.
You may redeem Fund shares 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. If you select a telephone redemption
privilege or telephone exchange privilege (which is granted automatically
unless you refuse it), you authorize the Transfer Agent to act on telephonic
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 Transfer Agent or the Fund
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.
REGULAR REDEMPTION -- Under the regular redemption procedure, you may redeem
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
Page 14
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 Che
ck because of 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 Check. 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
certificates have been issued may not be redeemed by Redemption Check. 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 not more than $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. The Fund reserves the right
to refuse any redemption request, including requests made shortly after a chan
ge 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.
TELEPHONE REDEMPTION PRIVILEGE -- You may redeem Fund shares (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
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.
Shareholder Services Plan
The Fund has adopted a Shareholder Services Plan pursuant to which
the Fund reimburses Dreyfus Service Corporation, a wholly-owned subsidiary of
The Dreyfus Corporation, an amount not to exceed an annual rate of .25 of 1%
of the value of each series' 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.
Page 15
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily declares dividends from each series' net
investment income on each day the New York Stock Exchange or, with respect to
the Money Market Series, the Transfer Agent is open for business. Dividends
usually are paid on the last business day of each month, and are
automatically reinvested in additional shares of the series from which they
were paid at net asset value or, at your option, paid in cash. Each series'
earnings for Saturdays, Sundays and holidays are declared as dividends on the
preceding business day. If you redeem all shares in your account at any time
during the month, all dividends to which you are entitled are paid to you
along with the proceeds of the redemption. Distributions from net realized
securities gains, if any, generally are declared and paid by each series 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 long-term securities gains unless capital
loss carryovers, if any, have been utilized or have expired. You may choose
whether to receive distributions in cash or to reinvest in additional shares
of the series from which distributions were paid 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 gains realized from the sale or other disposition of certain
market discount bonds, paid by a series will be taxable to U.S. shareholders
as ordinary income, whether received in cash or reinvested in additional
shares of the series. No dividend will qualify for the dividends received
deduction allowable to certain U.S. corporations. Distributions from net
realized long-term securities gains of a series will be taxable as long-term
capital gains regardless of how long shareholders have held their shares and
whether such distributions are received in cash or reinvested in additional
shares. The Code provides that the net capital gain 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 gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, paid by a series to a foreign investor generally are
subject to U.S. nonresident withholding taxes at the rate of 30%, unless the
foreign investor claims the benefit of a lower rate specified in a tax
treaty. Distributions from net realized long-term securities gains paid by a
series 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. Dividends and
distributions attributable to interest from direct obligations of the United
States and paid by a series to individuals currently are not subject to tax
in most states. Dividends and distributions attributable to interest from
other securities in which the series may invest may be subject to state tax.
The Fund intends to provide shareholders with a statement which sets forth
the percentage of dividends and distributions paid by the series that is
attributable to interest income from direct obligations of the United States.
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 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 a sharehold-
Page 16
er'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 each series of the Fund has qualified for
the fiscal year ended December 31, 1994 as a "regulated investment company"
under the Code. Each series of the Fund intends to continue to so qualify if
such qualification is in the best interests of its shareholders. Such
qualification relieves the series of any liability for Federal income taxes
to the extent its earnings are distributed in accordance with applicable
provisions of the Code. Each series is subject to a non-deductible 4% excise
tax, measured with respect to undistributed amounts of taxable investment
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 March l9, 1980. On
April 1, 1982, the Fund began offering shares of the Government Securities
Series, and on May 4, 1982, the Fund began offering shares of the Money
Market Series. On April 27, 1987, the Fund was reorganized as an
unincorporated business trust under the laws of the Commonwealth of
Massachusetts. The Fund is authorized to issue an unlimited number of shares
of beneficial interest, par value $.001 per share. Each share has one vote.
To date, two series of shares have been authorized. All
consideration received by the Fund for shares of one of the series and all
assets in which such consideration is invested, belong to that series
(subject only to the rights of creditors of the Fund) and will be subject to
the liabilities related thereto. The income attributable to, and the expenses
of, one series are treated separately from those of the other series.
Rule 18f-2 under the Investment Company Act of 1940 provides that
any matter required to be submitted under the provisions of the Investment
Company Act of 1940 or applicable state law or otherwise, to the holders of
the outstanding voting securities of an investment company such as the Fund
will not be deemed to have been effectively acted upon unless approved by the
holders of a majority of the outstanding shares of each series affected by
such matter. Rule 18f-2 further provides that a series shall be deemed to be
affected by a matter unless it is clear that the interests of each series in
the matter are identical or that the matter does not affect any interest of
such series. However, the Rule exempts the selection of independent
accountants and the election of trustees from the separate voting
requirements of the Rule.
Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Fund.
However, the Agreement and Declaration of Trust (the "Trust Agreement")
disclaims shareholder liability for acts or obligations of the Fund and
requires that notice of such disclaimer be given in each agreement,
obligation or instrument entered into or executed by the Fund or a Trustee.
The Trust Agreement provides for indemnification from the Fund's property for
all losses and expenses of any shareholder held personally liable for the
obligations of the Fund. Thus, the risk of a shareholder's incurring
financial loss on account of shareholder liability is limited to
circumstances in which the Fund itself would be unable to meet its
obligations, a possibility which management believes is remote. Upon payment
of any liability incurred by the Fund, the shareholder paying such liability
will be entitled to reimbursement from the general assets of the Fund. The
Trustees intend to conduct the operations of the Fund in such a way so as to
avoid, as far as possible, ultimate liability of the shareholders for
liabilities of the Fund. As described under "Management of the Fund" in the
Statement of Additional Information, the Fund ordinarily will not hold
shareholder meetings; however, shareholders under certain circumstances may
have the right to call a meeting of shareholders for the purpose of voting to
remove Trustees.
The Transfer Agent maintains a record of your ownership and sends
you confirmations and statements of account.
Page 17
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 1-800-242-8671. In New York City, call 1-718-895-1396; outside the U.S.
and Canada, call 516-794-5452.
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 FUND. 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 18
DREYFUS INSTITUTIONAL MONEY MARKET FUND
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
MAY 1, 1995
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus
of Dreyfus Institutional Money Market Fund (the "Fund"), dated May 1, 1995,
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 1-718-895-1396
Outside the U.S. and Canada -- Call 516-794-5452
The Dreyfus Corporation ("the Manager") serves as the Fund's
investment adviser.
Premier Mutual Fund Services, Inc. (the "Distributor") 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-9
Shareholder Services Plan . . . . . . . . . . . . . . . . . .B-10
Purchase of Fund Shares . . . . . . . . . . . . . . . . . . .B-11
Redemption of Fund Shares . . . . . . . . . . . . . . . . . .B-12
Shareholder Services. . . . . . . . . . . . . . . . . . . . .B-14
Portfolio Transactions. . . . . . . . . . . . . . . . . . . .B-17
Determination of Net Asset Value. . . . . . . . . . . . . . .B-17
Dividends, Distributions and Taxes. . . . . . . . . . . . . .B-18
Yield Information . . . . . . . . . . . . . . . . . . . . . .B-18
Information About the Fund. . . . . . . . . . . . . . . . . .B-19
Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors . . . . . . . . . . . .B-19
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . .B-20
Financial Statements. . . . . . . . . . . . . . . . . . . . .B-23
Report of Independent Auditors. . . . . . . . . . . . . . . .B-33
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. (Money Market Series only) Investments in time
deposits and certificates of deposit are limited to domestic banks having
total assets in excess of one billion dollars and London branches of such
domestic banks.
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.
Domestic commercial banks organized under Federal law are supervised
and examined by the Comptroller of the Currency and are required to be
members of the Federal Reserve System and to have their deposits insured by
the Federal Deposit Insurance Corporation. Domestic banks organized under
state law are supervised and examined by state banking authorities but are
members of the Federal Reserve System only if they elect to join. As a
result of Federal and state laws and regulations, domestic banks are, among
other things, generally required to maintain specified levels of reserves
and are subject to other regulations designed to promote financial
soundness. However, not all of such laws and regulations apply to the
London branches of domestic banks.
Investment Restrictions. The Fund has adopted investment restrictions
numbered 1 through 10, with respect to each series, and investment
restrictions numbered 12 and 13, with respect to the Money Market Series
only, as fundamental policies. Fundamental policies cannot be changed, as
to either series, without approval by the holders of a majority (as defined
in the Investment Company Act of 1940 (the "Act")) of the outstanding
voting shares of such series. Investment restriction number 11 is not a
fundamental policy and may be changed, as to either series, by vote of a
majority of the Fund's Trustees at any time. Neither series may:
1. Purchase common stocks, preferred stocks, warrants, other equity
securities, corporate bonds or debentures, state bonds, municipal bonds or
industrial revenue bonds.
2. Borrow money, except from banks for temporary or emergency (not
leveraging) purposes, in an amount up to 15% of the value of a series'
total assets (including the amount borrowed) based on the lesser of cost or
market, less liabilities (not including the amount borrowed) at the time
the borrowing is made. While borrowings exceed 5% of the value of the
series' total assets, the series will not make any additional investments.
3. Pledge, hypothecate, mortgage or otherwise encumber 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 or purchase securities on margin.
5. Write or purchase put or call options.
6. Underwrite the securities of other issuers.
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. However, the Government Securities Series may lend securities
to brokers, dealers and other institutional investors, but only when the
borrower deposits collateral consisting of cash or U.S. Treasury securities
with the Government Securities Series and agrees to maintain such
collateral so that it amounts at all times to at least 100% of the value of
the securities loaned. Such loans will not be made if, as a result, the
aggregate value of the securities loaned exceeds 20% of the value of the
Government Securities Series' total assets.
9. Invest in companies for the purpose of exercising control.
10. Invest in securities of other investment companies, except as
they may be acquired as part of a merger, consolidation or acquisition of
assets.
11. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid if,
in the aggregate, more than 10% of the value of the series' net assets
would be so invested.
The following investment restrictions numbered 12 and 13, which are
fundamental policies, apply only to the Money Market Series. The Money
Market Series may not:
12. 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 the
rules of the Securities and Exchange Commission, the Money Market Series
will not invest more than 5% of its assets in the obligations of any one
bank.
13. 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, provided that there shall be no limitation on the purchase
of obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities. Notwithstanding the foregoing, if at some future date
available yields on bank securities are significantly lower than yields on
other securities in which the Money Market Series may invest, the Money
Market Series may invest less than 25% of its assets in bank obligations.
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 such restriction.
The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of series' shares in certain states.
Should the Fund determine that a commitment is no longer in the best
interest of a series and its shareholders, the Fund reserves the right to
revoke the commitment by terminating the sale of such series' shares in the
state involved.
MANAGEMENT OF THE FUND
Trustees 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 Trustee who is deemed to be an "interested person"
of the Fund, as defined in the Act, is indicated by an asterisk.
Trustees of the Fund
*JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995, Chairman
of the Board of various funds in the Dreyfus Family of Funds. For
more than five years prior thereto, he was President and a director
and, until August 1994, Chief Operating Officer of Dreyfus and
Executive Vice President and a director of Dreyfus Service
Corporation, a wholly-owned subsidiary of Dreyfus and, until August
24, 1994, the Fund's distributor. From August 1994 to December 31,
1994, he was a director of Mellon Bank Corporation. Mr. DiMartino is
a director and former Treasurer of The Muscular Dystrophy Association;
a trustee of Bucknell University; Chairman of the Board of Directors
of the Noel Group, Inc.; and a director of HealthPlan Corporation,
Belding Heminway Company, Inc. and Curtis Industries, Inc. He is also
a Board member of 92 other funds in the Dreyfus Family of Funds. Mr.
DiMartino is 51 years old and his address is 200 Park Avenue, New
York, New York 10166.
*DAVID P. FELDMAN, Trustee. Corporate Vice President - Investment
management of AT&T and a Trustee of Corporate Property Investors, a
real estate investment company. He is also a Board member of 37 other
funds in the Dreyfus Family of Funds. Mr. Feldman is 55 years old and
his address is One Oak Way, Berkeley Heights, New Jersey 07922
JOHN M. FRASER, JR., Trustee. President of Fraser Associates, a service
company for planning and arranging corporate meetings and other
events. He was Executive Vice President of Flagship Cruises, Ltd.
from September 1975 to June 1978. Prior thereto, he was Senior Vice
President and Resident Director of the Swedish-American Line for the
United States and Canada. He is also a Board member of 14 other funds
in the Dreyfus Family of Funds. Mr. Fraser is 73 years old and his
address is 133 East 64th Street, New York, New York 10021.
ROBERT R. GLAUBER, Trustee. Research Fellow, Center for Business and
Government at the John F. Kennedy School of Government, Harvard
University since January 1992. He was Under Secretary of the Treasury
for Finance at the U.S. Treasury Department from May 1989 to
January 1992. For more than five years prior thereto, he was a
Professor of Finance at the Graduate School of Business Administration
of Harvard University and, from 1985 to 1989, Chairman of its Advanced
Management Program. He is also a Board member of 20 other funds in the
Dreyfus Family of Funds. Mr. Glauber is 56 years old and his address
is 79 John F. Kennedy Street, Cambridge, Massachusetts 02138.
JAMES F. HENRY, Trustee. President of the Center for Public Resources, a
non-profit organization principally engaged in the development of
alternatives to business litigation. He was of counsel to the law
firm of Lovejoy, Wasson & Ashton from October 1975 to December 1976
and from October 1979 to June 1983, and was a partner of that firm
from January 1977 to September 1979. He was President and a director
of the Edna McConnell Clark Foundation, a philanthropic organization
from September 1971 to December 1976. He is also a Board member of 10
other funds in the Dreyfus Family of Funds. Mr. Henry is 64 years old
and his address is c/o Center for Public Resources, 366 Madison
Avenue, New York, New York 10017.
ROSALIND GERSTEN JACOBS, Trustee. Director of Merchandise and Marketing,
Corporate Property Investors, a real estate investment company. From
1974 to 1976, she was owner-manager of a merchandise and marketing
consulting firm. Prior to 1974, she was a Vice President of Macy's,
New York. She is also a Board member of 20 other funds in the Dreyfus
Family of Funds. Mrs. Jacobs is 69 years old and her address is c/o
Corporate Property Investors, 305 East 47th Street, New York, New York
10017.
IRVING KRISTOL, Trustee. John M. Olin Distinguished Fellow of the American
Enterprise Institute for Public Policy Research, co-editor of The
Public Interest magazine, and an author or co-editor of several books.
From May 1981 to December 1994 he was a consultant to Dreyfus on
economic matters; from 1969 to 1988, he was Professor of Social
Thought at the Graduate School of Business Administration, New York
University; from September 1969 to August 1979, he was Henry R. Luce
Professor of Urban Values at New York University; from 1975 to 1990,
he was a director of Lincoln National Corporation, an insurance
company; and from 1977 to 1990, he was a director of Warner-Lambert
Company, a pharmaceutical and consumer products company. He is also a
Board member of 10 other funds in the Dreyfus Family of Funds. Mr.
Kristol is 75 years old and his address is c/o The Public Interest,
1112 16th Street, N.W., Suite 530, Washington, D.C. 20036.
DR. PAUL A. MARKS, Trustee. President and Chief Executive Officer of
Memorial Sloan-Kettering Cancer Center. He was Vice President for
Health Sciences and director of the Cancer Center at Columbia
University from 1973 to 1980, and Professor of Medicine and of Human
Genetics and Development at Columbia University from 1968 to 1982. He
is also a director of Pfizer, Inc., a pharmaceutical company, Life
Technologies, Inc., a life science company providing products for cell
and molecular biology and microbiology, and National Health
Laboratories, a national clinical diagnostic laboratory. From 1976 to
1991, he was a director of the Charles H. Revson Foundation; and from
1992 to 1993, he was a director of Biotechnology General, Inc., a
biotechnology development company. He is also a Board member of 10
other funds in the Dreyfus Family of Funds. Dr. Marks is 68 years old
and his address is c/o Memorial Sloan-Kettering Cancer Center, 1275
York Avenue, New York, New York 10021.
DR. MARTIN PERETZ, Trustee. Editor-in-Chief of The New Republic magazine
and a lecturer in Social Studies at Harvard University where he has
been a member of the faculty since 1965. He is a trustee of The
Center for Blood Research at the Harvard Medical School and a director
of Leukosite Inc., a biopharmaceutical company. From 1988 to 1989, he
was a director of Bank of Leumi Trust Company of New York; and from
1988 to 1991, he was a director of Carmel Container Corporation. He
is also a Board member of 10 other funds in the Dreyfus Family of
Funds. Dr. Peretz is 55 years old and his address is c/o The New
Republic, 1220 19th Street, N.W., Washington, D.C. 20036.
BERT W. WASSERMAN, Trustee. Financial Consultant. From January 1990 to
March 1995, Executive Vice President and Chief Financial Officer, and
from January 1990 to March 1993 a director, of Time Warner Inc.; from
1981 to 1990, he was President and a director of Warner Communications
Inc. He is also a member of the Chemical Bank National Advisory Board
and a director of The New Germany Fund, Mountasia Entertainment
International, Inc. and Lillian Vernon Corporation. He is also a Board
member of 10 other funds in the Dreyfus Family of Funds. Mr. Wasserman
is 62 years old and his address is 126 East 56th Street, Suite 12 North,
New York, New York 10022-3613.
The Trustees, except Messrs. DiMartino and Feldman, were elected at a
meeting of shareholders held on August 2, 1994. No further shareholder
meetings will be held for the purpose of electing Trustees unless and until
such time as less than a majority of the Trustees holding office have been
elected by shareholders, at which time the Trustees then in office will
call a shareholders' meeting for the election of Trustees. Under the Act,
shareholders of record of not less than two-thirds of the outstanding
shares of the Fund may remove a Trustee through a declaration in writing or
by vote cast in person or by proxy at a meeting called for that purpose.
Under the Fund's Agreement and Declaration of Trust, the Trustees are
required to call a meeting of shareholders for the purpose of voting upon
the question of removal of any such Trustee when requested in writing to do
so by the shareholders of record of not less than 10% of the Fund's
outstanding shares.
The Fund typically pays its Trustees an annual retainer and a per
meeting fee and reimburses them for their expenses. The Chairman of the
Board receives an additional 25% of such compensation. The aggregate
amount of compensation paid to each Trustee by the Fund and all other funds
in the Dreyfus Family of Funds for which such person is a Board member for
the fiscal year ended December 31, 1994, were as follows:
<TABLE>
<CAPTION>
(5)
(3) Total
(2) Pension or (4) Compensation from
(1) Aggregate Retirement Benefits Estimated Annual Fund and Fund
Name of Board Compensation from Accrued as Part of Benefits Upon Complex Paid to
Member Fund* Fund's Expenses Retirement Board Members
------------- ----------------- ------------------ -------------- ---------------
<S> <C> <C> <C> <C>
Joseph S. DiMartino** $8,125 none none $445,000
David P. Feldman $ 747 none none $ 85,631
John M. Fraser, Jr. $6,500 none none $ 46,766
Robert R. Glauber $6,500 none none $ 79,696
James F. Henry $6,500 none none $ 44,946
Rosalind Gersten Jacobs $6,500 none none $ 57,638
Irving Kristol $6,500 none none $ 44,946
Dr. Paul A Marks $6,500 none none $ 44,946
Dr. Martin Peretz $6,500 none none $ 44,946
Bert W. Wasserman $6,500 none none $ 40,720
____________________________________
* Amount does not include reimbursed expenses for attending Board
meetings, which amounted to $396 for all Trustees as a group.
** Estimated amount for current fiscal year ending December 31, 1995
For so long as the Fund's plan described in the section captioned
"Shareholder Services Plan" remains in effect, the Trustees of the Fund who
are not "interested persons" of the Fund, as defined in the Act, will be
selected and nominated by the Trustees who are not "interested persons" of
the Fund.
Officers of the Fund
MARIE E. CONNOLLY, President and Treasurer. President and Chief Operating
Officer of the Distributor and an officer of other investment
companies advised or administered by the Manager. From December 1991
to July 1994, she was President and Chief Compliance Officer of Funds
Distributor, Inc., a wholly-owned subsidiary of The Boston Company,
Inc. Prior to December 1991, she served as Vice President and
Controller, and later as Senior Vice President, of The Boston Company
Advisors, Inc. She is 37 years old.
JOHN E. PELLETIER, Vice President and Secretary. Senior Vice President and
General Counsel of the Distributor and an officer of other investment
companies advised or administered by the Manager. From February 1992
to July 1994, he served as Counsel for The Boston Company Advisors,
Inc. From August 1990 to February 1992, he was employed as an
Associate at Ropes & Gray, and prior to August 1990, he was employed
as an Associate at Sidley & Austin. He is 30 years old.
FREDERICK C. DEY, Vice President and Assistant Treasurer. Senior Vice
President of the Distributor and an officer of other investment
companies advised or administered by the Manager. From 1988 to August
1994, he was Manager of the High Performance Fabric Division of
Springs Industries Inc. He is 33 years old.
ERIC B. FISCHMAN, Vice President and Assistant Secretary. Associate
General Counsel of the Distributor and an officer of other investment
companies advised or administered by the Manager. From September 1992
to August 1994, he was an attorney with the Board of Governors of the
Federal Reserve System. He is 30 years old.
JOSEPH F. TOWER,III, Assistant Treasurer. Senior Vice President, Treasurer
and Chief Financial Officer of the Distributor and an officer of other
investment companies advised or administered by the Manager. From
July 1988 to August 1994, he was employed by The Boston Company, Inc.
where he held various management positions in the Corporate Finance
and Treasury areas. He is 32 years old.
JOHN J. PYBURN, Assistant Treasurer, Vice President of the Distributor and
an officer of other investment companies advised or administered by
the Manager. From 1984 to July 1994, he was Assistant Vice President
in the Mutual Fund Accounting Department of the Manager. He is 59
years old.
RUTH D. LEIBERT, Assistant Secretary. Assistant Vice President of the
Distributor and an officer of other investment companies advised or
administered by the Manager. From March 1992 to July 1994, she was a
Compliance Officer for The Managers Funds, a registered investment
company. From March 1990 until September 1991, she was Development
Director of The Rockland Center for the Arts and, prior thereto, was
employed as a Research Assistant for the Bureau of National Affairs.
She is 50 years old.
PAUL FURCINITO, Assistant Secretary. Assistant Vice President of the
Distributor and an officer of other investment companies advised or
administered by the Manager. From January 1992 to July 1994, he was a
Senior Legal Product Manager, and, from January 1990 to January 1992,
he was a mutual fund accountant, for The Boston Company Advisors, Inc.
He is 28 years old.
The address of each officer of the Fund is 200 Park Avenue, New York,
New York 10166.
Trustees and officers of the Fund, as a group, owned less than 1% of
the Fund's shares of beneficial interest outstanding on February 10, 1995.
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 August 24, 1994 with the Fund. As to
each series, the Agreement is subject to annual approval by (i) the Fund's
Board of Trustees or (ii) vote of a majority (as defined in the Act) of the
outstanding voting securities of such series, provided that in either event
the continuance also is approved by a majority of the Trustees 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. Shareholders approved the Agreement on August 2, 1994. The
Board of Trustees, including a majority of the Trustees who are not
"interested persons" of any party to the Agreement, last voted to renew the
Agreement at a meeting held on March 13, 1995. As to each series, the
Agreement is terminable without penalty on 60 days' notice by the Fund's
Board or by vote of a majority of the outstanding voting securities of such
series or, on 90 days' notice, by the Manager. The Agreement will
terminate automatically, as to the relevant series, in the event of its
assignment (as defined in the Act).
The following persons are officers and/or directors of the Manager:
Howard Stein, Chairman of the Board and Chief Executive Officer; W. Keith
Smith, Vice Chairman of the Board; Robert E. Riley, President, Chief
Operating Officer and a director; Lawrence S. Kash, Vice Chairman--
Distribution and a director; Philip L. Toia, Vice Chairman-- Operations and
Administration; Paul H. Snyder, Vice President and Chief Financial Officer;
Daniel C. Maclean, Vice President and General Counsel; Elie M. Genadry,
Vice President--Institutional Sales; Henry D. Gottmann, Vice President--
Retail Sales and Service; Jeffrey N. Nachman, Vice President--Mutual Fund
Accounting; Diane M. Coffey, Vice President--Corporate Communications;
Barbara E. Casey, Vice President--Retirement Services; Katherine C.
Wickham, Vice President--Human Resources; Mark N. Jacobs, Vice
President--Fund Legal and Compliance and Secretary; Maurice Bendrihem,
Controller; and Mandell L. Berman, Frank V. Cahouet, Alvin E. Friedman,
Lawrence M. Greene, Julian M. Smerling and David B. Truman, directors.
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 Trustees. The Manager is responsible for investment decisions and
provides the Fund with portfolio managers who are authorized by the Board
to execute purchases and sales of securities. The Fund's portfolio
managers are Robert P. Fort, Jr., Garitt Kono and Patricia A. Larkin. 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 for each series are reported for the
Board's review at the meeting subsequent to such transactions.
All expenses incurred in the operation of the Fund 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 Board members 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 registrars and custodians,
transfer and dividend disbursing agents' fees, outside auditing and legal
expenses, costs of maintaining the Fund's existence, all costs of insurance
obtained other than under a blanket policy covering one or more other
investment companies managed by the Manager, costs attributable to investor
services (including, allocable telephone and personnel expenses), costs of
shareholders' reports and meetings, costs of preparing and printing
prospectuses for regulatory purposes and for distribution to existing
shareholders. Expenses attributable to a particular series are charged
against the assets of that series; other expenses of the Fund are allocated
between the series on the basis determined by the Board members, including,
but not limited to, proportionately in relation to the net assets of each
series.
The Manager maintains office facilities, on behalf of the Fund, and
furnishes statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing services, and certain other
required services to the Fund. The Manager may make such advertising and
promotional expenditures, using its own resources, as it from time to time
deems appropriate.
As compensation for the Manager's services, the Fund has agreed to pay
the Manager a monthly management fee at the annual rate of .50 of 1% of the
value of each series' average daily net assets. All expenses are accrued
daily and deducted before declaration of dividends to investors. The
management fees paid by the Money Market Series to the Manager for the
fiscal years ended December 31, 1992, 1993 and 1994 amounted to $1,962,361,
$1,876,774 and $1,745,382, respectively. The management fees paid by the
Government Securities Series to the Manager for the fiscal years ended
December 31, 1992, 1993 and 1994 amounted to $1,221,895, $844,481 and
$581,006, respectively.
The Manager has agreed that if in any fiscal year the aggregate
expenses of the Fund, exclusive of taxes, brokerage commissions, 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 average net assets of either series for the
year, the Fund may deduct from the management fees charged to the series or
the Manager will bear such excess amount.
The aggregate of the fees payable to the Manager is not subject to
reduction as the value of a series' net assets increases.
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 (the "Plan") pursuant
to which the Fund reimburses Dreyfus Service Corporation 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.
A quarterly report of the amounts expended under the Plan, and the
purposes for which such expenditures were incurred, must be made to the
Trustees for their review. In addition, the Plan provides that material
amendments of the Plan must be approved by the Board of Trustees, and by
the Trustees 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 Plan by vote cast in person at a meeting called for the purpose of
considering such amendments. The Plan is subject to annual approval by
such vote of the Trustees cast in person at a meeting called for the
purpose of voting on the Plan. The Plan is terminable at any time by vote
of a majority of the Trustees who are not "interested persons" and have no
direct or indirect financial interest in the operation of the Plan.
The fees paid by the Money Market Series and the Government Securities
Series pursuant to the Plan for the fiscal year ended December 31, 1994
amounted to $85,335 and $40,682, respectively.
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.
Using Federal Funds. The Shareholder Services Group, Inc., the Fund's
transfer and dividend disbursing agent (the "Transfer Agent"), or the Fund
may attempt to notify the investor upon receipt of checks drawn on banks
that are not members of the Federal Reserve System as to the possible delay
in conversion into Federal Funds and may attempt to arrange for a better
means of transmitting the money. If the investor is a customer of a
securities dealer, bank or other financial institution and his order to
purchase Fund shares is paid for other than in Federal Funds, the
securities dealer, bank or other financial institution, acting on behalf of
its customer, will complete the conversion into, or itself advance, Federal
Funds generally on the business day following receipt of the customer
order. The order is effective only when so converted and received by the
Transfer Agent. An order for the purchase of Fund shares placed by an
investor with a sufficient Federal Funds or cash balance in his brokerage
account with a securities dealer, bank or other financial institution will
become effective on the day that the order, including Federal Funds, is
received by the Transfer Agent.
Procedures for Multiple Accounts. The Transfer Agent will provide
each institution with a written confirmation for each transaction in a
sub-account. Duplicate confirmations may be transmitted to the beneficial
owner of the sub-account at no additional charge. Upon receipt of funds
for investment by interbank wire, the Transfer Agent or First Interstate
Bank of California will promptly confirm the receipt of the investment by
telephone or return wire to the transmitting bank, if the investor so
requests.
The Transfer Agent also will provide each institution with a monthly
statement setting forth, for each sub-account, the share balance, income
earned for the month, income earned for the year to date and the total
current value of the account.
Transactions Through Securities Dealers. Fund shares may be purchased
and redeemed through securities dealers who 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 not take physical delivery of share 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. In some states, banks or other institutions effecting
transactions in Fund shares may be required to register as dealers pursuant
to state law.
There is no sales or service charge by the Fund or the Distributor
although investment dealers, banks and other financial 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 these 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.
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.
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. Shareholders 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. Checks should not be used to close an account.
Wire Redemption Privilege. By using this Privilege, the 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 same business day if the redemption request is
received by the Transfer Agent in proper form prior to 12:00 Noon, New York
time, on such day; otherwise, the Fund will initiate payment on the next
business day. 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 "Share Certificates; Signatures."
Share Certificates; Signatures. Any certificate 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 Exchanges 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,
administrators, 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 relevant series' 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 Trustees reserves the right to make payments in
whole or part in securities or other assets of the relevant series in case
of an emergency or any time a cash distribution would impair the liquidity
of such series to the detriment of the existing shareholders. In such
event, the securities would be valued in the same manner as the series'
portfolio is valued. If the recipient sold such securities, brokerage
charges would be incurred.
Suspension of Redemptions. The right of redemption may be suspended
or the date of payment postponed (a) during any periods 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."
Fund Exchanges. 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 request an exchange, an investor must give exchange instructions to
the Transfer Agent in writing or by telephone. The ability to issue
exchange instructions by telephone is given to all Fund shareholders
automatically, unless the investor checks the applicable "NO" box on the
Account Application, indicating that the investor specifically refuses this
privilege. By using the Telephone Exchange Privilege, the investor
authorizes the Transfer Agent to act on telephonic 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 exchanges.
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 certain other funds 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 set forth above under "Fund Exchanges."
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.
Fund Exchanges and the 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 by calling 1-800-645-6561. The Fund reserves the right to reject
any exchange request in whole or in part. The Fund Exchanges service or
the Dreyfus Auto-Exchange Privilege may be modified or terminated at any
time upon notice to shareholders.
Dreyfus Dividend Sweep. Dreyfus Dividend Sweep allows investors to
invest 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
other funds purchased pursuant to this 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.
PORTFOLIO TRANSACTIONS
Portfolio securities ordinarily are purchased from the issuer or from
an underwriter or a market maker for the securities. Usually 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 portfolio
managers 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.
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 Trustees has established, as a particular responsibility
within the overall duty of care owed to the Fund's investors, procedures
reasonably designed to stabilize the Fund's price per share as computed for
the purpose of sales and redemptions at $1.00. Such procedures include
review of the Fund's portfolio holdings by the Board of Trustees, 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 will
be 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 will be valued at fair value as
determined in good faith by the Board of Trustees.
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 Trustees. If such
deviation exceeds 1/2 of 1%, the Board of Trustees will consider promptly
what action, if any, will be initiated. In the event the Board of Trustees
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.
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. In addition, the
New York Stock Exchange is closed on Good Friday.
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 gains
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, 1994, the Money Market
Series' yield was 5.03% and its effective yield was 5.16%. For the
seven-day period ended December 31, 1994, the Government Securities Series'
yield was 4.84% and its effective yield was 4.96%. See "Management of the
Fund" in the Prospectus. 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 1 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. Investors 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.
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."
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. 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, 90 Washington Street, New York, New York 10286,
acts as custodian. First Interstate Bank of California, 707 Wilshire
Boulevard, Los Angeles, California 90017, serves as a sub-custodian of the
Fund's investments. 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 Bank of New
York, First Interstate Bank of California and The Shareholder Services
Group, Inc. have no 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 beneficial interest being sold pursuant to the Fund's Prospectus.
Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as auditors of the Fund.
APPENDIX
Description of the two highest commercial paper, bond and other short-
and long-term rating categories assigned by Standard & Poor's Corporation
("S&P"), Moody's Investors Service, Inc. ("Moody's"), Fitch Investors
Service, Inc. ("Fitch"), Duff & Phelps Credit Rating Co. ("Duff"), IBCA
Limited and IBCA Inc. ("IBCA") and Thomson BankWatch, Inc. ("BankWatch"):
Commercial Paper and Short-Term Ratings
The designation A-1 by S&P indicates that the degree of safety
regarding timely payment is either overwhelming or very strong. Capacity
for timely payment on issues with an A-2 designation is strong. However,
the relative degree of safety is not as high as for issues designated A-1.
Those issues determined to possess overwhelming safety characteristics are
denoted with a plus sign (+) designation.
The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity
for repayment of short-term promissory obligations, and ordinarily will be
evidenced by leading market positions in well established industries, high
rates of return on funds employed, conservative capitalization structures
with moderate reliance on debt and ample asset protection, broad margins in
earnings coverage of fixed financial charges and high internal cash
generation, and well established access to a range of financial markets and
assured sources of alternate liquidity. Issues rated Prime-2 (P-2) have a
strong capacity for repayment of short-term promissory obligations. This
ordinarily will be evidenced by many of the characteristics cited above but
to a lesser degree. Earnings trends and coverage ratios, while sound, will
be more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
The rating Fitch-1 (Highest Grade) is the highest commercial paper
rating assigned by Fitch. Paper rated Fitch-1 is regarded as having the
strongest degree of assurance for timely payment. The rating Fitch-2 (Very
Good Grade) is the second highest commercial paper rating assigned by Fitch
which reflects an assurance of timely payment only slightly less in degree
than the strongest issues.
The rating Duff-1 is the highest commercial paper rating assigned by
Duff. Paper rated Duff-1 is regarded as having very high certainty of
timely payment with excellent liquidity factors which are supported by
ample asset protection. Risk factors are minor. Paper rated Duff-2 is
regarded as having good certainty of timely payment, good access to capital
markets and sound liquidity factors and company fundamentals. Risk factors
are small.
The designation A1 by IBCA indicates that the obligation is supported
by a very strong capacity for timely repayment. Those obligations rated
A1+ are supported by the highest capacity for timely repayment.
Obligations rated A2 are supported by a strong capacity for timely
repayment, although such capacity may be susceptible to adverse changes in
business, economic or financial conditions.
The rating TBW-1 is the highest short-term obligation rating assigned
by BankWatch. Obligations rated TBW-1 are regarded as having the strongest
capacity for timely repayment. Obligations rated TBW-2 are supported by a
strong capacity for timely repayment, although the degree of safety is not
as high as for issues rated TBW-1.
Bond and Long-Term Ratings
Bonds rated AAA are considered by S&P to be the highest grade
obligations and possess an extremely strong capacity to pay principal and
interest. Bonds rated AA by S&P are judged by S&P to have a very strong
capacity to pay principal and interest, and in the majority of instances,
differ only in small degree from issues rated AAA. The rating AA may be
modified by the addition of a plus or minus sign to show relative standing
within the rating category.
Bonds rated Aaa are judged by Moody's to be of the best quality.
Bonds rated Aa by Moody's are judged by Moody's to be of high quality by
all standards. Together with the Aaa group, they comprise what are
generally known as high-grade bonds. Bonds rated Aa are rated lower than
Aaa bonds because margins of protection may not be as large or fluctuations
of protective elements may be of greater amplitude or there may be other
elements present which make the long-term risks appear somewhat larger.
Moody's applies the numerical modifiers 1, 2 and 3 in the Aa rating
category. The modifier 1 indicates a ranking for the security in the
higher end of this rating category, the modifier 2 indicates a mid-range
ranking and the modifier 3 indicates a ranking in the lower end of the
rating category.
Bonds rated AAA by Fitch are judged by Fitch to be strictly
high-grade, broadly marketable and suitable for investment by trustees and
fiduciary institutions and liable to but slight market fluctuation other
than through changes in the money rate. The prime feature of an AAA bond
is a showing of earnings several times or many times interest requirements,
with such stability of applicable earnings that safety is beyond reasonable
question whatever changes occur in conditions. Bonds rated AA by Fitch are
judged by Fitch to be of safety virtually beyond question and are readily
salable, whose merits are not unlike those of the AAA class, but whose
margin of safety is less strikingly broad. The issue may be the obligation
of a small company, strongly secured but influenced as to rating by the
lesser financial power of the enterprise and more local type of market.
Bonds rated AAA by Duff are considered to be of the highest credit
quality. The risk factors are negligible, being only slightly more than
U.S. Treasury debt. Bonds rated AA are considered to be of high credit
quality with strong protection factors. Risk is modest but may vary
slightly from time to time because of economic conditions.
Obligations rated AAA by IBCA have the lowest expectation of
investment risk. Capacity for timely repayment of principal and interest
is substantial, such that adverse changes in business, economic or
financial conditions are unlikely to increase investment risk
significantly. Obligations rated AA by IBCA have a very low expectation of
investment risk. Capacity for timely repayment of principal and interest
is substantial. Adverse changes in business, economic or financial
conditions may increase investment risk albeit not very significantly.
IBCA also assigns a rating to certain international and U.S. banks.
An IBCA bank rating represents IBCA's current assessment of the strength of
the bank and whether such bank would receive support should it experience
difficulties. In its assessment of a bank, IBCA uses a dual rating system
comprised of Legal Ratings and Individual Ratings. In addition, IBCA
assigns banks long- and short-term ratings as used in the corporate ratings
discussed above. Legal Ratings, which range in gradations from 1 through
5, address the question of whether the bank would receive support provided
by central banks or shareholders if it experienced difficulties, and such
ratings are considered by IBCA to be a prime factor in its assessment of
credit risk. Individual Ratings, which range in gradations from A through
E, represent IBCA's assessment of a bank's economic merits and address the
question of how the bank would be viewed if it were entirely independent
and could not rely on support from state authorities or its owners.
In addition to ratings of short-term obligations, BankWatch assigns a
rating to each issuer it rates, in gradations of A through E. BankWatch
examines all segments of the organization including, were applicable, the
holding company, member banks or associations, and other subsidiaries. In
those instances where financial disclosure is incomplete or untimely, a
qualified rating (QR) is assigned to the institution. BankWatch also
assigns, in the case of foreign banks, a country rating which represents a
assessment of the overall political and economic stability of the country
in which the bank is domiciled.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS INSTITUTIONAL MONEY MARKET FUND, Money Market Series
STATEMENT OF INVESTMENTS DECEMBER 31, 1994
PRINCIPAL
NEGOTIABLE BANK CERTIFICATES OF DEPOSIT--2.7% AMOUNT VALUE
-------------- -------------
<S> <C> <C>
Harris Trust & Savings Bank (London)
5.90%, 2/14/95
(cost $9,997,499)....................................................... $ 10,000,000 $ 9,997,499
--------------
--------------
COMMERCIAL PAPER--45.0%
Ford Motor Credit Co.
5.90%-6.49%, 2/21/95-4/11/95............................................ $ 15,000,000 $ 14,829,356
General Electric Capital Corp.
6.00%, 3/28/95.......................................................... 15,000,000 14,789,300
General Motors Acceptance Corp.
5.47%-6.07%, 1/17/95-3/22/95............................................ 15,000,000 14,909,889
Generale Bank Inc.
5.23%, 1/12/95.......................................................... 7,000,000 6,989,006
Goldman Sachs Group L.P.
5.12%, 1/5/95........................................................... 10,000,000 9,994,411
ITT Corp.
5.83%, 1/13/95.......................................................... 15,000,000 14,971,100
ITT Financial Corp.
5.47%-6.13%, 1/17/95-4/3/95............................................. 15,000,000 14,899,333
Morgan Stanley Group Inc.
6.26%, 1/5/95........................................................... 14,000,000 13,990,278
NYNEX Corp.
5.12%, 1/10/95.......................................................... 5,000,000 4,993,712
Paine Webber Group Inc.
5.25%, 1/3/95........................................................... 13,000,000 12,996,280
Sears Roebuck Acceptance Corp.
5.56%-6.04%, 1/13/95-2/27/95............................................ 15,000,000 14,896,650
SwedBank Inc.
6.04%, 3/24/95.......................................................... 10,000,000 9,865,156
UBS Finance (Delaware) Inc.
6.25%, 1/3/95........................................................... 15,000,000 14,994,792
--------------
TOTAL COMMERCIAL PAPER
(cost $163,119,263)..................................................... $163,119,263
============
BANK NOTES--5.0%
FCC National Bank Delaware
5.82%, 3/14/95 (a)...................................................... $ 10,000,000 $ 9,999,008
Huntington National Bank
4.92%, 1/20/95.......................................................... 4,000,000 3,996,856
Society National Bank
5.08%, 1/20/95.......................................................... 4,000,000 3,996,788
--------------
TOTAL BANK NOTES
(cost $17,992,652)...................................................... $ 17,992,652
============
DREYFUS INSTITUTIONAL MONEY MARKET FUND, Money Market Series
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1994
PRINCIPAL
CORPORATE NOTE--4.1% AMOUNT VALUE
-------------- ------------
Pepsico Inc.
3.57%, 2/3/95
(cost $14,999,118)...................................................... $ 15,000,000 $ 14,999,118
============
U.S. GOVERNMENT AGENCY--2.8%
Federal National Mortgage Association, Consolidated
Systemwide, Floating Rate Bonds (a)
5.97%, 2/14/97
(cost $10,000,000)...................................................... $ 10,000,000 $ 10,000,000
============
TIME DEPOSITS--12.5%
Chase Manhattan Bank (London)
5.75%, 1/3/95........................................................... $ 15,000,000 $15,000,000
Chemical Bank (London)
6.00%, 1/3/95........................................................... 15,000,000 15,000,000
Republic National Bank of New York (London)
5.00%, 1/3/95........................................................... 15,340,000 15,340,000
-------------
TOTAL TIME DEPOSITS
(cost $45,340,000)...................................................... $ 45,340,000
============
REPURCHASE AGREEMENTS--28.1%
Barclays de Zoete Wedd Securities Inc.
4.00%, dated 12/30/94, due 1/3/95 in the amount of
$5,002,222 (fully collateralized by $5,062,000 U.S.
Treasury Notes 4.625% due 8/15/95, value $5,080,518).................... $ 5,000,000 $ 5,000,000
Daiwa Securities America Inc.
5.70%, dated 12/30/94, due 1/3/95 in the amount of
$17,010,767 (fully collateralized by $17,020,000 U.S.
Treasury Notes 3.875% due 2/28/95, value $17,205,187)................... 17,000,000 17,000,000
Eastbridge Capital Inc.
6.00%, dated 12/30/94, due 1/3/95 in the amount of
$40,026,667 (fully collateralized by $42,355,000 U.S.
Treasury Bills due 6/1/95, value $41,246,146)........................... 40,000,000 40,000,000
Yamaichi International (America) Inc.
6.10%, dated 12/30/94, due 1/3/95 in the amount of
$40,027,111 (fully collateralized by $40,670,000 U.S.
Treasury Notes 4.125% due 5/31/95, value $40,445,421)................... 40,000,000 40,000,000
------------
TOTAL REPURCHASE AGREEMENTS
(cost $102,000,000)..................................................... $102,000,000
============
TOTAL INVESTMENTS
(cost $363,448,532)............................................ 100.2% $363,448,532
====== =============
LIABILITIES, LESS CASH AND RECEIVABLES............................. (.2%) $ (623,187)
====== =============
NET ASSETS ................................................... 100.0% $362,825,345
====== =============
</TABLE>
NOTE TO STATEMENT OF INVESTMENTS;
(a) Variable interest rate - subject to periodic change.
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS INSTITUTIONAL MONEY MARKET FUND, Government Securities Series
STATEMENT OF INVESTMENTS DECEMBER 31, 1994
ANNUALIZED
YIELD ON
DATE OF PRINCIPAL
U.S. TREASURY BILLS--16.3% PURCHASE AMOUNT VALUE
---------- --------- ----------
<S> <C> <C> <C>
3/16/95.................................................... 5.03% $ 10,000,000 $ 9,899,175
5/25/95.................................................... 6.00 10,000,000 9,767,200
---------- --------- ----------
TOTAL U.S. TREASURY BILLS
(cost $19,666,375)......................................... $ 19,666,375
============
U.S. TREASURY NOTES--39.0%
3.875%, 2/28/95
(cost $46,873,993)......................................... 5.46% $ 47,000,000 $ 46,873,993
============
REPURCHASE AGREEMENTS--35.4%
Daiwa Securities America Inc.
dated 12/30/94, due 1/3/95 in the amount of $14,009,100
(fully collateralized by $14,260,000 U.S. Treasury
Notes 3.875% due 8/31/95, value $14,170,063).............. 5.85% $ 14,000,000 $ 14,000,000
Eastbridge Capital Inc.
dated 12/30/94, due 1/3/95 in the amount of $12,008,333
(fully collateralized by $12,710,000 U.S. Treasury
Bills due 6/1/95, value $12,377,257)....................... 6.25 12,000,000 12,000,000
First Interstate Bank of California
dated 12/30/94, due 1/3/95 in the amount of $4,542,774
(fully collateralized by $4,451,000 U.S. Treasury
Notes 11.25% due 5/15/95, value $4,596,672)................ 5.50 4,540,000 4,540,000
Yamaichi International (America) Inc.
dated 12/30/94, due 1/3/95 in the amount of $12,008,200
(fully collateralized by $12,090,000 U.S. Treasury
Notes 4.25% due 7/31/95, value $12,134,023)................ 6.15 12,000,000 12,000,000
------------
TOTAL REPURCHASE AGREEMENTS
(cost $42,540,000)......................................... $ 42,540,000
============
TOTAL INVESTMENTS (cost $109,080,368).............. 90.7% $109,080,368
===== =============
CASH AND RECEIVABLES (NET)......................... 9.3% $11,200,789
===== =============
NET ASSETS .................................. 100.0% $120,281,157
===== =============
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS INSTITUTIONAL MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1994
MONEY GOVERNMENT
MARKET SECURITIES
SERIES SERIES
-------------- -------------
<S> <C> <C>
ASSETS:
Investments in securities, at value (including repurchase agreements
of $102,000,000 and $42,540,000 for the Money Market Series
and the Government Securities Series, respectively)_Note 2(a,b)....... $363,448,532 $109,080,368
Cash.................................................................... -- 438,205
Interest receivable..................................................... 543,242 861,831
Receivable for investment securities sold............................... -- 9,999,747
Prepaid expenses........................................................ 27,000 3,976
-------------- -------------
364,018,774 120,384,127
-------------- -------------
LIABILITIES:
Due to The Dreyfus Corporation.......................................... 138,975 50,604
Due to Custodian........................................................ 942,996 --
Accrued expenses........................................................ 111,458 52,366
-------------- -------------
1,193,429 102,970
-------------- -------------
NET ASSETS ..................................................... $362,825,345 $120,281,157
============= ============
REPRESENTED BY:
Paid-in capital......................................................... $363,072,278 $120,403,833
Accumulated net realized (loss) on investments.......................... (246,933) (122,676)
-------------- -------------
NET ASSETS at value applicable to 363,072,278 and 120,403,833 shares
outstanding (unlimited number of $.001 par value shares of
Beneficial Interest authorized)......................................... $362,825,345 $120,281,157
============= ============
NET ASSET VALUE, offering and redemption price per share:
Money Market Series
($362,825,345 / 363,072,278 shares)................................... $1.00
=====
Government Securities Series
($120,281,157 / 120,403,833 shares)................................... $1.00
=====
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS INSTITUTIONAL MONEY MARKET FUND
STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1994
MONEY GOVERNMENT
MARKET SECURITIES
SERIES SERIES
------------- ------------
<S> <C> <C>
INVESTMENT INCOME:
INTEREST INCOME......................................................... $14,736,847 $4,742,616
------------- ------------
EXPENSES--Note 2(c):
Management fee_Note 3(a).............................................. $ 1,745,382 $ 581,006
Shareholder servicing costs_Note 3(b)................................. 230,576 80,433
Custodian fees........................................................ 87,988 80,782
Professional fees..................................................... 52,649 24,377
Trustees' fees and expenses_Note 3(c)................................. 38,108 14,788
Registration fees..................................................... 30,159 7,432
Prospectus and shareholders' reports.................................. 9,410 3,979
Miscellaneous......................................................... 13,946 3,362
------------- ------------
TOTAL EXPENSES.................................................... 2,208,218 796,159
------------- ------------
INVESTMENT INCOME--NET...................................................... 12,528,629 3,946,457
NET REALIZED GAIN (LOSS) ON INVESTMENTS--Note 2(b).......................... (11,498) 8,900
------------- ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $12,517,131 $3,955,357
=========== ===========
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS INSTITUTIONAL MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
MONEY MARKET SERIES GOVERNMENT SECURITIES SERIES
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
----------------------------- -------------------------------
1993 1994 1993 1994
-------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Investment income_net.................. $ 10,211,576 $ 12,528,629 $ 4,408,137 $ 3,946,457
Net realized gain (loss) on investments 7,405 (11,498) 13,181 8,900
-------------- -------------- ------------- -------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS........ 10,218,981 12,517,131 4,421,318 3,955,357
-------------- -------------- ------------- -------------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income_net.................. (10,211,576) (12,528,629) (4,408,137) (3,946,457)
-------------- -------------- ------------- -------------
BENEFICIAL INTEREST TRANSACTIONS
($1.00 per share):
Net proceeds from shares sold.......... 5,849,191,027 3,974,164,559 695,721,400 451,323,605
Dividends reinvested................... 2,014,356 2,001,825 879,189 1,142,313
Cost of shares redeemed................ (5,826,609,515) (3,967,506,908) (754,181,180) $(466,767,213)
-------------- -------------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS. 24,595,868 8,659,476 (57,580,591) (14,301,295)
-------------- -------------- ------------- -------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 24,603,273 8,647,978 (57,567,410) (14,292,395)
NET ASSETS:
Beginning of year...................... 329,574,094 354,177,367 192,140,962 134,573,552
-------------- -------------- ------------- -------------
End of year............................ $ 354,177,367 $ 362,825,345 $ 134,573,552 $ 120,281,157
=============== =============== ============= =============
</TABLE>
See notes to financial statements.
DREYFUS INSTITUTIONAL MONEY MARKET FUND, Money Market Series
FINANCIAL HIGHLIGHTS
Reference is made to page 3 of the Fund's Prospectus dated May 1, 1995.
See notes to financial statements.
DREYFUS INSTITUTIONAL MONEY MARKET FUND, Government Securities Series
FINANCIAL HIGHLIGHTS
Reference is made to page 3 of the Fund's Prospectus dated May 1, 1995.
See notes to financial statements.
DREYFUS INSTITUTIONAL MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1--GENERAL:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a diversified open-end management investment company and operates as a
series company issuing two classes of Beneficial Interest: the Money Market
Series and the Government Securities Series. The Fund accounts separately for
the assets, liabilities and operations of each series. Dreyfus Service
Corporation, a wholly-owned subsidiary of The Dreyfus Corporation
("Manager"), until August 24, 1994, acted as the exclusive distributor of the
Fund's shares, which are sold to the public without a sales charge. Effective
August 24, 1994, the Manager became a direct subsidiary of Mellon Bank, N.A.
On August 24, 1994, Premier Mutual Fund Services, Inc. (the
"Distributor") was engaged as the Fund's distributor. The Distributor,
located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned
subsidiary of Institutional Administration Services, Inc., a provider of
mutual fund administration services, the parent company of which is Boston
Institutional Group, Inc.
It is the Fund's policy to maintain a continuous net asset value per
share of $1.00 for each series; the Fund has adopted certain investment,
portfolio valuation and dividend and distribution policies to enable it to do
so. There is no assurance, however, that the Fund will be able to maintain a
stable net asset value of $1.00.
NOTE 2--SIGNIFICANT ACCOUNTING POLICIES:
(A) PORTFOLIO VALUATION: Investments are valued at amortized cost, which
has been determined by the Fund's Board of Trustees 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 custodians 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) EXPENSES: Expenses directly attributable to each series are charged
to that series' operations; expenses which are applicable to both series are
allocated among them on a pro rata basis.
(D) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund, with respect
to both series, to declare dividends from investment income-net on each
business day; such dividends are paid monthly. Dividends from net realized
capital gain, with respect to both series, are normally declared and paid
annually, but each series may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code.
However, to the extent that a net realized capital gain of either series can
be reduced by a capital loss carryover of that series, such gain will not be
distributed.
DREYFUS INSTITUTIONAL MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(E) FEDERAL INCOME TAXES: It is the policy of each series to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income and
excise taxes.
The Money Market Series has an unused capital loss carryover of
approximately $247,000 available for Federal income tax purposes to be
applied against future net securities profits, if any, realized subsequent to
December 31, 1994. If not applied, $155,000 of the carryover expires in 1995,
$80,000 expires in 1996 and $12,000 expires in 2002.
The Government Securities Series has an unused capital loss carryover of
approximately $123,000 available for Federal income tax purposes to be
applied against future net securities profits, if any, realized subsequent to
December 31, 1994. If not applied, $35,000 of the carryover expires in 1995,
$24,000 expires in 1996 and $64,000 expires in 1997.
At December 31, 1994, the cost of investments of each series for Federal
income tax purposes was substantially the same as the cost for financial
reporting purposes (see the Statement of Investments).
NOTE 3--MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee for each series is computed at the annual rate of 1/2 of
1% of the average daily value of the net assets of each series and is payable
monthly.
The Agreement provides for an expense reimbursement from the Manager
should the aggregate expenses of either series, exclusive of taxes, interest
on borrowings, brokerage commissions and extraordinary expenses, exceed the
expense limitation of any state having jurisdiction over the Fund for any
full year. The most stringent state expense limitation applicable to each
series presently requires reimbursement of expenses in any full year that
such expenses (exclusive of distribution expenses and certain expenses as
described above) exceed 2 1/2% of the first $30 million, 2% of the next $70
million and 1 1/2% of the excess over $100 million of the average value of
each series' net assets in accordance with California "blue sky" regulations.
No expense reimbursement was required pursuant to the Agreement for the year
ended December 31, 1994.
(B) Pursuant to the Fund's Shareholder Services Plan, each series
reimburses Dreyfus Service Corporation an amount not to exceed an annual rate
of .25 of 1% of the value of a series' 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, 1994, the Money Market Series and the Government Securities
Series were charged an aggregate of $85,335 and $40,682, respectively,
pursuant to the Shareholder Services Plan.
(C) Prior to August 24, 1994, certain officers and trustees of the Fund
were "affiliated persons," as defined in the Act, of the Manager and/or
Dreyfus Service Corporation. Each trustee who is not an "affiliated person"
receives from the Fund an annual fee of $4,500 and an attendance fee of $500
per meeting.
DREYFUS INSTITUTIONAL MONEY MARKET FUND
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
DREYFUS INSTITUTIONAL MONEY MARKET FUND
We have audited the accompanying statement of assets and liabilities,
including the statements of investments, of Dreyfus Institutional Money
Market Fund (comprising, respectively, the Money Market Series and the
Government Securities Series) as of December 31, 1994, 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, 1994 by correspondence with the custodians
and others. 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 each of the respective series constituting the Dreyfus
Institutional Money Market Fund at December 31, 1994, the results of their
operations for the year then ended, the changes in their 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.
(Logo Signature)
New York, New York
February 2, 1995
