<PAGE> 1
- --------------------------------------------------------------------------------
ANNUAL REPORTS SEPTEMBER 30, 1996
COWEN STANDBY RESERVE
FUND, INC.
AND
COWEN STANDBY TAX-EXEMPT
RESERVE FUND, INC.
(COWEN LOGO)
COWEN & COMPANY
- --------------------------------------------------------------------------------
<PAGE> 2
COWEN STANDBY RESERVE FUND, INC.
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
ANNUAL FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
Chairman's Letter............................................................. 1
Statements of Investments:
Cowen Standby Reserve Fund, Inc. ........................................... 3
Cowen Standby Tax-Exempt Reserve Fund, Inc. ................................ 6
Statements of Assets and Liabilities..........................................19
Statements of Operations......................................................20
Statements of Changes in Net Assets...........................................21
Notes to Combined Financial Statements........................................22
Report of Ernst & Young LLP, Independent Auditors.............................26
<PAGE> 3
CHAIRMAN'S LETTER NOVEMBER 5, 1996
Dear Shareholder:
We are pleased to report that the managers of the Cowen Standby Reserve Fund
and the Cowen Standby Tax-Exempt Reserve Fund continued to produce competitive
yields throughout the annual period ended September 30, 1996. This performance
primarily reflects the managers' ability to attempt to maximize yield by
adjusting maturities within the portfolios, as perceptions of the economy and
its impact on interest rates changed. On September 30, 1996, the annualized
7-day yields provided by your Funds were 4.77% and 3.13%, respectively.
Market Activity
When the Federal Reserve Board cut interest rates by 1/2 of 1% this past
winter, general market expectations were that the economy was either close to or
in a recession and thus the Fed would have to continue to cut rates. Instead,
evidence unfolded in February of an economy no longer slowing. This resulted in
interest rates rising through spring and summer.
Beginning in the third calendar quarter, signs of an economic slowdown
emerged. Consumer spending had eased, higher mortgage rates were holding back
housing construction, and the pace of non-farm employment payroll increases had
abated. Even so, as we anticipated, short-term interest rates and the money
markets had entered a period of relative stability. The Federal Reserve Board,
in fact, has left the Fed Funds rate -- the rate banks charge each other for
overnight loans -- unchanged at 5.25% since January 1996.
Investment Review
To capture the higher incremental yields available from the end of January
through the end of September and to lock them in for a longer period of time, we
kept the Cowen Standby Reserve Fund's maturity longer than the IBC/Financial
Data industry average maturity for most of those months. Having extended to a
high of 85 days in the middle of March after rates had risen, the Fund's average
maturity stood at 46 days on September 30, 1996.
The same economic factors were at work in the tax-exempt market and thus we
followed a similar maturity adjustment strategy in the Cowen Standby Tax-Exempt
Reserve Fund. There was, however, an increase in short-term tax-exempt supply
issued this summer, primarily as a result of subsiding concerns over a major tax
system overhaul.
To lock in the higher yields that came with the higher supply, we chose to
extend the Fund's maturity from 31 days to 64 days in early July. On September
30, 1996, the Fund's average maturity stood at 44 days. The Fund's portfolio
continued to be composed 100% of investment grade municipal obligations, and
diversification remained broad, with securities held in 37 different states plus
Washington, D.C. and Puerto Rico as of fiscal year end.
In accordance with the requirements of the Internal Revenue Code, this is to
inform you that 100% of the dividends distributed by the Cowen Standby
Tax-Exempt Reserve Fund, Inc. during its fiscal year ended
--
1
<PAGE> 4
September 30, 1996 were exempt from Federal personal income taxes. After
December 31, 1996, you will receive a breakdown of income by state earned during
the year.
LOOKING AHEAD
We do not believe that the Federal Reserve Board will have to take action in
the near term. The economy seems to be maintaining slow but steady growth, and
inflation remains under control. We believe that short-term interest rates and
the money markets will likely remain in a period of relative stability. At the
same time, with little inflationary pressure, a strong dollar, and slow global
growth, there seems to be some room for interest rates to go lower. Our strategy
is to maintain an average days-to-maturity slightly longer than the industry
average.
As always, we appreciate your ongoing support of the Cowen Standby Reserve
Funds and look forward to serving your investment needs well into the future
with competitive yields, liquidity, and a high degree of safety.
Sincerely,
/s/ Joseph M. Cohen
Joseph M. Cohen
Chairman
--
2
<PAGE> 5
COWEN STANDBY RESERVE FUND, INC.
STATEMENT OF INVESTMENTS
SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL DESCRIPTION OF OF
AMOUNT SECURITY PURCHASE VALUE
<C> <S> <C> <C>
BANK NOTES - 2.72%
Bank of America
$30,000,000 10-22-1996 5.50% $30,000,000
-----------
Total Bank Notes
(Cost $30,000,000) $30,000,000
-----------
COMMERCIAL PAPER - 61.45%
AKZO Nobel Inc.
25,000,000 01-08-1997 5.64 $24,627,375
16,000,000 01-21-1997 5.63 15,729,209
American Brands Inc.
20,000,000 10-08-1996 5.51 19,979,583
American Home Food Products
14,500,000 10-11-1996 5.43 14,478,532
Bankers Trust
22,000,000 02-28-1997 5.72 21,500,417
Beta Finance Corp.
23,000,000 11-25-1996 5.61 22,807,790
Ciesco
35,000,000 11-15-1996 5.49 34,765,938
Citicorp
50,000,000 10-01-1996 6.00 50,000,000
Copley Financing
31,059,000 10-07-1996 5.44 31,031,461
22,000,000 11-08-1996 5.47 21,875,761
Countrywide Funding
16,000,000 10-07-1996 5.52 15,985,600
38,000,000 10-09-1996 5.49 37,954,653
Daimler - Benz N.A.
20,000,000 12-23-1996 5.65 19,747,311
20,000,000 02-04-1997 5.63 19,622,700
duPont
25,000,000 10-25-1996 5.47 24,911,333
Gillette Co.
6,100,000 10-01-1996 5.90 6,100,000
Merrill Lynch
11,000,000 11-13-1996 5.49 10,929,707
20,000,000 01-15-1997 5.65 19,680,822
</TABLE>
See notes to combined financial statements
--
3
<PAGE> 6
COWEN STANDBY RESERVE FUND, INC.
STATEMENT OF INVESTMENTS - (continued)
SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL DESCRIPTION OF OF
AMOUNT SECURITY PURCHASE VALUE
<C> <S> <C> <C>
COMMERCIAL PAPER - (CONTINUED)
Morgan Stanley Group
$46,000,000 10-07-1996 5.47% $45,958,983
Philip Morris, Co.
22,000,000 11-01-1996 5.49 21,899,026
27,500,000 11-15-1996 5.50 27,315,750
Riverwood Funding
30,000,000 10-11-1996 5.42 29,955,667
Sharp Electronics
16,000,000 11-15-1996 5.67 15,890,400
Three Rivers Funding
25,000,000 10-21-1996 5.55 24,924,444
14,533,000 10-22-1996 5.58 14,486,628
Transamerica Corp.
35,000,000 10-08-1996 5.45 34,963,863
Union Bank of Switzerland
50,000,000 10-01-1996 5.88 50,000,000
------------
Total Commercial Paper
(Cost $677,122,953) $677,122,953
------------
FLOATING RATE NOTES - 18.79%
Bayerische Landesbank
25,000,000 08-20-1997 5.5900(c) 25,000,000
Bear Stearns
20,000,000 11-04-1996 5.6320(c) 20,000,000
25,000,000 09-04-1997 5.4600(c) 25,000,000
Beta Finance Corp.
20,000,000 06-16-1997 5.4430(c) 20,000,000
Centurion Bank
22,000,000 11-12-1996 5.4540(b) 22,000,000
Canadian Imperial Bank of Commerce
20,000,000 08-06-1997 5.6350(c) 20,000,000
First National Bank of Maryland
25,000,000 10-23-1996 5.8120(b) 25,000,000
GMAC
25,000,000 11-21-1996 6.000(b) 25,014,044
</TABLE>
See notes to combined financial statements
--
4
<PAGE> 7
COWEN STANDBY RESERVE FUND, INC.
STATEMENT OF INVESTMENTS - (continued)
SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL DESCRIPTION OF OF
AMOUNT SECURITY PURCHASE VALUE
<C> <S> <C> <C>
FLOATING RATE NOTES - (CONTINUED)
PNC Bank of Kentucky
$25,000,000 03-24-1997 5.275%(a) $ 24,988,320
------------
Total Floating Rate Notes
(Cost $207,002,364) $207,002,364
------------
YANKEE CERTIFICATES OF DEPOSIT - 14.97%
Bank of Nova Scotia
30,000,000 12-16-1996 5.52 $30,004,947
Canadian Imperial Bank of Commerce
30,000,000 01-09-1997 5.50 30,000,000
Commerzbank U.S. Finance
20,000,000 01-21-1997 5.14 19,999,537
Deustche Bank
30,000,000 03-19-1997 5.70 30,000,000
Dresdner Bank (NY)
25,000,000 11-22-1996 5.13 25,000,145
National Westminster Bank
30,000,000 01-17-1997 5.56 30,007,289
------------
Total Yankee Certificates of Deposit
(Cost $165,011,918) $165,011,918
------------
U.S. TREASURY BILL - 1.78%
U.S. Treasury Bill
20,000,000 03-06-1997 5.07 $19,560,600
-----------
Total U.S. Treasury Bills
(Cost $19,560,000) $19,560,600
-----------
TOTAL INVESTMENTS
(Cost $1,098,697,835)......... 99.71% $1,098,697,835
Cash and Receivables,
Less Payables (net)........... 0.29% 3,246,575
------ ---------
Net Assets.................... 100.00% $1,101,944,410
====== ==============
</TABLE>
Notes:
(a) -- Fed. Fund rate instruments reflect rate as of 09-30-1996
(b) -- 1 Month Libor rate instruments reflect rate as of 09-30-1996
(c) -- 3 Month Libor rate instruments reflect rate as of 09-30-1996
See notes to combined financial statements
--
5
<PAGE> 8
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS
SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
<C> <S> <C> <C>
$2,900,000 Adams County, CO Industrial Development
Authority
Revenue Notes--City View Park Project
(7-Day Put, 7-Day Change)
12-01-2015 3.95%# $2,900,000
400,000 Alabama Special Care Facility
Montgomery Hospital Floating Rate Demand
Note
Series 1985
(7-Day Put, 7-Day Change)
04-01-2015 3.90# 400,000
2,000,000 Alaska State Housing Financing Corporation
Series A, Floating Rate Demand Note
(7-Day Put, 7-Day Change)
06-01-2026 3.85# 2,000,000
1,000,000 Alaska State Housing Financing Corporation
Series C, Floating Rate Demand Note
(7-Day Put, 7-Day Change)
06-01-2026 3.90# 1,000,000
2,235,000 Alaska State Industrial Development
Authority
Lot 6
(7-Day Put, 7-Day Change)
07-01-2001 4.00# 2,235,000
1,000,000 Allegheny County, PA, Hospital Development
Health Center, Presbyterian University
Series D
(Daily Put, 7-Day Change)
03-01-2020 3.85# 1,000,000
2,000,000 Alma, WI Pollution Control Revenue Bonds
Dairyland Power Co-Op Project
(7-Day Put, Monthly Change)
02-01-2015 3.80# 2,000,000
1,200,000 Arizona Health Facilities Authority Revenue
Bonds
(7-Day Put, 7-Day Change)
10-01-2015 3.90# 1,200,000
</TABLE>
See notes to combined financial statements
--
6
<PAGE> 9
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
<C> <S> <C> <C>
$1,300,000 City of Asheville, NC, Certificates of
Participation, Series 1993A
(7-Day Put, 7-Day Change)
07-01-2003 3.65%# $1,300,000
4,000,000 Baltimore County, MD General Obligation
Note
10-08-1996 3.50 4,000,000
1,750,000 City of Belleville, IL, Industrial
Development Revenue Refunding Bonds
(Wetterau Inc. Project), Series 1991
(7-Day Put, 7-Day Change)
12-01-2008 3.85# 1,750,000
1,000,000 Bethel Park, PA School District General
Obligation Bonds (Pre-refunded to 02-01-
1997 @ 100)
02-01-1999 3.65 1,010,085
600,000 Bexar County, TX Housing Finance
Corporation Park Hill Project Series 88-B
(7-Day Put, 7-Change)
06-01-2005 4.00# 600,000
1,100,000 Billings, MT Industrial Development Revenue
Note Adjustable Tender Notes
(7-Day Put, 7-Day Change)
12-01-2014 3.90# 1,100,000
480,000 Brewster, MA General Obligation Unlimited
Note
11-15-1996 3.78 481,848
2,000,000 Burke County, GA, Development Authority
Pollution Control Revenue Bonds-Oglethorpe
Project Georgia Power Company
(Mandatory Put 11-20-1996)
01-01-2025 3.50 2,000,000
1,300,000 Burlington, KS Pollution Control Revenue
Notes Kansas City Power and Light Project
(Mandatory Put 10-08-1996)
09-01-2015 3.45 1,300,000
</TABLE>
See notes to combined financial statements
--
7
<PAGE> 10
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
<C> <S> <C> <C>
$3,150,000 Burlington County, KS Pollution Control
Revenue Notes
Kansas City Power and Light Project
(Mandatory Put 11-07-1996)
10-01-2017 3.50% $3,150,000
1,100,000 Capital Industrial Development Corporation
of Texas
Series 1985, WL Gore & Assoc. Project
(Mandatory Put 10-22-1996)
12-01-2015 3.65 1,100,000
1,000,000 Chelan County, WA Public Utility District
Number 1
Conservation Revenue Hydroelectric Project
Series A
(7-Day Put, 7-Day Change)
06-01-2015 3.80# 1,000,000
1,100,000 Clark County, NV Airport Improvement
Revenue Bond Series A-1
(7-Day Put, 7-Day Change)
07-01-2025 3.80# 1,100,000
500,000 Clark County, NV, Industrial Development
Authority Nevada Power Company Series C
(7-Day Put, 7-Day Change)
10-01-2030 3.95# 500,000
1,500,000 Clarksville, TN Public Building Authority
Pooled Financial Series
(7-Day Put, 7-Day Change)
12-01-2000 3.80# 1,500,000
5,805,000 Clayton County, GA Housing Finance
Authority B
(7-Day Put, 7-Day Change)
01-01-2021 3.90# 5,805,000
</TABLE>
See notes to combined financial statements
--
8
<PAGE> 11
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
<C> <S> <C> <C>
$1,200,000 Columbia, AL Industrial Development
Authority Pollution Control Revenue Bonds,
Alabama Power Co Project, Series D
(Daily Put, Daily Change)
10-01-2022 3.85%# $1,200,000
4,000,000 State of Connecticut, Special Assessment
Unemployment Compensation Advance Fund
Revenue Bonds, (Connecticut Unemployment
Revenue Bonds) 1993 Series C
07-01-1997 3.90 4,000,000
2,000,000 Dade County, FL Housing Finance Authority
Miami Childrens Hospital Project
(7-Day Put, 7-Day Change)
09-01-2025 3.80# 2,000,000
1,990,000 Dade County, FL Housing Finance Authority
Waterside Project Series 2
(7-Day Put, 7-Day Change)
08-01-2005 4.15# 1,990,000
2,000,000 Davis County, UT School District Tax
Anticipation Notes, General Obligation
06-30-1997 3.85 2,009,326
800,000 De Kalb Private Hospital Authority,
Georgia, (Egleston Children's Hospital at
Emory University, Inc. Project) Revenue
Anticipation Certificates Series 1994A
(7-Day Put, 7-Day Change)
03-01-2024 3.80# 800,000
1,095,000 District of Columbia, Revenue Bonds, (The
American University Issue), Series 1986A
(7-Day Put, 7-Day Change)
12-01-2015 3.95# 1,095,000
4,000,000 Durham, NC, Certificates of
Participation--Series A
(7-Day Put, 7-Day Change)
07-01-2007) 3.65# 4,000,000
</TABLE>
See notes to combined financial statements
--
9
<PAGE> 12
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
<C> <S> <C> <C>
$1,300,000 Florida Housing Finance Agency--Reference
Multi-Family Housing EE, Twin Colony
Project
(7-Day Put, 7-Day Change)
09-01-2008 3.95%# $1,300,000
1,230,000 Florida Housing Finance Agency--Reference
Multi-Family Housing EEE Carlton Project
(7-Day Put, 7-Day Change)
12-01-2008 3.95# 1,230,000
3,200,000 Florida Housing Finance Agency--Reference
Multi-Family Hillsboro, Series D
(7-Day Put, 7-Day Change)
12-01-2009 4.20# 3,200,000
3,000,000 Government Development Bank of Puerto Rico
General Obligation Revenue Notes
10-07-1996 3.60 3,000,000
575,000 Grand River Dam Authority, OK, Revenue
Bonds Electric Power Revenue,
(Pre-refunded to 06-01-1997 @ 102)
06-01-2013 3.80 595,303
1,285,000 Grand River Dam Authority, OK, Revenue
Bonds Electric Power Revenue,
(Pre-refunded to 06-01-1997 @ 102)
06-01-2000 3.75 1,334,510
3,010,000 Greater Detroit, MI Research Recovery
Authority
Revenue Bonds Series A
12-13-1996 3.70 3,014,651
1,000,000 Greensboro, NC General Obligation Note
Public Improvements-Sewer Project, Series B
(7-Day Put, 7-Day Change)
04-01-2007 3.80# 1,000,000
2,100,000 Harris County, TX Health Facilities Revenue
Bonds
Texas Medical Center Project 92
(Daily Put, Daily Change)
02-15-2022 4.00# 2,100,000
</TABLE>
See notes to combined financial statements
--
10
<PAGE> 13
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
<C> <S> <C> <C>
$1,000,000 Illinois Health Facility Authority Revenue
Bonds Alexian Brothers Medical Center D
(Mandatory Put 11-20-1996)
01-01-2014 3.55% $1,000,000
300,000 Illinois Health Facility Authority Hospital
Revenue Bonds, (Sisters of Charity
Project), Series E
(7-Day Put, 7-Day Change)
12-01-2015 3.90# 300,000
1,500,000 Illinois State Toll Highway Authority
Highway Priority Revenue Bonds, Series B
(7-Day Put, 7-Day Change)
01-01-2010 3.80# 1,500,000
2,000,000 Indiana Bond Bank
Advance Funding Notes
01-09-1997 3.70 2,002,728
2,000,000 City of Indianapolis, IN, Multi-Family
Housing Revenue Refunding Bonds, (Canal
Square Project)
(7-Day Put, 7-Day Change)
12-01-2015 3.90# 2,000,000
2,300,000 Jacksonville, FL Electric Authority
Revenue Bonds Series AA
(Mandatory Put 10-04-1996)
10-01-2014 3.30 2,300,000
2,000,000 Jefferson County, KY Pollution Control
Revenue Bonds
Louisville Gas and Electric Project A
(Mandatory Put 10-10-1996)
09-01-2017 3.40 2,000,000
1,000,000 Jefferson County, KY Pollution Control
Revenue Bonds
Louisville Gas and Electric Project A
(Mandatory Put 11-07-1996)
09-01-2017 3.45 1,000,000
1,000,000 Lexington-Fayette Urban County, KY Public
Facilities Corporation, Mortgage Revenue
Notes
02-01-1997 3.75 1,002,015
</TABLE>
See notes to combined financial statements
--
11
<PAGE> 14
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
<C> <S> <C> <C>
$2,000,000 Los Angeles, CA Unified School District Tax
and Revenue Anticipation Notes
06-30-1997 3.80% $2,010,043
2,000,000 Louisa, VA Industrial Development
Corporation
Virginia Electric and Power Project
(Mandatory Put 10-15-1996)
12-01-2008 3.65 2,000,000
450,000 Louisiana Public Facilities Authority
Revenue Bonds--College & University
Equipment and Capital Series A
(7-Day Put, 7-Day Change)
09-01-2010 3.90# 450,000
1,500,000 Louisiana Public Facilities Authority,
Hospital Revenue CP Program
(7-Day Put, 7-Day Change)
12-01-2000 3.90# 1,500,000
4,100,000 Louisiana Public Facilities Authority Multi
Family Housing Revenue Bonds, (Willis
Knighton Medical Center Project) Series
1988
(7-Day Put, 7-Day Change)
09-01-2023 3.80# 4,100,000
200,000 Lynchburg, VA, Industrial Development
Authority Hospital Revenue Bonds, (VHA
Mid-Atlantic States, Inc. Capital Asset
Financing Project), Series 1985D
(7-Day Put, 7-Day Change)
12-01-2025 3.80# 200,000
2,000,000 Maine Municipal Bond Bank Note Series B
(Pre-refunded to 11-01-1996 @ 102)
11-01-2005 3.85 2,044,437
1,000,000 Maricopa County, AZ Pollution Control
Revenue Corp. Pollution Control Revenue
Notes, Southern California Edison, Palo
Verde Project Series G
(Mandatory Put 11-18-1996)
12-01-2009 3.60 1,000,000
</TABLE>
See notes to combined financial statements
--
12
<PAGE> 15
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
<C> <S> <C> <C>
----
-------------
$4,200,000 Maryland State Health and Higher Education
Facilities Authority Revenue Notes
(7-Day Put, 7-Day Change)
04-01-2035 3.80%# $4,200,000
2,000,000 Maryland State Health and Higher Education
Facilities Authority Revenue Notes
(7-Day Put, 7-Day Change)
07-01-2024 3.85# 2,000,000
700,000 Mason County, KY Pollution Control Revenue
Bonds Kentucky Power-National Rural
Electric Project Series B-1
(7-Day Put, 7-Day Change)
10-15-2014 3.95# 700,000
1,000,000 Massachusetts State Dedicated Income Tax
Bonds Fiscal Recovery Loan Act 1990, Series
B
(Daily Put, Daily Change)
12-01-1997 3.85# 1,000,000
1,510,000 Maui County, HI General Obligation
Unlimited Series A
(Pre-refunded to 10-01-1996 @ 101.5)
10-01-2005 3.30 1,532,650
1,000,000 Metropolitan Government of Nashville &
Davidson County, TN Electric Power and
Light Revenue Bonds
05-15-1997 3.70 1,005,414
3,000,000 Michigan State Building Authority Revenue
Notes University of Michigan Adult General
Hospital
(Pre-refunded to 12-01-1996 @ 102)
12-01-2004 3.60 3,080,520
2,000,000 Michigan State Hospital Finance Authority
Revenue Bonds, Hospital Equipment Loan
Program
(Pre-refunded to 12-01-1996 @ 102)
12-01-2013 3.70 2,051,251
</TABLE>
See notes to combined financial statements
--
13
<PAGE> 16
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
<C> <S> <C> <C>
$515,000 Michigan State Hospital Finance Authority
Revenue Bonds, Hospital Equipment Loan
Program
(7-Day Put, 7-Day Change)
06-01-2001 3.80%# $ 515,000
900,000 Missouri State Environmental Improvement
and Energy Research Authority, Pollution
Control Revenue Bonds National Rural
Utilities Project
(7-Day Put, 7-Day Change)
12-15-2003 3.95# 900,000
2,000,000 Montgomery County, MD, General Obligation
Bonds 1996 Series
10-08-1996 3.89 1,999,850
500,000 Montgomery County, PA General Obligation
Bonds 1994 Series A
(Mandatory Put 11-13-1996)
06-01-2029 3.55 500,000
2,000,000 Municipal Electric Authority of Georgia,
Revenue Bonds Series A
(Mandatory Put 12-13-1996)
01-01-2009 3.65 2,000,000
2,000,000 Municipal Electric Authority of Georgia,
Revenue Bonds Project One, Series 1994 D
(Mandatory Put 11-12-1996)
01-01-2022 3.60 2,000,000
2,000,000 New Hampshire Higher Education Facility
Authority, Veterans Housing Authority
Revenue Bonds Series E
(7-Day Put, 7-Day Change)
12-01-2025 3.85# 2,000,000
750,000 New Mexico Educational Assistance
Foundation Student Loan Revenue Series
Two-A
12-01-1996 3.95 750,179
550,000 New Mexico State Hospital Equipment Revenue
Bonds
(7-Day Put, 7-Day Change)
05-01-2009 3.85# 550,000
</TABLE>
See notes to combined financial statements
--
14
<PAGE> 17
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
<C> <S> <C> <C>
$3,500,000 New Orleans, LA, Aviation Revenue Bonds,
Series 1993B
(7-Day Put, 7-Day Change)
08-01-2016 3.70%# $3,500,000
2,000,000 New York, NY General Obligation Series B
11-06-1996 3.60 2,000,000
900,000 New York, NY General Obligation Series B-3
(Daily Put, Daily Change)
08-15-2004 4.05# 900,000
400,000 New York, NY General Obligation Series B
(Daily Put, Daily Change)
10-01-2020 4.00# 400,000
400,000 New York, NY General Obligation Series B
Subseries B4
(Daily Put, Daily Change)
08-15-2022 4.00# 400,000
1,600,000 Ohio State Air Quality Development
Authority Revenue Bonds, Series 1985-A
(Daily Put, Daily Change)
12-01-2015 4.00# 1,600,000
1,000,000 Ohio State Water Development Authority
Pollution Control Revenue Facilities
Cleveland Electric Series A
(Mandatory Put 10-09-1996)
03-01-2015 3.50 1,000,000
500,000 Orange County, FL Tax-Exempt Commercial
Paper Series A
11-12-1996 3.50 500,000
1,000,000 Person County, NC Industrial Facilities and
Pollution Control Finance Authority
Revenue-Carolina Power and Light Project
Series A
(7-Day Put, 7-Day Change)
11-01-2019 4.05# 1,000,000
3,000,000 Philadelphia, PA Gas Works Eleventh Series
A (Pre-refunded to 07-01-1997 @ 102)
07-01-2017 3.70 3,149,381
</TABLE>
See notes to combined financial statements
--
15
<PAGE> 18
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
<C> <S> <C> <C>
$2,715,000 Pima Country, AZ Community College District
Project of 1995, Series A
07-01-1997 3.90% $2,776,128
700,000 Pima County, AZ Industrial Development
Corporation Tucson Electric Corp. Series A
(7-Day Put, 7-Day Change)
06-15-2022 3.90# 700,000
2,000,000 Placquemines, LA Port, Harbor, and Terminal
Authority Variable Electric Coal Transfer
Project D
(Mandatory Put 11-13-1996)
09-01-2007 3.45 2,000,000
1,600,000 Platte County, WY Pollution Control Revenue
Bonds Tri-State G & T Project Series A
(Daily Put, Daily Change)
07-01-2014 4.10# 1,600,000
950,000 Richardson, TX Independent School District
General Obligation Notes Series A
(Pre-refunded to 10-01-1996 @ 102)
08-15-1997 3.825 975,542
3,000,000 Rockport, IN, Pollution Control Revenue
Notes Indiana-Michigan Power
Company-Project B
(7-Day Put, 7-Day Change)
06-01-2025 3.90# 3,000,000
1,000,000 Saint Claire County, AL, Industrial
Development Revenue Bonds (National Cement
Company, Inc. Project)
(7-Day Put, 7-Day Change)
03-01-2005 3.85# 1,000,000
2,500,000 Salt River Project, AZ Agricultural
Improvement
and Power District
01-16-1997 3.60 2,500,000
2,000,000 San Francisco, CA, City and County Unified
School District, Tax and Revenue
Anticipation Notes
07-24-1997 3.98 2,008,104
</TABLE>
See notes to combined financial statements
--
16
<PAGE> 19
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
<C> <S> <C> <C>
$500,000 Seattle, WA Municipal Light and Power
Authority Refunding Bonds
(Pre-refunded to 10-01-1996 @ 102)
10-01-2000 3.90% $ 510,000
500,000 Seattle, WA Water System Revenue Bonds
(7-Day Put, 7-Day Change)
09-01-2025 3.90# 500,000
2,800,000 Port of Seattle, Washington, General
Obligation Bonds
(7-Day Put, 7-Day Change)
01-01-2005 3.90# 2,800,000
1,000,000 City of Sheridan, AR, Industrial
Development Revenue Bonds, (H.H. Robertson
Co. Project), Series 1988A
(7-Day Put, 7-Day Change)
08-01-1998 3.85# 1,000,000
50,000 South Carolina Jobs Economic Development
Authority, Industrial Development Revenue
Bonds, Series 1987A
(Daily Put, 7-Day Change)
11-01-2007 3.95# 50,000
1,205,000 St. Louis, MO, Industrial Development
Authority Multi-Family Housing (Cedar Run
Apts. Project)
(7-Day Put, 7-Day Change)
02-01-2007 4.15# 1,205,000
950,000 Texas Higher Education Authority, Inc.
Series B
(7-Day Put, 7-Day Change)
12-01-2025 3.90# 950,000
980,000 Texas Hospital Equipment Financing
Authority Revenue Bonds
(7-Day Put, 7-Day Change)
04-07-2005 4.05# 980,000
1,900,000 Texas State General Obligation Note
Unlimited Refunding Bonds
12-01-1996 3.60 1,909,557
</TABLE>
See notes to combined financial statements
--
17
<PAGE> 20
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
DATE
PRINCIPAL OF
AMOUNT DESCRIPTION OF BOND PURCHASE VALUE
<C> <S> <C> <C>
$635,000 Washington State Higher Educational
Facilities Authority Revenue Bonds, Seattle
University Project
(Pre-refunded to 11-01-1996 @ 100)
11-01-1996 3.85% $ 636,358
580,000 Wisconsin State Health and Education
Authority Medical College of Wisconsin,
Inc. Project D
12-01-1996 3.83 582,412
-------------
TOTAL INVESTMENTS
(Cost $169,627,292)............. 99.17% $169,627,292
Cash and receivables, less
payables (net).................. 0.83% 1,428,202
---- ---------
Net Assets...................... 100.00% $171,055,494
====== ============
</TABLE>
- ---------------
Notes: #-Variable Rate Instruments Reflect Rate as of 09-30-1996
89.70% of the investment values above are supported by Letters of Credit,
guarantees or other credit enhancements.
See notes to combined financial statements
--
18
<PAGE> 21
STATEMENTS OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
COWEN STANDBY
COWEN STANDBY TAX-EXEMPT
RESERVE FUND, INC. RESERVE FUND, INC.
<S> <C> <C>
ASSETS
Investments in securities, at value - Note
A(1) $1,098,697,835 $169,627,292
Cash 458,616
Interest receivable 5,778,833 1,238,993
Prepaid expenses 68,263 30,624
-------------- ------------
TOTAL ASSETS 1,104,544,931 171,355,525
-------------- ------------
LIABILITIES
146,331
Due to Custodian
466,635 58,235
Due to investment manager - Note B
422,144 84,531
Accrued expenses
Dividends payable 1,565,411 157,265
-------------- ------------
TOTAL LIABILITIES 2,600,521 300,031
-------------- ------------
NET ASSETS $1,101,944,410 $171,055,494
============== ============
Represented By:
Paid-in capital $1,103,709,373 $171,074,179
Accumulated net realized loss on investments (1,764,963) (18,685)
-------------- ------------
NET ASSETS AT VALUE, applicable to
1,103,709,373 outstanding shares of $.01 par
value Common Stock for SRF and 171,074,179
outstanding shares of $.001 par value Common
Stock for STE (2,000,000,000 and
1,000,000,000 shares authorized for SRF and
STE, respectively) $1,101,944,410 $171,055,494
============== ============
Offering and redemption price per share $ 1.00 $ 1.00
============== ============
</TABLE>
See notes to combined financial statements
--
19
<PAGE> 22
STATEMENTS OF OPERATIONS
YEAR ENDED SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
COWEN STANDBY
COWEN STANDBY TAX-EXEMPT
RESERVE FUND, INC. RESERVE FUND, INC.
<S> <C> <C>
INVESTMENT INCOME
Interest income $58,486,827 $5,631,401
----------- ----------
EXPENSES
Investment management fee - Note B 5,266,603 784,964
Shareholder servicing costs and custodian fee 1,797,591 163,732
Federal and State registration fees 166,045 46,631
Professional fees 53,647 41,977
Directors' fees and expenses - Note B 20,999 21,253
Prospectus and shareholders' reports 62,390 4,525
Miscellaneous 73,358 13,134
----------- ----------
Total Expenses 7,440,633 1,076,216
Less: Investment management fee
waived - Note B -- (156,993)
----------- -----------
Net Expenses 7,440,633 919,223
----------- -----------
Investment Income - net 51,046,194 4,712,178
Net realized gain on investments 77,106 --
----------- -----------
Net Increase in Net Assets Resulting From
Operations $51,123,300 $4,712,178
=========== ==========
</TABLE>
See notes to combined financial statements
--
20
<PAGE> 23
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
COWEN STANDBY
COWEN STANDBY TAX-EXEMPT
RESERVE FUND, INC. RESERVE FUND, INC.
--------------------------------- -------------------------------
YEAR ENDED SEPTEMBER 30,
1996 1995 1996 1995
--------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS
Investment
income - net $ 51,046,194 $40,478,146 $ 4,712,178 $ 3,933,193
Net realized gain on
investments 77,106 141,897 -- --
--------------- ------------ ------------ ------------
Net increase in net
assets resulting
from operations 51,123,300 40,620,043 4,712,178 3,933,193
DIVIDENDS TO
SHAREHOLDERS FROM
Investment
income - net (51,046,194) (40,478,146) (4,712,178) (3,933,193)
COMMON STOCK
TRANSACTIONS
(NET) - NOTE C 210,979,736 198,136,691 48,519,374 1,832,138
-------------- ------------ ------------ -----------
Total increase in net
assets 211,056,842 198,278,588 48,519,374 1,832,138
NET ASSETS
Beginning of year 890,887,568 692,608,980 122,536,120 120,703,982
-------------- ------------ ------------ ------------
End of year $1,101,944,410 $890,887,568 $171,055,494 $122,536,120
============== ============ ============ ============
</TABLE>
See notes to combined financial statements
--
21
<PAGE> 24
COWEN STANDBY RESERVE FUND, INC. AND
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
NOTE A - SUMMARY OF SIGNIFICANT AC-COUNTING POLICIES: General: Cowen Standby
Reserve Fund, Inc. (SRF) and Cowen Standby Tax-Exempt Reserve Fund, Inc. (STE)
are each separately registered under the Investment Company Act of 1940, as
amended ("Act"), as diversified, open-end management companies. Cowen & Company
("Cowen") serves as each company's Investment Manager and acts as the exclusive
distributor of each company's shares, which are sold without a sales charge. It
is each company's policy to maintain a continuous net asset value per share of
$1.00; each company has adopted certain investment portfolio valuation and
dividend and distribution policies to enable it to do so.
(1) PORTFOLIO VALUATION: Each company values its investments at amortized
cost, which has been determined by the Board of Directors of each company to
represent the fair value of each company's investments.
(2) 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,
including amortization of premiums and discounts, is recorded on the accrual
basis. Cost of investments represents amortized cost.
(3) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: It is the policy of each
company to declare dividends from net investment income on each business day;
such dividends are paid through the business day preceding the next to last
Friday of the month except for December. In December, income dividends will be
paid through the last business day of the month. Distributions from net realized
capital gains, if any, are declared and paid annually after the end of the
fiscal year in which earned. To the extent that net realized capital gains can
be offset by capital loss carryovers, it is the policy of each company not to
distribute such gains.
(4) FEDERAL INCOME TAXES: It is the policy of each company to continue to
qualify as a regulated investment company, if such qualification is in the best
interests of its shareholders, by complying with the provisions available to
certain investment companies, as defined in applicable sections of the Internal
Revenue Code, and to make distributions of taxable income sufficient to relieve
it from all, or substantially all, Federal income taxes.
At September 30, 1996, the aggregate cost of investments for Federal income
tax purposes was substantially the same as the cost for financial reporting
purposes (see the Statements of Investments).
At September 30, 1996, SRF and STE had unused capital loss carryovers of
approximately $1,765,000 and $19,000, respectively, available for Federal income
tax purposes to be applied against future securities profits, if any. If not
applied, the carryovers expire in fiscal 2001 and in fiscal 2000, 2001 and 2002,
respectively.
NOTE B - INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES: Fees
paid by each company to Cowen pursuant to the provisions of Investment
Management Agreements are payable monthly, based on an annual rate of .50 of 1%,
of the average daily value of that company's net assets. The Agreements further
provide that if the aggregate expenses of either company, exclusive of interest,
taxes, brokerage and, with the prior written consent of the necessary state
securities commissions, extraordinary expenses, exceed the expense limitation of
any state having jurisdiction over that company, Cowen will reimburse the
company for such excess. The only state expense limitation applicable currently
requires reimbursement of expenses in any year that such expenses
--
22
<PAGE> 25
COWEN STANDBY RESERVE FUND, INC. AND
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS - (continued)
exceed 2 1/2% of the first $30 million of average net assets, 2% of the next $70
million of average net assets, and 1 1/2% of average net assets in excess of
$100 million, provided that in no event shall the amount of expense
reimbursement required be greater than the investment advisory fee. There was no
expense reimbursement required for either company for the year ended September
30, 1996, however, Cowen has waived $156,993 of its Investment Management Fee
from STE during such period.
Directors who are not officers, directors, partners, stockholders or employees
of Cowen or its affiliates
receive from each company a fee of $3,000 per annum plus $500 per meeting
attended and reimbursement for travel and out-of-pocket expenses.
NOTE C - COMMON STOCK TRANSACTIONS: At September 30, 1996, there were 2 billion
shares of $.01 par value Common Stock for SRF and 1 billion shares of $.001 par
value Common Stock of STE authorized.
Transactions in Common Stock were all at $1.00 per share and are summarized as
follows (000's omitted):
<TABLE>
<CAPTION>
SRF
---------------------------------------------
YEAR ENDED SEPTEMBER 30,
1996 1995
<S> <C> <C>
Shares sold 5,$093,876 3,$546,994
Dividends reinvested 48,575 38,739
------------- -------------
5,142,451 3,585,733
Shares redeemed (4,931,471) (3,387,596)
------------- -------------
Net increase $210,980 $198,137
============= =============
</TABLE>
<TABLE>
<CAPTION>
STE
---------------------------------------------
YEAR ENDED SEPTEMBER 30,
1996 1995
<S> <C> <C>
Shares sold 72$9,409 62$0,723
Dividends reinvested 4,508 3,765
----------- -----------
733,917 624,488
Shares redeemed (685,398) (622,656)
----------- -----------
Net increase 4$8,519 $1,832
=========== ===========
</TABLE>
--
23
<PAGE> 26
COWEN STANDBY RESERVE FUND, INC. AND
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS - (continued)
NOTE D - FINANCIAL HIGHLIGHTS: Selected data for a share of Common Stock
outstanding throughout each year:
<TABLE>
<CAPTION>
SRF
---------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
---------------------------------------------------------------
1996 1995 1994 1993 1992
----------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE
Beginning of Year $ 1.00 $1.00 $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.05 0.05 0.03 0.03 0.04
LESS DISTRIBUTIONS
Dividends from Net Investment Income (0.05) (0.05) (0.03) (0.03) (0.04)
---------- --------- --------- --------- ---------
NET ASSET VALUE
End of Year $ 1.00 $1.00 $1.00 $1.00 $1.00
========== ======== ========= ========= =========
Total Return 4.97% 5.23% 3.14% 3.07% 4.16%
RATIOS/SUPPLEMENTAL DATA
Net Assets (000 omitted) $1,101,944 $890,888 $ 692,609 $682,379 $ 667,366
Ratio of Expenses to Average Net Assets 0.71% 0.71% 0.64% 0.68% 0.70%
Ratio of Net Investment Income to Average Net
Assets 4.89% 5.13% 3.11% 3.00% 4.06%
</TABLE>
--
24
<PAGE> 27
COWEN STANDBY RESERVE FUND, INC. AND
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS - (continued)
NOTE D - (continued)
<TABLE>
<CAPTION>
STE
-------------------------------------------------------------
YEAR ENDED SEPTEMBER 30,
-------------------------------------------------------------
1996 1995 1994 1993 1992
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE
Beginning of Year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.03 0.03 0.02 0.02 0.03
LESS DISTRIBUTIONS
Dividends from Net Investment Income (0.03) (0.03) (0.02) (0.02) (0.03)
--------- --------- --------- --------- ---------
NET ASSET VALUE
End of Year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $1.00
========= ========= ========= ========= =========
Total Return 3.07% 3.19% 2.11% 2.03% 2.97%
RATIOS/SUPPLEMENTAL DATA
Net Assets (000 omitted) $ 171,055 $122,536 $ 120,704 $116,618 $118,389
Ratio of Expenses to Average Net Assets 0.59% 0.61% 0.58% 0.62% 0.61%
Ratio of Net Investment Income to Average Net
Assets 3.01% 3.14% 2.03% 1.99% 2.87%
INVESTMENT ADVISORY FEES WAIVED
Amount $ 156,993 $124,784 $ 130,483 $119,582 $130,414
Ratio to Average Net Assets 0.10% 0.10% 0.10% 0.10% 0.10%
</TABLE>
--
25
<PAGE> 28
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Stockholders and Boards of Directors
Cowen Standby Reserve Fund, Inc. and
Cowen Standby Tax-Exempt Reserve Fund, Inc.
We have audited the accompanying statements of assets and liabilities of Cowen
Standby Reserve Fund, Inc. and Cowen Standby Tax-Exempt Reserve Fund, Inc.,
including the statements of investments, as of September 30, 1996, and the
related statements of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended and the
financial highlights (see Note D) for each of the five years in the period then
ended. These financial statements and financial highlights are the
responsibility of each Company'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 these audits 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
September 30, 1996, by correspondence with the custodian. 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 Cowen
Standby Reserve Fund, Inc. and Cowen Standby Tax-Exempt Reserve Fund, Inc. at
September 30, 1996, 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 five years in the period then
ended, in conformity with generally accepted accounting principles.
/s/ ERNST & YOUNG LLP
New York, New York
October 29, 1996
--
26
<PAGE> 29
COWEN STANDBY RESERVE FUND, INC.
AND
COWEN STANDBY TAX-EXEMPT RESERVE FUND, INC.
Financial Square
New York, NY 10005
DIRECTORS
Joseph M. Cohen, Chairman
James H. Carey
Dr. Peter P. Gil
Dr. Martin J. Gruber
Gerald P. Kaminsky
Creighton H. Peet
Burton J. Weiss
OFFICERS
Joseph M. Cohen, Chairman of the Board of Directors and Chief Executive Officer
David R. Sarns, President
Creighton H. Peet, Treasurer and Chief Financial Officer
Rodd M. Baxter, Secretary
Gerald P. Kaminsky, Senior Investment Officer
Alan E. Koepplin, Investment Officer
Gordon G. Ifill, Assistant Investment Officer
Irwood Schlackman, Controller
<TABLE>
<S> <C>
INVESTMENT ADVISER CUSTODIAN
& DISTRIBUTOR & TRANSFER AGENT
Cowen & Company Investors Fiduciary Trust Company
Financial Square P.O. Box 419111
New York, NY 10005 Kansas City, MO 64141
LEGAL COUNSEL INDEPENDENT AUDITORS
Willkie Farr & Gallagher Ernst & Young LLP
One Citicorp Center 787 Seventh Avenue
153 East 53rd Street New York, NY 10019
New York, NY 10022
</TABLE>
CMB-RSRV
