Prudential Government Securities Trust
(Money Market Series-Class Z Shares)
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Prospectus dated January 29, 1996
(as supplemented March 1, 1996 and September 16, 1996)
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Prudential Government Securities Trust (the Trust) is a diversified, open-end
management investment company whose shares of beneficial interest are offered in
three series. Each series operates as a separate fund with its own investment
objectives and policies designed to meet its specific investment goals.
The investment objectives of the Money Market Series (the Series) are to obtain
high current income, preservation of capital and maintenance of liquidity by
investing principally in a diversified portfolio of short-term money-market
instruments issued or guaranteed by the United States Government or its agencies
or instrumentalities. There can be no assurance that the Series' investment
objective will be achieved. See "How the Trust Invests-Investment Objectives and
Policies."
An investment in the Series is neither insured nor guaranteed by the
U.S.Government and there can be no assurance that the Series will be able to
maintain a stable net asset value of $1.00 per share. See "How the Trust Values
its Shares."
The Trust's address is One Seaport Plaza, New York, New York 10292, and its
telephone number is (800) 225-1852.
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Class Z shares are offered exclusively for sale to a limited group of investors.
Only Class Z shares are offered through this Prospectus. The Series also offers
Class A shares through the attached Prospectus dated January 29, 1996 (the
Retail Class Prospectus) which is a part hereof.
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This Prospectus sets forth concisely the information about the Trust and the
Series that a prospective investor should know before investing. Additional
information about the Trust has been filed with the Securities and Exchange
Commission in a Statement of Additional Information, dated January 29, 1996,
which information is incorporated herein by reference (is legally considered a
part of this Prospectus) and is available without charge upon request to the
Trust at the address or telephone number noted above.
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Investors are advised to read this Prospectus and retain it for future
reference.
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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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FUND EXPENSES-MONEY MARKET SERIES-CLASS Z SHARES
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Shareholder Transaction Expenses
<TABLE>
<S> <C>
Maximum Sales Load Imposed on Purchases (as a percentage of offering price) ........... None
Maximum Sales Load or Deferred Sales Load Imposed on Reinvested Dividends ............. None
Deferred Sales Load (as a percentage of original purchase price or redemption proceeds,
whichever is lower) ................................................................... None
Redemption Fees ....................................................................... None
Exchange Fee .......................................................................... None
Annual Fund Operating Expenses*
(as a percentage of average net assets)
Management Fees ....................................................................... .400%
12b-1 Fees ............................................................................ None
Other Expenses ........................................................................ .255%
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Total Fund Operating Expenses .................................................... .655%
=====
</TABLE>
<TABLE>
<CAPTION>
Example* 1 Year 3 Years 5 Years 10 Years
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<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 invest-
ment, assuming (1) 5% annual return and (2) redemption at
the end of each time period:
Class Z ............................................ $ 7 $ 21 $ 36 $ 82
</TABLE>
The above example should not be considered a representation of past or future
expenses. Actual expenses may be greater or less than those shown.
The purpose of this table is to assist investors in understanding the various
costs and expenses that an investor in Class Z shares of the Series will bear,
whether directly or indirectly. For more complete descriptions of the various
costs and expenses, see "How the Trust is Managed." "Other Expenses" includes
operating expenses of the Series, such as Trustees' and professional fees,
registration fees, reports to shareholders, transfer agency and custodian fees
and franchise taxes.
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*Estimated based on expenses expected to have been incurred if Class Z shares
had been in existence during the fiscal year ended November 30, 1995.
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2
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The following information supplements "How the Trust is Managed-Distributor" in
the Retail Class Prospectus:
Prudential Securities serves as the Distributor of Class Z shares and incurs
the expenses of distributing the Series' Class Z shares under a Distribution
Agreement with the Trust, none of which is paid for or reimbursed by the Trust.
The following information supplements "Taxes, Dividends and Distributions-
Taxation of Shareholders" in the Retail Class Prospectus:
The Trust has obtained an opinion of counsel to the effect that the exchange
of one class of the Series' shares for the other class of its shares does not
constitute a taxable event for federal income tax purposes. However, such
opinion is not binding on the Internal Revenue Service.
The following information supplements "Shareholder Guide-How to Buy Shares of
the Trust" and "Shareholder Guide-How to Sell Your Shares" in the Retail Class
Prospectus:
Class Z shares of the Series are available for purchase by the following
categories of investors:
(i) pension, profit-sharing or other employee benefit plans qualified under
Section 401 of the Internal Revenue Code, deferred compensation and annuity
plans under Sections 457 and 403(b)(7) of the Internal Revenue Code, and
non-qualified plans for which the Series is an available option (collectively,
Benefit Plans), provided such Benefit Plans (in combination with other plans
sponsored by the same employer or group of related employers) have at least $50
million in defined contribution assets; (ii) participants in any fee-based
program sponsored by Prudential Securities or its affiliates which includes
mutual funds as investment options and for which the Series is an available
option; and (iii) investors who are, or have executed a letter of intent to
become, shareholders of any series of The Prudential Institutional Fund
(Institutional Fund) on or before one or more series of Institutional Fund
reorganize or who on that date have investments in certain products for which
Institutional Fund provides exchangeability. After a Benefit Plan qualifies to
purchase Class Z shares, all subsequent purchases will be for Class Z shares.
In connection with the sale of Class Z shares, the Manager, the Distributor
or one of their affiliates may pay dealers, financial advisers and other persons
which distribute shares a finders' fee based on a percentage of the net asset
value of shares by such persons. The following information supplements
"Shareholder Guide-How to Exchange Your Shares" in the Retail Class Prospectus:
Class Z shareholders of the Series may exchange their Class Z shares for
Class Z shares of other Prudential Mutual Funds on the basis of relative net
asset value. Shareholders who qualify to purchase Class Z shares (other than
participants in any fee-based program) will have their Class A shares exchanged
for Class Z shares on a quarterly basis. Participants in any fee-based program
for which the Fund is an available option will have their Class A shares, if
any, exchanged for Class Z shares when they elect to have those assets become a
part of the fee-based program. Upon leaving the program (whether voluntarily or
not), such Class Z shares (and, to the extent provided for in the program, Class
Z shares acquired through participation in the program) will be exchanged for
Class A shares at net asset value. Similarly, participants in the PSI 401(k)
Plan, an employee benefit plan sponsored by Prudential Securities (the PSI
401(k) Plan) for which the Series' Class Z shares are an available option and
who wish to transfer their Class Z shares out of the PSI 401(k) Plan following
separation from service (i.e., voluntary or involuntary termination of
employment or retirement) will have their Class Z shares exchanged for Class A
shares at net asset value. See "Shareholder Guide-How to Exchange Your Shares."
The information above also supplements the information under "Fund Highlights"
in the Retail Class Prospectus as appropriate.
3
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(Left Column)
No dealer, sales representative or any other person has been
authorized to give any information or to make any
representations, other than those contained in this
Prospectus, in connection with the offer contained in this
Prospectus, and, if given or made, such other information or
representations must not be relied upon as having been
authorized by the Trust or the Distributor. This Prospectus
does not constitute an offer by the Trust or by the
Distributor to sell or a solicitation of an offer to buy any
of the securities offered hereby in any jurisdiction to any
person to whom it is unlawful to make such offer in such
jurisdiction.
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TABLE OF CONTENTS
Page
TRUST HIGHLIGHTS................................. 2
Risk Factors and Special Characteristics...... 2
TRUST EXPENSES................................... 4
FINANCIAL HIGHLIGHTS............................. 5
CALCULATION OF YIELD............................. 6
HOW THE TRUST INVESTS............................ 6
Investment Objectives and Policies............ 6
Other Investments and Policies................ 7
Investment Restrictions ...................... 8
HOW THE TRUST IS MANAGED......................... 8
Manager....................................... 8
Distributor................................... 9
Portfolio Transactions........................ 10
Custodian and Transfer and
Dividend Disbursing Agent................. 10
HOW THE TRUST VALUES ITS SHARES.................. 10
TAXES, DIVIDENDS AND DISTRIBUTIONS............... 11
GENERAL INFORMATION.............................. 12
Description of Shares......................... 12
Additional Information........................ 12
SHAREHOLDER GUIDE................................ 13
How to Buy Shares of the Trust................ 13
How to Sell Your Shares....................... 15
How to Exchange Your Shares................... 17
Shareholder Services ......................... 18
THE PRUDENTIAL MUTUAL FUND FAMILY................ A-1
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100A 430144C
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CUSIP #: Class Z: 744342
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(Right Column)
Prudential
Government
Securities
Trust
(Money Market Series
Class Z Shares)
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Prudential Mutual Funds
BUILDING YOUR FUTURE
ON OUR STRENGTH SM
PROSPECTUS
January 29, 1996
as supplemented
on March 1, 1996
and September 16,
1996
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Prudential Government Securities Trust
Supplement dated September 16, 1996 to
Prospectus dated January 29, 1996 as supplemented March 1, 1996
The following information supplements "General Information-Description of
Shares" in the Prospectus:
Shares of the Money Market Series are currently divided into two classes
designated as Class A and Class Z shares. Each class represents an interest in
the same assets of the Series and is identical in all respects except that (i)
each class is subject to different expenses which may affect performance, (ii)
each class has exclusive voting rights on any matter submitted to shareholders
that relates solely to its arrangement and has separate voting rights on any
matters submitted to shareholders in which the interests of one class differ
from the interests of any other class, (iii) each class has a different exchange
privilege and (iv) Class Z shares are offered exclusively for sale to a limited
group of investors. For more information about Class Z shares, contact your
Prudential Securities financial adviser or Prusec representative or telephone
the Trust at (800) 225-1852. Participants in programs sponsored by Prudential
Retirement Services should contact their client representative for more
information about Class Z shares.
MF110C (9/16/96)
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Prudential Government Securities Trust
Supplement dated September 16, 1996 to
Statement of Additional Information dated
January 29, 1996 as supplemented March 1, 1996
The following information supplements "Shareholder Investment Account-Exchange
Privilege" in the Statement of Additional Information.
Class Z. Class Z shares may be exchanged for Class Z shares of other
Prudential Mutual Funds.
