SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (NO 2-74808)
UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. ____ [ ]
Post-Effective Amendment No. 22 [x]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 [x]
Amendment No. __ [ ]
Fidelity Institutional Cash Portfolios
(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, MA 02109
(Address of Principal Executive Offices) (Zip Code)
DC-134379.1
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Registrant's Telephone Number, Including Area Code (617)570-7000
Arthur Loring, Esq.
82 Devonshire Street
Boston, Massachusetts 02109
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
[ ] Immediately upon filing pursuant to paragraph (b) of Rule 485
[ ] On ( ) pursuant to paragraph (b) of Rule 485
[ ] 60 days after filing pursuant to paragraph (a) of Rule 485
[x ] On (May 20, 1994) pursuant to paragraph (a) of Rule 485
Registrant has filed a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940 and will file the notice required by such
Rule on or about May 30, 1994.
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FIDELITY INSTITUTIONAL CASH PORTFOLIOS: CLASS A
CROSS REFERENCE SHEET
NOTE: A combined Prospectus and Statement of Additional Information format,
subject to the rules of N-1A, has been utilized in the preparation of this
document.
Form N-1A Item Number
Part A Prospectus Caption
1 . . . . . . . . . . . Cover Page
2 a . . . . . . . . . . Summary of Portfolio Expenses
b,c . . . . . . . . . Summary of Portfolio Expenses
3 a . . . . . . . . . . Per-Share Data and Ratios
b . . . . . . . . . . *
c . . . . . . . . . . Performance
4 a(i) . . . . . . . . . The Fund and the Fidelity Organization
a(ii) . . . . . . . . Fund Summary; Investment Objective and
Policies; Portfolio Transactions; The Fund and
the Fidelity Organization; Investment
Limitations
b . . . . . . . . . . Investment Limitations
c . . . . . . . . . . Investment Objectives and Policies;
Suitability
5 a . . . . . . . . . . Trustees and Officers; Management Contracts,
Distribution Plans and Service Agreements
b,c . . . . . . . . . Management Contracts, Distribution Plans and
Service Agreements; Fund Summary;
d . . . . . . . . . . Management Contracts, Distribution Plans and
Service Agreements
e . . . . . . . . . . Summary of Portfolio Expenses; Management
Contracts, Distribution Plans and Service
Agreements; Trustees and Officers;
DC-134393.1
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f(i) . . . . . . . . . Portfolio Transactions
f(ii) . . . . . . . . *
6 a(i) . . . . . . . . . Investment Objective and Policies; The Fund
and the Fidelity Organization
a(ii) . . . . . . . . How to Invest, Exchange and Redeem
a(iii),b . . . . . . . The Fund and the Fidelity Organization
c,d . . . . . . . . . *
e . . . . . . . . . . Cover Page; How to Invest, Exchange and Redeem
f,g . . . . . . . . . Distributions and Taxes
7 a . . . . . . . . . . The Fund and the Fidelity Organization
b(i),(ii) . . . . . . How to Invest, Exchange and Redeem
b(iii),(iv),(v),(c) . *
d . . . . . . . . . . Fund Summary; How to Invest, Exchange and
Redeem
e . . . . . . . . . . *
f . . . . . . . . . . Management Contracts, Distribution Plans and
Service Agreements
8 a . . . . . . . . . . How to Invest, Exchange and Redeem
b . . . . . . . . . . *
c,d . . . . . . . . . How to Invest, Exchange and Redeem
9 . . . . . . . . . . . *
10 . . . . . . . . . . . Cover Page
11 . . . . . . . . . . . Table of Contents
12 . . . . . . . . . . . Financial Statements
13 a,b,c . . . . . . . . Fund Summary; Investment Objective and
Policies; Investment Limitations
d . . . . . . . . . . *
14 a,b . . . . . . . . . Trustees and Officers
c . . . . . . . . . . *
15 a,b . . . . . . . . . *
c . . . . . . . . . . Trustees and Officers
16 a(i) . . . . . . . . . The Fund and the Fidelity Organization
a(ii) . . . . . . . . Trustees and Officers
a(iii),b . . . . . . Management Contracts, Distribution Plans and
Service Agreements
c,d,e . . . . . . . . *
f . . . . . . . . . . Management Contracts, Distribution Plans and
Service Agreements
g . . . . . . . . . . *
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h . . . . . . . . . . The Fund and the Fidelity Organization
i . . . . . . . . . . Management Contracts, Distribution Plans and
Service Agreements
17 a . . . . . . . . . . Portfolio Transactions
b . . . . . . . . . . *
c,d . . . . . . . . . Portfolio Transactions
e . . . . . . . . . . *
18 a . . . . . . . . . . The Fund and the Fidelity Organization
b . . . . . . . . . . *
19 a,b . . . . . . . . . How to Invest, Exchange and Redeem
c . . . . . . . . . . *
20 . . . . . . . . . . . Distribution and Taxes
21 a(i),(ii) . . . . . . How to Invest, Exchange and Redeem; The Fund
and the Fidelity Organization
(iii),b,c . . . . . . *
22 . . . . . . . . . . . Performance
23 . . . . . . . . . . . Financial Statements for the fiscal year
ended March 31, 1994 will be filed by
subsequent amendment.
_______________
*Not Applicable
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FIDELITY INSTITUTIONAL CASH PORTFOLIOS - CLASS A
U.S. Treasury Portfolio
U.S. Treasury Portfolio II
U.S. Government Portfolio
Domestic Money Market Portfolio 82 Devonshire Street
Money Market Portfolio Boston, Massachusetts 02109
____________________________________________________________________________
PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION
Fidelity Institutional Cash Portfolios (the Fund) offers investors a
convenient and economical way to invest in professionally managed money
market portfolios (the Portfolios). Each Portfolio's objective is to obtain
as high a level of current income as is consistent with the preservation of
principal and liquidity within the standards prescribed for the Portfolio.
Each Portfolio is comprised of two classes of shares, Class A and Class B.
Both Classes share a common investment objective and investment portfolio.
Class A shares are offered by this Prospectus and Statement of Additional
Information to institutional and corporate investors. Class B shares are
offered by a separate prospectus.
An investment in the Portfolios is neither insured nor guaranteed by the
U.S. government and there can be no assurance that the Portfolios will
maintain a stable $1.00 share price.
This Prospectus and Statement of Additional Information is designed to
provide investors with information that they should know before investing.
Please read and retain this document for future reference. The Annual Report
to Shareholders of the Fund is incorporated herein. To obtain additional
copies of this document, please call the number below.
DC-132487.1
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Mutual fund shares are not deposits or obligations of, or endorsed or
guaranteed by, any bank, savings association, insured depository institution
or government agency, nor are they federally insured or otherwise protected
by the FDIC, the Federal Reserve Board, or any other agency. Investments in
the fund involve investment risk, including possible loss of principal. The
value of the investment and its return will fluctuate and are not
guaranteed. When sold, the value of the investment may be higher or lower
than the amount originally invested.
_________________________________________________________________
For further information, or assistance in opening a new account, please
call:
Nationwide 800-843-3001
_________________________________________________________________
TABLE OF CONTENTS
SUMMARY OF EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . ^
FUND SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ^
PER-SHARE DATA AND RATIOS . . . . . . . . . . . . . . . . . . . . . . . . ^
INVESTMENT OBJECTIVE AND POLICIES . . . . . . . . . . . . . . . . . . . . ^
SUITABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ^
HOW TO INVEST, EXCHANGE AND REDEEM . . . . . . . . . . . . . . . . . . . ^
DISTRIBUTIONS AND TAXES . . . . . . . . . . . . . . . . . . . . . . . . . ^
INVESTMENT LIMITATIONS . . . . . . . . . . . . . . . . . . . . . . . . . ^
DESCRIPTION OF INVESTMENT PRACTICES . . . . . . . . . . . . . . . . . . . ^
PORTFOLIO TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . ^
PERFORMANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ^
MANAGEMENT CONTRACTS, DISTRIBUTION PLANS AND SERVICE AGREEMENTS . . . . . ^
DESCRIPTION OF THE FUND . . . . . . . . . . . . . . . . . . . . . . . . . ^
APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ^
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . .
^ _________________________________________________________________
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
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UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
May ^ 20, 1994
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SUMMARY OF EXPENSES
The purpose of the table below is to assist investors in understanding the
various costs and expenses that an investor in Class A shares would bear
directly or indirectly. The expense summary format below was developed for
use by all mutual funds to help investors make their investment decisions.
Of course you should consider this expense information along with other
important information such as each Portfolio's investment objective and its
past performance. There are no transaction expenses associated with
purchases, exchanges and redemptions of shares.
A. Annual Operating Expenses (as a percentage of average net assets) for
each of the Portfolios:
U.S. Domestic
U.S. Treasury U.S. Money Money
Treasury Portfolio Government Market Market
Portfolio II Portfolio Portfolio Portfolio
Management
Fee
Other
Expenses
Total
Operating
Expenses
* net of reimbursement
B. Example: An investor 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:
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1 Year 3 Years 5 Years 10 Years
$2 $6 $10 $23
Explanation of Table:
A. Annual Operating Expenses. Management fees are based on the Portfolios'
historical expenses after reimbursement. Management fees are paid by each
Portfolio to Fidelity Management & Research Company ("FMR" or the "Adviser")
for managing its investments and business affairs. The Portfolios incur
other expenses for maintaining shareholder records, furnishing shareholder
statements and reports, and other services. Subject to revision upon 90
days' notice to shareholders, FMR has agreed to reimburse each Portfolio if
and to the extent that total operating expenses (excluding interest, taxes,
brokerage commissions, extraordinary expenses, and 12b-1 fees payable by
Class B of each Portfolio's shares) exceed an annual rate of .18% of the
Portfolio's average net assets. If FMR had not reimbursed each Portfolio,
the respective Management Fees and Total Operating Expenses for Class A of
the Portfolios would have been: % and % for U.S. Treasury Portfolio; %
and % for U.S. Treasury Portfolio II; % and % for U.S. Government
Portfolio; % and % for Domestic Money Market Portfolio; and % and %
for Money Market Portfolio. Please refer to the section: "Management
Contracts, Distribution Plans and Service Agreements" on page ^__ for
further information.
B. Example of Expenses. The hypothetical example illustrates the expenses
associated with a $1,000 investment over periods of 1, 3, 5 and 10 years,
based on the expenses in the table and an assumed annual rate of return of
5%. These figures reflect FMR's voluntary reimbursement of expenses over
.18% for each Portfolio. The return of 5% and expenses should not be
considered indications of actual or expected performance or expenses, both
of which may vary.
FUND SUMMARY
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Investment Objective and Policies. Fidelity Institutional Cash Portfolios,
an open-end management investment company, offers institutional and
corporate investors a convenient and economical way to invest in a choice of
five professionally managed money market portfolios. Each Portfolio's
objective is to obtain as high a level of current income as is consistent
with the preservation of principal and liquidity within the standards
prescribed for the Portfolio.
U.S. Treasury Portfolio and U.S. Treasury Portfolio II. Comprised of
obligations which are issued or guaranteed as to principal and interest by
the U.S. government and thus constitute direct obligations of the United
States of America.
U.S. Government Portfolio. Comprised of obligations issued or guaranteed as
to principal and interest by the U.S. government, its agencies or
instrumentalities (U.S. government obligations).
Domestic Money Market Portfolio. Comprised of highest quality, U.S.
dollar-denominated money market obligations of domestic issuers only. Under
normal conditions more than 25% of the Portfolio's total assets will be
invested in obligations of companies in the financial services industry.
Money Market Portfolio. Comprised of a broad range of high quality U.S.
dollar-denominated money market obligations of domestic and foreign issuers.
Under normal conditions more than 25% of the Portfolio's total assets will
be invested in obligations of companies in the financial services industry.
Each Portfolio may engage in repurchase agreements and reverse repurchase
agreements; however, U.S. Treasury Portfolio II does not currently intend to
engage in reverse repurchase agreements. Domestic Money Market Portfolio and
Money Market Portfolio may purchase restricted securities. Other permitted
investments of these two Portfolios may include bankers' acceptances,
certificates of deposit, time deposits and commercial paper, and each
Portfolio may invest in variable rate obligations. See "Investment Objective
and Policies," page ^__ and "Description of Investment Practices," page ^__,
for further information on each Portfolio's permitted investments.
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Investing in the Fund. The Portfolios' shares of beneficial interest may be
purchased at the next determined net asset value per share (NAV). Each
Portfolio requires a minimum initial investment of $5,000,000. Additional
investments may be made in any amount. For immediate acceptance of purchase
orders, federal funds must be transmitted. See "How to Invest," page ^__.
Redemption of Investment. Investors may redeem all or any part of the value
of their accounts by instructing a Portfolio to redeem shares as described
under "How to Redeem" on page ^__. Redemptions may be requested by telephone
and are effected at the NAV next determined after receipt and acceptance of
the request. Funds will be redeemed by wire to the investor's designated
bank account.
Investment Adviser. Fidelity Management & Research Company is the investment
adviser to the Fund. FMR, one of the largest investment management
organizations in the U.S., serves as investment adviser to investment
companies which had aggregate net assets of more than ^ $___ billion and
approximately ^____ million shareholder accounts as of April 30, ^ 1994. FMR
has entered into a sub-advisory agreement with FMR Texas Inc. (FMR Texas), a
subsidiary of FMR, pursuant to which FMR Texas has primary responsibility
for providing portfolio investment management services to each Portfolio.
See "Management Contracts, Distribution Plans and Service Agreements," page
^__.
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PER-SHARE DATA AND RATIOS
The tables below give information about each Portfolio's financial
history. They use the Portfolios' fiscal year (which ends March 31) and
express the information in terms of a single share outstanding throughout
the periods shown. The per-share data and ratios have been audited by _____
______, independent accountants. Their unqualified report is included on
page ^__.
[To be filed by subsequent amendment]
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INVESTMENT OBJECTIVE AND POLICIES
The investment objective of each Portfolio is to obtain as high a level of
current income as is consistent with the preservation of principal and
liquidity within the standards prescribed for the Portfolio. There is no
assurance that a Portfolio will achieve its investment objective.
The Fund consists of five individual Portfolios, differentiated in terms of
their permitted investments or investment techniques. Each Portfolio seeks
to maintain a $1.00 share price at all times. The permitted investments of
the Portfolios are as follows:
U.S. Treasury Portfolio II (Treasury Portfolio II) currently maintains an
operating policy of investing 100% of its total assets in U.S. Treasury
bills, notes and bonds and repurchase agreements backed by those
obligations.
U.S. Treasury Portfolio (Treasury Portfolio) currently maintains an
operating policy of investing at least 65% of its total assets in U.S.
Treasury bills, notes and bonds and repurchase agreements backed by those
obligations. The balance of its assets may be invested in other direct
obligations of the United States.
. Each of the above operating policies for Treasury Portfolio II and
Treasury Portfolio may be changed upon 90 days' notice to shareholders.
In the case of such notification, each Portfolio would be permitted to
invest in instruments which are issued or guaranteed as to principal
and interest by the U.S. government and thus constitute direct
obligations of the United States. Such direct U.S. government
obligations include such instruments as U.S. Treasury bills, notes and
bonds and instruments issued by such Federal agencies as the
Export-Import Bank of the U.S., the General Services Administration,
the Government National Mortgage Association, the Small Business
Administration and the Washington Metropolitan Area Transit Authority.
The Portfolios will not invest in securities issued or guaranteed by
U.S. government agencies, instrumentalities, or government-sponsored
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enterprises that are not backed by the full faith and credit of the
United States of America.
U.S. Government Portfolio (Government Portfolio) invests in U.S. government
obligations issued or guaranteed as to principal and interest by the U.S.
government, including bills, notes, bonds and other U.S. Treasury debt
securities; and instruments issued by U.S. government instrumentalities or
agencies (agency obligations). These instruments include:
. ^ obligations of the Federal Home Loan Banks, Federal Farm Credit
Banks, and Federal National Mortgage Association, which are backed only
by the right of the issuer to borrow from the U.S. Treasury under
certain circumstances or are backed by the credit of the agency or
instrumentality issuing the obligation. Such agency obligations are not
deemed direct obligations of the United States of America, and
therefore involve more risk.
Domestic Money Market Portfolio (Domestic Portfolio) invests in U.S.
dollar-denominated money market instruments of domestic issuers rated in the
highest rating category by at least two nationally recognized rating
services, or by one if only one rating service has rated an obligation. The
Portfolio may purchase unrated obligations determined to be of equivalent
quality pursuant to procedures adopted by the Board of Trustees. The
Portfolio's investments include:
. ^ obligations of companies in the financial services industry,
including domestic banks, savings and loan associations, consumer and
industrial finance companies, securities brokerage companies and a
variety of firms in the insurance field. (These obligations include
time deposits, certificates of deposit, bankers' acceptances and
commercial paper.) Under normal conditions, the Portfolio will invest
more than 25% of its total assets in obligations of companies in the
financial services industry.
. ^ obligations of governments and their agencies and instrumentalities.
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<PAGE>
. ^ short-term corporate obligations, including commercial paper, notes
and bonds.
. ^ other short-term debt obligations.
Money Market Portfolio invests in high quality, U.S. dollar-denominated
money market instruments of domestic and foreign issuers, such as:
. ^ obligations of companies in the financial services industry,
including domestic banks, savings and loan associations, consumer and
industrial finance companies, securities brokerage companies and a
variety of firms in the insurance field. (These obligations include
time deposits, certificates of deposit, bankers' acceptances and
commercial paper.) Under normal conditions, the Portfolio will invest
more than 25% of its total assets in obligations of companies in the
financial services industry.
. ^ obligations of governments and their agencies and instrumentalities.
. ^ short-term corporate obligations, including commercial paper, notes
and bonds.
. ^ other short-term debt obligations.
To the extent that either Domestic Portfolio or Money Market Portfolio
invests more than 25% of its assets in obligations of companies in the
financial services industry, it will be exposed to greater risks associated
with that industry as a whole. Domestic Portfolio and Money Market Portfolio
may invest in restricted securities. In addition, Money Market Portfolio may
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invest in obligations of U.S. banks, foreign branches of U.S. and foreign
banks (Eurodollars), U.S. branches and agencies of foreign banks (Yankee
dollars). Eurodollar and Yankee dollar investments involve risks that are
different from investments in securities of U.S. banks. (See "Description of
Investment Practices," beginning on page ^__ .)
Regulatory Requirements. The following is a brief summary of regulatory
requirements applicable to all money market funds which limit certain of the
Portfolios' investment policies, though some of the Portfolios may follow
more restrictive policies as described above.
. ^ Quality. Pursuant to procedures adopted by the Board of Trustees,
each Portfolio may purchase only high quality securities that FMR
believes present minimal credit risks. To be considered high quality, a
security must be: a U.S. government security; rated in accordance with
applicable rules in one of the two highest categories for short-term
securities by at least two nationally recognized rating services (or by
one, if only one rating service has rated the security); or, if
unrated, judged to be of equivalent quality by FMR.
High quality securities are divided into "first tier" and "second tier"
securities. First tier securities have received the highest rating
(e.g., S&P A-1 rating) from at least two rating services (or one, if
only one has rated the security). Second tier securities have received
ratings within the two highest categories (e.g., S&P A-1 or A-2) from
at least two rating services (or one, if only one has rated the
security), but do not qualify as first tier securities. If a security
has been assigned different ratings by different rating services, at
least two rating services must have assigned the higher rating in order
for FMR to determine eligibility on the basis of that higher rating.
Based on procedures adopted by the Board of Trustees, FMR may determine
that an unrated security is of equivalent quality to a rated first or
second tier security.
^ Money Market Portfolio may not invest more than 5% of its total
assets in second tier securities. In addition, Money Market Portfolio
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may not invest more than 1% of its total assets or $1 million
(whichever is greater) in the second tier securities of a single
issuer.
. ^ Maturity. Each Portfolio must limit its investments to securities
with remaining maturities of 397 days or less and must maintain a
dollar-weighted average maturity of 90 days or less.
. ^ Diversification. Domestic Portfolio or Money Market Portfolio
normally may not invest more than 5% of its total assets in the
securities (other than U.S. government securities) of any single
issuer. Under certain conditions, however, each Portfolio may invest up
to 10% of its total assets in the first tier securities of a single
issuer for up to three days.
Investment Techniques. Each Portfolio may engage in repurchase agreements
with respect to any of its portfolio securities. Each Portfolio, except
Treasury Portfolio II, also may engage in reverse repurchase agreements to
raise cash temporarily or to attempt to increase income. Shareholders of
Treasury Portfolio II will be notified should the Portfolio change its
policies concerning reverse repurchase agreements.
See "Description of Investment Practices" on page ^__ for further
information on the Portfolios' investment techniques, including repurchase
and reverse repurchase agreements, and the "Appendix" on page ^__ for a
description of rating categories.
The investment objective and policies set forth above are supplemented by
the Fund's investment limitations beginning on page ^__. Each Portfolio's
objective is fundamental; however, its investment policies and limitations,
unless otherwise indicated, are not fundamental, and may be changed without
shareholder approval.
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<PAGE>
SUITABILITY
The Fund is designed as an economical and convenient vehicle for those
institutional and corporate investors with cash balances or cash reserves
seeking to obtain the yields available from money market instruments while
maintaining liquidity. The ability to select from among the Portfolios
allows investors to choose that Portfolio, or combination of Portfolios,
which best suits their particular investment goals.
Each Portfolio's ability to achieve its investment objective depends on the
quality and maturity of its investments. Although the Portfolios' policies
are designed to maintain a stable $1.00 share price, all money market
instruments can change in value when interest rates or issuers'
creditworthiness change, or if an issuer or a guarantor of a security fails
to pay interest or principal when due. If these changes in value were large
enough, a Portfolio's share price could fall below $1.00. In general,
securities with longer maturities are more vulnerable to price changes,
although they may provide higher yields.
The Fund offers the advantages of large purchasing power and
diversification. Generally, in purchasing money market instruments from
dealers, the percentage difference between the bid and asked prices tends to
decrease as the size of the transaction increases. The Fund also offers
investors the opportunity to participate in a portfolio of money market
instruments which is more diversified in terms of issuers and maturities
than the size the investor's investment might otherwise permit.
Investment in the Fund relieves the investor of many management and
administrative burdens usually associated with the direct purchase and sale
of money market instruments. These include selection of portfolio
investments; surveying the market for the best terms at which to buy and
sell; scheduling and monitoring maturities and reinvestments; receipt,
delivery and safekeeping of securities; and portfolio recordkeeping.
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HOW TO INVEST, EXCHANGE AND REDEEM
Shares of each Portfolio are offered continuously and may be purchased at
the NAV next determined after an order is received and accepted. The
Portfolios do not impose any sales charges in connection with purchases of
their shares, although institutions may charge their clients fees in
connection with purchases and sales for the accounts of their clients. The
Fund may discontinue offering its shares generally in any Portfolio or in
any particular state without notice to shareholders. Investments in the
Portfolios must be made using the Federal Reserve Wire System. Checks will
not be accepted as a means of investment.
Share Price and Dividends. The NAV for each Portfolio is determined by
Fidelity Service Co. (Service), 82 Devonshire Street, Boston, MA 02109 as of
3:00 p.m., Eastern time, each day the Portfolios are open for business. (See
"Holiday Schedule" on page ^__.) The NAV of each Portfolio is determined by
adding the value of all securities and other assets of the Portfolio,
deducting its actual and accrued liabilities allocated to each class of
shares, and dividing by the number of shares outstanding in a class. (See
"How Net Asset Value is Determined" on page ^__).
Each Class' net interest income for dividend purposes is determined by
Service on a daily basis and shall be payable to shareholders of record at
the time of its declaration (including, for this purpose, holders of shares
purchased, but excluding holders of shares redeemed on that day). Income
dividends declared are accrued daily throughout the month and are
distributed in the form of full and fractional shares of the applicable
class on the first business day of the following month. Based on prior
approval of the Fund, dividends relating to shares redeemed during the month
can be distributed in the form of full and fractional shares on the day of
redemption. The Fund reserves the right to limit this service. The
shareholder may elect to receive monthly dividends in cash.
Minimum Investment and Account Balance. The minimum initial investment to
establish a new account in each Portfolio is $5,000,000. Subsequent
investments may be made in any amount. To keep an account open, please leave
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$5,000,000 in it. If an account balance falls below $5,000,000 due to
redemption, the account may be closed and the proceeds wired to the bank
account of record. An investor will be given 30 days' notice that the
account will be closed unless an additional investment is made to increase
the account balance to the $5,000,000 minimum.
How to Invest. An initial investment in a Portfolio must be preceded or
accompanied by a completed, signed application. Unless you already have a
Fidelity mutual fund account, you must complete and sign the application.
The application should be forwarded to:
Fidelity Institutional Cash Portfolios
FIIOC, ZR5
P.O. Box 1182
Boston, MA 02103-1182
An investor must purchase shares of each Portfolio by wire. For wiring
information and instructions, investors should call the institution through
which they trade or Fidelity Client Services. There is no charge imposed by
the Fund for the wire; however, banks may charge a fee for this services.
In order to receive same day acceptance of the investment, investors must
telephone Institutional Trading before 3:00 p.m., Eastern time, on days the
Portfolios are open for business, to advise them of the wire and to place
the trade.
Fidelity Client Services:
Nationwide . . . . . . . . . . . . . . . . . . . . . . . . 800-843-3001
Institutional Trading:
Nationwide . . . . . . . . . . . . . . . . . . . . . . . . 800-343-6310
In Massachusetts . . . . . . . . . . . . . . . . . . . . . 800-462-2603
Investors will be entitled to the dividend declared by a Portfolio provided
the Portfolio's custodian bank receives the wire by the close of the Federal
Reserve Wire System on the day the purchase order is accepted. Investors are
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advised to wire funds as early in the day as possible, and to provide
advance notice to Institutional Trading for large transactions.
How to Exchange. Each Portfolio's shares may be exchanged (subject to the
minimum initial investment requirement) at no charge for Class A shares of
any other Portfolio of the Fund or for shares of Fidelity Institutional
Tax-Exempt Cash Portfolios, provided the portfolio to be acquired is
registered in an investor's state. You may only exchange between accounts
that are registered in the same name, address, and taxpayer identification
number. Exchanges will not be permitted until a completed and signed mutual
fund application is on file. Investors should consult the prospectus of the
portfolio to be acquired to determine eligibility and suitability.
To Exchange by Telephone. Exchanges may be requested on any day the
Portfolios are open for business by calling Institutional Trading before
3:00 p.m. Eastern time at the numbers listed.
To Exchange by Mail. Written requests for exchanges should contain the
Portfolio name, account number, and number of shares to be redeemed, and the
Portfolio name of the shares to be purchased. The letter must be signed by a
person authorized to act on the account and must include a signature
guarantee. Signature guarantees will be accepted from banks, brokers,
dealers, municipal securities dealers, municipal securities brokers,
government securities dealers, government securities brokers, credit unions
(if authorized under state law), national securities associations, clearing
agencies and savings associations. Letters should be sent to Fidelity Client
Services at the address shown.
An exchange involves the redemption of all or a portion of the shares of one
portfolio and the purchase of shares in another portfolio. Shares will be
redeemed at the next determined NAV following receipt of the exchange order.
Shares of the portfolio to be acquired will be purchased at its next
determined NAV after redemption proceeds are made available. Investors will
earn dividends in the acquired portfolio in accordance with the portfolio's
customary policy, normally on the day the exchange request is received.
Investors should note that under certain circumstances, a Portfolio may take
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up to seven days to make redemption proceeds available for the exchange
purchase of shares of another Portfolio.
Pursuant to Rule 11a-3 under the Investment Company Act of 1940 (the 1940
Act), each Portfolio is required to give shareholders at least 60 days'
notice prior to terminating or modifying a Portfolio's exchange privilege.
Under Rule 11a-3, the 60-day notification requirement may be waived if (i)
the only effect of a modification would be to reduce or eliminate an
administrative fee, redemption fee or deferred sales charge ordinarily
payable at the time of exchange, or (ii) a Portfolio suspends the redemption
of the shares to be exchanged ^as permitted under the 1940 Act or ^the rules
and regulations thereunder, ^or the Portfolio to be acquired suspends sale
of its shares because it is unable to invest amounts effectively in
accordance with its investment objective and policies.
In this Prospectus and Statement of Additional Information, each Portfolio
notifies shareholders that it reserves the right at any time without prior
notice to refuse exchange purchases by any person or group, if, in FMR's
judgment, the Portfolio would be unable to invest effectively in accordance
with its investment objective and policies or might otherwise be adversely
affected.
The exchange privilege may be modified or terminated in the future.
How to Redeem. Shareholders may redeem all or any part of the value of their
account(s) on any business day. Redemptions may be requested by telephone
and are effected at the NAV next determined after receipt of the redemption
request.
Shareholders must designate on their applications their U.S. commercial bank
account(s) into which they wish the proceeds of redemptions to be deposited.
A shareholder may change the bank account(s) designated to receive amounts
redeemed at any time prior to making a redemption request. A letter of
instruction, including a signature guarantee, should be sent to Client
Services.
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<PAGE>
Redemption proceeds will be wired via the Federal Reserve Wire System to a
bank account of record on the same day a redemption request is received,
provided it is made before 3:00 p.m. Eastern time. Shares redeemed will not
receive the dividend declared on the day of redemption. Redemption requests
can be made by calling Institutional Trading:
Nationwide . . . . . . . . . . . . . . . . . . . . . . . . 800-343-6310
In Massachusetts . . . . . . . . . . . . . . . . . . . . . 800-462-2603
There is no charge imposed for wiring of redemption proceeds.
If shares redeemed represent an investment made via clearing house funds,
each Portfolio reserves the right to withhold the redemption proceeds until
it is reasonably assured of the crediting of such funds to its account.
Under the 1940 Act, the right of redemption may be suspended or the date of
payment postponed for more than seven days at times when the New York Stock
Exchange (NYSE) is closed, other than customary weekend or holiday closings,
or when trading on the NYSE is restricted, or under certain emergency
circumstances as determined by the SEC. If investors are unable to execute a
transaction by telephone (for example, during time of unusual market
activity) they may consider placing their orders by mail. In case of the
suspension of the right of redemption, investors may either withdraw their
requests for redemption or receive payment based on the NAV next determined
after termination of the suspension.
Additional Information. ^ Investors may initiate many transactions by
telephone. Note that Fidelity will not be responsible for any losses
resulting from unauthorized transactions if it follows reasonable procedures
designed to verify the identity of the caller. Fidelity will request
personalized security codes or other information, and may also record calls.
Investors should verify the accuracy of their confirmation statements
immediately after receiving them. If an investor does not want the ability
to redeem and exchange by telephone, call Fidelity for instructions.
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<PAGE>
To allow the Adviser to manage the Portfolios most effectively, investors
are strongly urged to initiate all trades (investments, exchanges or
redemptions of shares) as early in the day as possible and to notify
Fidelity Client Services at least one day in advance of transactions in
excess of $5 million. In making these trade requests, the name of the
registered shareholder and the account number must be supplied for each
transaction. To protect each Portfolio's performance and shareholders, the
Adviser discourages frequent trading in response to short-term market
fluctuations.
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are valued in
computing each Portfolio's NAV. Shareholders receiving securities or other
property on redemption may realize a gain or loss for tax purposes, and will
incur any costs of sale, as well as the associated inconveniences.
Each Portfolio reserves the right to suspend the offering of shares for a
period of time, and each Portfolio reserves the right to reject any specific
purchase order including certain purchases by exchange. Purchase orders may
be refused if, in FMR's opinion, they are of a size that would disrupt
management of the Portfolios. Each Portfolio may discontinue offering its
shares at any time or in any particular state without notice to
shareholders.
Investor Accounts. Fidelity Investments Institutional Operations Company
(FIIOC) is the transfer, dividend disbursing and shareholder servicing agent
for the Fund and maintains an account for each investor expressed in terms
of full and fractional shares of each Portfolio rounded to the nearest
1/1000th of a share.
The Fund does not issue share certificates, but FIIOC will send investors a
confirmation statement after every transaction (except a reinvestment of
dividends or capital gains) that affects the share balance or the account
registration. After the end of each month, FIIOC will send each investor a
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statement setting forth the transactions in their account for the month and
the month-end balance of full and fractional shares held in the account.
Subaccounting and Special Services. Special processing has been arranged
with FIIOC for banks, corporations and other institutions that wish to open
multiple accounts (a master account and subaccounts). An investor wishing to
utilize FIIOC's subaccounting facilities or other special services for
individual or multiple accounts will be required to enter into a separate
agreement with FIIOC. Charges for these services, if any, will be determined
on the basis of the level of services to be rendered. Subaccounts may be
opened with the initial investment or at a later date.
Holiday Schedule. Each Portfolio is open for business and its NAV is
calculated every day that both the Federal Reserve Bank of New York (New York
Fed) and the NYSE are open for trading. The following holiday closings have
been scheduled for ^ 1994: Dr. Martin Luther King, Jr. Day (observed),
Presidents' Day, Good Friday, Memorial Day (observed), Independence Day
(observed), Labor Day, Columbus Day, Veterans' Day, Thanksgiving Day and
Christmas Day (observed). Although FMR expects the same holiday schedule,
with the addition of New Year's Day, to be observed in the future, the
New York Fed or the NYSE may modify its holiday schedule at any time. ^ The
right is reserved to advance the time on that day by which purchase and
redemption orders must be received on any day that: (1) the New York Fed or
the NYSE closes early or, in the case of U.S. Treasury Portfolio II, the
principal government securities markets close early, such as on days in
advance of holidays generally observed by participants in such markets; (2)
if in FMR's judgment, early closing is deemed to be in the best interest of
each Portfolio's shareholders; or, (3) as permitted by the SEC. To the
extent that each Portfolio's securities are traded in other markets on days
the New York Fed or the NYSE is closed, each Portfolio's NAV may be affected
when investors do not have access to the Portfolio to purchase or redeem
shares. Certain Fidelity funds may follow different holiday closing
schedules.
How Net Asset Value is Determined. Each Portfolio values its investments on
the basis of amortized cost. This technique involves valuing an instrument
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at its cost as adjusted for amortization of premium or accretion of discount
rather than its value based on current market quotations or appropriate
substitutes which reflect current market conditions. The amortized cost
value of an instrument may be higher or lower than the price a Portfolio
would receive if it sold the instrument.
Valuing a Portfolio's instruments on the basis of amortized cost and use of
the term "money market fund" are permitted by Rule 2a-7 under the 1940 Act.
The Portfolios must adhere to certain conditions under Rule 2a-7; these
conditions are summarized under "Regulatory Requirements" on page ^__.
The Board of Trustees of the Fund oversees FMR's adherence to SEC rules
concerning money market funds, and has established procedures designed to
stabilize each Portfolio's NAV for each class at $1.00. At such intervals as
they may deem appropriate, the Trustees consider the extent to which NAV
calculated by using market valuations would deviate from $1.00. If the
Trustees believe that a deviation from a Portfolio's amortized cost per
share may result in material dilution or other unfair results to
shareholders, the Trustees have agreed to take such corrective action, if
any, as they deem appropriate to eliminate or reduce, to the extent
reasonably practicable, the dilution or unfair results. Such corrective
action could include selling portfolio instruments prior to maturity to
realize capital gains or losses or to shorten average portfolio maturity;
withholding dividends; redeeming shares in kind; establishing NAV by using
available market quotations; and such other measures as the Trustees may
deem appropriate.
During periods of declining interest rates, a Portfolio's yield based on
amortized cost may be higher than a yield based on market valuations. Under
these circumstances, a shareholder in a Portfolio would be able to obtain a
somewhat higher yield than would result if the Portfolio utilized market
valuations to determine its NAV. The converse would apply in a period of
rising interest rates.
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<PAGE>
DISTRIBUTIONS AND TAXES
Dividends. Each Portfolio ordinarily declares dividends from net investment
income daily and pays such dividends monthly. Each Portfolio intends to
distribute substantially all of its net investment income and capital gains,
if any, to shareholders within each calendar year as well as on a fiscal
year basis.
Dividends from the Portfolios will not normally qualify for the
dividends-received deduction available to corporations, since a Portfolio's
income is primarily derived from interest income and short-term capital
gains. Depending upon state law, a portion of each Portfolio's dividends
attributable to interest income derived from U.S. government securities may
be exempt from state and local taxation. The Portfolios will provide
information on the portion of each Portfolio's dividends, if any, that
qualify for this exemption.
Capital Gain Distributions. The Portfolios may distribute short-term capital
gains once a year or more often as necessary to maintain their NAV at $1.00
per share or to comply with distribution requirements under federal tax law.
The Portfolios do not anticipate earning long-term capital gains on
securities held by the Portfolios.
Federal Taxes. Dividends derived from net investment income and short-term
capital gains are taxable as ordinary income. Distributions are taxable when
paid, whether investors receive distributions in cash or reinvest them in
additional shares, except that distributions declared in December and paid
in January are taxable as if paid on December 31st. The Portfolios will send
investors an IRS Form 1099-DIV by January 31st showing their taxable
distributions for the past calendar year.
State and Local Tax Issues. For mutual funds organized as business trusts,
most states' laws provide for a pass-through of the state and local income
tax exemption afforded to direct owners of U.S. government securities.
Therefore, for residents of most states, the tax treatment of your dividend
distributions from U.S. Treasury Portfolio, U.S. Treasury Portfolio II, and
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<PAGE>
U.S. Government Portfolio will be treated the same as if you directly owned
your proportionate share of each Portfolio's portfolio securities. Thus,
because the income earned on most U.S. government securities in which these
Portfolios invest is exempt from state and local income taxes in most
states, the portion of your dividends from each Portfolio attributable to
these securities will also be free from income taxes in those states.
Pennsylvania does not provide for this benefit, and some states may limit
the benefit. However, legislation providing for a pass-through has been
approved by the Pennsylvania legislature which, if signed by the Governor,
would be retroactive to January 1, 1993. In addition, certain types of
securities, such as repurchase agreements and certain agency backed
securities, may not qualify for the government interest exemption on a
state-by-state basis. The exemption from state and local income taxation
does not preclude states from asserting other taxes on the ownership of U.S.
government securities.
Tax Status of the Fund. Each Portfolio has qualified and intends to continue
to qualify as a "regulated investment company" under the Internal Revenue
Code of 1986, as amended (the Code), so that a Portfolio will not be liable
for federal income or excise taxes on net investment income or capital gains
to the extent that these are distributed to shareholders in accordance with
applicable provisions of the Code.
Other Tax Information. The information above is only a summary of some of
the federal tax consequences generally affecting a Portfolio and its
shareholders, and no attempt has been made to discuss individual tax
consequences. In addition to federal ^ tax, investors may be subject to
state or local taxes on their investment. Investors should consult their tax
advisors to determine whether a Portfolio is suitable to their particular
tax situation.
When investors sign their account application, they will be asked to certify
that their social security or taxpayer identification number is correct and
that they are not subject to 31% backup withholding for failing to report
income to the IRS. If investors violate IRS regulations, the IRS can require
a Portfolio to withhold 31% of taxable distributions and redemptions.
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<PAGE>
Issuers of tax-exempt bonds should note that, although the U.S. Treasury has
adopted rules which allow certain issuers of tax-exempt bonds to take into
account qualified administrative costs in determining payments and receipts
on non-purpose investments, there is no assurance that expenses of a
Portfolio will meet this standard. Such issuers should consult their own
tax counsel before investing.
INVESTMENT LIMITATIONS
Unless otherwise noted, whenever an investment policy or limitation states a
maximum percentage of a Portfolio's assets that may be invested in any
security or other asset or sets forth a policy regarding quality standards,
such standard or percentage limitation shall be determined immediately after
and as a result of a Portfolio's acquisition of such security or other
asset. Accordingly, any subsequent change in values, net assets or other
circumstances will not be considered when determining whether the investment
complies with a Portfolio's investment policies and limitations.
The Portfolios' fundamental investment policies and limitations may not be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the 1940 Act) of the Portfolios. However, except
for the fundamental investment limitations set forth below, the investment
policies and limitations described in this combined Prospectus and Statement
of Additional Information are not fundamental and may be changed without
shareholder approval. The following are the Portfolios' fundamental
investment limitations set forth in their entirety. Each Portfolio may not:
(1) purchase the securities of any issuer (other than obligations issued or
guaranteed as to principal and interest by the government of the United
States, its agencies or instrumentalities) if, as a result, more than
5% of its total assets would be invested in the securities of such
issuer, provided, however, that with respect to 25% of its total
assets, 10% of its assets may be invested in the securities of an
issuer;
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<PAGE>
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the Portfolio may (i) borrow money for
temporary or emergency purposes (not for leveraging or investment) and
(ii) engage in reverse repurchase agreements for any purpose; provided
that (i) and (ii) in combination do not exceed 33 1/3% of the value of
the Portfolio's total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays
and holidays) to the extent necessary to comply with the 33 1/3%
limitation;
(4) underwrite securities issued by others, except to the extent that the
Portfolio may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the Portfolio's
total assets would be invested in the securities of companies whose
principal business activities are in the same industry, except that
Domestic Portfolio and Money Market Portfolio will invest more than 25%
of its total assets in the financial services industry;
(6) buy or sell real estate;
(7) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to
repurchase agreements;
(8) invest in oil, gas, or other mineral exploration or development
programs; or
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<PAGE>
(9) invest in companies for the purpose of exercising control or
management.
(10) Each Portfolio may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company with substantially the
same fundamental investment objectives, policies and limitations as the
Portfolio.
The following limitations are not fundamental, and may be changed without
shareholder approval:
(i) Domestic Portfolio and Money Market Portfolio each do not currently
intend to purchase a security (other than a security issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 5% of its total
assets would be invested in the securities of a single issuer;
provided that the Portfolio may invest up to 10% of its total
assets in the first tier securities of a single issuer for up to
three business days.
(ii) Each Portfolio does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(iii) Each Portfolio does not currently intend to purchase securities on
margin, except that the Portfolio may obtain such short-term
credits as are necessary for the clearance of transactions, and
provided that margin payments in connection with futures contracts
and options on futures contracts shall not constitute purchasing
securities on margin.
(iv) Each Portfolio may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
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affiliate serves as investment adviser or (b) by engaging in
reverse repurchase agreements with any party. Each Portfolio will
not purchase any security while borrowings (excluding reverse
repurchase agreements) representing more than 5% of its total
assets are outstanding. Each Portfolio will not borrow from other
funds advised by FMR or its affiliates if total outstanding
borrowings immediately after such borrowing would exceed 15% of the
Portfolio's total assets. Treasury Portfolio II does not currently
intend to engage in reverse repurchase agreements.
(v) Each Portfolio does not currently intend to purchase any security
if, as a result, more than 10% of its net assets would be invested
in securities that are deemed to be illiquid because they are
subject to legal or contractual restrictions on resale or because
they cannot be sold or disposed of in the ordinary course of
business at approximately the prices at which they are valued.
(vi) Subject to 60 days' notice to its shareholders, each Portfolio does
not currently intend to purchase or sell futures contracts or call
options. This limitation does not apply to options attached to, or
acquired or traded together with, their underlying securities and
does not apply to securities that incorporate features similar to
options or futures contracts.
(vii) Domestic Portfolio and Money Market Portfolio do not currently
intend to lend assets other than securities to other parties,
except by lending money (up to 10% of each Portfolio's net assets)
to a registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser. (This limitation does not
apply to purchases of debt securities or to repurchase agreements.)
(viii) Each Portfolio does not currently intend to (a) purchase securities
of other investment companies, except in the open market where no
commission except the ordinary broker's commission is paid, or (b)
purchase or retain securities issued by other open-end investment
companies. Limitations (a) and (b) do not apply to securities
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<PAGE>
received as dividends, through offers of exchange, or as a result
of a reorganization, consolidation, or merger.
(ix) Treasury Portfolio, Treasury Portfolio II and Government Portfolio
do not currently intend to make loans, but this limitation does not
apply to purchases of debt securities or to repurchase agreements.
(x) Each Portfolio does not currently intend to invest in securities of
real estate investment trusts that are not readily marketable, or
to invest in securities of real estate limited partnerships that
are not listed on the New York Stock Exchange or the American Stock
Exchange or traded on the NASDAQ National Market System.
(xi) Each Portfolio does not currently intend to purchase the securities
of any issuer if those officers and Trustees of the Fund and those
officers and directors of FMR who individually own more than 1/2 of
1% of the securities of such issuer together own more than 5% of
such issuer's securities.
(xii) Each Portfolio does not currently intend to invest in oil, gas, or
other mineral exploration or development programs or leases.
(xiii) Each Portfolio does not currently intend to invest all of its
assets in the securities of a single open-end management investment
company with substantially the same fundamental investment
objectives, policies, and limitations as the Portfolio.
DESCRIPTION OF INVESTMENT PRACTICES
The following paragraphs provide a brief description of securities in which
the Portfolios may invest and transactions they may make. The Portfolios are
not limited by this discussion, however, and may purchase other types of
securities and enter into other types of transactions if they are consistent
with the Portfolios' investment objective and policies.
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Affiliated Bank Transactions. ^ A Portfolio may engage in transactions with
financial institutions that are, or may be considered to be, "affiliated
persons" of the ^ Portfolio under the Investment Company Act of 1940. These
transactions may include repurchase agreements with custodian banks; ^
short-term obligations of, and repurchase agreements with, the 50 largest
U.S. banks (measured by deposits); ^ municipal securities; ^ U.S. government
securities with affiliated ^ financial institutions that are primary dealers
in these securities; short-term currency transactions; and short-term
borrowings. In accordance with exemptive orders issued by the Securities
and Exchange Commission, the Board of Trustees has established and
periodically reviews procedures applicable to transactions involving
affiliated financial institutions.
Asset-Backed Securities may include pools of mortgages, loans, receivables
or other assets. Payment of principal and interest may be largely dependent
upon the cash flows generated by the assets backing the securities, and, in
certain cases, supported by letters of credit, surety bonds, or other credit
enhancements. The value of asset-backed securities may also be affected by
the creditworthiness of the servicing agent for the pool, the originator of
the loans or receivables, or the financial institution(s) providing the
credit support.
Bankers' Acceptances. Negotiable obligations of a bank to pay a draft which
has been drawn on it by a customer. These obligations are backed by large
banks and usually are backed by goods in international trade.
Certificates of Deposit. Negotiable certificates representing a commercial
bank's obligations to repay funds deposited with it, earning specified
rates of interest over a given period of time.
Commercial Paper. Short-term obligations issued by banks, broker-dealers,
corporations and other entities for purposes such as financing their current
operations.
Corporate Obligations. Bonds and notes issued by corporations and other
business organizations in order to finance their long-term credit needs.
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Delayed Delivery Transactions. Each Portfolio may buy and sell securities on
a delayed delivery or when-issued basis. These transactions involve a
commitment by a Portfolio to purchase or sell specific securities at a
predetermined price and/or yield with payment and delivery taking place
after the customary settlement period for that type of security (and more
than seven days in the future). Typically, no interest accrues to the
purchaser until the security is delivered.
When purchasing securities on a delayed delivery basis, each Portfolio
assumes the rights and risks of ownership, including the risk of price and
yield fluctuations. Because a Portfolio is not required to pay for
securities until the delivery date, these risks are in addition to the risks
associated with the Portfolio's other investments. If a Portfolio remains
substantially fully invested at a time when delayed delivery purchases are
outstanding, the delayed delivery purchases may result in a form of
leverage. When delayed delivery purchases are outstanding, the Portfolio
will set aside appropriate liquid assets in a segregated custodial account
to cover its purchase obligations. When a Portfolio has sold a security on a
delayed delivery basis, the Portfolio does not participate in further gains
or losses with respect to the security. If the other party to a delayed
delivery transaction fails to deliver or pay for the securities, the
Portfolio could miss a favorable price or yield opportunity, or could suffer
a loss.
Each Portfolio may renegotiate delayed delivery transactions after they are
entered into, and may sell underlying securities before they are delivered,
which may result in capital gains or losses.
Financial Services Industry. Because Domestic Portfolio and Money Market
Portfolio concentrate more than 25% of their respective total assets in the
financial services industry, their performance may be affected by conditions
affecting banks and other financial services companies. Companies in the
financial services industry are subject to various risks related to that
industry, such as governmental regulation, changes in interest rates, and
exposure on loans, including loans to foreign borrowers. Investments in the
financial services industry may include obligations of foreign and domestic
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<PAGE>
banks, savings and loan associations, consumer and industrial finance
companies, securities brokerage companies, leasing companies, and a variety
of firms in the insurance field. These obligations include time deposits,
certificates of deposit, bankers' acceptances, and commercial paper.
Foreign Securities. Eurodollar and Yankee dollar investments of Money Market
Portfolio risks include future unfavorable political and economic
developments, possible withholding taxes, seizure of foreign deposits,
currency controls, interest limitations or other governmental restrictions
which might affect payment of principal or interest. Additionally, there may
be less public information available about foreign banks and their branches
than is available with respect to domestic banks. Foreign branches of
foreign banks are not regulated by U.S. banking authorities, and generally
are not bound by accounting, auditing and financial reporting standards
comparable to U.S. banks. Although the Adviser carefully considers these
factors when making investments, the Money Market Portfolio does not limit
the amount of its assets which can be invested in any one type of instrument
or in any foreign country.
Illiquid Investments. ^ Illiquid Investments are investments that cannot be
sold or disposed of in the ordinary course of business at approximately the
prices at which they are valued. Under the supervision of the Board of
Trustees, FMR determines the liquidity of a Portfolio's investments and,
through reports from FMR, the Board monitors investments in illiquid
instruments. In determining the liquidity of each Portfolio's investments,
FMR may consider various factors including (1) the frequency of trades and
quotations,(2) the number of dealers and prospective purchasers in the
marketplace, (3) dealer undertakings to make a market, (4) the nature of the
security (including any demand or tender features) and (5) the nature of the
marketplace for trades (including the ability to assign or offset the
Portfolio's rights and obligations relating to the investment). Investments
currently considered by the Portfolios to be illiquid include repurchase
agreements not entitling the holder to payment of principal and interest
within seven days. Also, for Domestic Money Market Portfolio and Money
Market Portfolio FMR may determine some restricted securities and time
deposits ^ to be illiquid. In the absence of market quotations illiquid
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<PAGE>
investments are priced at fair value as determined in good faith by a
committee appointed by the Board of Trustees. If through a change in
values, net assets or other circumstances, a Portfolio were in a position
where more than 10% of its net assets were invested in illiquid securities,
it would seek to take appropriate steps to protect liquidity.
Interfund Borrowing Program. The Portfolios have received permission from
the SEC to lend money to and borrow money from other funds advised by FMR or
its affiliates. Interfund loans and borrowings normally will extend
overnight, but can have a maximum duration of seven days. Treasury
Portfolio, Treasury Portfolio II and Government Portfolio will participate
in this interfund lending program only as borrowers. Each Portfolio will
borrow through the program only when costs are equal to or lower than the
cost of bank loans. Domestic Money Market and Money Market Portfolio will
lend through the program only when the returns are higher than those
available at the same time from other short-term instruments (such as
repurchase agreements). Each Portfolio that may lend will not lend more than
10% of its net assets to other funds and no Portfolio will borrow through
the program if, after doing so, its total outstanding borrowings would
exceed 15% of total assets. Loans may be called on one day's notice and a
Portfolio may have to borrow from a bank at a higher interest rate if an
interfund loan is called or not renewed. Any delay in repayment to a lending
fund could result in a lost investment opportunity or additional borrowing
costs.
Money Market refers to the marketplace where short-term, high quality debt
securities are traded, including U.S. government obligations, commercial
paper, certificates of deposit, bankers' acceptances, time deposits and
short-term corporate obligations. Money market instruments may carry fixed
rates of return or have variable or floating interest rates.
Municipal Obligations are issued to raise money for various public purposes,
including general purpose financing for state and local governments as well
as financing for specific projects or public facilities. Municipal
obligations may be backed by the full taxing power of a municipality or by
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the revenues from a specific project or the credit of a private
organization.
Repurchase Agreements are transactions by which a Portfolio purchases a
security and simultaneously commits to resell that security to the seller at
an agreed upon price on an agreed upon date within a number of days from the
date of purchase. The resale price reflects the purchase price plus an
agreed upon incremental amount which is unrelated to the coupon rate or
maturity of the purchased security. A repurchase agreement involves the
obligation of the seller to pay the agreed upon price, which obligation is
in effect secured by the value (at least equal to the amount of the agreed
upon resale price and marked to market daily) of the underlying security.
Each Portfolio may engage in a repurchase agreement with respect to any
security in which that Portfolio is authorized to invest. While it does not
presently appear possible to eliminate all risks from these transactions
(particularly the possibility of a decline in the market value of the
underlying securities, as well as delays and costs to the Portfolios in
connection with bankruptcy proceedings), it is the policy of each Portfolio
to limit repurchase agreements to parties whose creditworthiness has been
reviewed and found satisfactory by FMR.
Restricted Securities. Domestic Portfolio and Money Market Portfolio may
purchase restricted securities that are not registered for sale to the
general public. Restricted securities generally can be sold in privately
negotiated transactions, pursuant to an exemption from registration under
the Securities Act of 1933, or in a registered public offering. Where
registration is required, a Portfolio may be obligated to pay all or part of
the registration expense and a considerable period may elapse between the
time it decides to seek registration and the time the fund may be permitted
to sell a security under an effective registration statement. If, during
such a period, adverse market conditions were to develop, the fund might
obtain a less favorable price than prevailed when it decided to seek
registration of the security.
Reverse Repurchase Agreements. Each Portfolio, other than Treasury Portfolio
II, may engage in reverse repurchase agreements. Reverse repurchase
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agreements are transactions whereby a Portfolio temporarily transfers
possession of a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash. At the same time, the Portfolio agrees to
repurchase the instrument at an agreed-upon price and time. A Portfolio
expects that it will engage in reverse repurchase agreements for temporary
purposes such as to fund redemptions or when it is able to invest cash so
acquired at a rate higher than the cost of the agreement, which would
increase the income earned by a Portfolio. While a reverse repurchase
agreement is outstanding, the Portfolio will maintain appropriate liquid
assets in a segregated custodial account to cover its obligation under the
agreement. Reverse repurchase agreements may increase the risk of
fluctuation in the market value of a Portfolio's assets or in its yield.
Such transactions may increase fluctuations in the market value of a
Portfolio's assets and may be viewed as a form of leverage. A Portfolio will
enter into reverse repurchase agreements only with parties whose
creditworthiness has been found satisfactory by FMR.
Short Sales "Against the Box." A Portfolio may sell securities short when
it owns or has the right to obtain securities equivalent in kind or amount
to the securities sold short. Short sales could be used to protect the net
asset value per share of the Portfolio in anticipation of increased interest
rates, without sacrificing the current yield of the securities sold short.
If a Portfolio enters into a short sale against the box, it will be required
to set aside securities equivalent in kind and amount to the securities sold
short (or securities convertible or exchangeable into such securities) and
will be required to hold such securities while the short sale is
outstanding. The Portfolio will incur transaction costs, including interest
expense, in connection with opening, maintaining, and closing short sales
against the box.
Time Deposits are non-negotiable deposits in a banking institution earning a
specified interest rate over a given period of time.
Variable or Floating Rate Instruments ^ bear variable or floating interest
rates and ^ carry rights that permit holders to demand ^ payment of the
unpaid principal balance plus accrued interest from the issuers or certain
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financial intermediaries. Floating rate ^ instruments have interest rates
that change whenever there is a change in a designated ^ base rate, while
variable rate instruments provide for a specified periodic adjustment in the
interest rate. These formulas ^ are designed to result in a market value for
the instrument that approximates its par value.
A Portfolio may invest in variable or floating rate instruments that
ultimately mature in more than 397 days if the Portfolio acquires a right to
sell securities that meet certain requirements set forth in Rule 2a-7.
Variable rate instruments (including instruments subject to a demand
feature) that mature in 397 days or less and U.S. government obligations
with a variable rate of interest reset no less frequently than every 762
days may be deemed to have maturities equal to the period remaining until
the next readjustment of the interest rate. Other variable rate instruments
with demand features may be deemed to have a maturity equal to the longer of
the period remaining until the next readjustment of the interest rate or the
period remaining until the principal amount can be recovered through demand.
A floating rate instrument subject to a demand feature may be deemed to have
a maturity equal to the period remaining until the principal amount can be
recovered through demand.
PORTFOLIO TRANSACTIONS
Money market obligations generally are traded in the over-the-counter market
through broker-dealers. A broker-dealer is a securities firm or bank which
makes a market for securities by offering to buy at one price and sell at a
slightly higher price. The difference between the prices is known as a
spread. Since FMR trades, directly or through affiliated sub-advisers, a
large number of securities, including those of Fidelity's other funds,
broker-dealers are willing to work with the funds on a more favorable spread
than would be possible for most individual investors.
All orders for the purchase or sale of portfolio securities are placed on
behalf of each Portfolio by FMR (either directly or through affiliated
sub-advisers) pursuant to authority contained in each Portfolio's Management
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Contract. FMR is also responsible for the placement of transaction orders
for other investment companies and accounts for which it or its affiliates
act as investment adviser. Securities purchased and sold by the Portfolios
will be traded on a net basis (i.e., without commission). In selecting
broker-dealers, subject to applicable limitations of the federal securities
laws, FMR will consider various relevant factors, including, but not limited
to, the size and type of the transaction; the nature and character of the
markets for the security to be purchased or sold; the execution efficiency,
settlement capability, and financial condition of the broker-dealer firm;
the broker-dealer's execution services rendered on a continuing basis; and
the reasonableness of any commissions.
The Portfolios may execute portfolio transactions with broker-dealers who
provide research and execution services to the Portfolios and other accounts
over which FMR or its affiliates exercise investment discretion. Such
services may include advice concerning the value of securities; the
advisability of investing in, purchasing or selling securities; the
availability of securities or the purchasers or sellers of securities;
furnishing analyses and reports concerning issuers, industries, securities,
economic factors and trends, portfolio strategy, and performance of
accounts; and effecting securities transactions and performing functions
incidental thereto (such as clearance and settlement). FMR maintains a
listing of broker-dealers who provide such services on a regular basis.
However, as many transactions on behalf of the Portfolios are placed with
dealers (including broker-dealers on the list) without regard to the
furnishing of such services, it is not possible to estimate the proportion
of such transactions directed to such broker-dealers solely because such
services were provided. The selection of such broker-dealers is generally
made by FMR (to the extent possible consistent with execution
considerations) based upon the quality of research and execution services
provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the Portfolios may be useful to FMR in rendering investment
management services to the Portfolios and/or its other clients, and
conversely, such research provided by broker-dealers who have executed
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transaction orders on behalf of other FMR clients may be useful to FMR in
carrying out its obligations to the Portfolios. The receipt of such research
has not reduced FMR's normal independent research activities; however, it
enables FMR to avoid the additional expenses that could be incurred if FMR
tried to develop comparable information through its own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause the
Portfolios to pay such higher commissions, FMR must determine in good faith
that such commissions are reasonable in relation to the value of the
brokerage and research services provided by such executing broker-dealers,
viewed in terms of a particular transaction or FMR's overall
responsibilities to the Portfolios and its other clients. In reaching this
determination, FMR will not attempt to place a specific dollar value on the
brokerage and research services provided, or to determine what portion of
the compensation should be related to those services.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided assistance in
the distribution of shares of the Portfolios or shares of other Fidelity
funds to the extent permitted by law. FMR may use research services provided
by and place agency transactions with Fidelity Brokerage Services, Inc.
(FBSI), a member of the New York Stock Exchange and a subsidiary of FMR
Corp., if the commissions are fair and reasonable and comparable to
commissions charged by non-affiliated, qualified brokerage firms for similar
services. Section 11(a) of the Securities Exchange Act of 1934 prohibits
members of national securities exchanges from executing exchange
transactions for accounts which they or their affiliates manage, unless
certain requirements are satisfied. Pursuant to such requirements, the
Board of Trustees has authorized FBSI to execute portfolio transactions on
national securities exchanges in accordance with approved procedures and
applicable SEC rules.
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The Trustees periodically review FMR's performance of its responsibilities
in connection with the placement of portfolio transactions on behalf of the
Portfolios and review the commissions paid by the Portfolios over
representative periods of time to determine if they are reasonable in
relation to the benefits to the Portfolios.
From time to time the Trustees will review whether the recapture for the
benefit of the Portfolios of some portion of the brokerage commissions or
similar fees paid by the Portfolios on portfolio transactions is legally
permissible and advisable. The Portfolios seek to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at present no
other recapture arrangements are in effect. The Trustees intend to continue
to review whether recapture opportunities are available and are legally
permissible and, if so, to determine, in the exercise of their business
judgment, whether it would be advisable for the Portfolios to seek such
recapture.
Although the Trustees and officers of the Portfolios are substantially the
same as those of other funds managed by FMR, investment decisions for the
Portfolios are made independently from those of other funds managed by FMR
or accounts managed by FMR affiliates. It sometimes happens that the same
security is held in the portfolio of more than one of these funds or
accounts. Simultaneous transactions are inevitable when several funds are
managed by the same investment adviser, particularly when the same security
is suitable for the investment objective of more than one fund.
When two or more funds are simultaneously engaged in the purchase or sale of
the same security, the prices and amounts are allocated in accordance with a
formula considered by the officers of the funds involved to be equitable to
each fund. In some cases this system could have a detrimental effect on the
price or value of the security as far as the Portfolios are concerned. In
other cases, however, the ability of the funds to participate in volume
transactions will produce better executions and prices for the Portfolios.
It is the current opinion of the Trustees that the desirability of retaining
FMR as investment adviser to the Portfolios outweighs any disadvantages that
may be said to exist from exposure to simultaneous transactions.
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PERFORMANCE
From time to time each Portfolio advertises its yield and effective yield
in advertisements or in reports or other communications with shareholders.
(Yield and total return figures will differ among each class of a
Portfolio's shares.) Both yield figures are based on historical earnings and
are not intended to indicate future performance. The current yield refers
to the income generated by an investment in a Portfolio over a seven-day
period (which will be stated in the advertisement). The net change in value
of a hypothetical account containing one share reflects the value of
additional shares purchased with dividends from the one original share and
dividends declared on both the original share and any additional shares.
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 each Portfolio is assumed to be reinvested. The effective
yield will be slightly higher than the yield because of the compounding
effect of this assumed reinvestment. In addition to the current yield, a
Portfolio may quote yields in advertising based on any historical seven day
period.
Each Portfolio's yield and effective yield figures are illustrated below for
the seven-day period ended March 31,^ 1994.
Effective
Yield Yield
Treasury ^ Portfolio . . . . % %
Treasury Portfolio II . . . . % %
Government Portfolio . . . . % %
Domestic Portfolio . . . . . % %
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Money Market Portfolio . . . % %
Yield information may be useful in reviewing each Portfolio's performance
and for providing a basis for comparison with other investment alternatives.
Each Portfolio's yield will fluctuate, unlike investments which pay a fixed
yield for a stated period of time. Investors should give consideration to
the quality and maturity of portfolio securities of the respective
investment companies when comparing investments.
Each Portfolio's total return is based on the overall dollar or percentage
change in value of a hypothetical investment in a Portfolio, assuming
dividends are reinvested. A cumulative total return reflects a Portfolio's
performance over a stated period of time. An average annual total return
reflects the hypothetical annually compounded return that would have
produced the same cumulative total return if performance had been constant
over the entire period. Because average annual returns tend to smooth out
variations in a Portfolio's performance, investors should recognize that
they are not the same as actual year-by-year results.
The following table shows each Portfolio's total return for the periods
ended March 31^, 1994.
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Historical Portfolio ^ Results
Five Life of
One Year Years Portfolio*
Average Annual Total Returns
U.S.^ Treasury . . . . . . % % %
U.S. Treasury II . . . . . % % %
U.S. Government . . . . . . % % %
Domestic Money Market . . . % NA %
Money Market . . . . . . . % % %
Cumulative Total Returns
U.S. Treasury . . . . . . . % % %
U.S. Treasury II . . . . . % % %
U.S. Government . . . . . . % % %
Domestic Money Market . . . % NA %
Money Market . . . . . . . % % %
*Life of Portfolio returns are from each Portfolio's commencement of
operations. The commencement of operations date for each Portfolio is
November 9, 1985 for U.S. Treasury, February 2, 1987 for U.S. Treasury II,
July 25, 1985 for U.S. Government, November 3, 1989 for Domestic Money
Market, and July 5, 1985 for Money Market.
The Portfolios' performance, or the performance of securities in which they
may invest, may be compared to:
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. ^ IBC/Donoghue's MONEY FUND AVERAGES TM, which are average yields
of various types of money market funds that include the effect of
compounding distributions, assume reinvestment of distributions,
are reported in IBC/Donoghue's MONEY FUND REPORT, and are published
by IBC USA (Publications), Inc. of Ashland, Massachusetts;
. ^ Other mutual funds in general, or to the performance of specific
types of mutual funds. These comparisons may be ^ expressed as
mutual fund rankings prepared by Lipper Analytical Services, Inc.
(Lipper), an independent service located in Summit, New Jersey that
monitors the performance of mutual funds. Lipper generally ranks
funds on the basis of total return, assuming reinvestment of
distributions, but does not take sales charges or redemption fees
into consideration, and is prepared without regard to tax
consequences. Lipper may also rank the funds based on yield. In
addition to the mutual fund rankings, a Portfolio's performance may
be compared to mutual fund performance indices prepared by Lipper;^
. Yields on other money market securities or averages of other money
market securities as reported by the Federal Reserve Bulletin; by
TeleRate, a financial information network; or by Salomon Brothers
Inc., a broker-dealer firm; and
. ^ Fixed-income investments such as Certificates of Deposit (CDs).
The principal value and interest rate of CDs and certain other money market
securities are fixed at the time of purchase, whereas each Portfolio's yield
will fluctuate. Unlike some CDs and certain other money market securities,
money market mutual funds are not insured by the FDIC. Investors should give
consideration to the quality and maturity of the portfolio securities of the
respective investment companies when comparing investment alternatives. The
Portfolios also may reference the growth and variety of money market mutual
funds and the Adviser's innovation and participation in the industry.
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Each Portfolio may ^ discuss its fund number, Quotron TM number, CUSIP
number, and current portfolio manager ^.
From time to time, in reports and promotional literature, each Portfolio's
performance also may be compared to other mutual funds tracked by financial
or business publications and periodicals. For example, each Portfolio may
quote Morningstar, Inc. in its advertising materials. Morningstar, Inc. is a
mutual fund rating service that rates mutual funds on the basis of
risk-adjusted performance. In addition, each Portfolio may quote financial
or business publications and periodicals as they relate to fund management,
investment philosophy, and investment techniques. Rankings that compare the
performance of Fidelity funds to one another in appropriate categories over
specific periods of time may also be quoted in advertising.
MANAGEMENT CONTRACTS, DISTRIBUTION PLANS AND SERVICE AGREEMENTS
Management Contracts. Each Portfolio employs FMR to furnish investment
advisory and other services to the Portfolio. Under FMR's Management
Contract with each Portfolio, FMR acts as investment adviser and, subject to
the supervision of the Board of Trustees, directs the investments of each
Portfolio in accordance with its investment objective, policies and
limitations. FMR also provides each Portfolio with all necessary office
facilities, equipment and personnel for servicing the Portfolio's
investments, and compensates all officers of the Fund, all Trustees who are
"interested persons" of the Fund or of FMR, and all personnel of the Fund or
FMR performing services relating to research, statistical and investment
activities.
In addition, FMR or its affiliates, subject to the supervision of the Board
of Trustees, provides the management and administrative services necessary
for the operation of each Portfolio. These services include providing
facilities for maintaining each Portfolio's organization; supervising
relations with the custodians, transfer and pricing agents, accountants,
underwriters and other persons dealing with the Portfolios; preparing all
general shareholder communications and conducting shareholder relations;
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maintaining the Fund's records and the registration of each Portfolio's
shares under federal and state securities laws; developing management and
shareholder services for each Portfolio and furnishing reports, evaluations
and analyses on a variety of subjects to the Trustees. As described below,
FMR has agreed to limit each Portfolio's expenses.
For these services each Portfolio pays a monthly fee to FMR at the annual
rate of .20% of the average net assets of the Portfolio as determined as of
the close of business on each day throughout the month.
For the fiscal years ended March 31, 1994, 1993, and 1992 ^, management fees
before reimbursement of expenses were $___________, $5,351,147 ^ and
$4,236,988 ^ for the Treasury Portfolio, $___________, $14,029,197 ^ and
$8,506,023 ^ for the Treasury Portfolio II, $_____________, $12,610,880 ^
and $8,576,656 ^ for the Government Portfolio, $_____________, $1,536,740 ^
and $1,095,503 ^ for the Domestic Portfolio, and $____________, $10,066,276
^ and $9,604,202 ^ for the Money Market Portfolio, respectively.
In addition to the management fee payable to FMR and the fees payable to
Service and FIIOC, and subject to the reimbursement provisions described
below, each Portfolio pays all its expenses, without limitation, that are
not assumed by those parties. Each Portfolio pays for the typesetting,
printing and mailing of its proxy material to shareholders, and for legal
expenses and the fees of the custodian, auditor and non-interested Trustees.
Other charges paid by each Portfolio include: interest, taxes, brokerage
commissions, the Portfolio's proportionate share of insurance premiums and
Investment Company Institute dues, and the costs of registering shares under
federal and state securities laws. Each Portfolio also is liable for such
nonrecurring expenses as may arise, including costs of litigation to which
the Portfolio is a party and any obligation it may have to indemnify
officers and Trustees with respect to such litigation.
Although each Portfolio's current Management Contract provides that the
Portfolio will pay for typesetting, printing and mailing of Prospectuses,
Statements of Additional Information and reports to existing shareholders,
the Portfolios entered into a revised transfer agent agreement with FIIOC
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effective June 1, 1989, pursuant to which FIIOC bears the cost of providing
these services.
FMR has voluntarily agreed to reimburse any of the Portfolios if and to the
extent that a Portfolio's aggregate operating expenses (excluding interest,
taxes, brokerage commissions, extraordinary expenses and 12b-1 fees with
respect to each Portfolio's Class B shares) exceed an annual rate of .18% of
the average net assets of the Portfolio for any fiscal year or for a portion
of such year if FMR's agreement is terminated or revised. FMR retains the
ability to be repaid by the Portfolios for these expense reimbursements in
the amount that expenses fall below the limit prior to the end of the fiscal
year. FMR will continue this reimbursement arrangement subject to revision
upon 90 days' notice to shareholders. Such reimbursements have the effect of
artificially decreasing a Portfolio's expenses, thereby increasing its
yield.
For the fiscal years ended March 31, 1994, 1993, and 1992, ^ aggregate
operating expenses reimbursed by FMR were $__________, $1,246,151, and
$1,470,637 ^ for the Treasury Portfolio, $___________, $3,246,298 ^ and
$3,143,538 ^ for the Treasury Portfolio II, $___________, $3,508,338 ^ and
$2,804,357 ^ for the Government Portfolio, $____________, $645,507 ^ and
$579,020 ^ for the Domestic Portfolio, and $______________, $2,697,402 ^
and $2,735,714 ^ for the Money Market Portfolio, respectively.
Sub-Advisory Agreements. With respect to each Portfolio, FMR has entered
into a sub-advisory agreement with FMR Texas, a Texas corporation with
principal offices at 400 East Las Colinas Boulevard in Irving, Texas.
Pursuant to the agreement, FMR Texas has primary responsibility for
providing portfolio investment management services to each Portfolio, while
FMR retains responsibility for providing other portfolio management
services.
Under each sub-advisory agreement, FMR pays FMR Texas fees equal to 50% of
the management fees payable to FMR under its current Management Contract
with each Portfolio. The fees paid to FMR Texas are not reduced by any
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voluntary or mandatory expense reimbursements that may be in effect from
time to time.
For the fiscal years ended March 31, 1994, 1993, and 1992, ^ fees paid to
FMR Texas by FMR were $__________, $2,675,573 ^ and $2,118,494 ^ for the
Treasury Portfolio, $_______________, $7,014,599 ^ and $4,253,012 ^ for the
Treasury Portfolio II, $__________, $6,305,440 ^ and $4,288,328 ^ for the
Government Portfolio, $___________, $768,370 ^ and $547,752 ^ for the
Domestic Portfolio and $_________, $5,033,138 ^ and $4,802,101 ^ for the
Money Market Portfolio, respectively.
Contracts with Companies Affiliated with FMR. Fidelity Investments
Institutional Operations Company, 82 Devonshire Street, Boston,
Massachusetts 02109, an affiliate of FMR, is transfer, dividend-paying and
shareholder servicing agent for each Portfolio and maintains shareholder
records.
For institutional client master accounts effective June 1, 1990, FIIOC
receives a per account fee and a monetary transaction fee of $65 and $14,
respectively, or $60 and $12, respectively, depending on the nature of
services provided. Effective January 1, 1993, FIIOC is paid a per account
fee of $95 and a monetary transaction fee of $20 or $17.50 depending on the
nature of the services provided. Fees for institutional retirement plan
accounts, if any, would be based on the NAV of all such accounts in a
Portfolio. In addition, FIIOC pays out-of-pocket expenses associated with
providing transfer agent services and bears the expense of typesetting,
printing and mailing Prospectuses, Statements of Additional Information,
reports, notices and statements to shareholders.
For the fiscal years ended March 31, 1994, 1993, and 1992, ^ transfer agent
fees and expenses were $________, $198,961 ^ and $259,235 ^ for the Treasury
Portfolio, $__________, $786,114 ^ and $723,978 ^ for the Treasury
Portfolio II, $_______________, $889,140 ^ and $726,802 ^ for the Government
Portfolio, $____________, $162,165 ^ and $118,032 ^ for the Domestic
Portfolio and $___________, $591,793 ^ and $680,128 ^ for the Money Market
Portfolio, respectively.
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The Portfolios' contracts with Fidelity Service Co., an affiliate of FMR,
provides that Service will perform the calculations necessary to determine
the Portfolios' net asset value per share and dividends and to maintain
general accounting records. Prior to July 1, 1991, the annual fee for these
pricing and bookkeeping services was based on two schedules, one pertaining
to each Portfolio's average net assets and one pertaining to the type and
number of transactions a Portfolio made. The fee rates in effect as of July
1, 1991 are based on each Portfolio's average net assets, specifically
.0175% for the first $500 million of average net assets and .0075% for
average net assets in excess of $500 million. The fee is limited to a
minimum of $20,000 and a maximum of $750,000 per year for each Portfolio.
For the fiscal years ended March 31, 1994, 1993, and 1992, ^ portfolio
accounting fees paid to Service for pricing and bookkeeping services
(including related out-of-pocket expenses) were $__________, $251,607 ^ and
$210,011 ^ for the Treasury Portfolio, ^ $_____________, $579,072 and
$354,383 for the Treasury Portfolio II, $_____________, $523,696 ^ and
$346,477 ^ for the Government Portfolio, $_____________, $108,548 ^ and
$95,756 ^ for the Domestic Portfolio and $_____________, $429,428 ^ and
$376,076 ^ for the Money Market Portfolio, respectively.
Service also receives fees for administering the Portfolios' securities
lending programs where applicable. Securities lending fees are based on the
number and duration of individual securities loans.
Prior to January 1, 1991, Bank of Boston, 100 Federal Street, Boston, MA,
served as transfer and bookkeeping agent for the Portfolios. Bank of Boston
had a sub-transfer agent agreement with FIIOC, as well as a sub-servicing
agreement with Service. Under these agreements, all of the fees described
above were paid to FIIOC and Service by Bank of Boston, which was reimbursed
by each Portfolio for such payments.
Each Portfolio has a Distribution Agreement with Fidelity Distributors
Corporation (Distributors), an affiliate of FMR. Distributors, a
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Massachusetts corporation organized July 18, 1960, is a broker-dealer
registered under the Securities Exchange Act of 1934 and is a member of the
National Association of Securities Dealers, Inc. The Distribution Agreement
calls for Distributors to use all reasonable efforts, consistent with its
other business, to secure purchasers for shares of each Portfolio.
Promotional and administrative expenses in connection with the offer and
sale of shares are paid by FMR. Distributors also acts as general
distributor for other publicly offered Fidelity funds.
Distribution and Service Plans. Class A of each Portfolio has adopted a
Distribution and Service Plan (each Plan) pursuant to Rule 12b-1 of the 1940
Act (the Rule). The Rule provides in substance that a mutual fund may not
engage directly or indirectly in financing any activity that is intended
primarily to result in the sale of shares of the fund except pursuant to a
plan adopted by the fund under the Rule. The Fund's Board of Trustees
adopted the Plans to assure that each Portfolio and FMR may incur certain
expenses that might be considered to constitute indirect payment by a
Portfolio of distribution expenses.
Each Plan specifically recognizes that FMR, either directly or through
Distributors, may use its management fee revenue, past profits or other
resources, without limitation, to pay promotional and administrative
expenses in connection with the offer and sale of shares of the Portfolios.
In addition, each Plan provides that FMR may use its resources, including
its management fee revenues, to make payments to banks and other financial
intermediaries that provide sales and/or shareholder support services. The
Trustees have not authorized any such payments.
As required by the Rule, the Trustees carefully considered all pertinent
factors relating to the implementation of each Plan prior to its approval,
and have determined that there is a reasonable likelihood that each Plan
will benefit the Portfolios and their shareholders. In particular, the
Trustees noted that each Plan does not authorize payments by the Portfolio
other than those made to FMR under its Management Contract with the
Portfolio. To the extent that the Plans give FMR and Distributors greater
flexibility in connection with the distribution of shares of the Portfolios,
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additional shares of each Portfolio's shares may result. Additionally,
certain shareholder support services may be provided more effectively under
the Plans by local entities with whom shareholders have other relationships.
The Glass-Steagall Act generally prohibits federally and state chartered or
supervised banks from engaging in the business of underwriting, selling or
distributing securities. Although the scope of this prohibition under the
Glass-Steagall Act has not been clearly defined, in Distributors' opinion it
should not prohibit banks from being paid for shareholder servicing and
recordkeeping functions. Distributors intends to engage banks only for the
purpose of performing such functions. However, changes in federal or state
statutes and regulations pertaining to the permissible activities of banks
and their affiliates or subsidiaries, as well as further judicial or
administrative decisions or interpretations, could prevent a bank from
continuing to perform all or a part of the contemplated services. If a bank
were prohibited from so acting, the Trustees would consider what actions, if
any, should be taken to continue to provide efficient and effective
shareholder services. In such event, changes in the operation of the
Portfolios might occur, including possible termination of any automatic
investment or redemption or other services then being provided by the bank.
It is not expected that shareholders would suffer any adverse financial
consequences as a result of any of these occurrences. In addition, state
securities laws on this issue may differ from the interpretations of federal
law expressed herein, and banks and financial institutions may be required
to register as dealers pursuant to state law. The Portfolios may execute
portfolio transactions with and purchase securities issued by depository
institutions that receive payments under the Plans. No preference will be
shown in the selection of investments for the instruments of depository
institutions.
- 50 -
<PAGE>
DESCRIPTION OF THE FUND
Fund Organization. U.S. Treasury, U.S. Treasury II, U.S. Government,
Domestic Money Market and Money Market are portfolios of Fidelity
Institutional Cash Portfolios, which is an open-end management investment
company organized as a Delaware Business trust on May 30, 1993. The
Portfolios acquired all of the assets of the Massachusetts Trust,
respectively, Fidelity Institutional Cash Portfolios on May 30, 1993.
Currently there are five Portfolios of ^ Fidelity Institutional Cash
Portfolios: U.S. Treasury Portfolio, U.S. Treasury II Portfolio, U.S.
Government Portfolio, Domestic Money Market Portfolio, and Money Market
Portfolio. Each Portfolio currently offers two Classes of shares, Class A
and Class B. The ^ Trust Instrument permits the Trustees to create
additional portfolios.
Class B shares of each Portfolio are offered to institutional and corporate
investors that invest through a bank or other financial intermediary. Each
Portfolio's Class B has a Distribution and Service Plan pursuant to Rule
12b-1 (each 12b-1 Plan). Under each 12b-1 Plan, Class B is authorized to pay
Distributors a monthly distribution fee at an annual rate of up to .32% of
average net assets (except that the amount of a particular day's 12b-1 fee
will not exceed that day's income). The distribution fee is an expense of
Class B in addition to each Portfolio's expenses of .18% of average net
assets. All or a portion of the distribution fee is paid by Distributors to
banks or other financial intermediaries as compensation for providing sales
and/or shareholder support services. Class B Portfolio shares may be
exchanged (subject to minimum initial investment requirement) at no charge
for Class B shares of any other Portfolio of the Fund.
In the event that FMR ceases to be the investment adviser to the Fund or a
Portfolio, the right of the Fund or Portfolio to use the identifying name
"Fidelity" may be withdrawn. There is a remote possibility that one
Portfolio might become liable for any misstatement in its Prospectus and
Statement of Additional Information about another Portfolio.
- 51 -
<PAGE>
The assets of the Fund received for the issue or sale of shares of each of
its Portfolios and all income, earnings, profits, and proceeds thereof,
subject only to the rights of creditors, are especially allocated to such
Portfolio, and constitute the underlying assets of such Portfolio. The
underlying assets of each Portfolio are segregated on the books of account,
and are to be charged with the liabilities with respect to such Portfolio
and with a share of the general expenses of the Fund. Expenses with respect
to the Fund are to be allocated in proportion to the asset value of the
respective Portfolios except where allocations of direct expense can
otherwise be fairly made. The officers of the Fund, subject to the general
supervision of the Board of Trustees, have the power to determine which
expenses are allocable to a given Portfolio, or which are general or
allocable to all of the Portfolios. In the event of the dissolution or
liquidation of the Fund, shareholders of each Portfolio are entitled to
receive as a class the underlying assets of such Portfolio available for
distribution.
Shareholder and Trustee Liability. The Fund is a business trust organized
under Delaware law. Delaware law provides that shareholders shall be
entitled to the same limitations of personal liability extended to
stockholders of private corporations for profit. The courts of some states,
however, may decline to apply Delaware law on this point. The ^ Trust
Instrument contains an express disclaimer of shareholder liability for the
debts, liabilities, obligations, and expenses of the Fund and requires that
a disclaimer be given in each contract entered into or executed by the Fund
or the Trustees. The ^ Trust Instrument provides for indemnification out of
each Portfolio's property of any shareholder or former shareholder held
personally liable for the obligations of the Portfolio. The Declaration of
Trust also provides that each Portfolio shall, upon request, assume the
defense of any claim made against any shareholder for any act or obligation
of the Portfolio and satisfy any judgment thereon. Thus, the risk of a
shareholder incurring financial loss on account of shareholder liability is
limited to circumstances in which Delaware law does not apply, no
contractual limitation of liability was in effect, and the portfolio is
unable to meet its obligations. FMR believes that, in view of the above, the
risk of personal liability to shareholders is extremely remote.
- 52 -
<PAGE>
The ^ Trust Instrument further provides that the Trustees, if they have
exercised reasonable care, shall not be personally liable to any person
other than the ^ Fund or its shareholders; moreover, the Trustees shall not
be liable for any conduct whatsoever, provided that Trustees are not
protected against any liability to which they would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of their office.
Voting Rights. Each class of each Portfolio's capital consists of shares of
beneficial interest. The shares have no preemptive or conversion rights; the
voting and dividend rights, the right of redemption, and the privilege of
exchange are described in this Prospectus and Statement of Additional
Information. Shares are fully paid and nonassessable, except as set forth
under the heading "Shareholder and Trustee Liability" above. Shareholders
representing 10% or more of the Fund, a Portfolio or a Class may, as set
forth in the Trust Instrument, call meetings of the Fund or a Portfolio for
any purpose related to the Fund, Portfolio or Class, as the case may be,
including, in the case of a meeting of the entire Fund, the purpose of
voting on removal of one or more Trustees.
The Fund, Portfolio or Class may be terminated upon the sale of its assets
to another open-end management investment company, or upon liquidation and
distribution of its assets. Generally such terminations must be approved by
vote of the holders of a majority of the outstanding shares of the Fund,
Portfolio or Class; however, the Trustees may, without prior shareholder
approval, change the form or organization of the Fund by merger,
consolidation, or incorporation. If not so terminated, the Fund, the
Portfolios and the Classes will continue indefinitely.
Under the ^ Trust Instrument, the Trustees may, without shareholder vote,
cause the Fund to merge or consolidate into one or more trusts,
partnerships, or corporations, or cause the Fund to be incorporated under
Delaware law, so long as the surviving entity is an open-end management
- 53 -
<PAGE>
investment company that will succeed to or assume the Fund registration
statement.
As of April 30, 1994, the following owned of record or beneficially 5% or
more of the outstanding shares of:
[To be filed by subsequent amendment].
Custodian. Morgan Guaranty Trust Company of New York, 60 Wall Street, New
York, NY 10260 is custodian of the assets of the Portfolios. The custodian
is responsible for the safekeeping of the Portfolios' assets and the
appointment of subcustodian banks and clearing agencies. The custodian takes
no part in determining the investment policies of the Portfolio or in
deciding which securities are purchased or sold by the Fund. The Portfolios,
however, may invest in obligations of the custodian and may purchase
securities from or sell securities to the custodian.
FMR, its officers and directors and its affiliated companies and the Fund's
Trustees may, from time to time, have transactions with various banks,
including banks serving as custodians for certain of the funds advised by
FMR. Transactions that have occurred to date include mortgages and personal
and general business loans. In the judgment of FMR, the terms and conditions
of those transactions were not influenced by existing or potential
custodial or other Fund relationships.
Auditor. _____________ serves as the Fund's independent accountants. The
auditor examines financial statements for the Fund and provides other
audit, tax, and related services.
FMR. FMR, 82 Devonshire Street, Boston, Massachusetts 02109, is a wholly
owned subsidiary of FMR Corp., a parent company organized in 1972. At
present, the principal operating activities of FMR Corp. are those conducted
by three of its divisions as follows: Fidelity Service Co., which is the
transfer and shareholder servicing agent for certain of the funds advised by
FMR; Fidelity Investments Institutional Operations Company, which performs
shareholder servicing functions for certain institutional customers; and
- 54 -
<PAGE>
Fidelity Investments Retail Services Marketing Company, which provides
marketing services to various companies within the Fidelity organization.
Through ownership of voting common stock, Edward C. Johnson 3rd (President
and a Trustee of the Fund), Johnson family members, and various trusts for
the benefit of Johnson family members form a controlling group with respect
to FMR Corp.
Several affiliates of FMR also are engaged in the investment advisory
business. Fidelity Management Trust Company provides trustee, investment
advisory and administrative services to retirement plans and corporate
employee benefit accounts. Fidelity Management & Research (U.K.) Inc. (FMR
U.K.) and Fidelity Management & Research (Far East) Inc. (FMR Far East),
both wholly owned subsidiaries of FMR formed in 1986, supply investment
research, and may supply portfolio management services, to FMR in connection
with certain funds advised by FMR. Analysts employed by FMR, FMR U.K., and
FMR Far East research and visit thousands of domestic companies each year.
FMR Texas, a wholly owned subsidiary of FMR formed in 1989, supplies
portfolio management and research services in connection with certain money
market funds advised by FMR.
Trustees and Officers. The Trustees and executive officers of the Trust are
listed below. Except as indicated, each individual has held the office shown
or other offices in the same company for the last five years. Trustees and
officers elected or appointed prior to the Trust's conversion to a Delaware
business trust served the Massachusetts business trust in identical
capacities. All persons named as Trustees serve in similar capacities for
other funds advised by FMR. Unless otherwise noted, the business address of
each Trustee and officer is 82 Devonshire Street, Boston, Massachusetts
02109, which is also the address of FMR. Those Trustees who are "interested
persons" (as defined in the Investment Company Act of 1940) by virtue of
their affiliation with either the Trust or FMR, are indicated by an asterisk
(*).
*EDWARD C. JOHNSON 3d, Trustee and President, is Chairman, Chief Executive
Officer and a Director of FMR Corp.; a Director and Chairman of the Board
and of the Executive Committee of FMR; Chairman and a Director of FMR Texas
- 55 -
<PAGE>
Inc. (1989), Fidelity Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
*J. GARY BURKHEAD, Trustee and Senior Vice President, is President of FMR;
and President and a Director of FMR Texas Inc. (1989), Fidelity Management &
Research (U.K.) Inc. and Fidelity Management & Research (Far East) Inc.
RALPH F. COX, 200 Rivercrest Drive, Fort Worth, TX, Trustee (1991), is
President of Greenhill Petroleum Corporation (petroleum exploration and
production, 1990). ^ Until March 1990, Mr. Cox was President and Chief
Operating Officer of Union Pacific Resources Company (exploration and
production). He is a Director of Bonneville Pacific Corporation (independent
power, 1989), Sanifill Corporation (non-hazardous waste, 1993), and CH2M
Hill Companies (engineering). In addition, he served on the Board of
Directors of the Norton Company (manufacturer of industrial devices,
1983-1990) and continues to serve on the Board of Directors of the Texas
State Chamber of Commerce, and is a member of advisory boards of Texas A&M
University and the University of Texas at Austin.
PHYLLIS BURKE DAVIS, ^ Box 264, Bridgehampton, NY, Trustee (1992). Prior to
her retirement in September of 1991, Mrs. Davis was the Senior Vice
President of Corporate Affairs of Avon Products, Inc. She is currently a
Director of BellSouth Corporation (telecommunications), Eaton Corporation
(manufacturing, 1991), and the TJX Companies, Inc. (retail stores, 1990),
and previously served as a Director of Hallmark Cards, Inc. (1985-1991) and
Nabisco Brands, Inc. In addition, she serves as a Director of the New York
City Chapter of the National Multiple Sclerosis Society, and is a member of
the Advisory Council of the International Executive Service Corps. and the
President's Advisory Council of the University of Vermont School of Business
Administration^.
RICHARD J. FLYNN, 77 Fiske Hill, Sturbridge, MA, Trustee, is a financial
consultant. Prior to September 1986, Mr. Flynn was Vice Chairman and a
Director of the Norton Company (manufacturer of industrial devices). He is
- 56 -
<PAGE>
currently a Director of Mechanics Bank and a Trustee of College of the Holy
Cross and Old Sturbridge Village, Inc.
E. BRADLEY JONES, ^ 3881-2 Lander Road, Chagrin Falls, OH, Trustee (1990).
Prior to his retirement in 1984, Mr. Jones was Chairman and Chief Executive
Officer of LTV Steel Company. Prior to May 1990, he was Director of National
City Corporation (a bank holding company) and National City Bank of
Cleveland. He is a Director of TRW Inc. (original equipment and replacement
products), Cleveland-Cliffs Inc. (mining), NACCO Industries, Inc. (mining
and marketing), Consolidated Rail Corporation, Birmingham Steel Corporation,
Hyster-Yale Materials Handling, Inc. (1989), and RPM, Inc. (manufacturer of
chemical products, 1990). In addition, he serves as a Trustee of First Union
Real Estate Investments, Chairman of the Board of Trustees and a member of
the Executive Committee of the Cleveland Clinic Foundation, a Trustee and a
member of the Executive Committee of University School (Cleveland), and a
Trustee of Cleveland Clinic Florida.
DONALD J. KIRK, 680 Steamboat Road, Apartment #1-North, Greenwich, CT,
Trustee, is a Professor at Columbia University Graduate School of Business
and a financial consultant. Prior to 1987, he was Chairman of the Financial
Accounting Standards Board. Mr. Kirk is a Director of General Re Corporation
(reinsurance), ^ and Valuation Research Corp. (appraisals and valuations,
1993). In addition, he serves as Vice Chairman of the Board of Directors of
the National Arts Stabilization Fund and Vice Chairman of the Board of
Trustees of the Greenwich Hospital Association (1989).
*PETER S. LYNCH, Trustee (1990) is Vice Chairman of FMR (1992). Prior to his
retirement on May 31, 1990, he was a Director of FMR (1989) and Executive
Vice President of FMR (a position he held until March 31, 1991); Vice
President of Fidelity Magellan Fund and FMR Growth Group Leader; and
Managing Director of FMR Corp. Mr. Lynch was also Vice President of Fidelity
Investments Corporate Services (1991-1992). He is a Director of W.R. Grace &
Co. (chemicals, 1989) and Morrison Knudsen Corporation (engineering and
construction^). In addition, he serves as a Trustee of Boston College,
- 57 -
<PAGE>
Massachusetts Eye & Ear Infirmary, Historic Deerfield (1989) and Society for
the Preservation of New England Antiquities, and as an Overseer of the
Museum of Fine Arts of Boston (1990).
GERALD C. McDONOUGH, 135 Aspenwood Drive, Cleveland, OH, Trustee (1989), is
Chairman of G.M. Management Group (strategic advisory services). Prior to
his retirement in July 1988, he was Chairman and Chief Executive Officer of
Leaseway Transportation Corp. (physical distribution services). Mr.
McDonough is a Director of ACME-Cleveland Corp. (metal working,
telecommunications and electronic products), Brush-Wellman Inc. (metal
refining), and York International Corp. (air-conditioning and refrigeration,
1989), and Commercial Intertech Corp. (water treatment equipment, 1992) ^
and Associated Estates Realty Corporation (a real estate investment trust,
1993).
EDWARD H. MALONE, 5601 Turtle Bay Drive #2104 Naples, FL, Trustee^. Prior
to his retirement in 1985, Mr. Malone was Chairman, General Electric
Investment Corporation and a Vice President of General Electric Company. He
is a Director of Allegheny Power Systems, Inc. (electric utility), General
Re Corporation (reinsurance) and Mattel Inc. (toy manufacturer). He is also
a Trustee of Rensselaer Polytechnic Institute and of Corporate Property
Investors and a member of the Advisory Boards of Butler Capital Corporation
Funds and Warburg, Pincus Partnership Funds.
MARVIN L. MANN, 55 Railroad Avenue, Greenwich, CT, Trustee (1993) is
Chairman of the Board, President, and Chief Executive Officer of Lexmark
International, Inc. (office machines, 1991). Prior to 1991, he held the
positions of Vice President of International Business Machines Corporation
("IBM") and President and General Manager of various IBM divisions and
subsidiaries. Mr. Mann is a Director of M.A. Hanna Company (chemicals,
1993) and Infomart (marketing services, 1991), a Trammell Crow Co. In
addition, he serves as the Campaign Vice Chairman of the Tri-State United
Way (1993) and is a member of the University of Alabama President's Cabinet
(1990).
- 58 -
<PAGE>
THOMAS R. WILLIAMS, 21st Floor, 191 Peachtree Tower, 191 Peachtree Street,
N.E., Atlanta, GA, Trustee^, is President of The Wales Group, Inc.
(management and advisory services). Prior to retiring in 1987, Mr. Williams
served as Chairman of the Board of First Wachovia Corporation (bank holding
company), and Chairman and Chief Executive Officer of The First National
Bank of Atlanta and First Atlanta Corporation (bank holding company). He is
currently a Director of BellSouth Corporation (telecommunications), ConAgra,
Inc. (agricultural products), Fisher Business Systems, Inc. (computer
software), Georgia Power Company (electric utility), Gerber Alley &
Associates, Inc. (computer software), National Life Insurance Company of
Vermont, American Software, Inc. (1989), and Apple South, Inc. (restaurants,
1992).
^
GARY L. FRENCH, Treasurer (1991). Prior to becoming Treasurer of the
Fidelity funds, Mr. French was Senior Vice President, Fund Accounting -
Fidelity Accounting & Custody Services Co. (1991); Vice President, Fund
Accounting - Fidelity Accounting & Custody Services Co. (1990); and Senior
Vice President, Chief Financial and Operations Officer - Huntington
Advisers, Inc. (1985-1990).
ARTHUR S. LORING, Secretary, is Senior Vice President and General Counsel of
FMR, Vice President - Legal of FMR Corp., and Vice President and Clerk of
FDC.
LELAND BARRON Vice President (1989), is also Vice President of other funds
advised by FMR and an employee of FMR Texas Inc.
BURNELL STEHMAN Vice President (1992), is also Vice President of other funds
advised by FMR and an employee of FMR Texas Inc.
JOHN TODD Vice President (1992), is also Vice President of other funds
advised by FMR and an employee of FMR Texas Inc.
- 59 -
<PAGE>
THOMAS D. MAHER, Assistant Vice President (1990), is Assistant Vice
President of Fidelity's money market funds and Vice President and Associate
General Counsel of FMR Texas Inc. (1990).
Under a retirement program which became effective on November 1, 1989, a
Trustee, upon reaching age 72, becomes eligible to participate in a defined
benefit retirement program under which he receives payments during his
lifetime from the Portfolios based on his final year's basic trustee fees
and length of service. Currently, Messrs. Robert L. Johnson, William R.
Spaulding, ^ Bertram H. Witham, and David L. Yunich participate in the
program. The Trustees receive additional payments for serving in similar
capacities for other funds advised by FMR. The Trustees and officers of the
Fund as a group own less than 1% of each Portfolio's outstanding shares.
- 60 -
<PAGE>
APPENDIX
Ratings
The descriptions that follow are examples of eligible ratings for the
Portfolios. The Portfolios may, however, consider the ratings for other
types of investments and the ratings assigned by other rating organizations
when determining the eligibility of a particular investment
Description of Moody's Investors Service, Inc.'s commercial paper ratings:
Prime-1 - issuers (or related institutions) have a superior capacity for
repayment of short-term promissory obligations. Prime-1 repayment capacity
will normally be evidenced by the following characteristics:
-- 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 with high
internal cash generation.
-- Well-established access to a range of financial markets and assured
sources of alternate liquidity.
Prime-2 - issuers (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will
normally 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.
- 61 -
<PAGE>
Description of Moody's Investors Service, Inc.'s corporate bond ratings:
Aaa - Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issuers.
Aa - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long term risks appear somewhat
larger than in Aaa securities.
Description of Standard & Poor's Corporation's commercial paper ratings:
A-1 - This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics will be denoted with a plus (+)
sign designation.
A-2 - Capacity for timely payment on issues with this designation is strong.
However, the relative degree of safety is not as high as for issues
designated A-1.
Description of Standard & Poor's Corporation's corporate bond ratings:
AAA - Debt rated AAA has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated debt issues only in small
- 62 -
<PAGE>
degree.
- 63 -
<PAGE>
FIDELITY INSTITUTIONAL CASH PORTFOLIOS: CLASS B
CROSS REFERENCE SHEET
NOTE: A combined Prospectus and Statement of Additional Information
format, subject to the rules of N-1A, has been utilized in the
preparation of this document.
Form N-1A Item Number
Part A Prospectus Caption
1 . . . . . . . . . . . . . . . . . . . Cover Page
2 a . . . . . . . . . . . . . . . . . . . Summary of Portfolio Expenses
b,c . . . . . . . . . . . . . . . . . . Summary of Portfolio Expenses
3 a . . . . . . . . . . . . . . . . . . . Per-Share Data and Ratios
b . . . . . . . . . . . . . . . . . . . *
c . . . . . . . . . . . . . . . . . . . Performance
4 a(i) . . . . . . . . . . . . . . . . . The Fund and the Fidelity
Organization
a(ii) . . . . . . . . . . . . . . . . . Fund Summary; Investment
Objective and Policies;
Portfolio Transactions; The
Fund and the Fidelity
Organization; Investment
Limitations
b . . . . . . . . . . . . . . . . . . . Investment Limitations
c . . . . . . . . . . . . . . . . . . . Investment Objectives and
Policies; Suitability
5 a . . . . . . . . . . . . . . . . . . . Trustees and Officers;
Management Contracts,
Distribution Plans and
Service Agreement
__________________
* Not Applicable
<PAGE>
b,c . . . . . . . . . . . . . . . . . . Management Contracts,
Distribution Plans and
Service Agreements; Fund
Summary;
d . . . . . . . . . . . . . . . . . . . Management Contracts,
Distribution Plans and
Service Agreements
e . . . . . . . . . . . . . . . . . . . Summary of Portfolio
Expenses; Management
Contracts, Distributions
Plans and Service
Agreements; Trustees and
Officers;
f(i) . . . . . . . . . . . . . . . . . Portfolio Transactions
f(ii) . . . . . . . . . . . . . . . . . *
6 a(i) . . . . . . . . . . . . . . . . . Investment Objective and
Policies; The Fund
and the Fidelity Organization
a(ii) . . . . . . . . . . . . . . . . . How to Invest, Exchange and
Redeem
a(iii), b . . . . . . . . . . . . . . . The Fund and the Fidelity
Organization
c,d . . . . . . . . . . . . . . . . . . *
e . . . . . . . . . . . . . . . . . . . Cover Page; How to Invest,
Exchange and Redeem
f,g . . . . . . . . . . . . . . . . . . Distributions and Taxes
7 a . . . . . . . . . . . . . . . . . . . The Fund and the Fidelity
Organization
b(i), (ii) . . . . . . . . . . . . . . How to Invest, Exchange and
Redeem
b(iii), (iv), (v), (c) . . . . . . . . *
d . . . . . . . . . . . . . . . . . . . Fund Summary; How to Invest,
Exchange and Redeem
e . . . . . . . . . . . . . . . . . . . *
__________________
* Not Applicable - 2 -
<PAGE>
f . . . . . . . . . . . . . . . . . . . Management Contracts,
Distribution Plans and
Service Agreements
8 a . . . . . . . . . . . . . . . . . . . How to Invest, Exchange and
Redeem
b . . . . . . . . . . . . . . . . . . . *
c,d . . . . . . . . . . . . . . . . . . How to Invest, Exchange and
Redeem
9 . . . . . . . . . . . . . . . . . . . *
10 . . . . . . . . . . . . . . . . . . . Cover Page
11 . . . . . . . . . . . . . . . . . . . Table of Contents
12 . . . . . . . . . . . . . . . . . . . Financial Statements
13 a,b,c . . . . . . . . . . . . . . . . Fund Summary ; Investment
Objective and Policies;
Investment Limitations
d . . . . . . . . . . . . . . . . . . *
14 a,b . . . . . . . . . . . . . . . . . Trustees and Officers
c . . . . . . . . . . . . . . . . . . *
15 a,b . . . . . . . . . . . . . . . . . *
c . . . . . . . . . . . . . . . . . . Trustees and Officers
16 a(i) . . . . . . . . . . . . . . . . . The Fund and the Fidelity
Organization
a(ii) . . . . . . . . . . . . . . . . Trustees and Officers
a(iii),b . . . . . . . . . . . . . . . Management Contracts,
Distribution Plans and
Service Agreements
c,d,e . . . . . . . . . . . . . . . . *
f . . . . . . . . . . . . . . . . . . Management Contracts,
Distribution Plans and
Service Agreements
g . . . . . . . . . . . . . . . . . . *
__________________
* Not Applicable - 3 -
<PAGE>
h . . . . . . . . . . . . . . . . . . The Fund and the Fidelity
Organization
i . . . . . . . . . . . . . . . . . . Management Contracts,
Distribution Plans and
Service Agreements
17 a . . . . . . . . . . . . . . . . . . Portfolio Transactions
b . . . . . . . . . . . . . . . . . . *
c,d . . . . . . . . . . . . . . . . . Portfolio Transactions
e . . . . . . . . . . . . . . . . . . *
18 a . . . . . . . . . . . . . . . . . . The Fund and the Fidelity
Organization
b . . . . . . . . . . . . . . . . . . *
19 a,b . . . . . . . . . . . . . . . . . How to Invest, Exchange and
Redeem
c . . . . . . . . . . . . . . . . . . *
20 . . . . . . . . . . . . . . . . . . . Distribution and Taxes
21 a(i), (ii) . . . . . . . . . . . . . . How to Invest, Exchange and
Redeem; The Fund and the
Fidelity Organization
(iii),b,c . . . . . . . . . . . . . . *
22 . . . . . . . . . . . . . . . . . . . Performance
23 . . . . . . . . . . . . . . . . . . . Financial Statements for the
fiscal year ended March 31,
1994 will be filed by
subsequent amendment.
__________________
* Not Applicable - 4 -
<PAGE>
FIDELITY INSTITUTIONAL CASH PORTFOLIOS - CLASS B
U.S. Treasury Portfolio
U.S. Treasury Portfolio II
U.S. Government Portfolio
Domestic Money Market Portfolio 82 Devonshire Street
Money Market Portfolio Boston, Massachusetts 02109
_________________________________________________________________
PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION
Fidelity Institutional Cash Portfolios (the Fund) offers investors a
convenient and economical way to invest in professionally managed money
market portfolios (the Portfolios). Each Portfolio's objective is to obtain
as high a level of current income as is consistent with the preservation of
principal and liquidity within the standards prescribed for the Portfolio.
Each Portfolio is comprised of two classes of shares, Class A and Class B.
Both Classes share a common investment objective and investment portfolio.
Class B shares are offered by this Prospectus and Statement of Additional
Information to institutional and corporate investors that invest through a
bank or other financial intermediary. Class A shares are offered by a
separate prospectus.
An investment in the Portfolios is neither insured nor guaranteed by the
U.S. government and there can be no assurance that the Portfolios will
maintain a stable $1.00 share price.
This Prospectus and Statement of Additional Information is designed to
provide investors with information that they should know before investing.
Please read and retain this document for future reference. The Annual Report
to Shareholders of the Fund is incorporated herein. To obtain additional
copies of this document, please call the number below.
DC-132485.1
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Mutual fund shares are not deposits or obligations of, or endorsed or
guaranteed by, any bank, savings association, insured depository institution
or government agency, nor are they federally insured or otherwise protected
by the FDIC, the Federal Reserve Board, or any other agency. Investments in
the fund involve investment risk, including possible loss of principal. The
value of the investment and its return will fluctuate and are not
guaranteed. When sold, the value of the investment may be higher or lower
than the amount originally invested.
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For further information, or assistance in opening a new account,
please call:
Nationwide . . . . . . . . . . . .800-843-3001
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TABLE OF CONTENTS
Summary of ^ Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fund ^ Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Per-Share Data and ^ Ratios . . . . . . . . . . . . . . . . . . . . . . . .
Investment Objective and ^ Policies . . . . . . . . . . . . . . . . . . . .
^ Suitability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
How to Invest, Exchange and ^ Redeem . . . . . . . . . . . . . . . . . . .
Distributions and ^ Taxes . . . . . . . . . . . . . . . . . . . . . . . . .
Investment ^ Limitations . . . . . . . . . . . . . . . . . . . . . . . . .
Description of Investment ^ Practices . . . . . . . . . . . . . . . . . . .
Portfolio ^ Transactions . . . . . . . . . . . . . . . . . . . . . . . . .
^ Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Management Contracts, Distribution Plans and
Service ^ Agreements . . . . . . . . . . . . . . . . . . . . . . . . . .
Description of the ^ Fund . . . . . . . . . . . . . . . . . . . . . . . . .
^ Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial ^ Statements . . . . . . . . . . . . . . . . . . . . . . . . . .
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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.
May ^ 20, 1994 FICPB-PRO-0593
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SUMMARY OF EXPENSES
The purpose of the table below is to assist investors in understanding the
various costs and expenses that an investor in Class B shares would bear
directly or indirectly. The expense summary format below was developed for
use by all mutual funds to help investors make their investment decisions.
Of course you should consider this expense information along with other
important information such as each Portfolio's investment objective and its
past performance. There are no transaction expenses associated with
purchases, exchanges and redemptions of shares.
A. Annual Operating Expenses (as a percentage of average net assets) for
each of the Portfolios:
U.S. Domestic
U.S. Treasury U.S. Money Money
Treasury Portfolio Government Market Market
Portfolio II Portfolio Portfolio Portfolio
Management
Fee
12b-1 Fee
Other
Expenses
Total
Operating
Expenses
* net of reimbursement
B. Example: An investor 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:
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1 Year 3 Years 5 Years 10 Years
$5 $16 $28 $63
Explanation of Table:
A. Annual Operating Expenses. Management fees are based on the Portfolios'
historical expenses after reimbursement. Management fees are paid by each
Portfolio to Fidelity Management & Research Company ("FMR" or the "Adviser")
for managing its investments and business affairs. 12b-1 Fees are paid by
Class B to Fidelity Distributors Corporation (Distributors) for services and
expenses in connection with the distribution of shares. Long-term
shareholders may pay more than the economic equivalent of the maximum
front-end sales charges permitted by the NASD due to 12b-1 payments. The
Portfolios incur other expenses for maintaining shareholder records,
furnishing shareholder statements and reports, and other services. Subject
to revision upon 90 days' notice to shareholders, FMR has agreed to
reimburse each Portfolio if and to the extent that total operating expenses
(excluding interest, taxes, brokerage commissions, extraordinary expenses,
and 12b-1 fees payable by Class B of each Portfolio's shares) exceed an
annual rate of .18% of the Portfolio's average net assets. If FMR were not
reimbursing each Portfolio, the respective Management Fees and Total
Operating Expenses for Class B of the Portfolios would be: % and % for
U.S. Treasury Portfolio; % and % for U.S. Treasury Portfolio II; % and
% for U.S. Government Portfolio; % and % for Domestic Money Market
Portfolio; and % and % for Money Market Portfolio. Please refer to the
section "Management Contracts, Distribution Plans and Service Agreements" on
page ^___ for further information.
B. Example of Expenses. The hypothetical example illustrates the expenses
associated with a $1,000 investment over periods of 1, 3, 5 and 10 years,
based on the expenses in the table and an assumed annual rate of return of
5%. These figures reflect FMR's voluntary reimbursement of expenses for each
Portfolio. The return of 5% and expenses should not be considered
indications of actual or expected performance or expenses, both of which may
vary.
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FUND SUMMARY
Investment Objective and Policies. Fidelity Institutional Cash Portfolios,
an open-end management investment company, offers institutional and
corporate investors a convenient and economical way to invest in a choice of
five professionally managed money market portfolios. Each Portfolio's
objective is to obtain as high a level of current income as is consistent
with the preservation of principal and liquidity within the standards
prescribed for the Portfolio.
U.S. Treasury Portfolio and U.S. Treasury Portfolio II. Comprised of
obligations which are issued or guaranteed as to principal and interest by
the U.S. government and thus constitute direct obligations of the United
States of America.
U.S. Government Portfolio. Comprised of obligations issued or guaranteed as
to principal and interest by the U.S. government, its agencies or
instrumentalities (U.S. government obligations).
Domestic Money Market Portfolio. Comprised of highest quality U.S.
dollar-denominated money market obligations of domestic issuers only. Under
normal conditions more than 25% of the Portfolio's total assets will be
invested in obligations of companies in the financial services industry.
Money Market Portfolio. Comprised of a broad range of high quality U.S.
dollar-denominated money market obligations of domestic and foreign issuers.
Under normal conditions more than 25% of the Portfolio's total assets will
be invested in obligations of companies in the financial services industry.
Each Portfolio may engage in repurchase agreements and reverse repurchase
agreements; however, U.S. Treasury Portfolio II does not currently intend to
engage in reverse repurchase agreements. Domestic Money Market Portfolio and
Money Market Portfolio may purchase restricted securities. Other permitted
investments of these two Portfolios may include bankers' acceptances,
certificates of deposit, time deposits and commercial paper, and each
Portfolio may invest in variable rate obligations. See Investment Objective
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and Policies," page ^___ and "Description of Investment Practices," page
^___, for further information on each Portfolio's permitted investments.
Investing in the Fund. The Portfolios' shares of beneficial interest may be
purchased at the next determined net asset value per share (NAV). Each
Portfolio requires a minimum initial investment of $5,000,000. Additional
investments may be made in any amount. For immediate acceptance of purchase
orders, federal funds must be transmitted. See "How to Invest," page ^___.
Redemption of Investment. Investors may redeem all or any part of the value
of their accounts by instructing a Portfolio to redeem shares as described
under "How to Redeem" on page ^___. Redemptions may be requested by
telephone and are effected at the NAV next determined after receipt and
acceptance of the request. Funds will be redeemed by wire to the investor's
designated bank account.
Investment Adviser. Fidelity Management & Research Company is the investment
adviser to the Fund. FMR, one of the largest investment management
organizations in the U.S., serves as investment adviser to investment
companies which had aggregate net assets of more than ^ $___ billion and
approximately ^____ million shareholder accounts as of April 30, ^ 1994. FMR
has entered into a sub-advisory agreement with FMR Texas Inc. (FMR Texas), a
subsidiary of FMR, pursuant to which FMR Texas has primary responsibility
for providing portfolio investment management services to each Portfolio.
See "Management Contracts, Distribution Plans and Service Agreements," page
^___.
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PER-SHARE DATA AND RATIOS
The tables below give information about each Portfolio's financial history.
They use the Portfolio's fiscal year (which ends March 31) and express the
information in terms of a single share outstanding throughout the periods
shown. The Information below and the Annual Report incorporated herein do
not reflect payment of a 12b-1 fee and, therefore, may not be representative
of the expected operational results of Class B. The per-share data and
ratios have been audited by _____ _______, independent accountants. Their
unqualified report is included on page ^__.
[To be filed by subsequent amendment].
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INVESTMENT OBJECTIVE AND POLICIES
The investment objective of each Portfolio is to obtain as high a level of
current income as is consistent with the preservation of principal and
liquidity within the standards prescribed for the Portfolio. There is no
assurance that a Portfolio will achieve its investment objective.
The Fund consists of five individual Portfolios, differentiated in terms of
their permitted investments or investment techniques. Each Portfolio seeks
to maintain a $1.00 share price at all times. The permitted investments of
the Portfolios are as follows:
U.S. Treasury Portfolio II (Treasury Portfolio II) currently maintains an
operating policy of investing 100% of its total assets in U.S. Treasury
bills, notes and bonds and repurchase agreements backed by those
obligations.
U.S. Treasury Portfolio (Treasury Portfolio) currently maintains an
operating policy of investing at least 65% of its total assets in U.S.
Treasury bills, notes and bonds and repurchase agreements backed by those
obligations. The balance of its assets may be invested in other direct
obligations of the United States.
. Each of the above operating policies for Treasury Portfolio II and
Treasury Portfolio may be changed upon 90 days' notice to shareholders.
In the case of such notification, each Portfolio would be permitted to
invest in instruments which are issued or guaranteed as to principal
and interest by the U.S. government and thus constitute direct
obligations of the United States. Such direct government obligations
include such instruments as U.S. Treasury bills, notes and bonds and
instruments issued by such Federal agencies as the Export-Import Bank
of the U.S., the General Services Administration, the Government
National Mortgage Association, the Small Business Administration and
the Washington Metropolitan Area Transit Authority. The Portfolios will
not invest in securities issued or guaranteed by U.S. government
agencies, instrumentalities, or government-sponsored enterprises that
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are not backed by the full faith and credit of the United States of
America.
U.S. Government Portfolio (Government Portfolio) invests in U.S. government
obligations, issued or guaranteed as to principal and interest by the U.S.
government, including bills, notes, bonds and other U.S. Treasury debt
securities; and instruments issued by U.S. government instrumentalities or
agencies(agency obligations). These instruments include:
. ^ obligations of the Federal Home Loan Banks, Federal Farm Credit
Banks, and Federal National Mortgage Association, which are backed only
by the right of the issuer to borrow from the U.S. Treasury under
certain circumstances or are backed by the credit of the agency or
instrumentality issuing the obligation. Such agency obligations are not
deemed direct obligations of the United States of America, and
therefore involve more risk.
Domestic Money Market Portfolio (Domestic Portfolio) invests in U.S.
dollar-denominated money market instruments of domestic issuers rated in the
highest rating category by at least two nationally recognized rating
services, or by one if only one rating service has rated an obligation. The
Portfolio may purchase unrated obligations determined to be of equivalent
quality pursuant to procedures adopted by the Board of Trustees. The
Portfolio's investments include:
. ^ obligations of companies in the financial services industry,
including domestic banks, savings and loan associations, consumer and
industrial finance companies, securities brokerage companies and a
variety of firms in the insurance field. (These obligations include
time deposits, certificates of deposit, bankers' acceptances and
commercial paper.) Under normal conditions, the Portfolio will invest
more than 25% of its total assets in obligations of companies in the
financial services industry.
. ^ obligations of governments and their agencies and instrumentalities.
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. ^ short-term corporate obligations, including commercial paper, notes
and bonds.
. ^ other short-term debt obligations.
Money Market Portfolio invests in high quality, U.S. dollar-denominated
money market instruments of domestic and foreign issuers, such as:
. ^ obligations of companies in the financial services industry,
including domestic banks, savings and loan associations, consumer and
industrial finance companies, securities brokerage companies and a
variety of firms in the insurance field. (These obligations include
time deposits, certificates of deposit, bankers' acceptances and
commercial paper.) Under normal conditions, the Portfolio will invest
more than 25% of its total assets in obligations of companies in the
financial services industry.
. ^ obligations of governments and their agencies and instrumentalities.
. ^ short-term corporate obligations, including commercial paper, notes
and bonds.
. ^ other short-term debt obligations.
To the extent that either Domestic Portfolio or Money Market Portfolio
invests more than 25% of its assets in obligations of companies in the
financial services industry, it will be exposed to the greater risks
associated with that industry as a whole. Domestic Portfolio and Money
Market Portfolio may invest in restricted securities. In addition, Money
Market Portfolio may invest in obligations of U.S. banks, foreign branches
of U.S. and foreign banks (Eurodollars), U.S. branches and agencies of
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foreign banks (Yankee dollars). Eurodollar and Yankee dollar investments
involve risks that are different from investments in securities of U.S.
banks. (See "Description of Investment Practices," beginning on page ^___.)
Regulatory Requirements. The following is a brief summary of regulatory
requirements applicable to all money market funds which limit certain of the
Portfolios' investment policies, though some of the Portfolios may follow
more restrictive policies as described above.
. ^ Quality. Pursuant to procedures adopted by the Board of Trustees,
each Portfolio may purchase only high quality securities that FMR
believes present minimal credit risks. To be considered high quality, a
security must be: a U.S. government security; rated in accordance with
applicable rules in one of the two highest categories for short-term
securities by at least two nationally recognized rating services (or by
one, if only one rating service has rated the security); or, if
unrated, judged to be of equivalent quality by FMR.
High quality securities are divided into "first tier" and "second tier"
securities. First tier securities have received the highest rating
(e.g., S&P A-1 rating) from at least two rating services (or one, if
only one has rated the security). Second tier securities have received
ratings within the two highest categories (e.g., S&P A-1 or A-2) from
at least two rating services (or one, if only one has rated the
security), but do not qualify as first tier securities. If a security
has been assigned different ratings by different rating services, at
least two rating services must have assigned the higher rating in order
for FMR to determine eligibility on the basis of that higher rating.
Based on procedures adopted by the Board of Trustees, FMR may determine
that an unrated security is of equivalent quality to a rated first or
second tier security.
^ Money Market Portfolio may not invest more than 5% of its total
assets in second tier securities. In addition, Money Market Portfolio
may not invest more than 1% of its total assets or $1 million
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(whichever is greater) in the second tier securities of a single
issuer.
. ^ Maturity. Each Portfolio must limit its investments to securities
with remaining maturities of 397 days or less and must maintain a
dollar-weighted average maturity of 90 days or less.
. ^ Diversification. Domestic Portfolio or Money Market Portfolio
normally may not invest more than 5% of its total assets in the
securities (other than U.S. government securities) of any single
issuer. Under certain conditions, however, each Portfolio may invest up
to 10% of its total assets in the first tier securities of a single
issuer for up to three days.
Investment Techniques. Each Portfolio may engage in repurchase agreements
with respect to any of its portfolio securities. Each Portfolio, except
Treasury Portfolio II, also may engage in reverse repurchase agreements to
raise cash temporarily or to attempt to increase income. Shareholders of
Treasury Portfolio II will be notified should the Portfolio change its
policies concerning reverse repurchase agreements.
See "Description of Investment Practices" on page ^___ for further
information on the Portfolios' investment techniques, including repurchase
and reverse repurchase agreements, and the "Appendix" on page ^___ for a
description of rating categories.
The investment objective and policies set forth above are supplemented by
the Fund's investment limitations beginning on page ^___. Each Portfolio's
objective is fundamental; however, its investment policies and limitations,
unless otherwise indicated, are not fundamental, and may be changed without
shareholder approval.
SUITABILITY
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The Fund is designed as an economical and convenient vehicle for those
institutional and corporate investors with cash balances or cash reserves
seeking to obtain the yields available from money market instruments while
maintaining liquidity. The ability to select from among the Portfolios
allows investors to choose that Portfolio, or combination of Portfolios,
which best suits their particular investment goals.
Each Portfolio's ability to achieve its investment objective depends on the
quality and maturity of its investments. Although the Portfolios' policies
are designed to maintain a stable $1.00 share price, all money market
instruments can change in value when interest rates or issuers'
creditworthiness change, or if an issuer or a guarantor of a security fails
to pay interest or principal when due. If these changes in value were large
enough, a Portfolio's share price could fall below $1.00. In general,
securities with longer maturities are more vulnerable to price changes,
although they may provide higher yields.
The Fund offers the advantages of large purchasing power and
diversification. Generally, in purchasing money market instruments from
dealers, the percentage difference between the bid and asked prices tends to
decrease as the size of the transaction increases. The Fund also offers
investors the opportunity to participate in a portfolio of money market
instruments which is more diversified in terms of issuers and maturities
than the size the investor's investment might otherwise permit.
Investment in the Fund relieves the investor of many management and
administrative burdens usually associated with the direct purchase and sale
of money market instruments. These include selection of portfolio
investments; surveying the market for the best terms at which to buy and
sell; scheduling and monitoring maturities and reinvestments; receipt,
delivery and safekeeping of securities; and portfolio recordkeeping.
HOW TO INVEST, EXCHANGE AND REDEEM
Shares of each Portfolio are offered continuously and may be purchased at
the NAV next determined after an order is received and accepted.
Institutions may charge their clients fees in connection with purchases and
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sales for the accounts of their clients. The Fund may discontinue offering
its shares generally in any Portfolio or in any particular state without
notice to shareholders. Investments in the Portfolios must be made using the
Federal Reserve Wire System. Checks will not be accepted as a means of
investment.
Share Price and Dividends. The NAV for each Portfolio is determined by
Fidelity Service Co. (Service), 82 Devonshire Street, Boston, MA 02109 as of
3:00 p.m., Eastern time, each day the Portfolios are open for business. (See
"Holiday Schedule" on page ^___.) The NAV of each Portfolio is determined by
adding the value of all securities and other assets of the Portfolio,
deducting its actual and accrued liabilities allocated to each class of
shares, and dividing by the number of shares outstanding in a class. (See
"How Net Asset Value is Determined" on page ^___ .)
Each Class' net interest income for dividend purposes is determined by
Service on a daily basis and shall be payable to shareholders of record at
the time of its declaration (including, for this purpose, holders of shares
purchased, but excluding holders of shares redeemed on that day). Income
dividends declared are accrued daily throughout the month and are
distributed in the form of full and fractional shares of the applicable
class on the first business day of the following month. Based on prior
approval of the Fund, dividends relating to shares redeemed during the month
can be distributed in the form of full and fractional shares on the day of
redemption. The Fund reserves the right to limit this service. The
shareholder may elect to receive monthly dividends in cash.
Minimum Investment and Account Balance. The minimum initial investment to
establish a new account in each Portfolio is $5,000,000. Subsequent
investments may be made in any amount. To keep an account open, please leave
$5,000,000 in it. If an account balance falls below $5,000,000 due to
redemption, the account may be closed and the proceeds wired to the bank
account of record. An investor will be given 30 days' notice that the
account will be closed unless an additional investment is made to increase
the account balance to the $5,000,000 minimum.
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How to Invest. An initial investment in a Portfolio must be preceded or
accompanied by a completed, signed application. Unless you already have a
Fidelity mutual fund account, you must complete and sign the application.
The application should be forwarded to:
Fidelity Institutional Cash Portfolios
FIIOC, ZR5
P.O. Box 1182
Boston, MA 02103-1182
An investor must purchase shares of each Portfolio by wire. For wiring
information and instructions, investors should call the institution through
which they trade or Fidelity Client Services. There is no charge imposed by
the Fund for the wire; however, banks may charge a fee for this service.
In order to receive same day acceptance of the investment, investors must
telephone Institutional Trading before 3:00 p.m., Eastern time, on days the
Portfolios are open for business, to advise them of the wire and to place
the trade.
Fidelity Client Services:
Nationwide . . . . . . . . . . . . . . . . . . . . . . . . . . 800-843-3001
Institutional Trading:
Nationwide . . . . . . . . . . . . . . . . . . . . . . . . . . 800-343-6310
In Massachusetts . . . . . . . . . . . . . . . . . . . . . . . 800-462-2603
Investors will be entitled to the dividend declared by a Portfolio provided
the Portfolio's custodian bank receives the wire by the close of the Federal
Reserve Wire System on the day the purchase order is accepted. Investors are
advised to wire funds as early in the day as possible, and to provide
advance notice to Institutional Trading for large transactions.
How to Exchange. Each Portfolio's shares may be exchanged (subject to the
minimum initial investment requirement) at no charge for Class B shares of
any other Portfolio of the Fund, provided the portfolio to be acquired is
registered in an investor's state. You may only exchange between accounts
that are registered in the same name, address, and taxpayer identification
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number. Exchanges will not be permitted until a completed and signed mutual
fund application is on file. Investors should consult the prospectus of the
portfolio to be acquired to determine eligibility and suitability.
To Exchange by Telephone. Exchanges may be requested on any day the
Portfolios are open for business by calling Institutional Trading before
3:00 p.m. Eastern time at the numbers listed.
To Exchange by Mail. Written requests for exchanges should contain the
Portfolio name, account number, and number of shares to be redeemed, and the
Portfolio name of the shares to be purchased. The letter must be signed by a
person authorized to act on the account and must include a signature
guarantee. Signature guarantees will be accepted from banks, brokers,
dealers, municipal securities dealers, municipal securities brokers,
government securities dealers, government securities brokers, credit unions
(if authorized under state law), national securities associations, clearing
agencies and savings associations. Letters should be sent to Fidelity Client
Services at the address shown.
An exchange involves the redemption of all or a portion of the shares of one
portfolio and the purchase of shares in another portfolio. Shares will be
redeemed at the next determined NAV following receipt of the exchange order.
Shares of the portfolio to be acquired will be purchased at its next
determined NAV after redemption proceeds are made available. Investors will
earn dividends in the acquired portfolio in accordance with the portfolio's
customary policy, normally on the day the exchange request is received.
Investors should note that under certain circumstances, a Portfolio may take
up to seven days to make redemption proceeds available for the exchange
purchase of shares of another Portfolio.
Pursuant to Rule 11a-3 under the Investment Company Act of 1940 (the 1940
Act), each Portfolio is required to give shareholders at least 60 days'
notice prior to terminating or modifying a Portfolio's exchange privilege.
Under Rule 11a-3, the 60-day notification requirement may be waived if (i)
the only effect of a modification would be to reduce or eliminate an
administrative fee, redemption fee or deferred sales charge ordinarily
payable at the time of exchange, or (ii) a Portfolio suspends the redemption
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of the shares to be exchanged^as permitted under the 1940 Act or^the rules
and regulations thereunder,^or the Portfolio to be acquired suspends sale of
its shares because it is unable to invest amounts effectively in accordance
with its investment objective and policies.
In this Prospectus and Statement of Additional Information, each Portfolio
notifies shareholders that it reserves the right at any time without prior
notice to refuse exchange purchases by any person or group, if, in FMR's
judgment, the Portfolio would be unable to invest effectively in accordance
with its investment objective and policies or might otherwise be adversely
affected. The exchange privilege may be modified or terminated in the
future.
How to Redeem. Shareholders may redeem all or any part of the value of their
account(s) on any business day. Redemptions may be requested by telephone
and are effected at the NAV next determined after receipt of the redemption
request.
Shareholders must designate on their applications their U.S. commercial bank
account(s) into which they wish the proceeds of redemptions to be deposited.
A shareholder may change the bank account(s) designated to receive amounts
redeemed at any time prior to making a redemption request. A letter of
instruction, including a signature guarantee, should be sent to Client
Services.
Redemption proceeds will be wired via the Federal Reserve Wire System to a
bank account of record on the same day a redemption request is received,
provided it is made before 3:00 p.m. Eastern time. Shares redeemed will not
receive the dividend declared on the day of redemption. Redemption requests
can be made by calling Institutional Trading:
Nationwide . . . . . . . . . . . . . . . . . . . . . . . . . . 800-343-6310
In Massachusetts . . . . . . . . . . . . . . . . . . . . . . . 800-462-2603
There is no charge imposed for wiring of redemption proceeds.
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If shares redeemed represent an investment made via clearing house funds,
each Portfolio reserves the right to withhold the redemption proceeds until
it is reasonably assured of the crediting of such funds to its account.
Under the 1940 Act, the right of redemption may be suspended or the date of
payment postponed for more than seven days at times when the New York Stock
Exchange (NYSE) is closed, other than customary weekend or holiday closings,
or when trading on the NYSE is restricted, or under certain emergency
circumstances as determined by the SEC. If investors are unable to execute a
transaction by telephone (for example, during time of unusual market
activity) they may consider placing their orders by mail. In case of the
suspension of the right of redemption, investors may either withdraw their
requests for redemption or receive payment based on the NAV next determined
after termination of the suspension.
Additional Information. ^ Investors may initiate many transactions by
telephone. Note that Fidelity will not be responsible for any losses
resulting from unauthorized transactions if it follows reasonable procedures
designed to verify the identity of the caller. Fidelity will request
personalized security codes or other information, and may also record calls.
Investors should verify the accuracy of their confirmation statements
immediately after receiving them. If an investor does not want the ability
to redeem and exchange by telephone, call Fidelity for instructions.
To allow the Adviser to manage the Portfolios most effectively, investors
are strongly urged to initiate all trades (investments, exchanges or
redemptions of shares) as early in the day as possible and to notify
Fidelity Client Services at least one day in advance of transactions in
excess of $5 million. In making these trade requests, the name of the
registered shareholder and the account number must be supplied for each
transaction. To protect each Portfolio's performance and shareholders, the
Adviser discourages frequent trading in response to short-term market
fluctuations.
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are valued in
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computing each Portfolio's NAV. Shareholders receiving securities or other
property on redemption may realize a gain or loss for tax purposes, and will
incur any costs of sale, as well as the associated inconveniences.
Each Portfolio reserves the right to suspend the offering of shares for a
period of time, and each Portfolio reserves the right to reject any specific
purchase order including certain purchases by exchange. Purchase orders may
be refused if, in FMR's opinion, they are of a size that would disrupt
management of the Portfolios. Each Portfolio may discontinue offering its
shares at any time or in any particular state without notice to
shareholders.
Investor Accounts. Fidelity Investments Institutional Operations Company
(FIIOC) is the transfer, dividend disbursing and shareholder servicing agent
for the Fund and maintains an account for each investor expressed in terms
of full and fractional shares of each Portfolio rounded to the nearest
1/1000th of a share.
The Fund does not issue share certificates, but FIIOC will send investors a
confirmation statement after every transaction (except a reinvestment of
dividends or capital gains) that affects the share balance or the account
registration. After the end of each month, FIIOC will send each investor a
statement setting forth the transactions in their account for the month and
the month-end balance of full and fractional shares held in the account.
Subaccounting and Special Services. Special processing has been arranged
with FIIOC for banks, corporations and other institutions that wish to open
multiple accounts (a master account and subaccounts). An investor wishing to
utilize FIIOC's subaccounting facilities or other special services for
individual or multiple accounts will be required to enter into a separate
agreement with FIIOC. Charges for these services, if any, will be determined
on the basis of the level of services to be rendered. Subaccounts may be
opened with the initial investment or at a later date.
Holiday Schedule. Each Portfolio is open for business and its NAV is
calculated each day that both the Federal Reserve Bank of New York (New
York Fed) and the NYSE are open for trading. The following holiday closings
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have been scheduled for ^ 1994: Dr. Martin Luther King, Jr. Day (observed),
Presidents' Day, Good Friday, Memorial Day, ^ Independence Day (observed),
Labor Day, Columbus Day, Veterans' Day, Thanksgiving Day and Christmas Day
(observed). Although FMR expects the same holiday schedule, with the
addition of New Year's Day, to be observed in the future, the New York Fed
or the NYSE may modify its holiday schedule at any time. ^ The right is
reserved to advance the time on that day by which purchase and redemption
orders must be received on any day that: (1) the New York Fed or the NYSE
closes early or, in the case of U.S. Treasury Portfolio II, the principal
government securities markets close early, such as on days in advance of
holidays generally observed by participants in such markets; (2) if in
FMR's judgment, early closing is deemed to be in the best interest of each
Portfolio's shareholders; or, (3) as permitted by the SEC. To the extent
that each Portfolio's securities are traded in other markets on days the
New York Fed or the NYSE is closed, each Portfolio's NAV may be affected when
investors do not have access to a Portfolio to purchase or redeem shares.
Certain Fidelity funds may follow different holiday closing schedules.
How Net Asset Value is Determined. Each Portfolio values its investments on
the basis of amortized cost. This technique involves valuing an instrument
at its cost as adjusted for amortization of premium or accretion of discount
rather than its value based on current market quotations or appropriate
substitutes which reflect current market conditions. The amortized cost
value of an instrument may be higher or lower than the price a Portfolio
would receive if it sold the instrument.
Valuing a Portfolio's instruments on the basis of amortized cost and use of
the term "money market fund" are permitted by Rule 2a-7 under the 1940 Act.
The Portfolios must adhere to certain conditions under Rule 2a-7; these
conditions are summarized under "Regulatory Requirements" on page ^___.
The Board of Trustees of the Fund oversees FMR's adherence to SEC rules
concerning money market funds, and has established procedures designed to
stabilize each Portfolio's NAV for each Class at $1.00 per share. At such
intervals as they may deem appropriate, the Trustees consider the extent to
which NAV calculated by using market valuations would deviate from $1.00. If
the Trustees believe that a deviation from a Portfolio's amortized cost per
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share may result in material dilution or other unfair results to
shareholders, the Trustees have agreed to take such corrective action, if
any, as they deem appropriate to eliminate or reduce, to the extent
reasonably practicable, the dilution or unfair results. Such corrective
action could include selling portfolio instruments prior to maturity to
realize capital gains or losses or to shorten average portfolio maturity;
withholding dividends; redeeming shares in kind; establishing NAV by using
available market quotations; and such other measures as the Trustees may
deem appropriate.
During periods of declining interest rates, a Portfolio's yield based on
amortized cost may be higher than a yield based on market valuations. Under
these circumstances, a shareholder in a Portfolio would be able to obtain a
somewhat higher yield than would result if the Portfolio utilized market
valuations to determine its NAV. The converse would apply in a period of
rising interest rates.
DISTRIBUTIONS AND TAXES
Dividends. Each Portfolio ordinarily declares dividends from net investment
income daily and pays such dividends monthly. Each Portfolio intends to
distribute substantially all of its net investment income and capital gains,
if any, to shareholders within each calendar year as well as on a fiscal
year basis.
Dividends from the Portfolios will not normally qualify for the
dividends-received deduction available to corporations, since a Portfolio's
income is primarily derived from interest income and short-term capital
gains. Depending upon state law, a portion of each Portfolio's dividends
attributable to interest income derived from U.S. government securities may
be exempt from state and local taxation. The Portfolios will provide
information on the portion of each Portfolio's dividends, if any, that
qualify for this exemption.
Capital Gain Distributions. The Portfolios may distribute short-term capital
gains once a year or more often as necessary to maintain their NAV at $1.00
per share or to comply with distribution requirements under federal tax law.
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The Portfolios do not anticipate earning long-term capital gains on
securities held by the Portfolios.
Federal Taxes. Dividends derived from net investment income and short-term
capital gains are taxable as ordinary income. Distributions are taxable when
paid, whether investors receive distributions in cash or reinvest them in
additional shares, except that distributions declared in December and paid
in January are taxable as if paid on December 31st. The Portfolios will send
investors an IRS Form 1099-DIV by January 31st showing their taxable
distributions for the past calendar year.
State and Local Tax Issues. For mutual funds organized as business trusts,
most states' laws provide for a pass-through of the state and local income
tax exemption afforded to direct owners of U.S. government securities.
Therefore, for residents of most states, the tax treatment of your dividend
distributions from U.S. Treasury Portfolio, U.S. Treasury Portfolio II, and
U.S. Government Portfolio will be treated the same as if you directly owned
your proportionate share of each Portfolio's portfolio securities. Thus,
because the income earned on most U.S. government securities in which these
Portfolios invest is exempt from state and local income taxes in most
states, the portion of your dividends from each Portfolio attributable to
these securities will also be free from income taxes in those states.
Pennsylvania does not provide for this benefit, and some states may limit
the benefit. However, legislation providing for a pass-through has been
approved by the Pennsylvania legislature which, if signed by the Governor,
would be retroactive to January 1, 1993. In addition, certain types of
securities, such as repurchase agreements and certain agency backed
securities, may not qualify for the government interest exemption on a
state-by-state basis. The exemption from state and local income taxation
does not preclude states from asserting other taxes on the ownership of U.S.
government securities.
Tax Status of the Fund. Each Portfolio has qualified and intends to continue
to qualify as a "regulated investment company" under the Internal Revenue
Code of 1986, as amended (the Code), so that a Portfolio will not be liable
for federal income or excise taxes on net investment income or capital gains
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to the extent that these are distributed to shareholders in accordance with
applicable provisions of the Code.
Other Tax Information. The information above is only a summary of some of
the federal tax consequences generally affecting a Portfolio and its
shareholders, and no attempt has been made to discuss individual tax
consequences. In addition to federal taxes, investors may be subject to
state or local taxes on their investment. Investors should consult their tax
advisors to determine whether a Portfolio is suitable to their particular
tax situation.
When investors sign their account application, they will be asked to certify
that their social security or taxpayer identification number is correct and
that they are not subject to 31% backup withholding for failing to report
income to the IRS. If investors violate IRS regulations, the IRS can require
a Portfolio to withhold 31% of taxable distributions and redemptions.
Issuers of tax-exempt bonds should note that, although the U.S. Treasury has
adopted rules which allow certain issuers of tax-exempt bonds to take into
account qualified administrative costs in determining payments and receipts
on non-purpose investments, there is no assurance that expenses of a
Portfolio will meet this standard. Such issuers should consult their own tax
counsel before investing.
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<PAGE>
INVESTMENT LIMITATIONS
Unless otherwise noted, whenever an investment policy or limitation states a
maximum percentage of a Portfolio's assets that may be invested in any
security or other asset or sets forth a policy regarding quality standards,
such standard or percentage limitation shall be determined immediately after
and as a result of a Portfolio's acquisition of such security or other
asset. Accordingly, any subsequent change in values, net assets or other
circumstances will not be considered when determining whether the investment
complies with a Portfolio's investment policies and limitations.
The Portfolios' fundamental investment policies and limitations may not be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the 1940 Act) of the Portfolios. However, except
for the fundamental investment limitations set forth below, the investment
policies and limitations described in this combined Prospectus and Statement
of Additional Information are not fundamental and may be changed without
shareholder approval. The following are the Portfolios' fundamental
investment limitations set forth in their entirety. Each Portfolio may not:
(1) purchase the securities of any issuer (other than obligations issued or
guaranteed as to principal and interest by the government of the United
States, its agencies or instrumentalities) if, as a result, more than
5% of its total assets would be invested in the securities of such
issuer, provided, however, that with respect to 25% of its total
assets, 10% of its assets may be invested in the securities of an
issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the Portfolio may (i) borrow money for
temporary or emergency purposes (not for leveraging or investment) and
(ii) engage in reverse repurchase agreements for any purpose; provided
that (i) and (ii) in combination do not exceed 33 1/3% of the value of
the Portfolio's total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
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this amount will be reduced within three days (not including Sundays
and holidays) to the extent necessary to comply with the 33 1/3%
limitation;
(4) underwrite securities issued by others, except to the extent that the
Portfolio may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the Portfolio's
total assets would be invested in the securities of companies whose
principal business activities are in the same industry, except that
Domestic Portfolio and Money Market Portfolio will invest more than 25%
of its total assets in the financial services industry;
(6) buy or sell real estate;
(7) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to
repurchase agreements;
(8) invest in oil, gas, or other mineral exploration or development
programs; or
(9) invest in companies for the purpose of exercising control or
management.
(10) Each Portfolio may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company with substantially the
same fundamental investment objectives, policies and limitations as the
Portfolio.
The following limitations are not fundamental, and may be changed without
shareholder approval:
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(i) Domestic Portfolio and Money Market Portfolio each do not currently
intend to purchase a security (other than a security issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 5% of its total assets
would be invested in the securities of a single issuer; provided that
the Portfolio may invest up to 10% of its total assets in the first
tier securities of a single issuer for up to three business days.
(ii) Each Portfolio does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(iii) Each Portfolio does not currently intend to purchase securities on
margin, except that the Portfolio may obtain such short-term credits
as are necessary for the clearance of transactions, and provided that
margin payments in connection with futures contracts and options on
futures contracts shall not constitute purchasing securities on
margin.
(iv) Each Portfolio may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party.
Each Portfolio will not purchase any security while borrowings
(excluding reverse repurchase agreements) representing more than 5%
of its total assets are outstanding. Each Portfolio will not borrow
from other funds advised by FMR or its affiliates if total
outstanding borrowings immediately after such borrowing would exceed
15% of the Portfolio's total assets. Treasury Portfolio II does not
currently intend to engage in reverse repurchase agreements.
(v) Each Portfolio does not currently intend to purchase any security if,
as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
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legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(vi) Subject to 60 days' notification to its shareholders, each Portfolio
does not currently intend to purchase or sell futures contracts or
call options. This limitation does not apply to options attached to,
or acquired or traded together with, their underlying securities and
does not apply to securities that incorporate features similar to
options or futures contracts.
(vii) Domestic Portfolio and Money Market Portfolio do not currently intend
to lend assets other than securities to other parties, except by
lending money (up to 10% of each Portfolio's net assets) to a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser. (This limitation does not
apply to purchases of debt securities or to repurchase agreements.)
(viii) Each Portfolio does not currently intend to (a) purchase securities
of other investment companies, except in the open market where no
commission except the ordinary broker's commission is paid, or (b)
purchase or retain securities issued by other open-end investment
companies. Limitations (a) and (b) do not apply to securities
received as dividends, through offers of exchange, or as a result of
a reorganization, consolidation, or merger.
(ix) Treasury Portfolio, Treasury Portfolio II and Government Portfolio do
not currently intend to make loans, but this limitation does not
apply to purchases of debt securities or to repurchase agreements.
(x) Each Portfolio does not currently intend to invest in securities of
real estate investment trusts that are not readily marketable, or to
invest in securities of real estate limited partnerships that are not
listed on the New York Stock Exchange or the American Stock Exchange
or traded on the NASDAQ National Market System.
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<PAGE>
(xi) Each Portfolio does not currently intend to purchase the securities
of any issuer if those officers and Trustees of the Fund and those
officers and directors of FMR who individually own more than 1/2 of
1% of the securities of such issuer together own more than 5% of such
issuer's securities.
(xii) Each Portfolio does not currently intend to invest in oil, gas, or
other mineral exploration or development programs or leases.
(xiii) Each Portfolio does not currently intend to invest all of its assets
in the securities of a single open-end management investment company
with substantially the same fundamental investment objectives,
policies, and limitations as the Portfolio.
DESCRIPTION OF INVESTMENT PRACTICES
The following paragraphs provide a brief description of securities in which
the Portfolios may invest and transactions they may make. The Portfolios are
not limited by this discussion, however, and may purchase other types of
securities and enter into other types of transactions if they are consistent
with the Portfolios' investment objective and policies.
Affiliated Bank Transactions. ^ A Portfolio may engage in transactions with
financial institutions that are, or may be considered to be, "affiliated
persons" of the ^ Portfolio under the Investment Company Act of 1940. These
transactions may include repurchase agreements with custodian banks; ^
short-term obligations of, and repurchase agreements with, the 50 largest
U.S. banks (measured by deposits); ^ municipal securities; ^ U.S. government
securities with affiliated ^ financial institutions that are ^ primary
dealers in these securities; short-term currency transactions; and
short-term borrowings. In accordance with exemptive orders issued by the
Securities and Exchange Commission, the Board of Trustees has established
and periodically reviews procedures applicable to transactions involving
affiliated financial institutions.
Asset-Backed Securities may include pools of mortgages, loans, receivables
or other assets. Payment of principal and interest may be largely dependent
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upon the cash flows generated by the assets backing the securities, and, in
certain cases, supported by letters of credit, surety bonds, or other credit
enhancements. The value of asset-backed securities may also be affected by
the creditworthiness of the servicing agent for the pool, the originator of
the loans or receivables, or the financial institution(s) providing the
credit support.
Bankers' Acceptances. Negotiable obligations of a bank to pay a draft which
has been drawn on it by a customer. These obligations are backed by large
banks and usually are backed by goods in international trade.
Certificates of Deposit. Negotiable certificates representing a commercial
bank's obligations to repay funds deposited with it, earning specified rates
of interest over a given period of time.
Commercial Paper. Short-term obligations issued by banks, broker-dealers,
corporations, and other entities for purposes such as financing their
current operations.
Corporate Obligations. Bonds and notes issued by corporations and other
business organizations in order to finance their long-term credit needs.
Delayed Delivery Transactions. Each Portfolio may buy and sell securities on
a delayed delivery or when-issued basis. These transactions involve a
commitment by a Portfolio to purchase or sell specific securities at a
predetermined price or yield with payment and delivery taking place after
the customary settlement period for that type of security (and more than
seven days in the future). Typically, no interest accrues to the purchaser
until the security is delivered.
When purchasing securities on a delayed delivery basis, each Portfolio
assumes the rights and risks of ownership, including the risk of price and
yield fluctuations. Because a Portfolio is not required to pay for
securities until the delivery date, these risks are in addition to the risks
associated with the Portfolio's other investments. If a Portfolio remains
substantially fully invested at a time when delayed delivery purchases are
outstanding, the delayed delivery purchases may result in a form of
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leverage. When delayed delivery purchases are outstanding, the Portfolio
will set aside appropriate liquid assets in a segregated custodial account
to cover its purchase obligations. When a Portfolio has sold a security on a
delayed delivery basis, the Portfolio does not participate in further gains
or losses with respect to the security. If the other party to a delayed
delivery transaction fails to deliver or pay for the securities, the
Portfolio could miss a favorable price or yield opportunity, or could suffer
a loss.
Each Portfolio may renegotiate delayed delivery transactions after they are
entered into, and may sell underlying securities before they are delivered,
which may result in capital gains or losses.
Financial Services Industry. Because Domestic Portfolio and Money Market
Portfolio concentrate more than 25% of their respective total assets in the
financial services industry, their performance may be affected by conditions
affecting banks and other financial services companies. Companies in the
financial services industry are subject to various risks related to that
industry, such as governmental regulation, changes in interest rates, and
exposure on loans, including loans to foreign borrowers. Investments in the
financial services industry may include obligations of foreign and domestic
banks, savings and loan associations, consumer and industrial finance
companies, securities brokerage companies, leasing companies, and a variety
of firms in the insurance field. These obligations include time deposits,
certificates of deposit, bankers' acceptances, and commercial paper.
Foreign Securities. Eurodollar and Yankee dollar investments of Money Market
Portfolio risks include future unfavorable political and economic
developments, possible withholding taxes, seizure of foreign deposits,
currency controls, interest limitations or other governmental restrictions
which might affect payment of principal or interest. Additionally, there may
be less public information available about foreign banks and their branches
than is available with respect to domestic banks. Foreign branches of
foreign banks are not regulated by U.S. banking authorities, and generally
are not bound by accounting, auditing and financial reporting standards
comparable to U.S. banks. Although the Adviser carefully considers these
factors when making investments, the Money Market Portfolio does not limit
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the amount of its assets which can be invested in any one type of instrument
or in any foreign country.
Illiquid Investments ^ are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they
are valued. Under the supervision of the Board of Trustees, FMR determines
the liquidity of a Portfolio's investments and, through reports from FMR,
the Board monitors investments in illiquid instruments. In determining the
liquidity of each Portfolio's investments, FMR may consider various factors
including (1) the frequency of trades and quotations, (2) the number of
dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, (4) the nature of the security (including any
demand or tender features) and (5) the nature of the marketplace for trades
(including the ability to assign or offset the Portfolio's rights and
obligations relating to the investment). Investments currently considered by
the Portfolios to be illiquid include repurchase agreements not entitling
the holder to payment of principal and interest within seven days^. Also,
for Domestic Money Market Portfolio and Money Market Portfolio FMR may
determine some restricted securities and time deposits ^ to be illiquid. In
the absence of market quotations, illiquid investments are valued for
purposes of monitoring amortized cost valuation at fair value as determined
in good faith by a committee appointed by the Board of Trustees. If through
a change in values, net assets or other circumstances, a Portfolio were in a
position where more than 10% of its net assets were invested in illiquid
securities, it would seek to take appropriate steps to protect liquidity.^
Interfund Borrowing Program. The Portfolios have received permission from
the SEC to lend money to and borrow money from other funds advised by FMR or
its affiliates. Interfund loans and borrowings normally will extend
overnight, but can have a maximum duration of seven days. Treasury
Portfolio, Treasury Portfolio II and Government Portfolio will participate
in this interfund lending program only as borrowers. Each Portfolio will
borrow through the program only when costs are equal to or lower than the
cost of bank loans. Domestic Money Market and Money Market Portfolio will
lend through the program only when the returns are higher than those
available at the same time from other short-term instruments (such as
repurchase agreements). Each Portfolio that may lend will not lend more than
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10% of its net assets to other funds and no Portfolio will borrow through
the program if, after doing so, its total outstanding borrowings would
exceed 15% of total assets. Loans may be called on one day's notice and a
Portfolio may have to borrow from a bank at a higher interest rate if an
interfund loan is called or not renewed. Any delay in repayment to a lending
fund could result in a lost investment opportunity or additional borrowing
costs.
Money Market refers to the marketplace where short-term, high quality debt
securities are traded, including U.S. government obligations, commercial
paper, certificates of deposit, bankers' acceptances, time deposits and
short-term corporate obligations. Money market instruments may carry fixed
rates of return or have variable or floating interest rates.
Municipal Obligations are issued to raise money for various public purposes,
including general purpose financing for state and local governments as well
as financing for specific projects or public facilities. Municipal
obligations may be backed by the full taxing power of a municipality or by
the revenues from a specific project or the credit of a private
organization.
Repurchase Agreements. Repurchase agreements are transactions by which a
Portfolio purchases a security and simultaneously commits to resell that
security to the seller at an agreed upon price on an agreed upon date within
a number of days from the date of purchase. The resale price reflects the
purchase price plus an agreed upon incremental amount which is unrelated to
the coupon rate or maturity of the purchased security. A repurchase
agreement involves the obligation of the seller to pay the agreed upon
price, which obligation is in effect secured by the value (at least equal to
the amount of the agreed upon resale price and marked to market daily) of
the underlying security. Each Portfolio may engage in a repurchase agreement
with respect to any security in which that Portfolio is authorized to
invest. While it does not presently appear possible to eliminate all risks
from these transactions (particularly the possibility of a decline in the
market value of the underlying securities, as well as delays and costs to
the Portfolios in connection with bankruptcy proceedings), it is the policy
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of each Portfolio to limit repurchase agreements to parties whose
creditworthiness has been reviewed and found satisfactory by FMR.
Restricted Securities. Domestic Portfolio and Money Market Portfolio may
purchase restricted securities that are not registered for sale to the
general public. Restricted securities generally can be sold in privately
negotiated transactions, pursuant to an exemption from registration under
the Securities Act of 1933, or in a registered public offering. Where
registration is required, a Portfolio may be obligated to pay all or part of
the registration expense and a considerable period may elapse between the
time it decides to seek registration and the time the fund may be permitted
to sell a security under an effective registration statement. If, during
such a period, adverse market conditions were to develop, the fund might
obtain a less favorable price than prevailed when it decided to seek
registration of the security.
Reverse Repurchase Agreements. Each Portfolio, other than Treasury Portfolio
II, may engage in reverse repurchase agreements. Reverse repurchase
agreements are transactions whereby a Portfolio temporarily transfers
possession of a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash. At the same time, the Portfolio agrees to
repurchase the instrument at an agreed upon price and time. A Portfolio
expects that it will engage in reverse repurchase agreements for temporary
purposes such as to fund redemptions or when it is able to invest the cash
so acquired at a rate higher than the cost of the agreement, which would
increase the income earned by a Portfolio. While a reverse repurchase
agreement is outstanding, the Portfolio will maintain appropriate liquid
assets in a segregated custodial account to cover its obligations under the
agreement. Reverse repurchase agreements may increase the risk of
fluctuation in the market value of a Portfolio's assets or in its yield.
Such transactions may increase fluctuations in the market value of a
Portfolio's assets and may be viewed as a form of leverage. A Portfolio will
enter into reverse repurchase agreements only with parties whose
creditworthiness has been found satisfactory by FMR.
Short Sales "Against the Box." A Portfolio may sell securities short when
it owns or has the right to obtain securities equivalent in kind or amount
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to the securities sold short. Short sales could be used to protect the net
asset value per share of the Portfolio in anticipation of increased interest
rates, without sacrificing the current yield of the securities sold short.
If a Portfolio enters into a short sale against the box, it will be required
to set aside securities equivalent in kind and amount to the securities sold
short (or securities convertible or exchangeable into such securities) and
will be required to hold such securities while the short sale is
outstanding. The Portfolio will incur transaction costs, including interest
expense, in connection with opening, maintaining, and closing short sales
against the box.
Time Deposits are non-negotiable deposits in a banking institution earning a
specified interest rate over a given period of time.
Variable or Floating Rate Instruments ^ bear variable or floating interest
rates and ^ carry rights that permit holders to demand ^ payment of the
unpaid principal balance plus accrued interest from the issuers or certain
financial intermediaries. Floating rate ^ instruments have interest rates
that change whenever there is a change in a designated ^ base rate, while
variable rate instruments provide for a specified periodic adjustment in the
interest rate. These formulas ^ are designed to result in a market value for
the instrument that approximates its par value.
A Portfolio may invest in variable or floating rate instruments that
ultimately mature in more than 397 days if the Portfolio acquires a right to
sell securities that meets certain requirements set forth in Rule 2a-7.
Variable rate instruments (including instruments subject to a demand
feature) that mature in 397 days or less and U.S. government obligations
with a variable rate of interest reset no less frequently than every 762
days may be deemed to have maturities equal to the period remaining until
the next readjustment of the interest rate. Other variable rate instruments
with demand features may be deemed to have a maturity equal to the longer of
the period remaining until the next readjustment of the interest rate or the
period remaining until the principal amount can be recovered through demand.
A floating rate instrument subject to a demand feature may be deemed to have
a maturity equal to the period remaining until the principal amount can be
recovered through demand.
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PORTFOLIO TRANSACTIONS
Money market obligations generally are traded in the over-the-counter market
through broker-dealers. A broker-dealer is a securities firm or bank which
makes a market for securities by offering to buy at one price and sell at a
slightly higher price. The difference between the prices is known as a
spread. Since FMR trades, directly or through affiliated sub-advisers, a
large number of securities, including those of Fidelity's other funds,
broker-dealers are willing to work with the funds on a more favorable spread
than would be possible for most individual investors.
All orders for the purchase or sale of portfolio securities are placed on
behalf of each Portfolio by FMR (either directly or through affiliated
sub-advisers) pursuant to authority contained in each Portfolio's Management
Contract. FMR is also responsible for the placement of transaction orders
for other investment companies and accounts for which it or its affiliates
act as investment adviser. Securities purchased and sold by the Portfolios
will be traded on a net basis (i.e., without commission). In selecting
broker-dealers, subject to applicable limitations of the federal securities
laws, FMR will consider various relevant factors, including, but not limited
to, the size and type of the transaction; the nature and character of the
markets for the security to be purchased or sold; the execution efficiency,
settlement capability, and financial condition of the broker-dealer firm;
the broker-dealer's execution services rendered on a continuing basis; and
the reasonableness of any commissions.
The Portfolios may execute portfolio transactions with broker-dealers who
provide research and execution services to the Portfolios and other accounts
over which FMR or its affiliates exercise investment discretion. Such
services may include advice concerning the value of securities; the
advisability of investing in, purchasing or selling securities; the
availability of securities or the purchasers or sellers of securities;
furnishing analyses and reports concerning issuers, industries, securities,
economic factors and trends, portfolio strategy, and performance of
accounts; and effecting securities transactions and performing functions
incidental thereto (such as clearance and settlement). FMR maintains a
listing of broker-dealers who provide such services on a regular basis.
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However, as many transactions on behalf of the Portfolios are placed with
dealers (including broker-dealers on the list) without regard to the
furnishing of such services, it is not possible to estimate the proportion
of such transactions directed to such broker-dealers solely because such
services were provided. The selection of such broker-dealers is generally
made by FMR (to the extent possible consistent with execution
considerations) based upon the quality of research and execution services
provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the Portfolios may be useful to FMR in rendering investment
management services to the Portfolios and/or its other clients, and
conversely, such research provided by broker-dealers who have executed
transaction orders on behalf of other FMR clients may be useful to FMR in
carrying out its obligations to the Portfolios. The receipt of such research
has not reduced FMR's normal independent research activities; however, it
enables FMR to avoid the additional expenses that could be incurred if FMR
tried to develop comparable information through its own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause the
Portfolios to pay such higher commissions, FMR must determine in good faith
that such commissions are reasonable in relation to the value of the
brokerage and research services provided by such executing broker-dealers,
viewed in terms of a particular transaction or FMR's overall
responsibilities to the Portfolios and its other clients. In reaching this
determination, FMR will not attempt to place a specific dollar value on the
brokerage and research services provided, or to determine what portion of
the compensation should be related to those services.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided assistance in
the distribution of shares of the Portfolios or shares of other Fidelity
funds to the extent permitted by law. FMR may use research services provided
by and place agency transactions with Fidelity Brokerage Services, Inc.
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(FBSI), a member of the New York Stock Exchange and a subsidiary of FMR
Corp., if the commissions are fair and reasonable and comparable to
commissions charged by non-affiliated, qualified brokerage firms for similar
services. Section 11(a) of the Securities Exchange Act of 1934 prohibits
members of national securities exchanges from executing exchange
transactions for accounts which they or their affiliates manage, unless
certain requirements are satisfied. Pursuant to such requirements, the Board
of Trustees has authorized FBSI to execute portfolio transactions on
national securities exchanges in accordance with approved procedures and
applicable SEC rules.
The Trustees periodically review FMR's performance of its responsibilities
in connection with the placement of portfolio transactions on behalf of the
Portfolios and review the commissions paid by the Portfolios over
representative periods of time to determine if they are reasonable in
relation to the benefits to the Portfolios.
From time to time the Trustees will review whether the recapture for the
benefit of the Portfolios of some portion of the brokerage commissions or
similar fees paid by the Portfolios on portfolio transactions is legally
permissible and advisable. The Portfolios seek to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at present no
other recapture arrangements are in effect. The Trustees intend to continue
to review whether recapture opportunities are available and are legally
permissible and, if so, to determine, in the exercise of their business
judgment, whether it would be advisable for the Portfolios to seek such
recapture.
Although the Trustees and officers of the Portfolios are substantially the
same as those of other funds managed by FMR, investment decisions for the
Portfolios are made independently from those of other funds managed by FMR
or accounts managed by FMR affiliates. It sometimes happens that the same
security is held in the portfolio of more than one of these funds or
accounts. Simultaneous transactions are inevitable when several funds are
managed by the same investment adviser, particularly when the same security
is suitable for the investment objective of more than one fund.
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When two or more funds are simultaneously engaged in the purchase or sale of
the same security, the prices and amounts are allocated in accordance with a
formula considered by the officers of the funds involved to be equitable to
each fund. In some cases this system could have a detrimental effect on the
price or value of the security as far as the Portfolios are concerned. In
other cases, however, the ability of the funds to participate in volume
transactions will produce better executions and prices for the Portfolios.
It is the current opinion of the Trustees that the desirability of retaining
FMR as investment adviser to the Portfolios outweighs any disadvantages that
may be said to exist from exposure to simultaneous transactions.
PERFORMANCE
From time to time each Portfolio advertises its yield and effective yield
in advertisements or in reports or other communications with shareholders.
(Yield and total return figures will differ among each class of a
Portfolio's shares.) Both yield figures are based on historical earnings and
are not intended to indicate future performance. The current yield refers to
the income generated by an investment in a Portfolio over a seven-day period
(which will be stated in the advertisement). The net change in value of a
hypothetical account containing one share reflects the value of additional
shares purchased with dividends from the one original share and dividends
declared on both the original share and any additional shares. 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 each Portfolio is assumed to be reinvested. The effective
yield will be slightly higher than the yield because of the compounding
effect of this assumed reinvestment. In addition to the current yield, a
Portfolio may quote yields in advertising based on any historical seven day
period.
Each Portfolio's yield and effective yield figures are illustrated below for
the seven-day period ended ^March 31, 1994.
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Yield* Effective
Yield*
Treasury Portfolio . . . . . . . ^% ^%
Treasury Portfolio II . . . . . . % %
Government Portfolio . . . . . . % %
Domestic Portfolio . . . . . . . % %
Money Market Portfolio . . . . . % %
Yield information may be useful in reviewing each Portfolio's performance
and for providing a basis for comparison with other investment alternatives.
Each Portfolio's yield will fluctuate, unlike investments which pay a fixed
yield for a stated period of time. Investors should give consideration to
the quality and maturity of portfolio securities of the respective
investment companies when comparing investments.
Each Portfolio's total return is based on the overall dollar or percentage
change in value of a hypothetical investment in a Portfolio, assuming
dividends are reinvested. A cumulative total return reflects a Portfolio's
performance over a stated period of time. An average annual total return
reflects the hypothetical annually compounded return that would have
produced the same cumulative total return if performance had been constant
over the entire period. Because average annual returns tend to smooth out
variations in a Portfolio's performance, investors should recognize that
they are not the same as actual year-by-year results.
The following table shows each Portfolio's total return for the periods
ended ^March 31, 1994:
Historical Portfolio Results
Life of
One Year Five Years Portfolio*
Average Annual Total Returns*
U.S. ^ Treasury % % %
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U.S. Treasury II % % %
U.S. Government % % %
Domestic Money Market % N/A %
Money Market % % %
Cumulative Total Returns*
U.S. ^ Treasury % % %
U.S. Treasury II % % %
U.S. Government % % %
Domestic Money Market % N/A %
Money Market % % %
*Life of Portfolio returns are from each Portfolio's commencement of
operations. The commencement of operations date for each Portfolio is
November 9, 1985 for U.S. Treasury, February 2, 1987 for U.S. Treasury II,
July 25, 1985 for U.S. Government, November 3, 1989 for Domestic Money
Market, and July 5, 1985 for Money Market.
* Figures do not reflect the .32% 12b-1 fee payable by Class B, and would
have been lower if taken into account.
The Portfolios' performance, or the performance of securities in which they
may invest, may be compared to:
. ^ IBC/Donoghue's MONEY FUND AVERAGES, which are average yields of
various types of money market funds that include the effect of
compounding distributions, assume reinvestment of distributions, are
reported in IBC/Donoghue's MONEY FUND ^ REPORT, and are published by
IBC USA (Publications), Inc. of Ashland, Massachusetts;
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. ^ Other mutual funds, in general, or to the performance of specific
types of mutual funds. These comparisons may be ^ expressed as mutual
fund rankings prepared by Lipper Analytical Services, Inc. (Lipper), an
independent service located in Summit, New Jersey that monitors the
performance of mutual funds. Lipper generally ranks funds on the basis
of total return, assuming reinvestment of distributions, but does not
take sales charges or redemption fees into consideration, and is
prepared without regard to tax consequences. Lipper may also rank the
funds based on yield. In addition to the mutual fund rankings, a
Portfolio's performance may be compared to mutual fund performance
indices prepared by Lipper;^
. Yields on other money market securities or averages of other money
market securities as reported by the Federal Reserve Bulletin; by
TeleRate, a financial information network; or by Salomon Brothers Inc.,
a broker-dealer firm; and
. ^ Fixed-income investments such as Certificates of Deposit (Cds).
The principal value and interest rate of Cds and certain other money market
securities are fixed at the time of purchase, whereas each Portfolio's yield
will fluctuate. Unlike some CDs and certain other money market securities,
money market mutual funds are not insured by the FDIC. Investors should give
consideration to the quality and maturity of the portfolio securities of the
respective investment companies when comparing investment alternatives. The
Portfolios also may reference the growth and variety of money market mutual
funds and the Adviser's innovation and participation in the industry.
Each Portfolio may ^ discuss its fund number, Quotron TM number, CUSIP
number, and current portfolio manager ^.
From time to time, in reports and promotional literature, each Portfolio's
performance also may be compared to other mutual funds tracked by financial
or business publications and periodicals. For example, each Portfolio may
quote Morningstar, Inc. in its advertising materials. Morningstar, Inc. is a
mutual fund rating service that rates mutual funds on the basis of
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risk-adjusted performance. In addition, each Portfolio may quote financial
or business publications and periodicals as they relate to fund management,
investment philosophy, and investment techniques. Rankings that compare the
performance of Fidelity funds to one another in appropriate categories over
specific periods of time may also be quoted in advertising.
MANAGEMENT CONTRACTS, DISTRIBUTION PLANS AND SERVICE AGREEMENTS
Management Contracts. Each Portfolio employs FMR to furnish investment
advisory and other services to the Portfolio. Under FMR's Management
Contract with each Portfolio, FMR acts as investment adviser and, subject to
the supervision of the Board of Trustees, directs the investments of each
Portfolio in accordance with its investment objective, policies and
limitations. FMR also provides each Portfolio with all necessary office
facilities, equipment and personnel for servicing the Portfolio's
investments, and compensates all officers of the Fund, all Trustees who are
"interested persons" of the Fund or of FMR, and all personnel of the Fund or
FMR performing services relating to research, statistical and investment
activities.
In addition, FMR or its affiliates, subject to the supervision of the Board
of Trustees, provides the management and administrative services necessary
for the operation of each Portfolio. These services include providing
facilities for maintaining each Portfolio's organization; supervising
relations with the custodians, transfer and pricing agents, accountants,
underwriters and other persons dealing with the Portfolios; preparing all
general shareholder communications and conducting shareholder relations;
maintaining the Fund's records and the registration of each Portfolio's
shares under federal and state securities laws; developing management and
shareholder services for each Portfolio and furnishing reports, evaluations
and analyses on a variety of subjects to the Trustees. As described below,
FMR has agreed to limit each Portfolio's expenses.
For these services each Portfolio pays a monthly fee to FMR at the annual
rate of .20% of the average net assets of the Portfolio as determined as of
the close of business on each day throughout the month.
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<PAGE>
For the fiscal years ended March 31, 1994, 1993 ^ and 1992 ^, management
fees before reimbursement of expenses were $____________, $5,351,145 ^ and
$4,236,988 ^ for the Treasury Portfolio, $__________, $14,029,197 ^ and
$8,506,023 ^ for the Treasury Portfolio II, $___________, $12,610,880 ^ and
$8,576,656 ^ for the Government Portfolio, $___________, $1,536,740 ^ and
$1,095,503 ^ for the Domestic Portfolio, and $_____________, $10,066,276 ^
and $9,604,202 ^ for the Money Market Portfolio, respectively.
In addition to the management fee payable to FMR and the fees payable to
Service and FIIOC, and subject to the reimbursement provisions described
below, each Portfolio pays all its expenses, without limitation, that are
not assumed by those parties. Each Portfolio pays for the typesetting,
printing and mailing of its proxy material to shareholders, and for legal
expenses and the fees of the custodian, auditor and non-interested Trustees.
Other charges paid by each Portfolio include: interest, taxes, brokerage
commissions, the Portfolio's proportionate share of insurance premiums and
Investment Company Institute dues, and the costs of registering shares under
federal and state securities laws. Each Portfolio also is liable for such
nonrecurring expenses as may arise, including costs of litigation to which
the Portfolio is a party and any obligation it may have to indemnify
officers and Trustees with respect to such litigation.
Although each Portfolio's current Management Contract provides that the
Portfolio will pay for typesetting, printing and mailing of Prospectuses,
Statements of Additional Information and reports to existing shareholders,
the Portfolios entered into a revised transfer agent agreement with FIIOC
effective June 1, 1989, pursuant to which FIIOC bears the cost of providing
these services.
FMR has voluntarily agreed to reimburse any of the Portfolios if and to the
extent that a Portfolio's aggregate operating expenses (excluding interest,
taxes, brokerage commissions, extraordinary expenses and 12b-1 fees with
respect to each Portfolio's Class B shares) exceed an annual rate of .18% of
the average net assets of the Portfolio for any fiscal year or for a portion
of such year if FMR's agreement is terminated or revised. FMR retains the
ability to be repaid by the Portfolios for these expense reimbursements in
the amount that expenses fall below the limit prior to the end of the fiscal
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year. FMR will continue this reimbursement arrangement subject to revision
upon 90 days' notice to shareholders. Such reimbursements have the effect of
artificially decreasing a Portfolio's expenses, thereby increasing its
yield.
For the fiscal years ended March 31, 1994, 1993 ^ and 1992 ^, aggregate
operating expenses reimbursed by FMR were ^ $____________, $1,246,151 and
$1,470,637, for the Treasury Portfolio, $____________, $3,246,298 and
$3,143,538 for the Treasury Portfolio II, $____________, $3,508,338 and
$2,804,357 for the Government Portfolio, $________________, $645,507 ^ and
$579,020 ^ for the Domestic Portfolio, and $____________, $2,697,451 ^ and
$2,735,714 ^ for the Money Market Portfolio, respectively.
Sub-Advisory Agreements. With respect to each Portfolio, FMR has entered
into a sub-advisory agreement with FMR Texas, a Texas corporation with
principal offices at 400 East Las Colinas Boulevard in Irving, Texas.
Pursuant to the agreement, FMR Texas has primary responsibility for
providing portfolio investment management services to each Portfolio, while
FMR retains responsibility for providing other portfolio management
services.
Under each sub-advisory agreement, FMR pays FMR Texas fees equal to 50% of
the management fees payable to FMR under its current Management Contract
with each Portfolio. The fees paid to FMR Texas are not reduced by any
voluntary or mandatory expense reimbursements that may be in effect from
time to time.
For the fiscal years ended March 31, 1994, 1993 ^ and 1992 ^, fees paid to
FMR Texas by FMR were $_____________, $2,675,574 ^ and $2,118,494 ^ for the
Treasury Portfolio, $_____________, $7,014,599 ^ and $4,253,012 ^ for the
Treasury Portfolio II, $______________, $6,305,440 ^ and $4,288,328 ^ for
the Government Portfolio, $_____________, $768,370 ^ and $547,752 ^ for the
Domestic Portfolio and $____________, $5,033,138 ^ and $4,802,101 ^ for the
Money Market Portfolio, respectively.
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<PAGE>
Contracts with Companies Affiliated with FMR. Fidelity Investments
Institutional Operations Company, 82 Devonshire Street, Boston,
Massachusetts 02109, an affiliate of FMR, is transfer, dividend-paying and
shareholder servicing agent for each Portfolio and maintains shareholder
records.
For institutional client master accounts effective June 1, 1990, FIIOC
receives a per account fee and a monetary transaction fee of $65 and $14,
respectively, or $60 and $12, respectively, depending on the nature of
services provided. Effective January 1, 1993, FIIOC is paid a per account
fee of $95 and a monetary transaction fee of $20 or $17.50 depending on the
nature of the services provided. Fees for institutional retirement plan
accounts, if any, would be based on the NAV of all such accounts in a
Portfolio. In addition, FIIOC pays out-of-pocket expenses associated with
providing transfer agent services and bears the expense of typesetting,
printing and mailing Prospectuses, Statements of Additional Information,
reports, notices and statements to shareholders.
For the fiscal years ended March 31, 1994, 1993 ^ and 1992 ^, transfer agent
fees and expenses were $___________, $198,961 ^ and $259,235 ^ for the
Treasury Portfolio, $______________, $786,114 ^ and $723,978 ^ for the
Treasury Portfolio II, $_____________, $889,140 ^ and $726,802 ^ for the
Government Portfolio, $____________, $162,165 ^ and $118,032 ^ for the
Domestic Portfolio and $_____________, $591,793 ^ and $680,128 ^ for the
Money Market Portfolio, respectively.
The Portfolios' contracts with Fidelity Service Co., an affiliate of FMR,
provides that Service will perform the calculations necessary to determine
the Portfolios' net asset value per share and dividends and to maintain
general accounting records. Prior to July 1, 1991, the annual fee for these
pricing and bookkeeping services was based on two schedules, one pertaining
to each Portfolio's average net assets and one pertaining to the type and
number of transactions a Portfolio made. The fee rates in effect as of July
1, 1991 are based on each Portfolio's average net assets, specifically
.0175% for the first $500 million of average net assets and .0075% for
average net assets in excess of $500 million. The fee is limited to a
minimum of $20,000 and a maximum of $750,000 per year for each Portfolio.
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For the fiscal years ended March 31, 1994, 1993 ^ and 1992 ^, portfolio
accounting fees paid to Service for pricing and bookkeeping services
(including related out-of-pocket expenses) were $____________, $251,607 ^
and $210,011 ^ for the Treasury Portfolio, $____________, $576,072 ^ and
$354,383 ^ for the Treasury Portfolio II, $____________, $523,696 ^ and
$346,477 ^ for the Government Portfolio, $____________, $108,548 ^ and
$95,756 ^ for the Domestic Portfolio, and $____________, $429,428 ^ and
$376,076 ^ for the Money Market Portfolio, respectively.
Service also receives fees for administering the Portfolios' securities
lending programs where applicable. Securities lending fees are based on the
number and duration of individual securities loans.
Prior to January 1, 1991, Bank of Boston, 100 Federal Street, Boston, MA,
served as transfer and bookkeeping agent for the Portfolios. Bank of Boston
had a sub-transfer agent agreement with FIIOC, as well as a sub-servicing
agreement with Service. Under these agreements, all of the fees described
above were paid to FIIOC and Service by Bank of Boston, which was reimbursed
by each Portfolio for such payments.
Each Portfolio has a Distribution Agreement with Fidelity Distributors
Corporation (Distributors), an affiliate of FMR. Distributors, a
Massachusetts corporation organized July 18, 1960, is a broker-dealer
registered under the Securities Exchange Act of 1934 and is a member of the
National Association of Securities Dealers, Inc. The Distribution Agreement
calls for Distributors to use all reasonable efforts, consistent with its
other business, to secure purchasers for shares of each Portfolio.
Promotional and administrative expenses in connection with the offer and
sale of shares are paid by FMR. Distributors also acts as general
distributor for other publicly offered Fidelity funds.
Distribution and Service Plans. Class B of each Portfolio has adopted a
Distribution and Service Plan (each Plan) pursuant to Rule 12b-1 of the 1940
Act (the Rule). The Rule provides in substance that a mutual fund may not
engage directly or indirectly in financing any activity that is intended
primarily to result in the sale of shares of the fund except pursuant to a
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<PAGE>
plan adopted by the fund under the Rule. The Fund's Board of Trustees
adopted the Plans to assure that each Portfolio and FMR may incur certain
expenses that might be considered to constitute indirect payment by a
Portfolio of distribution expenses.
Under each Plan, Class B is authorized to pay Distributors a monthly
distribution fee at an annual rate of up to .32% of average net assets
(except that the amount of a particular day's 12b-1 fee will not exceed that
day's income) determined at the close of business on each day throughout the
month. Currently the Trustees have authorized Class B to pay Distributors at
an annual rate of .32%. This distribution fee is paid by Class B and not by
individual accounts.
All or a portion of the distribution fee is paid by Distributors to banks
and other financial intermediaries as compensation for providing sales
and/or shareholder support services. The distribution fee is a component of
the annual operating expenses of Class B and will reduce yield and return.
The National Association of Securities Dealers (NASD) has approved
amendments which subject asset based sales charges to its maximum sales
charge rule^. Payments made by Class B to Distributors, which are then paid
to banks and other financial intermediaries, will be limited by the maximums
established by the NASD rule.
As required by the Rule, the Trustees carefully considered all pertinent
factors relating to the implementation of each Plan prior to its approval,
and have determined that there is a reasonable likelihood that each Plan
will benefit the Portfolios and their shareholders. To the extent that the
Plans give FMR and Distributors greater flexibility in connection with the
distribution of shares of the Portfolios, additional shares of each
Portfolio's shares may result. Additionally, certain shareholder support
services may be provided more effectively under the Plans by local entities
with whom shareholders have other relationships.
The Glass-Steagall Act generally prohibits federally and state chartered or
supervised banks from engaging in the business of underwriting, selling or
distributing securities. Although the scope of this prohibition under the
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Glass-Steagall Act has not been clearly defined, in Distributors' opinion it
should not prohibit banks from being paid for shareholder servicing and
recordkeeping functions. Distributors intends to engage banks only for the
purpose of performing such functions. However, changes in federal or state
statutes and regulations pertaining to the permissible activities of banks
and their affiliates or subsidiaries, as well as further judicial or
administrative decisions or interpretations, could prevent a bank from
continuing to perform all or a part of the contemplated services. If a bank
were prohibited from so acting, the Trustees would consider what actions, if
any, should be taken to continue to provide efficient and effective
shareholder services. In such event, changes in the operation of the
Portfolios might occur, including possible termination of any automatic
investment or redemption or other services then being provided by the bank.
It is not expected that shareholders would suffer any adverse financial
consequences as a result of any of these occurrences. In addition, state
securities laws on this issue may differ from the interpretations of federal
law expressed herein, and banks and financial institutions may be required
to register as dealers pursuant to state law. The Portfolios may execute
portfolio transactions with and purchase securities issued by depository
institutions that receive payments under the Plans. No preference will be
shown in the selection of investments for the instruments of depository
institutions.
DESCRIPTION OF THE FUND
Fund Organization. U.S. Treasury, U.S. Treasury II, U.S. Government,
Domestic Money Market and Money Market are portfolios of Fidelity
Institutional Cash Portfolios, which is an open-end management investment
company organized as a Delaware Business trust on May 30, 1993. The
Portfolios acquired the assets of the Massachusetts Trust, respectively,
Fidelity Institutional Cash Portfolios on May 30, 1993. Currently, there are
five Portfolios of ^ Fidelity Institutional Cash Portfolios: U.S. Treasury
Portfolio, U.S. Treasury II Portfolio, U.S. Government Portfolio, Domestic
Money Market Portfolio, and Money Market Portfolio. Each Portfolio currently
offers two Classes of shares, Class A and Class B. The ^ Trust Instrument
permits the Trustees to create additional Portfolios.
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Class A shares of each Portfolio are offered to institutional and corporate
investors. Each Portfolio's Class A has a Distribution and Service Plan
pursuant to Rule 12b-1 (each, 12b-1 Plan). Each 12b-1 Plan does not provide
for payment of a separate distribution fee by Class A. Rather, the Plan
recognizes that FMR may use its management fee and other resources to pay
expenses for distribution related activities and make payments to banks or
other financial intermediaries that provide sales and/or shareholder support
services. Banks and other financial intermediaries do not receive 12b-1 Plan
related compensation in connection with providing sales and/or shareholder
support services for Class A shares. The total operating expenses of Class A
of each Portfolio are expected to be .18% of its average net assets. Class A
shares may be exchanged for Class A shares of any other Portfolio of the
Fund or for shares of Fidelity Institutional Tax-Exempt Cash Portfolios.
In the event that FMR ceases to be the investment adviser to the Fund or a
Portfolio, the right of the Fund or Portfolio to use the identifying name
"Fidelity" may be withdrawn. There is a remote possibility that one
Portfolio might become liable for any misstatement in its Prospectus and
Statement of Additional Information about another Portfolio.
The assets of the Fund received for the issue or sale of shares of each of
its Portfolios and all income, earnings, profits, and proceeds thereof,
subject only to the rights of creditors, are especially allocated to such
Portfolio, and constitute the underlying assets of such Portfolio. The
underlying assets of each Portfolio are segregated on the books of account,
and are to be charged with the liabilities with respect to such Portfolio
and with a share of the general expenses of the Fund. Expenses with respect
to the Fund are to be allocated in proportion to the asset value of the
respective Portfolios except where allocations of direct expense can
otherwise be fairly made. The officers of the Fund, subject to the general
supervision of the Board of Trustees, have the power to determine which
expenses are allocable to a given Portfolio, or which are general or
allocable to all of the Portfolios. In the event of the dissolution or
liquidation of the Fund, shareholders of each Portfolio are entitled to
receive as a class the underlying assets of such Portfolio available for
distribution.
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Shareholder and Trustee Liability. The Fund is a business trust organized
under Delaware law. Delaware law provides that shareholders shall be
entitled to the same limitations of personal liability extended to
stockholders of private corporations for profit. The courts of some states,
however, may decline to apply Delaware law on this point. The ^ Trust
Instrument contains an express disclaimer of shareholder liability for the
debts, liabilities, obligations, and expenses of the Fund and requires that
a disclaimer be given in each contract entered into or executed by the Fund
or the Trustees. The ^ Trust Instrument provides for indemnification out of
each Portfolio's property of any shareholder or former shareholder held
personally liable for the obligations of the Portfolio. The ^ Trust
Instrument also provides that each Portfolio shall, upon request, assume the
defense of any claim made against any shareholder for any act or obligation
of the Portfolio and satisfy any ^ judgment thereon. Thus, the risk of a
shareholder incurring financial loss on account of shareholder liability is
limited to circumstances in which Delaware law does not apply, no
contractual limitation of liability was in effect, and the Portfolio is
unable to meet its obligations. FMR believes that, in view of the above, the
risk of personal liability to shareholders is extremely remote.
The ^ Trust Instrument further provides that the Trustees, if they have
exercised reasonable care, ^ shall not be personally liable to any person
other than the Fund or its shareholders; moreover, the Trustees shall not be
liable for any ^ conduct whatsoever, provided that Trustees are not
protected against any liability to which ^ they would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of ^ their office.
^
Voting Rights. Each class of each Portfolio's capital consists of shares of
beneficial interest. The shares have no preemptive or conversion rights; the
voting and dividend rights, the right of redemption, and the privilege of
exchange are described in this Prospectus. Shares are fully paid and
nonassessable, except as set forth under the heading "Shareholder and
Trustee Liability" above. Shareholders representing 10% or more of the Fund,
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a Portfolio or a Class may, as set forth in the Declaration of Trust, call
meetings of the Fund or a Portfolio for any purpose related to the Fund,
Portfolio or Class, as the case may be, including, in the case of a meeting
of the entire Fund, the purpose of voting on removal of one or more
Trustees.
The Fund, Portfolio or Class may be terminated upon the sale of its assets
to another open-end management investment company, or upon liquidation and
distribution of its assets^. Generally such terminations must be approved
by vote of the holders of a majority of the outstanding shares of the Fund,
Portfolio or Class; however, the Trustees may, without prior shareholder
approval, change the form or organization of the Fund by merger,
consolidation, or incorporation. If not so terminated, the Fund, the
Portfolios and the Classes will continue indefinitely.
Under the ^ Trust Instrument, the Trustees may, without shareholder vote,
cause the Fund to merge or consolidate into one or more trusts,
partnerships, or corporations, or cause the Fund to be incorporated under
Delaware law, so long as the surviving entity is an open-end management
investment company that will succeed to or assume the Fund registration
statement.
As of the date of this Prospectus and Statement of Additional Information,
the following owned of record or beneficially more than 5% of the
outstanding shares of Class B:
[To be filed by subsequent amendment].
Custodian. Morgan Guaranty Trust Company of New York, 60 Wall Street, New
York, NY 10260 is custodian of the assets of the Portfolios. The custodian
is responsible for the safekeeping of the Portfolios' assets and the
appointment of subcustodian banks and clearing agencies. The custodian takes
no part in determining the investment policies of the Fund or in deciding
which securities are purchased or sold by the Fund. The Portfolios, however,
- 52 -
<PAGE>
may invest in obligations of the custodian and may purchase securities from
or sell securities to the custodian.
FMR, its officers and directors and its affiliated companies and the Fund's
Trustees may, from time to time, have transactions with various banks,
including banks serving as custodians for certain of the funds advised by
FMR. Transactions that have occurred to date include mortgages and personal
and general business loans. In the judgment of FMR, the terms and conditions
of those transactions were not influenced by existing or potential custodial
or other Fund relationships.
Auditor. ____________, serves as the Fund's independent accountants. The
auditor examines financial statements for the Fund and provides other audit,
tax, and related services.
FMR. FMR, 82 Devonshire Street, Boston, Massachusetts 02109, is a wholly
owned subsidiary of FMR Corp., a parent company organized in 1972. At
present, the principal operating activities of FMR Corp. are those conducted
by three of its divisions as follows: Fidelity Service Co., which is the
transfer and shareholder servicing agent for certain of the funds advised by
FMR; Fidelity Investments Institutional Operations Company, which performs
shareholder servicing functions for certain institutional customers; and
Fidelity Investments Retail Services Marketing Company, which provides
marketing services to various companies within the Fidelity organization.
Through ownership of voting common stock, Edward C. Johnson 3rd (President
and a Trustee of the Fund), Johnson family members, and various trusts for
the benefit of the Johnson family form a controlling group with respect to
FMR Corp.
Several affiliates of FMR also are engaged in the investment advisory
business. Fidelity Management Trust Company provides trustee, investment
advisory and administrative services to retirement plans and corporate
employee benefit accounts. Fidelity Management & Research (U.K.) Inc. (FMR
U.K.) and Fidelity Management & Research (Far East) Inc. (FMR Far East),
both wholly owned subsidiaries of FMR formed in 1986, supply investment
research, and may supply portfolio management services, to FMR in connection
with certain funds advised by FMR. Analysts employed by FMR, FMR U.K., and
- 53 -
<PAGE>
FMR Far East research and visit thousands of domestic companies each year.
FMR Texas, a wholly owned subsidiary of FMR formed in 1989, supplies
portfolio management and research services in connection with certain money
market funds advised by FMR.
Trustees and Officers. The Trustees and executive officers of the Fund are
listed below. Except as indicated, each individual has held the office shown
or other offices in the same company for the last five years. Trustees and
officers elected or appointed prior to the Trust's conversion to a Delaware
business trust served the Massachusetts business trust in identical
capacities. All persons named as Trustees and officers also serve in similar
capacities for other funds advised by FMR. Unless otherwise noted, the
business address of each Trustee and officer is 82 Devonshire Street,
Boston, MA 02109, which also is the address of FMR. Those Trustees who are
"interested persons" (as defined in the 1940 Act) by virtue of their
affiliation with either the Fund or FMR, are indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d, Trustee and President, is Chairman, Chief Executive
Officer and a Director of FMR Corp.; a Director and Chairman of the Board
and of the Executive Committee of FMR; Chairman and a Director of FMR Texas
Inc. (1989), Fidelity Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
*J. GARY BURKHEAD, Trustee and Senior Vice President, is President of FMR;
and President and a Director of FMR Texas Inc. (1989), Fidelity Management &
Research (U.K.) Inc. and Fidelity Management & Research (Far East) Inc.
RALPH F. COX, 200 Rivercrest Drive, Fort Worth, TX, Trustee (1991), is
President of Greenhill Petroleum Corporation (petroleum exploration and
production, 1990). ^ Until March 1990, Mr. Cox was President and Chief
Operating Officer of Union Pacific Resources Company (exploration and
production). He is a Director of Bonneville Pacific Corporation (independent
power, 1989), Sanifill Corporation (non-hazardous waste, 1993) and CH2M Hill
Companies (engineering). In addition, he served on the Board of Directors of
the Norton Company (manufacturer of industrial devices, 1983-1990) and
continues to serve on the Board of Directors of the Texas State Chamber of
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<PAGE>
Commerce, and is a member of advisory boards of Texas A&M University and the
University of Texas at Austin.
PHYLLIS BURKE DAVIS, ^ Box 264, Bridgehampton, NY, Trustee (1992). Prior to
her retirement in September of 1991, Mrs. Davis was the Senior Vice
President of Corporate Affairs of Avon Products, Inc. She is currently a
Director of BellSouth Corporation (telecommunications), Eaton Corporation
(manufacturing, 1991), and the TJX Companies, Inc. (retail stores, 1990),
and previously served as a Director of Hallmark Cards, Inc. (1985-1991) and
Nabisco Brands, Inc. In addition, she serves as a Director of the New York
City Chapter of the National Multiple Sclerosis Society, and is a member of
the Advisory Council of the International Executive Service Corps. and the
President's Advisory Council of the University of Vermont School of Business
Administration^.
RICHARD J. FLYNN, 77 Fiske Hill, Sturbridge, MA, Trustee, is a financial
consultant. Prior to September 1986, Mr. Flynn was Vice Chairman and a
Director of the Norton Company (manufacturer of industrial devices). He is
currently a Director of Mechanics Bank and a Trustee of College of the Holy
Cross and Old Sturbridge Village, Inc.
E. BRADLEY JONES, ^ 3881-2 Lander Road, Chagrin Falls, OH, Trustee (1990).
Prior to his retirement in 1984, Mr. Jones was Chairman and Chief Executive
Officer of LTV Steel Company. Prior to May 1990, he was Director of National
City Corporation (a bank holding company) and National City Bank of
Cleveland. He is a Director of TRW Inc. (original equipment and replacement
products), Cleveland-Cliffs Inc. (mining), NACCO Industries, Inc. (mining
and marketing), Consolidated Rail Corporation, Birmingham Steel
Corporation^, Hyster-Yale Materials Handling, Inc. (1989), and RPM, Inc.
(manufacturer of chemical products, 1990). In addition, he serves as a
Trustee of First Union Real Estate Investments^, Chairman of the Board of
Trustees and a member of the Executive Committee of the Cleveland Clinic
Foundation, a Trustee and a member of the Executive Committee of University
School (Cleveland), and a Trustee of Cleveland Clinic Florida.
- 55 -
<PAGE>
DONALD J. KIRK, 680 Steamboat Road, Apartment #1-North, Greenwich, CT,
Trustee, is a Professor at Columbia University Graduate School of Business
and a financial consultant. Prior to 1987, he was Chairman of the Financial
Accounting Standards Board. Mr. Kirk is a Director of General Re Corporation
(reinsurance)^, and Valuation Research Corp. (appraisals and valuations,
1993). In addition, he serves as Vice Chairman of the Board of Directors of
the National Arts Stabilization Fund and Vice Chairman of the Board of
Trustees of the Greenwich Hospital Association (1989).
*PETER S. LYNCH, Trustee (1990) is Vice Chairman of FMR (1992). Prior to his
retirement on May 31, 1990, he was a Director of FMR (1989) and Executive
Vice President of FMR (a position he held until March 31, 1991); Vice
President of Fidelity Magellan Fund and FMR Growth Group Leader; and
Managing Director of FMR Corp. Mr. Lynch was also Vice President of Fidelity
Investments Corporate Services (1991-1992). He is a Director of W.R. Grace &
Co. (chemicals, 1989) and Morrison Knudsen Corporation (engineering and
construction^). In addition, he serves as a Trustee of Boston College,
Massachusetts Eye & Ear Infirmary, Historic Deerfield (1989) and Society for
the Preservation of New England Antiquities, and as an Overseer of the
Museum of Fine Arts of Boston (1990).
GERALD C. McDONOUGH, 135 Aspenwood Drive, Cleveland, OH, Trustee (1989), is
Chairman of G.M. Management Group (strategic advisory services). Prior to
his retirement in July 1988, he was Chairman and Chief Executive Officer of
Leaseway Transportation Corp. (physical distribution services). Mr.
McDonough is a Director of ACME-Cleveland Corp. (metal working,
telecommunications and electronic products), Brush-Wellman Inc. (metal
refining), and York International Corp. (air-conditioning and refrigeration,
1989), and Commercial Intertech Corp. (water treatment equipment, 1992) ^
and Associated Estates Realty Corporation (a real estate investment trust,
1993).
EDWARD H. MALONE, 5601 Turtle Bay Drive #2104, Naples, FL, Trustee^. Prior
to his retirement in 1985, Mr. Malone was Chairman, General Electric
- 56 -
<PAGE>
Investment Corporation and a Vice President of General Electric Company. He
is a Director of Allegheny Power Systems, Inc. (electric utility), General
Re Corporation (reinsurance) and Mattel Inc. (toy manufacturer). He is also
a Trustee of Rensselaer Polytechnic Institute and of Corporate Property
Investors and a member of the Advisory Boards of Butler Capital Corporation
Funds and Warburg, Pincus Partnership Funds.
MARVIN L. MANN, 55 Railroad Avenue, Greenwich, CT, Trustee (1993) is
Chairman of the Board, President, and Chief Executive Officer of Lexmark
International, Inc. (office machines, 1991). Prior to 1991, he held the
positions of Vice President of International Business Machines Corporation
("IBM") and President and General Manager of various IBM divisions and
subsidiaries. Mr. Mann is a Director of M.A. Hanna Company (chemicals,
1993) and Infomart (marketing services, 1991), a Trammell Crow Co. In
addition, he serves as the Campaign Vice Chairman of the Tri-State United
Way (1993) and is a member of the University of Alabama President's Cabinet
(1990).
THOMAS R. WILLIAMS, 21st Floor, 191 Peachtree Tower, 191 Peachtree Street,
N.E., Atlanta, GA, Trustee^, is President of The Wales Group, Inc.
(management and advisory services). Prior to retiring in 1987, Mr. Williams
served as Chairman of the Board of First Wachovia Corporation (bank holding
company), and Chairman and Chief Executive Officer of The First National
Bank of Atlanta and First Atlanta Corporation (bank holding company). He is
currently a Director of BellSouth Corporation (telecommunications), ConAgra,
Inc. (agricultural products), Fisher Business Systems, Inc. (computer
software, 1988), Georgia Power Company (electric utility), Gerber Alley &
Associates, Inc. (computer software), National Life Insurance Company of
Vermont, American Software, Inc. (1989), and Apple South, Inc. (restaurants,
1992).
^
- 57 -
<PAGE>
GARY L. FRENCH, Treasurer (1991). Prior to becoming Treasurer of the
Fidelity funds, Mr. French was Senior Vice President, Fund Accounting -
Fidelity Accounting & Custody Services Co. (1991); Vice President, Fund
Accounting - Fidelity Accounting & Custody Services Co. (1990); and Senior
Vice President, Chief Financial and Operations Officer - Huntington
Advisers, Inc. (1985-1990).
ARTHUR S. LORING, Secretary, is Senior Vice President and General Counsel of
FMR, Vice President - Legal of FMR Corp., and Vice President and Clerk of
FDC.
LELAND BARRON, Vice President (1989), is also Vice President of other funds
advised by FMR and an employee of FMR Texas Inc.
BURNELL STEHMAN, Vice President (1992), is also Vice President of other
funds advised by FMR and an employee of FMR Texas Inc.
JOHN TODD, Vice President (1992), is also Vice President of other funds
advised by FMR and an employee of FMR Texas Inc.
THOMAS D. MAHER, Assistant Vice President (1990), is Assistant Vice
President of Fidelity's money market funds and Vice President and Associate
General Counsel of FMR Texas Inc. (1990).
Under a retirement program which became effective on November 1, 1989, a
Trustee, upon reaching age 72, becomes eligible to participate in a defined
benefit retirement program under which he receives payments during his
lifetime from the Portfolios based on his final year's basic trustee fees
and length of service. Currently, Messrs. Robert L. Johnson, William R.
Spaulding, ^ Bertram H. Witham, and David L. Yunich participate in the
program. The Trustees receive additional payments for serving in similar
capacities for other funds advised by FMR. The Trustees and officers of the
Fund as a group own less than 1% of each Portfolio's outstanding shares.
- 58 -
<PAGE>
APPENDIX
Ratings
The descriptions that follow are examples of eligible ratings for the
Portfolios. The Portfolios may, however, consider the ratings for other
types of investments and the ratings assigned by other rating organizations
when determining the eligibility of a particular investment.
Description of Moody's Investors Service, Inc.'s commercial paper ratings:
Prime-1 - issuers (or related institutions) have a superior capacity for
repayment of short-term promissory obligations. Prime-1 repayment capacity
will normally be evidenced by the following characteristics:
- 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 with high
internal cash generation.
- Well-established access to a range of financial markets and assured
sources of alternate liquidity.
Prime-2 - issuers (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will
normally 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.
Description of Moody's Investors Service, Inc.'s corporate bond ratings:
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<PAGE>
Aaa - Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issuers.
Aa - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long term risks appear somewhat
larger than in Aaa securities.
Description of Standard & Poor's Corporation's commercial paper ratings:
A-1 - This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics will be denoted with a plus (+)
sign designation.
A-2 - Capacity for timely payment on issues with this designation is strong.
However, the relative degree of safety is not as high as for issues
designated A-1.
Description of Standard & Poor's Corporation's corporate bond ratings:
AAA - Debt rated AAA has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated debt issues only in small
degree.
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<PAGE>
Fidelity Institutional Cash Portfolios
PART C - OTHER INFORMATION
Item 24. Financial Statement and Exhibits.
(b) Exhibits
1. Declaration of Trust, as amended and restated on April 9, 1985
is incorporated herein by reference to Exhibit 1 to Post-
Effective Amendment No. 2.
2. Bylaws of the Trust are incorporated herein by reference to
Exhibit 2 to Post-Effective Amendment No. 2.
3. Not applicable.
4. Not applicable.
5. (a) Management Contract between Fidelity Institutional Cash
Portfolios: Money Market Portfolio and Fidelity Management
& Research Company, dated September 1, 1986, is
incorporated herein by reference to Exhibit 5(a) to Post-
Effective Amendment No. 7.
(b) Management Contract between Fidelity Institutional Cash
Portfolios: U.S. Treasury Portfolio and Fidelity
Management & Research Company, dated September 1, 1986, is
incorporated herein by reference to Exhibit 5(b) to Post-
Effective Amendment No. 7.
(c) Management Contract between Fidelity Institutional Cash
Portfolios: U.S. Government Portfolio and Fidelity
Management & Research Company, dated June 30, 1985, is
DC-134388.1
<PAGE>
Fidelity Institutional Cash Portfolios
incorporated herein by reference in Exhibit 5(c) to Post-
Effective Amendment No. 7.
(d) Management Contract between Fidelity Institutional Cash
Portfolios: U.S. Treasury Portfolio II and Fidelity
Management & Research Company, dated December 1, 1986, is
incorporated herein by reference to Exhibit 5(d) to Post-
Effective Amendment No. 8.
(e) Management Contract between Fidelity Institutional Cash
Portfolios: Domestic Money Market Portfolio and Fidelity
Management & Research Company, dated December 1, 1986, is
incorporated herein by reference to Exhibit 5(e) to Post-
Effective Amendment. No. 8.
(f) Sub-Advisory agreement between Fidelity Management &
Research Company on behalf of Fidelity Institutional Cash
Portfolios: U.S. Treasury Portfolio and FMR Texas Inc.,
dated December 1, 1989, is incorporated herein by
reference to Exhibit 5(f) to Post-Effective Amendment No.
13.
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<PAGE>
Fidelity Institutional Cash Portfolios
(g) Sub-Advisory agreement between Fidelity Management &
Research Company on behalf of Fidelity Institutional Cash
Portfolios: U.S. Treasury Portfolio II and FMR Texas Inc.,
dated December 1, 1989, is incorporated herein by
reference to Exhibit 5(g) to Post-Effective Amendment No.
13.
(h) Sub-Advisory agreement between Fidelity Management &
Research Company on behalf of Fidelity Institutional Cash
Portfolios: U.S. Government Portfolio and FMR Texas Inc.,
dated December 1, 1989, is incorporated herein by
reference to Exhibit 5(h) to Post-Effective Amendment No.
13.
(i) Sub-Advisory agreement between Fidelity Management &
Research Company on behalf of Fidelity Institutional Cash
Portfolios: Domestic Money Market Portfolio and FMR Texas
Inc., dated November 1, 1989, is incorporated herein by
reference to Exhibit 5(i) to Post-Effective Amendment No.
13.
(j) Sub-Advisory agreement between Fidelity Management &
Research Company on behalf of Fidelity Institutional Cash
Portfolios: Money Market Portfolio and FMR Texas Inc.,
dated December 1, 1989, is incorporated herein by
reference to Exhibit 5(j) to Post-Effective Amendment No.
13.
6. (a) General Distribution Agreement between Registrant and
Fidelity Distributors Corporation, dated June 11, 1985, is
incorporated herein by reference to Exhibit 6 to Post-
Effective Amendment No. 4.
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<PAGE>
Fidelity Institutional Cash Portfolios
(b) Amendment to General Distribution Agreement between
Registrant and Fidelity Distributors Corporation, dated
January 1, 1988, is incorporated herein by reference to
Exhibit 6(b) to Post-Effective Amendment No. 9.
7. Retirement Plan for Non-Interested Person Trustees, Directors
or General Partners effective November 1, 1989 is incorporated
herein by reference to Exhibit 7 to Post-Effective Amendment
No. 17.
8. (a) Custodian Contract between the Registrant and First
National Bank of Boston, dated June 11, 1985, is
incorporated herein by reference to Exhibit 8(a) to Post-
Effective Amendment No. 4.
(b) Amendment to the Custodian Contract between Registrant and
First National Bank of Boston, dated November 29, 1985, is
incorporated herein by reference to Exhibit 8(b) to Post-
Effective Amendment No. 4.
(c) Custodian Agreement between the Registrant and Morgan
Guaranty Trust Company of New York, dated July 18, 1991,
is incorporated herein by reference to Exhibit 8(c) to
Post-Effective Amendment No. 17.
9. (a) Transfer Agency Agreement between the Registrant and First
National Bank of Boston, dated June 11, 1985, is
incorporated herein by reference to Exhibit 9(a) to Post-
Effective Amendment No. 4.
(b) Sub-Transfer Agent Agreement between FMR Corp., Fidelity
Service Co. and First National Bank of Boston, dated June
11, 1985, is incorporated herein by reference to Exhibit
9(b) to Post-Effective Amendment No. 4.
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<PAGE>
Fidelity Institutional Cash Portfolios
(c) Pricing Agreement between the Registrant and First
National Bank of Boston, dated June 11, 1985, is
incorporated herein by reference to Exhibit 9(c) to Post-
Effective Amendment No. 4.
(d) Appointment of Sub-Pricing Agent Agreement between FMR
Corp., Fidelity Service Co., and First National Bank of
Boston, dated June 11, 1985, is incorporated herein by
reference to Exhibit 9(d) to Post-Effective Amendment No.
4.
(e) Transfer Agency Agreement between Fidelity Institutional
Cash Portfolios: U.S. Treasury Portfolio II and First
National Bank of Boston, dated February 2, 1987, is
incorporated herein be reference to Exhibit 9(c) to Post-
Effective Amendment No. 9.
(f) Transfer Agency Agreement between Fidelity Institutional
Cash Portfolios: Domestic Money Market Portfolio and First
National Bank of Boston, dated March 12, 1987, is
incorporated herein by reference to Exhibit 9(f) to Post-
Effective Amendment No. 9.
(g) Amendment to Schedule A of Transfer Agent Agreement
between Fidelity Institutional Cash Portfolios: U.S.
Treasury Portfolio, and First National Bank of Boston,
dated June 1, 1990, is incorporated herein by reference to
Exhibit 9(g) to Post-Effective Amendment No. 15.
(h) Amendment to Schedule A of Transfer Agent Agreement
between Fidelity Institutional Cash Portfolios: U.S.
Treasury Portfolio II and First National Bank of Boston,
dated June 1, 1990, is incorporated herein by reference to
Exhibit 9(h) to Post-Effective Amendment No. 15.
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<PAGE>
Fidelity Institutional Cash Portfolios
(i) Amendment to Schedule A of Transfer Agent Agreement
between Fidelity Institutional Cash Portfolios: U.S.
Government Portfolio and First National Bank of Boston,
dated June 1, 1990, is incorporated herein by reference to
Exhibit 9(i) to Post-Effective Amendment No. 15.
(j) Amendment to Schedule A of Transfer Agent Agreement
between Fidelity Institutional Cash Portfolios: Domestic
Money Market Portfolio and First National Bank of Boston,
dated June 1, 1990, is incorporated herein by reference to
Exhibit 9(j) to Post-Effective Amendment No. 15.
(k) Amendment to Schedule A of Transfer Agent Agreement
between Fidelity Institutional Cash Portfolios: Money
Market Portfolio and First National Bank of Boston, dated
June 1, 1990, is incorporated herein by reference to
Exhibit 9(k) to Post-Effective Amendment No. 15.
(l) Amended Transfer Agency Agreement between the Registrant
and First National Bank of Boston, dated June 1, 1989, is
incorporated herein by reference to Exhibit 9(i) to Post-
Effective Amendment No. 15.
(m) Amended Service Agreement between the Registrant and First
National Bank of Boston, dated June 1, 1989, is
incorporated herein by reference to Exhibit 9(m) to Post-
Effective Amendment No. 15.
(n) Appointment of Sub-Transfer Agent Agreement between FMR
Corp., Fidelity Investments Institutional Operations
Company and First National Bank of Boston, dated June 1,
1989, is incorporated herein by reference to Exhibit 9(n)
to Post-Effective Amendment No. 15.
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<PAGE>
Fidelity Institutional Cash Portfolios
(o) Appointment of Sub-Servicing Agent Agreement between FMR
Corp., Fidelity Service Co., and First National Bank of
Boston, dated June 1, 1989, is incorporated herein by
reference to Exhibit 9(o) to Post-Effective Amendment No.
15.
(p) Schedule As of Transfer Agent Agreement between Fidelity
Institutional Cash Portfolios: U.S. Treasury Portfolio,
U.S. Treasury Portfolio II, U.S. Government Portfolio,
Domestic Money Market Portfolio and Money Market Portfolio
and First National Bank of Boston, dated June 1, 1989, is
incorporated herein by reference to Exhibit 9(p) to Post-
Effective Amendment No. 15.
(q) Schedule Bs of Transfer Agent Agreement between Fidelity
Institutional Cash Portfolios: U.S. Treasury Portfolio,
U.S. Treasury Portfolio II, U.S. Government Portfolio,
Domestic Money Market Portfolio and Money Market Portfolio
and First National Bank of Boston, dated June 1, 1989, is
incorporated herein by reference to Exhibit 9(q) to Post-
Effective Amendment No. 15.
(r) Schedule Cs of Transfer Agent Agreement between Fidelity
Institutional Cash Portfolios: U.S. Treasury Portfolio,
U.S. Treasury Portfolio II, U.S. Government Portfolio,
Domestic Money Market Portfolio and Money Market Portfolio
and First National Bank of Boston, dated June 1, 1989, is
incorporated herein by reference to Exhibit 9(r) to Post-
Effective Amendment No. 15.
(s) Termination of the Amended Transfer Agent Agreement and
the Amended Service Agreement between Fidelity
Institutional Cash Portfolios and the First National Bank
- 7 -
<PAGE>
Fidelity Institutional Cash Portfolios
of Boston is incorporated herein by reference to Exhibit
9(s) to Post-Effective Amendment No. 15.
10. Not applicable.
11. Not applicable.
12. Not applicable.
13. Not applicable.
14. Not applicable.
15. (a) Distribution and Service Plan of Fidelity Institutional
Cash Portfolios: Money Market Portfolio is incorporated
herein by reference to Exhibit 15(a) to Post-Effective
Amendment No. 6.
(b) Distribution and Service Plan of Fidelity Institutional
Cash Portfolios: U.S. Treasury Portfolio is incorporated
herein by reference to Exhibit 15(b) to Post-Effective
Amendment No. 6.
(c) Distribution and Service Plan of Fidelity Institutional
Cash Portfolios: U.S. Government Portfolio is incorporated
herein by reference to Exhibit 15(c) to Post-Effective
Amendment No. 6.
(d) Distribution and Service Plan of Fidelity Institutional
Cash Portfolios: U.S. Treasury Portfolio II is
incorporated herein by reference to Exhibit 15(d) to Post-
Effective Amendment No. 8.
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<PAGE>
Fidelity Institutional Cash Portfolios
(e) Distribution and Service Plan of Fidelity Institutional
Cash Portfolios: Domestic Money Market Portfolio is
incorporated herein by reference to Exhibit 15(c) to Post-
Effective Amendment No. 8.
(f) A Form of Distribution and Service Plan pursuant to Rule
12b-1, for each of the portfolios of Fidelity
Institutional Cash Portfolios: Class B, is incorporated
herein by reference to Exhibit 15(f) to Post-Effective
Amendment No. 19.
16. (a) Schedules for computations of performance quotations for
U.S. Government Portfolio is incorporated herein by
reference to Exhibit 16(a) to Post-Effective Amendment No.
9.
(b) Schedule for computations of performance quotations for
Money Market Portfolio is incorporated herein by reference
to Exhibit 16(b) to Post-Effective Amendment No. 9.
(c) Schedules for computations of performance quotations for
U.S. Treasury Portfolio is incorporated herein by
reference to Exhibit 16(c) to Post-Effective Amendment No.
9.
(d) Schedules for computations of performance quotations for
U.S. Treasury Portfolio II is incorporated herein by
reference to Exhibit 16(d) to Post-Effective Amendment No.
9.
(e) Schedules for computations of performance quotations for
Domestic Money Market Portfolio is incorporated herein by
reference to Exhibit 16(c) to Post-Effective Amendment No.
13.
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<PAGE>
Fidelity Institutional Cash Portfolios
Item 25. Persons Controlled by or under Common Control with Registrant
The Board of Trustees of Registrant is the same as the boards of the
other Fidelity funds, each of which has Fidelity Management & Research
Company as its investment adviser. In addition, the officers of these funds
are substantially identical. Nonetheless, Registrant takes the position
that it is not under common control with these other funds since the power
residing in the respective Boards and officers arises as the result of an
official position with the respective funds.
Item 26. Number of Holders of Securities
March 31, 1994
Title of Class Number of Recordholders
Shares of Beneficial Interest
U.S. Treasury Portfolio
U.S. Treasury Portfolio II
U.S. Government Portfolio
Domestic Money Market Portfolio
Money Market Portfolio
Item 27. Indemnification
Pursuant to Del. Code Ann. title 12 section 3817, a Delaware business
trust may provide in its governing instrument for the indemnification of its
officers and trustees from and against any and all claims and demands
whatsoever. Article X, Section 10.02 of the Declaration of Trust states
that the Registrant shall indemnify any present trustee or officer to the
fullest extent permitted by law against liability, and all expense
reasonably incurred by him or her in connection with any claim, action, suit
or proceeding in which he or she is involved by virtue of his or her service
as a trustee, officer, or both, and against any amount incurred in
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<PAGE>
Fidelity Institutional Cash Portfolios
settlement thereof. Indemnification will not be provided to a person
adjudged by a court or other adjudicatory body to be liable to the
Registrant or its shareholders by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of his or her duties (collectively,
"disabling conduct"), or not to have acted in good faith in the reasonable
belief that his or her action was in the best interest of the Registrant.
In the event of a settlement, no indemnification may be provided unless
there has been a determination, as specified in the Declaration of Trust,
that the office or trustee did not engage in disabling conduct.
Pursuant to Section 11 of the Distribution Agreement, the Registrant
agrees to indemnify and hold harmless the Distributor and each of its
directors and officers and each person, if any, who controls the Distributor
within the meaning of Section 15 of the 1933 Act against any loss,
liability, claim, damages or expense arising by reason of any person
acquiring any shares, based upon the ground that the registration statement,
Prospectus, Statement of Additional Information, shareholder reports or
other information filed or made public by the Registrant included a
materially misleading statement or omission. However, the Registrant does
not agree to indemnify the Distributor or hold it harmless to the extent
that the statement or omission was made in reliance upon, and in conformity
with, information furnished to the Registrant by or on behalf of the
Distributor. The Registrant does not agree to indemnify the parties against
any liability to which they would be subject by reason of their own
disabling conduct.
Pursuant to the agreement by which Fidelity Service Company (Service)
is appointed sub-transfer agent, the Transfer Agent agrees to indemnify
Service for its losses, claims, damages, liabilities and expenses to the
extent the Transfer Agent is entitled to and receives indemnification from
the Registrant for the same events. Under the Transfer Agency Agreement,
the Registrant agrees to indemnify and hold the Transfer Agent harmless
against any losses, claims, damages, liabilities, or expenses resulting
from:
- 11 -
<PAGE>
Fidelity Institutional Cash Portfolios
(1) any claim, demand, action or suit brought by any person other
than the Registrant, which names the Transfer Agent and/or the Registrant as
a party and is not based on and does not result from the Transfer Agent's
willful misfeasance, bad faith, negligence or reckless disregard of its
duties, and arises out of or in connection with the Transfer Agent's
performance under the Transfer Agency Agreement; or
(2) any claim, demand, action or suit (except to the extent
contributed to by the Transfer Agent's willful misfeasance, bad faith,
negligence or reckless disregard of its duties) which results from the
negligence of the Registrant, or from the Transfer Agent's acting upon any
instruction(s) reasonably believed by it to have been executed or
communicated by any person duly authorized by the Registrant, or as a result
of the Transfer Agent's acting in reliance upon advice reasonably believed
by the Transfer Agent to have been given by counsel for the Registrant, or
as a result of the Transfer Agent's acting in reliance upon any instrument
or stock certificate reasonably believed by it to have been genuine and
signed, countersigned or executed by the proper person.
Item 28. Business and Other Connections of Investment Adviser
FMR serves as investment adviser to a number of other investment
companies. The directors and officers of the Adviser have held, during the
past two fiscal years, the following positions of a substantial nature.
Edward C. Johnson 3d Chairman of the Executive Committee of FMR:
President and Chief Executive Officer of FMR
Corp., Chairman of the Board and a Director of
FMR, FMR Corp., FMR Texas Inc., Fidelity
Management & Research (U.K.) Inc. and Fidelity
Management & Research (Far East) Inc.:
President and Trustee of funds advised by FMR;
- 12 -
<PAGE>
Fidelity Institutional Cash Portfolios
J. Gary Burkhead President of FMR; Managing Director of FMR
Corp., President and a Director of FMR Texas
Inc., Fidelity Management & Research (U.K.)
Inc. and Fidelity Management & Research (Far
East) Inc.; Senior Vice President and Trustee
(1987) of funds advised by FMR.
Peter S. Lynch Vice President of FMR (1992).
David Breazzano Vice President of FMR (1993) and of a fund
advised by FMR.
Stephan Campbell Vice President of FMR (1993).
Rufus C. Cushman, Jr. Vice President of FMR and of funds advised by
FMR; Corporate Preferred Group Leader.
Will Danof Vice President of FMR (1993) and of a fund
advised by FMR.
Scott DeSano Vice President of FMR (1993).
Penelope Dobkin Vice President of FMR and of a fund advised by
FMR.
Larry Domash Vice President of FMR (1993).
George Domolky Vice President of FMR (1993) and of a fund
advised by FMR.
Charles F. Dornbush Senior Vice President of FMR; Chief Financial
Officer of the Fidelity funds; Treasurer of
FMR Texas Inc., Fidelity Management & Research
- 13 -
<PAGE>
Fidelity Institutional Cash Portfolios
(U.K.), and Fidelity Management & Research
(Far East) Inc.
Robert K. Duby Vice President of FMR.
Margaret L. Eagle Vice President of FMR and of a fund advised by
FMR.
Kathryn L. Eklund Vice President of FMR.
Richard B. Fentin Vice President of FMR (1993) and of a fund
advised by FMR.
Daniel R. Frank Vice President of FMR and of funds advised by
FMR.
Gary L. French Vice President of FMR and Treasurer of the
funds advised by FMR. Prior to assuming the
position as Treasurer he was Senior Vice
President, Fund Accounting - Fidelity
Accounting & Custody Services Co.
Michael S. Gray Vice President of FMR and of funds advised by
FMR.
Barry A. Greenfield Vice President of FMR and of a fund advised by
FMR.
William J. Hayes Senior Vice President of FMR: Income/Growth
Group Leader and International Group Leader.
Robert Haber Vice President of FMR and of funds advised by
FMR.
- 14 -
<PAGE>
Fidelity Institutional Cash Portfolios
Daniel Harmetz Vice President of FMR and of a fund advised by
FMR.
Ellen S. Heller Vice President of FMR.
John Hickling Vice President of FMR (1993) and of funds
advised by FMR.
Robert F. Hill Vice President of FMR and Director of
Technical Research.
Stephan Jonas Vice President of FMR (1993).
David B. Jones Vice President of FMR (1993).
Steven Kaye Vice President of FMR (1993) and of a fund
advised by FMR.
Frank Knox Vice President of FMR (1993).
Robert A. Lawrence Vice President of FMR (1993) and High Income
Group Leader.
Alan Leifer Vice President of FMR and of a fund advised by
FMR.
Harris Leviton Vice President of FMR (1993) and of a fund
advised by FMR.
Bradford E. Lewis Vice President of FMR and of funds advised by
FMR.
Robert H. Morrison Vice President of FMR and Director of Equity
Trading.
- 15 -
<PAGE>
Fidelity Institutional Cash Portfolios
David Murphy Vice President of FMR and of funds advised by
FMR.
Jacques Perold Vice President of FMR.
Brian Posner Vice President of FMR (1993) and of a fund
advised by FMR.
Anne Punzak Vice President of FMR and of funds advised by
FMR.
Richard A. Spillane Vice President of FMR and of funds advised by
FMR; and Director of Equity Research.
Robert E. Stansky Senior Vice President of FMR (1993) and of
funds advised by FMR.
Thomas Steffanci Vice President of FMR (1993); and Fixed-Income
Division Head.
Gary L. Swasyze Vice President of FMR and of funds advised by
FMR; and Tax-Free Fixed-Income Group Leader.
Donald Taylor Vice President of FMR (1993) and of funds
advised by FMR.
Beth F. Terrana Vice President of FMR (1993) and of funds
advised by FMR.
Joel Tillinghast Vice President of FMR (1993) and of a fund
advised by FMR.
Robert Tucket Vice President of FMR (1993).
- 16 -
<PAGE>
Fidelity Institutional Cash Portfolios
George A. Vanderheiden Senior Vice President of FMR; Vice President
of funds advised by FMR; and Growth Group
Leader.
Jeffrey Vinik Vice President of FMR (1993) and of a fund
advised by FMR.
Guy E. Wickwire Vice President of FMR and of a fund advised by
FMR.
Arthur S. Loring Senior Vice President (1993), Clerk and
General Counsel of FMR; Vice President, Legal
of FMR Corp., and Secretary of funds advised
by FMR.
- 17 -
<PAGE>
Fidelity Institutional Cash Portfolios
FMR TEXAS INC. (FMR Texas)
FMR Texas provides investment advisory services to Fidelity Management
& Research Company. The directors and officers of the Sub-Adviser have held
the following positions of a substantial nature during the past two fiscal
years.
Edward C. Johnson 3d Chairman and Director of FMR Texas;
Chairman of the Executive Committee of
FMR; President and Chief Executive
Officer of FMR Corp.; Chairman of the
Board and a Director of FMR, FMR Corp.,
Fidelity Management & Research (Far East)
Inc. and Fidelity Management & Research
(U.K.) Inc.; President and Trustee of
funds advised by FMR.
J. Gary Burkhead President and Director of FMR Texas
(1989); President of FMR; Managing
Director of FMR Corp.; President and a
Director of Fidelity Management &
Research (Far East) Inc. and Fidelity
Management & Research (U.K.) Inc.; Senior
Vice President and Trustee of funds
advised by FMR.
Frederic L. Henning, Jr. Senior Vice President of FMR Texas; Money
Market Group Leader.
Leland Baron Vice President of FMR Texas and of funds
advised by FMR.
Thomas D. Maher Vice President of FMR Texas.
- 18 -
<PAGE>
Fidelity Institutional Cash Portfolios
Burnell Stehman Vice President of FMR Texas and of funds
advised by FMR.
John Todd Vice President of FMR Texas and of funds
advised by FMR.
Sarah H. Zenoble Vice President of FMR Texas and of fund
advised by FMR.
Charles F. Dornbush Treasurer of FMR Texas; Treasurer of
Fidelity Management & Research (U.K.)
Inc.; Treasurer of Fidelity Management &
Research (Far East) Inc.; Senior Vice
President and Chief Financial Officer of
the Fidelity funds.
David C. Weinstein Secretary of FMR Texas; Clerk of Fidelity
Management & Research (U.K.) Inc.; Clerk
of Fidelity Management & Research (Far
East) Inc..
Item 29. Principal Underwriters
(a) Fidelity Distributors Corporation (Distributors) acts as
distributor for most funds advised by FMR and the following other
fund:
CrestFunds, Inc.
The Victory Funds
ARK Funds
- 19 -
<PAGE>
Fidelity Institutional Cash Portfolios
(b)
Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
Edward C. Johnson 3d Director Trustee, President
Nita B. Kincaid Director None
W. Humphrey Bogart Director None
Roger T. Servison President None
Thomas W. Littauer Senior Vice President None
William J. Kearns Senior Vice President None
Harry Anderson Treasurer None
Arthur S. Loring Vice President and Clerk Secretary
82 Devonshire Street, Boston, MA
(c) Not applicable.
Item 30. Location of Accounts and Records
Fidelity Management & Research Company of 82 Devonshire Street,
Boston, Massachusetts 02109 will maintain physical possession of each such
account, book or other document of the Trust, except for those maintained
by the Fund's Custodian, Morgan Guaranty Trust Company of New York, 61 Wall
Street, 37th Floor, New York, NY and by the Fund's Transfer Agent, Fidelity
Service Co., 82 Devonshire Street, Boston, MA 02109.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
Not applicable.
- 20 -
<PAGE>
POWER OF ATTORNEY
I, the undersigned Treasurer and principal financial and accounting
officer of the following investment companies:
Daily Money Fund
Daily Tax-Exempt Money Fund
Fidelity Beacon Street Trust
Fidelity California Municipal Trust II
Fidelity Court Street Trust II
Fidelity Hereford Street Trust
Fidelity Institutional Cash Portfolios
Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Institutional Investors Trust
Fidelity Money Market Trust II
Fidelity Municipal Trust II
Fidelity New York Municipal Trust II
Fidelity Phillips Street Trust
Fidelity Union Street Trust II
DC-134783.1
<PAGE>
In addition to any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as Treasurer and principal financial and accounting
officer (collectively, the "Funds"), hereby constitute and appoint John H.
Costello, my true and lawful attorney-in-fact, with full power of
substitution, and with full power to him to sign for me and in my name, in
the appropriate capacity any Registration Statements of the Funds on Form N-
1A, Form N-8A or any successor thereto, any and all subsequent Pre-Effective
Amendments or Post-Effective Amendments to said Registration Statements on
Form N-1A or any successor thereto, any Registration Statements on Form N-
14, and any supplements or other instruments in connection therewith, and
generally to do all such things in my name and behalf in connection
therewith as said attorney-in-fact deems necessary or appropriate, to comply
with the provisions of the Securities Act of 1933 and the Investment Company
Act of 1940, and all related requirements of the Securities and Exchange
Commission.
I hereby ratify and confirm all that said attorney-in-fact or his
substitutes may do or cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Gary L. French
October 20, 1993
Gary L. French
<PAGE>
POWER OF ATTORNEY
I, the undersigned President and Director, Trustee or General Partner,
as the case may be, of the following investment companies:
Daily Money Fund
Daily Tax-Exempt Money Fund
Fidelity Beacon Street Trust
Fidelity California Municipal Trust II
Fidelity Court Street Trust II
Fidelity Hereford Street Trust
Fidelity Institutional Cash Portfolios
Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Institutional Investors Trust
Fidelity Money Market Trust II
Fidelity Municipal Trust II
Fidelity New York Municipal Trust II
Fidelity Phillips Street Trust
Fidelity Union Street Trust II
DC-134785.1
<PAGE>
In addition to any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as President and Board Member (collectively, the "Funds"),
hereby severally constitute and appoint J. Gary Burkhead, my true and lawful
attorney-in-fact, with full power of substitution, and with full power to
sign for me and in my name in the appropriate capacity any Registration
Statements of the Funds on Form N-1A, Form N-8A or any successor thereto,
any and all subsequent Pre-Effective Amendments or Post-Effective Amendments
to said Registration Statements on Form N-1A or any successor thereto, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
my name and behalf in connection therewith as said attorney-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related requirements
of the Securities and Exchange Commission. I hereby ratify and confirm all
that said attorneys-in-fact or their substitutes may do or cause to be done
by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d
October 20, 1993
Edward C. Johnson 3d
<PAGE>
POWER OF ATTORNEY
We, the undersigned Directors, Trustees or General Partners, as the
case may be, of the following investment companies:
Daily Money Fund
Daily Tax-Exempt Money Fund
Fidelity Beacon Street Trust
Fidelity California Municipal Trust II
Fidelity Court Street Trust II
Fidelity Hereford Street Trust
Fidelity Institutional Cash Portfolios
Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Institutional Investors Trust
Fidelity Money Market Trust II
Fidelity Municipal Trust II
Fidelity New York Municipal Trust II
Fidelity Phillips Street Trust
Fidelity Union Street Trust II
DC-134786.1
<PAGE>
In addition to any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as a Director, Trustee or General Partner (collectively,
the "Funds"), hereby severally constitute and appoint Arthur J. Brown,
Arthur C. Delibert, Robert C. Hacker, Richard M. Phillips, Dana L. Platt and
Stephanie Xupolos, each of them singly, my true and lawful attorney-in-fact,
with full power of substitution, and with full power to each of them, to
sign for me and my name in the appropriate capacities any Registration
Statements of the Funds on Form N-1A or any successor thereto, any and all
subsequent Pre-Effective Amendments or Post-Effective Amendments to said
Registration Statements on Form N-1A or any successor thereto, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
my name and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related requirements
of the Securities and Exchange Commission, hereby ratifying and confirming
all that said attorney-in-fact or their substitutes may do or cause to be
done by virtue hereof.
WITNESS our hands on this twentieth day of October, 1993.
/s/Edward C. Johnson 3d
/s/Donald J. Kirk
Edward C. Johnson 3d
Donald J. Kirk
/s/J. Gary Burkhead
/s/Peter S. Lynch
J. Gary Burkhead
<PAGE>
Peter S. Lynch
/s/Ralph F. Cox
/s/Marvin L. Mann
Ralph F. Cox
Marvin L. Mann
/s/Phyllis Burke Davis
/s/Edward H. Malone
Phyllis Burke Davis
Edward H. Malone
/s/Richard J. Flynn
/s/Gerald C. McDonough
Richard J. Flynn
Gerald C. McDonough
/s/E. Bradley Jones
<PAGE>
/s/Thomas R. Williams
E. Bradley Jones
Thomas R. Williams
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Post-
Effective Amendment No. 22 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Boston,
and Commonwealth of Massachusetts, on the day of March 1994.
FIDELITY INSTITUTIONAL CASH PORTFOLIOS
By ______________________________*
Edward C. Johnson 3d, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
(Signature) (Title) (Date)
_______________________________* President and Trustee March __, 1994
Edward C. Johnson 3d (Principal Executive Officer)
_______________________________ Treasurer March __, 1994
Gary L. French
_______________________________ Trustee March __, 1994
J. Gary Burkhead
_______________________________* Trustee March __, 1994
Ralph F. Cox
_______________________________* Trustee March __, 1994
Phyllis Burke Davis
DC-134787.1
<PAGE>
_______________________________* Trustee March __, 1994
Richard J. Flynn
_______________________________* Trustee March __, 1994
E. Bradley Jones
_______________________________* Trustee March __, 1994
Donald J. Kirk
_______________________________* Trustee March __, 1994
Peter S. Lynch
_______________________________* Trustee March __, 1994
Edward H. Malone
_______________________________* Trustee March __, 1994
Marvin L. Mann
_______________________________* Trustee March __, 1994
Gerald C. McDonough
_______________________________* Trustee March __, 1994
Thomas R. Williams
* Signatures affixed by
pursuant to a power of attorney dated
October 20, 1993 and filed herewith.
* Signature affixed by ________________________________________ pursuant to
a power of attorney dated October 20, 1993 and filed herewith.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Post-
Effective Amendment No. 22 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Boston,
and Commonwealth of Massachusetts, on the 11th day of March 1994.
FIDELITY INSTITUTIONAL CASH PORTFOLIOS
By /s/Edward C. Johnson 3d
____________________________________
Edward C. Johnson 3d, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
(Signature) (Title) (Date)
/s/Edward C. Johnson 3d* President and Trustee March 11, 1994
Edward C. Johnson 3d (Principal Executive Officer)
/s/Gary L. French Treasurer March 11, 1994
Gary L. French
/s/J. Gary Burkhead Trustee March 11, 1994
J. Gary Burkhead
/s/Ralph F. Cox* Trustee March 11, 1994
Ralph F. Cox
/s/Phyllis Burke Davis* Trustee March 11, 1994
<PAGE>
Phyllis Burke Davis
/s/Richard J. Flynn* Trustee March 11, 1994
Richard J. Flynn
/s/E. Bradley Jones* Trustee March 11, 1994
E. Bradley Jones
/s/Donald J. Kirk* Trustee March 11, 1994
Donald J. Kirk
/s/Peter S. Lynch* Trustee March 11, 1994
Peter S. Lynch
/s/Edward H. Malone* Trustee March 11, 1994
Edward H. Malone
/s/Marvin L. Mann* Trustee March 11, 1994
Marvin L. Mann
/s/Gerald C. McDonough* Trustee March 11, 1994
Gerald C. McDonough
/s/Thomas R. Williams* Trustee March 11, 1994
Thomas R. Williams
<PAGE>
** Signatures affixed by J. Gary Burkhead pursuant to a power of attorney
dated October 20, 1993 and filed herewith.
* Signature affixed by Robert C. Hacker pursuant to a power of attorney
dated October 20, 1993 and filed herewith.
<PAGE>
