SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (No. 2-78458)
UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 25 [X]
and
REGISTRATION STATEMENT (No. 811-3518)
UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 25 [X]
Fidelity Daily Tax-Exempt Money Fund
(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, Massachusetts 02109
(Address Of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number: 617-563-7000
Arthur S. Loring, Secretary
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)
(X) on December 20, 1995 pursuant to paragraph (b)
( ) 60 days after filing pursuant to paragraph (a)(i)
( ) on ( ) pursuant to paragraph (a)(i)
( ) 75 days after filing pursuant to paragraph (a)(ii)
( ) on ( ) pursuant to paragraph (a)(ii) of rule 485.
If appropriate, check the following box:
( ) this post-effective amendment designates a new effective date for a
previously filed
post-effective amendment.
Registrant has filed a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940 and has filed the Notice required by such
Rule on or about December 19, 1995.
DAILY TAX-EXEMPT MONEY FUND:
CROSS REFERENCE SHEET
Form N-1A Item Number Prospectus Caption
1 ...................... Cover Page
2 ......................... Expenses
3 a,b...................... Financial Highlights
c..... ................... *
d..... ........... Financial Highlights
4 a(i)..................... Charter
a(ii). ................... Investment Principles and Risks; Securities
and Investment Practices; Fundamental Investment Policies and
Restrictions
c...... ................... Who May Want to Invest; Investment
Principles and Risks; Securities and Investment Practices
5 a,b(i)...... .............Charter
b(ii)................... FMR and Its Affiliates; Charter; Breakdown of
Expenses
b(iii)................. Expenses; Breakdown of Expenses
c,d..................... FMR and Its Affiliates
e....... ................ FMR and Its Affiliates; Breakdown of Expenses;
Other Expenses
f....................... Expenses
g...................... Expenses; FMR and Its Affiliates
5A...................... *
6 a(i).................. Charter
a(ii)................. How to Buy Shares; How to Sell Shares; Investor
Services; Transaction Details; Exchange Restrictions
a(iii)................. *
b....................... FMR and Its Affiliates
c....................... Charter
d....................... *
e....................... Cover Page; How to Buy Shares; How to Sell
Shares; Investor Services; Exchange Restrictions *
f,g..................... Dividends, Capital Gains and Taxes
7 a....................... Charter; Cover Page
b...................... How to Buy Shares; Transaction Details
c...................... *
d...................... How to Buy Shares
e...................... Transaction Details; Breakdown of Expenses
f...................... Breakdown of Expenses; Other Expenses
8 ....................... How to Sell Shares; Investor Services;
Transaction Details; Exchange Restrictions
9 ...................... *
* Not Applicable
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how the fund
invests and the services available to shareholders.
DAILY TAX-EXEMPT MONEY
FUND
To learn more about the fund and its investments, you can obtain a copy of
the fund's most recent financial report and portfolio listing or a copy of
the Statement of Additional Information (SAI) dated December 20, 1995. The
SAI has been filed with the Securities and Exchange Commission (SEC) and is
incorporated herein by reference (legally forms a part of the prospectus).
For a free copy of either document, c all Fidelity Client Services at
1-800-843-3001, or contact your investment professional.
INVESTMENTS IN THE FUND ARE NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT THE FUND WILL MAINTAIN A
STABLE $1.00 SHARE PRICE.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR
OBLIGATIONS OF, OR GUARANTEED BY, ANY
DEPOSITORY INSTITUTION. SHARES ARE NOT
INSURED BY THE FDIC, FEDERAL RESERVE
BOARD OR ANY OTHER AGENCY AND ARE SUBJECT
TO INVESTMENT RISK S , INCLUDING POSSIBLE
LOSS OF PRINCIPAL AMOUNT INVESTED .
LIKE ALL MUTUAL FUNDS, 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.
DTE-pro-1295
5488
The fund seeks to provide individual and institutional investors with as
high a level of current income, exempt from federal income taxes, as is
consistent with a portfolio of high-quality, short-term municipal
obligations selected on the basis of liquidity and stability of principal.
PROSPECTUS
(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA 02109DATED
DECEMBER 20,1995
AND
ANNUAL REPORT
(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA 02109FOR THE
PERIOD ENDING
OCTOBER 31, 1995
CONTENTS
PROSPECTUS
KEY FACTS WHO MAY WANT TO INVEST
EXPENSES The fund's yearly operating expenses.
FINANCIAL HIGHLIGHTS A summary of the fund's
financial data.
PERFORMANCE
THE FUND IN DETAIL CHARTER How the fund is organized.
INVESTMENT PRINCIPLES AND RISKS The fund's
overall approach to investing.
BREAKDOWN OF EXPENSES How operating costs
are calculated and what they include.
YOUR ACCOUNT TYPES OF ACCOUNTS Different ways to set up your
account.
HOW TO BUY SHARES Opening an account and
making additional investments.
HOW TO SELL SHARES Taking money out and
closing your account.
INVESTOR SERVICES Services to help you manage
your account.
SHAREHOLDER AND DIVIDENDS, CAPITAL GAINS, AND TAXES
ACCOUNT POLICIES
TRANSACTION DETAILS Share price calculations
and the timing of purchases and redemptions.
EXCHANGE RESTRICTIONS
ANNUAL REPORT
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENTS A- 1 A complete list of the fund's investments with
their
market values.
FINANCIAL STATEMENTS A- 11 Statements of assets and liabilities, operations,
and changes in net assets.
NOTES A- 14 Notes to the financial statements.
REPORT OF INDEPENDENT ACCOUNTANTS A- 16 The auditors' opinion.
</TABLE>
KEY FACTS
WHO MAY WANT TO INVEST
The fund offers individual and institutional investors a convenient way to
invest in a professionally managed portfolio of money market instruments.
The fund is designed for investors who would like to earn federally
tax-exempt income at current money market rates while preserving the value
of their investment.
The rate of income will vary from day to day, generally reflecting
short-term interest rates.
The fund is managed to keep its share price stable at $1.00.
The fund does not constitute a balanced investment plan. However,
because it emphasizes stability, it could be well-suited for a portion of
your savings. The fund offers free checkwriting to give you easy access to
your money.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy or sell
shares of the fund.
Maximum sales charge on purchases and None
reinvested distributions
Maximum deferred sales None
charge
Redemption fee None
Exchange fee None
ANNUAL OPERATING EXPENSES are paid out of the fund's assets. The fund pays
a management fee to Fidelity Management & Research Company (FMR). The fund
also incurs other expenses for services such as maintaining shareholder
records, and furnishing shareholder account statements and financial
reports.
12b-1 fees are paid by FMR from its management fee, its past profits or
other resources, to the distributor for services and expenses in connection
with the distribution of fund shares. Long-term shareholders may pay more
than the economic equivalent of the maximum sales charges permitted by the
National Association of Securities Dealers, Inc., due to 12b-1 fees.
The fund's expenses are factored into its share price or dividends and are
not charged directly to shareholder accounts (see "Breakdown of Expenses"
on page ).
The following are projections based on historical expenses of the fund, and
are calculated as a percentage of average net assets of the fund.
Management fee (after reimbursement) 0.12
%*
12b-1 fee (Distribution Fee) 0.26
%
Other expenses 0.27
%
Total operating expenses 0.65
%
* THE RATE FOR MANAGEMENT FEES REPRESENTS THE NET RATE RETAINED BY FMR
AFTER PAYMENTS MADE TO THE DISTRIBUTOR AND REIMBURSEMENT OF CERTAIN
OTHER EXPENSES. THE MANAGEMENT FEE BEFORE PAYMENTS MADE TO THE
DISTRIBUTOR BY FMR AND REIMBURSEMENT OF CERTAIN OTHER EXPENSES IS
0.50 %.
EXPENSE TABLE EXAMPLE: You would pay the following expenses on a $1,000
investment, assuming a 5% annual return and full redemption at the end of
each time period:
1 Year 3 Years 5 Years 10 Years
$ 7 $ 21 $ 36 $ 81
THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO
SUGGEST ACTUAL OR EXPECTED COSTS OR RETURNS, ALL OF WHICH MAY VARY.
FMR has voluntarily agreed to reimburse the fund to the extent that total
operating expenses (excluding interest, taxes, brokerage commissions, and
extraordinary expenses) are in excess of 0.65% of its average net assets.
If this agreement were not in effect, the management fee, 12b-1 fees, other
expenses, and total operating expenses would have been 0.24 %, 0.26%,
0.27%, and 0.77 %, respectively, as a percentage of its
average net assets.
FINANCIAL HIGHLIGHTS
The financial highlights table that follows and the fund's financial
statements are included in the fund's Annual Report and have been audited
by Price Waterhouse, LLP, independent accountants. Their report on the
financial statements and financial highlights is included in the Annual
Report. The financial statements and the report are attached.
SELECTED PER-SHARE DATA
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1.Fiscal years ended 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
October 31
2.Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period
3.Income from
Investment .033 .022 .021 .029 .044 .053 .056 .045 .039 .044
Operations
Net interest income
4.Less Distributions (.033) (.022) (.021) (.029) (.044) (.053) (.056) (.045) (.039) (.044)
From net interest income
5.Net asset value, end
of $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
6.Total return A 3.36 2.21 2.11 2.93 4.46 5.38 5.72 4.55 3.93 4.52
% % % % % % % % % %
7.RATIOS AND SUPPLEMENTAL DATA
8.Net assets, end
of period $ 559,17 $ 454,25 $ 538,75 $ 484,99 $ 304,14 $ 259,38 $ 203,51 $ 212,02 $ 288,27 $ 362,38
(000 omitted) 3 9 6 9 7 1 3 9 9 8
9.Ratio of expenses
to .65 .65 .61 .63 .65 .65 .64 .70 .63 .61
average net assets % % % % % % % % % %
10.Ratio of expenses
to .77 .67 .61 .63 .66 .68 .76 .75 .63 .61
average net assets
before % % % % % % % % % %
expense reductions
11.Ratio of net
interest 3.31 2.17 2.09 2.86 4.29 5.32 5.64 4.37 3.87 4.36
income to average % % % % % % % % % %
net assets
</TABLE>
A TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN (SEE NOTE 4 OF NOTES TO FINANCIAL STATEMENTS).
PERFORMANCE
Money market fund performance can be measured as TOTAL RETURN or YIELD.
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment in the fund over a
given period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of
time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that,
if achieved annually, would have produced the same cumulative total return
if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same
as actual year-by-year results.
YIELD refers to the income generated by an investment in the fund over a
given period of time, expressed as an annual percentage rate. When a yield
assumes that income earned is reinvested, it is called an EFFECTIVE YIELD.
A TAX-EQUIVALENT YIELD shows what an investor would have to earn before
taxes to equal a tax-free yield.
SEVEN-DAY YIELD illustrates the income earned by an investment in a money
market fund over a recent seven-day period. Since money market funds
maintain a stable $1.00 share price, current seven-day yields are the most
common illustration of money market fund performance.
The fund's performance and holdings are detailed twice a year in financial
reports, which are sent to all shareholders.
For current performance call Fidelity Client Services at 1-800-843-3001.
THE FUND IN DETAIL
CHARTER
DAILY TAX-EXEMPT MONEY FUND IS A MUTUAL FUND: an investment that pools
shareholders' money and invests it toward a specified goal. The fund is a
diversified fund of Daily Tax-Exempt Money Fund, an open-end management
investment company organized as a Delaware business trust on December 30,
1991.
THE FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet throughout the year to oversee the fund's activities,
review contractual arrangements with companies that provide services to the
fund, and review the fund's performance. The majority of trustees are not
otherwise affiliated with Fidelity.
THE FUND MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These meetings
may be called to elect or remove trustees, change fundamental policies,
approve a management contract, or for other purposes. Shareholders not
attending these meetings are encouraged to vote by proxy. The transfer
agent will mail proxy materials in advance, including a voting card and
information about the proposals to be voted on. You are entitled to one
vote for each share you own.
FMR AND ITS AFFILIATES
Fidelity Investments is one of the largest investment management
organizations in the United States and has its principal business address
at 82 Devonshire Street, Boston, Massachusetts 02109. It includes a number
of different subsidiaries and divisions which provide a variety of
financial services and products. The fund employs various Fidelity
companies to perform activities required for its operation.
The fund is managed by FMR, which handles the fund's business affairs. FMR
Texas Inc. (FMR Texas), located in Irving, Texas, has primary
responsibility for providing investment management services.
As of September 30 , 1995, FMR advised funds having approximately
22 million shareholder accounts with a total value of more than
$ 335 billion.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets Fidelity's
funds and services. Fidelity Investments Institutional Operations Company
(FIIOC) performs transfer agent servicing functions for the fund.
FMR Corp. is the ultimate parent company of FMR and FMR Texas. Members of
the Edward C. Johnson 3d family are the predominant owners of a class of
shares of common stock representing approximately 49% of the voting power
of FMR Corp. Under the Investment Company Act of 1940 (the 1940 Act),
control of a company is presumed where one individual or group of
individuals owns more than 25% of the voting stock of that company;
therefore, the Johnson family may be deemed under the 1940 Act to form a
controlling group with respect to FMR Corp.
UMB Bank, n.a. (UMB) is the fund's transfer agent, although it employs
FIIOC to perform these functions for the fund. UMB is located at 1010 Grand
Avenue, Kansas City, Missouri.
To carry out the fund's transactions, FMR may use its broker-dealer
affiliates and other firms that sell fund shares, provided that the fund
receives services and commission rates comparable to those of other
broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
The fund, under normal conditions, invests in U.S. dollar denominated
high-quality short-term municipal securities of all types. The fund
normally invests so that at least 80% of its income distributions is free
from federal income tax. The fund does not currently intend to purchase
municipal obligations that are subject to the federal alternative minimum
tax. The fund may invest any portion of its assets in industrial revenue
bonds (IRBs) backed by private issuers.
When you sell your shares, they should be worth the same amount as when you
bought them. Of course, there is no guarantee that the fund will maintain a
stable $1.00 share price. The fund follows industry-standard guidelines on
the quality and maturity of its investments, which are designed to help
maintain a stable $1.00 share price. The fund will purchase only
high-quality securities that FMR believes present minimal credit risks and
will observe maturity restrictions on securities it buys. In general,
securities with longer maturities are more vulnerable to price changes,
although they may provide higher yields. It is possible that a major change
in interest rates or a default on the fund's investments could cause its
share price (and the value of your investment) to change.
The fund earns income at current money market rates. It stresses
preservation of capital, liquidity, and tax-free income and does not seek
the higher yields or capital appreciation that more aggressive investments
may provide. The fund's yield will vary from day to day and generally
reflects current short-term interest rates and other market conditions.
FMR normally invests the fund's assets according to its investment strategy
and does not expect to invest in federally taxable obligations. The fund
also reserves the right to hold a substantial amount of uninvested cash or
to invest more than normally permitted in federally taxable obligations for
temporary, defensive purposes.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which the fund may invest, strategies FMR may employ in
pursuit of the fund's investment objective, and a summary of related risks.
Any restrictions listed supplement those discussed earlier in this section.
A complete listing of the fund's limitations and more detailed information
about the fund's investments are contained in the fund's SAI. Policies and
limitations are considered at the time of purchase; the sale of instruments
is not required in the event of a subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these techniques
unless it believes that they are consistent with the fund's investment
objective and policies and that doing so will help the fund achieve its
goal. Current holdings are described in the fund's financial reports, which
are sent to shareholders twice a year. For a free SAI or financial report,
c ontact your investment professional or call Fidelity Client
Services at 1-800-843-3001.
MONEY MARKET SECURITIES are high-quality, short-term obligations issued by
municipalities, local and state governments, and other entities. These
obligations may carry fixed, variable, or floating interest rates. Some
money market securities employ a trust or other similar structure to modify
the maturity, price characteristics, or quality of financial assets so that
they are eligible investments for money market funds. If the structure does
not perform as intended, adverse tax or investment consequences may result.
MUNICIPAL SECURITIES are issued to raise money for a variety of public or
private purposes, including general financing for state and local
governments, or financing for specific projects or public facilities. They
may be issued in anticipation of future revenues, and may be backed by the
full taxing power of a municipality, the revenues from a specific project,
or the credit of a private organization. The value of some or all municipal
securities may be affected by uncertainties in the municipal market related
to legislation or litigation involving the taxation of municipal securities
or the rights of municipal securities holders. The fund may own a municipal
security directly or through a participation interest.
CREDIT SUPPORT. Issuers may employ various forms of credit
enhancement, including letters of credit, guarantees, or insurance from a
bank, insurance company, or other entity. These arrangements expose the
fund to the credit risk of the entity. In the case of foreign entities,
extensive public information about the entity may not be available and the
entity may be subject to unfavorable political, economic, or governmental
developments which might affect its ability to honor its commitment.
VARIABLE AND FLOATING RATE SECURITIES have interest rates that are
periodically adjusted either at specific intervals or whenever a benchmark
rate changes. These interest rate adjustments are designed to help
stabilize the security's price.
MUNICIPAL LEASE OBLIGATIONS are used by municipalities to acquire land,
equipment, or facilities. If the municipality stops making payments or
transfers its obligations to a private entity, the obligation could lose
value or become taxable.
OTHER MUNICIPAL SECURITIES may include obligations of U.S. territories and
possessions such as Guam, the Virgin Islands, and Puerto Rico, and their
political subdivisions and public corporations.
PUT FEATURES entitle the holder to put (sell back) a security to the issuer
or a financial intermediary. In exchange for this benefit, the fund may pay
periodic fees or accept a lower interest rate. The credit quality of the
investment may be affected by the creditworthiness of the put provider.
Demand features, standby commitments, and tender options are types of put
features.
PRIVATE ENTITIES may be involved in some municipal securities. For example,
industrial revenue bonds are backed by private entities, and resource
recovery bonds often involve private corporations. The viability of a
project or tax incentives could affect the value and credit quality of
these securities.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by
FMR, under the supervision of the Board of Trustees, to be illiquid, which
means that they may be difficult to sell promptly at an acceptable price.
The sale of some illiquid securities, and some other securities, may be
subject to legal restrictions. Difficulty in selling securities may result
in a loss or may be costly to the fund.
RESTRICTIONS. The fund may not purchase a security if, as a result, more
than 10% of its net assets would be invested in illiquid securities.
WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS are trading practices in
which payment and delivery for the securities take place at a future date.
The market value of a security could change during this period, which could
affect the market value of the fund's assets.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the
risks of investing. This may include limiting the amount of money invested
in any one issuer or, on a broader scale, in any one industry or type of
project. Economic, business, or political changes can affect all securities
of a similar type.
RESTRICTIONS: With respect to 75% of its total assets, the fund may not
purchase a security if, as a result, more than 5% would be invested in the
securities of any issuer. Th is limitation do es not apply to
U.S. Government securities. The fund may invest more than 25% of its total
assets in tax-free securities that finance similar types of projects.
BORROWING. The fund may borrow from banks or from other funds advised by
FMR, or through reverse repurchase agreements, and may make additional
investments while borrowings are outstanding.
RESTRICTIONS: The fund may borrow only for temporary or emergency purposes,
but not in an amount exceeding 331/3% of its total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraphs restate all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraphs, can be changed without shareholder approval.
The fund seeks to provide individual and institutional investors with as
high a level of current income, exempt from federal income taxes, as is
consistent with a portfolio of high quality, short-term municipal
obligations selected on the basis of liquidity and stability of principal.
Under normal conditions, the fund will invest so that at least 80% of its
income distributions is free from federal income tax.
With respect to 75% of its total assets, the fund may not purchase a
security if, as a result, more than 5% would be invested in the securities
of any issuer.
The fund may borrow only for temporary or emergency purposes, but not in an
amount exceeding 33 1/3% of its total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the fund pays fees related to its daily operations.
Expenses paid out of the fund's assets are reflected in its share price or
dividends; they are neither billed directly to shareholders nor deducted
from shareholder accounts.
The fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs. FMR in turn pays fees to an affiliate who provides
assistance with these services. The fund also pays OTHER EXPENSES, which
are explained below.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month. The fund pays
the fee at the annual rate of 0.50 % of its average net assets.
FMR HAS A SUB-ADVISORY AGREEMENT with FMR Texas, which has primary
responsibility for providing investment management for the fund, while FMR
retains responsibility for providing the fund with other management
services. For these services FMR pays FMR Texas 50% of its management fee
(before expense reimbursements but after payments made by FMR pursuant to
the fund's Distribution and Service Plan). FMR paid FMR Texas 0.12 %
of the fund's average net assets for the fiscal year ended, 1995.
OTHER EXPENSES
While the management fee is a significant component of the fund's annual
operating costs, the fund has other expenses as well.
UMB has entered into a sub-arrangement with FIIOC. FIIOC performs
transfer agency, dividend disbursing and shareholder services for the fund.
UMB has also entered into a sub-arrangement with Fidelity Service
Co. ( FSC ) . FSC calculates the NAV and dividends for the fund,
and maintains the fund's general accounting records. All of the fees are
paid to FIIOC and FSC by UMB, which is reimbursed by the fund for such
payments.
For the fiscal year ended October 31, 1995, fees paid by UMB
to FIIOC and FSC on behalf of the fund were equal to 0.19 % and
0.02 %, respectively, of the fund's average net assets.
The fund has adopted a DISTRIBUTION AND SERVICE PLAN. The Plan recognizes
that FMR may use its resources, including management fees, to pay expenses
associated with the sale of shares of the fund . The Board of
Trustees has authorized FMR to pay FDC a distribution fee from its
management fee revenue, past profits or other resources at an annual rate
of up to 0.38% of the fund's average net assets. For the fiscal
year ended October 31, 1995, FMR paid FDC monthly at an annual rate of
0.26 % of the fund's average net assets throughout the month.
The fund also pays other expenses, such as legal, audit, and custodian
fees; in some instances, proxy solicitation costs; and the compensation of
trustees who are not affiliated with Fidelity.
YOUR ACCOUNT
TYPES OF ACCOUNTS
If you are investing through a securities dealer, financial or other
institution (investment professional), contact that investment professional
directly. Certain features of the fund may be modified when it is made
available through a program of services offered by an investment
professional, and administrative charges (in addition to payments the
financial institution may receive pursuant to the Distribution and Service
Plan) may be imposed for the services rendered.
The different ways to set up (register) your account with Fidelity are
listed below.
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have two or
more owners (tenants).
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and obtain
tax benefits. An individual can give up to $10,000 a year per child without
paying federal gift tax. Depending on state laws, you can set up a
custodial account under the Uniform Gifts to Minors Act (UGMA) or the
Uniform Transfers to Minors Act (UTMA). Contact your investment
professional.
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER
GROUPS
Requires a special application .
HOW TO BUY SHARES
THE FUND'S SHARE PRICE, called net asset value ( NAV ) , is
calculated every business day. The fund is managed to keep its share price
stable at $1.00.
Shares are purchased at the next NAV calculated after your order is
received and accepted by the transfer agent. NAV is normally calculated at
12:00 noon and 4:00 p.m. Eastern time.
It is the responsibility of your investment professional to submit your
order to purchase shares in order for you to receive the next determined
NAV.
Shareholders of record as of 12:00 noon Eastern time will be entitled to
dividends declared that day.
Shares purchased after 12:00 noon Eastern time will begin to earn income
dividends on the following business day.
Share certificates are not available for f und shares.
IF YOU ARE NEW TO FIDELITY, an initial investment must be preceded or
accompanied by a completed, signed application, which should be forwarded
to:
Fidelity Client Services
c/o Daily Tax-Exempt Money Fund
FIIOC
P.O. Box 1182
Boston, MA 02103-1182
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Mail an account application with a check,
(small solid bullet) Place a purchase order and w ire money into your
account,
(small solid bullet) Open your account by exchanging from Class A of
a Fidelity Advisor fund or from another Fidelity fund, or
(small solid bullet) Contact your investment professional.
BY MAIL . You or your investment professional must send a check
payable to the fund. When making subsequent investments by check, please
write your fund account number on the check. All investments by check
should be sent to the above address .
BY WIRE . For wiring information and instructions, you should call
the investment professional through which you trade or if you trade
directly through Fidelity, call Fidelity Client Services. There is no fee
imposed by the fund for wire purchases. However, if you buy shares through
an investment professional, the investment professional may impose a fee
for wire purchases.
Fidelity Client Services:
Nationwide 1-800-843-3001
Your wire must be received by the transfer agent in good order at the
fund's designated wire bank before the close of the Federal Reserve Wire
System on the day of purchase.
You are advised to wire funds as early in the day as possible and to
provide advance notice to Fidelity Client Services for large purchases.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $ 1,000
TO ADD TO AN ACCOUNT $ 250
MINIMUM BALANCE $ 500
HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares. Your shares will be sold at
the next NAV calculated after your order is received and accepted by the
transfer agent. NAV is normally calculated at 12:00 p.m. and 4:00 p.m.
Eastern time.
TO SELL SHARES IN A N ACCOUNT, you may use any of the methods
described below.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, please leave at
least $500 worth of shares in the account to keep it open.
It is the responsibility of your investment professional to submit your
order to redeem shares for you to receive the next determined NAV.
BY TELEPHONE. Redemption requests may be made by calling Fidelity Client
Services at 1-800-843-3001.
BY MAIL. Send a letter of instruction with signature guarantee(s) to the
address on page . The letter should specify the name of the fund,
the number of shares to be sold, name, account numbers, address, and should
include the additional requirements listed below that apply to each
particular account.
<TABLE>
<CAPTION>
<S> <C>
TYPE OF REGISTRATION REQUIREMENTS
Individual, Joint Tenants,
Letter of instruction signed by all person(s)
Sole Proprietorship, Custodial, (Uniform Gifts or required to sign for the account exactly as it is
Transfers to Minors Act), General Partners registered, accompanied by signature
guarantee(s).
Corporations, Associations Letter of instruction and a corporate resolution,
signed by person(s) required to sign for the
account accompanied by signature guarantee(s).
Trusts A letter of instruction signed by the Trustee(s) with
signature guarantee(s). (If the Trustee's name is
not registered on the account, also provide a copy
of the trust document, certified within the last 60
days.)
</TABLE>
If you do not fall into any of these registration categories (i.e.,
executors, administrators, conservators, or guardians) you should call
Fidelity Client Services at 1-800-843-3001 for further instructions.
BY WIRE. Redemptions may be made by calling Fidelity Client Services at
1-800-843-3001.
You must designate on your account application the U.S. commercial bank
account(s) into which you wish the redemption proceeds to be deposited.
Fidelity Client Services will then notify you that this feature has been
activated and that you may request wire redemptions.
You may change the bank account(s) designated to receive redemption
proceeds at any time prior to making a redemption request. You should send
a letter of instruction, including a signature guarantee, to Fidelity
Client Services at the address shown on page .
You should be able to obtain a signature guarantee from a bank, broker,
dealer, credit union (if authorized under state law), securities exchange
or association, clearing agency, or savings association. A notary public
cannot provide a signature guarantee.
There is no fee imposed by the fund for wiring of redemption proceeds.
However, if you sell shares through an investment professional, the
investment professional may impose a fee for wire redemptions.
Redemption proceeds will be wired via the Federal Reserve Wire System to
your bank account of record. If your redemption request is received by
the transfer agent before 12:00 noon Eastern time ,
redemption proceeds will normally be wired on that day. If your
redemption request is received by the transfer agent after 12:00 noon
Eastern time, redemption proceeds will normally be wired on the following
business day.
The fund reserves the right to take up to seven days to pay you if making
immediate payment would adversely affect the fund.
CHECKWRITING
If you have a checkbook for your account, you may write an unlimited number
of checks. The minimum amount for a check is $500. Do not, however, try to
close out your account by check.
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your account.
INFORMATION SERVICES
FIDELITY'S TELEPHONE REPRESENTATIVES are available Monday through Friday
8:30 a.m. to 6 :00 p.m. Eastern time. Whenever you call, you can
speak with someone equipped to provide the information or service you
need.
STATEMENTS AND REPORTS that the transfer agent sends to you include the
following:
(small solid bullet) Confirmation statements (after every transaction that
affects your account balance or your account registration)
(small solid bullet) Account statements (monthly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports will be mailed,
even if you have more than one account in the fund. Contact your investment
professional, or call Fidelity Client Services at 1-800-843-3001 if you
need additional copies of financial reports or historical account
information.
SUB-ACCOUNTING AND SPECIAL SERVICES. Special processing has been arranged
with FIIOC for institutions that wish to open multiple accounts (a master
account and sub-accounts). You may be required to enter into a separate
agreement with FIIOC. Charges for these services, if any, will be
determined based on the level of services to be rendered.
One easy way to pursue your financial goals is to invest money
regularly. The fund offers a convenient service that lets you transfer
money between fund accounts, automatically. While regular investment plans
do not guarantee a profit and will not protect you against loss in a
declining market, they can be an excellent way to invest for retirement, a
home, educational expenses, and other long-term financial goals. Call your
investment professional for more information.
REGULAR INVESTMENT PLANS
FIDELITY ADVISOR SYSTEMATIC EXCHANGE PROGRAM
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO A FIDELITY ADVISOR FUND
<TABLE>
<CAPTION>
<S> <C> <C>
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly, quarterly, (small solid bullet) To establish, call your investment professional after
semi-annually, or both accounts are opened.
annually (small solid bullet) To change the amount or frequency of your
investment, contact your investment professional
directly or, if you purchased your shares through a
b roker- d ealer or i nsurance r epresentative, call
1-800-522-7297. If you purchased your shares
through a b ank r epresentative, call 1-800-843-3001.
(small solid bullet) The account from which the exchanges are to be
processed must have a minimum balance of
$10,000. The account into which the exchange is
being processed must have a minimum of $1,000.
(small solid bullet) Both accounts must have the same registrations
and taxpayer ID numbers.
(small solid bullet) Call at least 2 business days prior to your next
scheduled exchange date.
</TABLE>
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
The fund distributes substantially all of its net investment income and
capital gains, if any, to shareholders each year. Income dividends are
declared daily and paid monthly.
Income dividends declared are accrued daily throughout the month and are
normally distributed 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 on the day of redemption. The fund
reserves the right to limit this service. Shareholders may elect to receive
dividend distributions in cash.
DISTRIBUTION OPTIONS
When you open an account, specify on your account application how you want
to receive your distributions. The fund offers two options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions, if
any, will be automatically reinvested in additional shares of the fund. If
you do not indicate a choice on your application, you will be assigned this
option.
2. CASH OPTION. You will be sent a check for your dividend and capital gain
distributions, if any.
Dividends will be reinvested at the fund's NAV on the last day of the
month. Capital gain distributions, if any, will be reinvested at the NAV as
of the record date of the distribution. The mailing of distribution checks
will begin within seven days.
TAXES
As with any investment, you should consider how an investment in a tax-free
fund could affect you. Below are some of the fund's tax implications.
TAXES ON DISTRIBUTIONS. Interest income that the fund earns is distributed
to shareholders as income dividends. Interest that is federally tax-free
remains tax-free when it is distributed.
However, gain on the sale of tax-free bonds results in taxable
distributions. Short-term capital gains and a portion of the gain on bonds
purchased at a discount are taxed as dividends. Long-term capital gain
distributions are taxed as long-term capital gains. These distributions are
taxable when they are paid, whether you take them in cash or reinvest them.
However, distributions declared in December and paid in January are taxable
as if they were paid on December 31.
Every January, the transfer agent will send you and the IRS a statement
showing the taxable distributions paid to you in the previous year.
A portion of the fund's dividends may be free from state or local taxes.
Income from investments in your state are often tax-free to you. Each year,
the transfer agent will send you a breakdown of your fund's income from
each state to help you calculate your taxes.
For the fiscal year ended October 31, 1995, 100 % of the fund's
income dividends was free from federal income tax.
TRANSACTION DETAILS
THE FUND IS OPEN FOR BUSINESS and its NAV is normally calculated each day
that both the Federal Reserve Bank of Kansas City (Kansas City Fed) and the
New York Stock Exchange (NYSE) are open. The following holiday closings
have been scheduled for 1996: New Year's Day, Martin Luther King's
Birthday, Washington's Birthday, Good Friday, Memorial Day,
Independence Day, Labor Day, Columbus Day, Veterans Day,
Thanksgiving Day, and Christmas Day. Although FMR expects the same
holiday schedule to be observed in the future, the Kansas City Fed or the
NYSE may modify its holiday schedule at any time. On any day that the
Kansas City Fed or the NYSE closes early, the principal government
securities markets close early (such as on days in advance of holidays
generally observed by participants in such markets), or as permitted by the
SEC, the right is reserved to advance the time on that day by which
purchase and redemption orders must be received.
To the extent that portfolio securities are traded in other markets on days
when the Kansas City Fed or the NYSE is closed, the fund's NAV may be
affected on days when investors do not have access to the fund to purchase
or redeem shares. Certain Fidelity funds may follow different holiday
closing schedules.
THE FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and dividing the result by the number of
shares outstanding. The fund values its portfolio securities on the basis
of amortized cost. This method minimizes the effect of changes in a
security's market value and helps the fund maintain a stable $1.00 share
price.
THE FUND'S OFFERING PRICE (price to buy one share) and REDEMPTION PRICE
(price to sell one share) are its NAV.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify
that your social security or taxpayer identification number is correct and
that you are not subject to 31% backup withholding for failing to report
income to the IRS. If you violate IRS regulations, the IRS can require the
fund to withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity and the transfer
agent may only be liable for losses resulting from unauthorized
transactions if they do not follow reasonable procedures designed to verify
the identity of the caller. Fidelity and the transfer agent will request
personalized security codes or other information, and may also record
calls. You should verify the accuracy of the confirmation statements
immediately after receipt. If you do not want the ability to redeem and
exchange by telephone, call the transfer agent for instructions. Additional
documentation may be required from corporations, associations and certain
fiduciaries.
IF YOU ARE UNABLE TO REACH THE TRANSFER AGENT BY PHONE (for example, during
periods of unusual market activity), consider placing your order by mail.
THE FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. The fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion, they would
disrupt management of the fund.
TO ALLOW FMR TO MANAGE THE FUND MOST EFFECTIVELY, you are urged to
initiate all trades as early in the day as possible and to notify Fidelity
Client Services in advance of large transactions.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased at the
next NAV calculated after your order is received and accepted by the
transfer agent. Note the following:
(small solid bullet) All of your purchases must be made in U.S. dollars and
checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check, each
check must have a value of at least $50.
(small solid bullet) The fund reserves the right to limit the number of
checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will be
canceled and you could be liable for any losses or fees the fund or the
transfer agent has incurred.
Shareholders of record as of 12:00 noon Eastern time will be
entitled to dividends declared that day.
Shares purchased after 12:00 noon Eastern time begin to earn income
dividends on the following business day.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your order is received and accepted by the
transfer agent. Note the following:
(small solid bullet) Shares redeemed before 12:00 noon Eastern time
do not receive the dividend declared on the day of redemption. Shares
redeemed after 12:00 noon Eastern time do receive the dividend
declared on the day of redemption.
(small solid bullet) The fund may withhold redemption proceeds until it is
reasonably assured that investments credited to your account have been
received and collected.
(small solid bullet) If you sell shares by writing a check and the amount
of the check is greater than the value of your account, your check will be
returned to you and you may be subject to additional charges.
When the NYSE or the Kansas City Fed is closed (or when trading is
restricted) for any reason other than its customary weekend or holiday
closings, or under any emergency circumstances as determined by the SEC to
merit such action, the fund may suspend redemption or postpone payment
dates. In cases of suspension of the right of redemption, the request for
redemption may either be withdrawn or payment may be made based on the NAV
next determined after the termination of the suspension.
IF YOUR ACCOUNT BALANCE FALLS BELOW $500 due to redemption, the account may
be closed and the proceeds may be mailed to your address of record. You
will be given 30 days' notice that your account will be closed unless it is
increased to the minimum.
THE TRANSFER AGENT MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
EXCHANGE RESTRICTIONS
As a shareholder you have the privilege of exchanging shares of the
fund for Class A shares of a Fidelity Advisor fund or shares of
other Fidelity funds.
If you have purchased shares of the fund in connection with the Fidelity
Advisor funds program, your shares may be exchanged only for Class A shares
of Fidelity Advisor funds or Initial Class shares of Daily Money Fund.
Other shareholders may not exchange shares of the fund for Class A shares
of Fidelity Advisor funds.
An exchange involves the redemption of all or a portion of the shares of
one fund and the purchase of shares of another fund.
BY TELEPHONE. Exchanges may be requested on any day the fund is open for
business by calling Fidelity Client Services at 1-800-843-3001 between 8:30
a.m. and 4 :00 p.m. Eastern time.
BY MAIL. You may exchange shares on any business day by submitting written
instructions with an authorized signature which is on file for that
account. Written requests for exchanges should contain the fund name,
account number, the number of shares to be redeemed, and the name of the
fund to be purchased. Written requests for exchange should be mailed to
Fidelity Client Services at the address on page .
WHEN YOU PLACE AN ORDER TO EXCHANGE SHARES, shares will be redeemed at the
next determined NAV after your order is received and accepted by the
transfer agent. Shares of the fund to be acquired will be purchased at its
next determined NAV after redemption proceeds are made available. You
should note that, under certain circumstances, the fund may take up to
seven days to make redemption proceeds available for the exchange purchase
of shares of another fund. In addition, please note the following:
(small solid bullet) Exchanges will not be permitted until a completed and
signed account application is on file.
(small solid bullet) The fund you are exchanging into must be registered
for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification number.
(small solid bullet) Before exchanging into a fund, read its prospectus.
(small solid bullet) You will earn dividends in the acquired fund in
accordance with the fund's customary policy, normally on the day the
exchange request is received.
(small solid bullet) If you exchange into a fund with a sales charge, you
pay the percentage difference between that fund's sales charge and any
sales charge you have already paid in connection with the shares you are
exchanging.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Currently, there is no limit on the number of
exchanges out of the fund, nor are there any administrative or redemption
fees applicable to exchanges out of the fund.
(small solid bullet) The fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would be
unable to invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
(small solid bullet) Your exchanges may be restricted or refused if the
fund receives or anticipates simultaneous orders affecting significant
portions of the fund's assets. In particular, a pattern of exchanges that
coincides with a "market timing" strategy may be disruptive to the fund.
Although the fund will attempt to give you prior notice whenever it is
reasonably able to do so, it may impose these restrictions at any time. The
fund reserves the right to terminate or modify the exchange privilege in
the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to $7.50 and redemption fees of up to 1.50% on
exchanges. Check each fund's prospectus for details.
No dealer, sales representative or any other person has been authorized to
give any information or to make any representations, other than those
contained in this Prospectus and in the related SAI, in connection with the
offer contained in this Prospectus. If given or made, such other
information or representations must not be relied upon as having been
authorized by the fund or FDC. This Prospectus and the related SAI do not
constitute an offer by the fund or by FDC to sell or to buy shares of the
fund to any person to whom it is unlawful to make such offer.
[This page intentionally left blank.]
DAILY TAX-EXEMPT MONEY FUND:
CROSS REFERENCE SHEET
Form N-1A Item Number Statement of Additional Information Caption
10 a,b.............. Cover Page
11 ................. Table of Contents
12 ................... *
13 a,b,c.............. Investment Policies and Limitations
d.................. *
14 a,b,c................ Trustees and Officers
15 a,b,c................ Trustees and Officers, FMR
16 a(i) ................ FMR
a(ii)................ Trustees and Officers
a(iii),b................ Management Contract
c.................. *
d.................. Management Contract
e.................. *
f.................. Distribution and Service Plan
g.................. *
h.................. Description of the Fund
i.................. Contract with FMR Affiliates
17 a.................. Portfolio Transactions
b................. *
c,d............... Portfolio Transactions
18 a.................. Description of the Fund
b................... *
19 a.................. Additional Purchase, Exchange, and Redemption
Information
b.................. Valuation
c.................... *
20 ................... Distributions and Taxes
21 a(i),(ii)...... Distribution and Service Plans; Contracts with FMR
Affiliates
a(iii),b,c......... *
22 ................... Performance
23 ................... Financial statements
* Not Applicable
DAILY TAX-EXEMPT MONEY FUND
STATEMENT OF ADDITIONAL INFORMATION
DECEMBER 20, 1995
This Statement of Additional Information (SAI) is not a prospectus but
should be read in conjunction with the fund's current Prospectus (dated
December 20, 1995). Please retain this document for future reference. The
fund's financial statements , included in the Annual Report, for the
fiscal year ended October 31, 1995, are incorporated herein by reference.
To obtain an additional copy of the Prospectus or the Annual Report, please
call Fidelity Client Services at 1-800-843-3001.
TABLE OF CONTENTS PAGE
Investment Policies and Limitations
Portfolio Transactions
Valuation
Performance
Additional Purchase, Exchange , and Redemption Information
Distributions and Taxes
FMR
Trustees and Officers
Management Contract
Contracts with FMR Affiliates
Distribution and Service Plan
Description of the Fund
Financial Statements
Appendix
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
SUB-ADVISOR
FMR Texas Inc. (FMR Texas)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
UMB Bank, n.a. (UMB)
DTE-ptb-1295
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in the
Prospectus. Unless otherwise noted, whenever an investment policy or
limitation states a maximum percentage of the fund'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 will be
determined immediately after and as a result of the fund'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 the fund's investment policies and
limitations.
The fund's fundamental investment policies and limitations cannot be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940 (1940 Act))
of the fund. However, except for the fundamental investment limitations
listed below, the investment policies and limitations described in this SAI
are not fundamental and may be changed without shareholder approval.
INVESTMENT LIMITATIONS OF DAILY TAX-EXEMPT MONEY FUND
THE FOLLOWING ARE DAILY TAX-EXEMPT'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, 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,
(a) more than 5% of the fund's total assets would be invested in the
securities of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) make short sales of securities;
(4) purchase any securities on margin, except for such short-term credits
as are necessary for the clearance of transactions;
(5) borrow money, except for temporary or emergency purposes (not for
leveraging or investment) in an amount not to exceed 33 1/3% of the value
of its total assets (including the amount borrowed) less liabilities (other
than borrowings). Any borrowings that come to exceed 33 1/3% of the fund's
assets by reason of a decline in net assets will be reduced within three
days (exclusive of Sundays and holidays) to the extent necessary to comply
with the 33 1/3% limitation;
(6) underwrite any issue of securities; except to the extent that the
purchase of municipal bonds in accordance with the fund's investment
objective, policies, and restrictions, either directly from the issuer, or
from an underwriter for an issuer, may be deemed to be underwriting;
(7) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government or any of its agencies or
instrumentalities, or tax-exempt obligations issued or guaranteed by a U.S.
territory or possession or a state or local government, or a political
subdivision of any of the foregoing) if, as a result, more than 25% of the
fund's total assets would be invested in securities of companies whose
principal business activities are in the same industry;
(8) purchase or sell real estate, but this shall not prevent the fund from
investing in municipal bonds or other obligations secured by real estate or
interests therein;
(9) purchase or sell commodities or commodity (futures) contracts;
(10) 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 limit
does not apply to purchases of debt securities or to repurchase agreements;
or
(11) invest in oil, gas or other mineral exploration or development
programs.
(12) The fund 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 objective, policies, and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund 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 (reverse repurchase agreements are treated as borrowings for
purposes of the fund's fundamental investment limitation 5). The fund will
not purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund 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 fund's total
assets.
(ii) The fund 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.
(iii) The fund does not currently intend to engage in repurchase agreements
or make loans, but this limitation does not apply to purchases of debt
securities.
(iv) The fund 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.
(v) The fund does not currently intend to invest in interests in real
estate investment trusts that are not readily marketable, or to invest in
interests in 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.
(vi) The fund does not currently intend to purchase the securities of any
issuer (other than securities issued or guaranteed by domestic or foreign
governments or political subdivisions thereof) if, as a result, more than
5% of its total assets would be invested in the securities of business
enterprises that, including predecessors, have a record of less than three
years of continuous operation.
(vii) The fund 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.
(viii) The fund 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.
(ix) The fund 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 objective, policies, and
limitations as the fund.
For purposes of limitation (vi), pass-through entities and other special
purpose vehicles or pools of financial assets, such as issuers of
asset-backed securities or investment companies, are not considered
"business enterprises."
For the fund's policies on quality and maturity, see the section entitled
"Quality and Maturity," on page 5.
AFFILIATED BANK TRANSACTIONS. The fund may engage in transactions with
financial institutions that are, or may be considered to be, "affiliated
persons" of the fund under the 1940 Act. 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
(SEC), the Board of Trustees has established and periodically reviews
procedures applicable to transactions involving affiliated financial
institutions.
DELAYED-DELIVERY TRANSACTIONS. The fund may buy and sell securities on a
delayed-delivery or when-issued basis. These transactions involve a
commitment by the fund 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. Typically, no
interest accrues to the purchaser until the security is delivered.
When purchasing securities on a delayed-delivery basis, the fund assumes
the rights and risks of ownership, including the risk of price and yield
fluctuations. Because the fund is not required to pay for securities until
the delivery date, these risks are in addition to the risks associated with
the fund's other investments. If the fund 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 fund will set aside
appropriate liquid assets in a segregated custodial account to cover its
purchase obligations. When the fund has sold a security on a
delayed-delivery basis, the fund 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 fund could miss a favorable price or yield opportunity, or could suffer
a loss.
The fund 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.
FEDERALLY TAXABLE OBLIGATIONS. Under normal conditions, the fund does not
intend to invest in securities whose interest is federally taxable.
However, from time to time on a temporary basis, the fund may invest a
portion of its assets in fixed-income obligations whose interest is subject
to federal income tax.
Should the fund invest in federally taxable obligations, it would purchase
securities that, in FMR's judgment, are of high quality. These obligations
would include those issued or guaranteed by the U.S. Government or its
agencies or instrumentalities and repurchase agreements backed by such
obligations.
Proposals to restrict or eliminate the federal income tax exemption for
interest on municipal obligations are introduced before Congress from time
to time. Proposals also may be introduced before state legislatures that
would affect the state tax treatment of the fund's distributions. If such
proposals were enacted, the availability of municipal obligations and the
value of the fund's holdings would be affected and the Trustees would
reevaluate the fund's investment objective and policies.
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 the fund's investments and, through reports from FMR, the
Board monitors investments in illiquid instruments. In determining the
liquidity of the fund'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 fund's rights and
obligations relating to the investment).
FMR may determine some restricted securities and municipal lease
obligations 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, the fund were in a
position where more than 10% of its net assets was invested in illiquid
securities, it would seek to take appropriate steps to protect liquidity.
INTERFUND BORROWING PROGRAM. Pursuant to an exemptive order issued by the
SEC, the fund has received permission to lend money to, and borrow money
from, other funds advised by FMR or its affiliates, but will participate in
the interfund borrowing program only as a borrower. Interfund borrowings
normally extend overnight, but can have a maximum duration of seven days. A
fund will borrow through the program only when the costs are equal to or
lower than the costs of bank loans. Loans may be called on one day's
notice, and a fund may have to borrow from a bank at a higher interest rate
if an interfund loan is called or not renewed.
MUNICIPAL M ARKET DISRUPTION RISK. The value of municipal
securities may be affected by uncertainties in the municipal market related
to legislation or litigation involving the taxation of municipal securities
or the rights of municipal securities holders in the event of a bankruptcy.
Municipal bankruptcies are relatively rare, and certain provisions of the
U.S. Bankruptcy Code governing such bankruptcies are unclear and remain
untested. Further, the application of state law to municipal issuers could
produce varying results among the states or among municipal securities
issuers within a state. These legal uncertainties could affect the
municipal securities market generally, certain specific segments of the
market, or the relative credit quality of particular securities. Any of
these effects could have a significant impact on the prices of some or all
of the municipal securities held by a fund, making it more difficult for
the fund to maintain a stable net asset value (NAV).
MONEY MARKET SECURITIES are high-quality, short-term obligations. Some
money market securities employ a trust or other similar structure to modify
the maturity, price characteristics, or quality of financial assets. For
example, put features can be used to modify the maturity of a security, or
interest rate adjustment features can be used to enhance price stability.
If the structure does not perform as intended, adverse tax or investment
consequences may result. Neither the Internal Revenue Service (IRS) nor any
other regulatory authority has ruled definitively on certain legal issues
presented by structured securities. Future tax or other regulatory
determinations could adversely affect the value, liquidity, or tax
treatment of the income received from these securities or the nature and
timing of distributions made by the fund.
MUNICIPAL LEASES and participation interests therein may take the form of a
lease, an installment purchase, or a conditional sale contract and are
issued by state and local governments and authorities to acquire land or a
wide variety of equipment and facilities. Generally, the fund will not hold
such obligations directly as a lessor of the property, but will purchase a
participation interest in a municipal obligation from a bank or other third
party. A participation interest gives the fund a specified, undivided
interest in the obligation in proportion to its purchased interest in the
total amount of the obligation.
Municipal leases frequently have risks distinct from those associated with
general obligation or revenue bonds. State constitutions and statutes set
forth requirements that states or municipalities must meet to incur debt.
These may include voter referenda, interest rate limits, or public sale
requirements. Leases, installment purchases, or conditional sale contracts
(which normally provide for title to the leased asset to pass to the
governmental issuer) have evolved as a means for governmental issuers to
acquire property and equipment without meeting their constitutional and
statutory requirements for the issuance of debt. Many leases and contracts
include "non-appropriation clauses" providing that the governmental issuer
has no obligation to make future payments under the lease or contract
unless money is appropriated for such purposes by the appropriate
legislative body on a yearly or other periodic basis. Non-appropriation
clauses free the issuer from debt issuance limitations.
MUNICIPAL SECTORS:
ELECTRIC UTILITIES INDUSTRY. The electric utilities industry has been
experiencing, and will continue to experience, increased competitive
pressures. Federal legislation in the last two years will open transmission
access to any electricity supplier, although it is not presently known to
what extent competition will evolve. Other risks include: (a) the
availability and cost of fuel, (b) the availability and cost of capital,
(c) the effects of conservation on energy demand, (d) the effects of
rapidly changing environmental, safety, and licensing requirements, and
other federal, state, and local regulations, (e) timely and sufficient rate
increases, and (f) opposition to nuclear power.
HEALTH CARE INDUSTRY. The health care industry is subject to regulatory
action by a number of private and governmental agencies, including federal,
state, and local governmental agencies. A major source of revenues for the
health care industry is payments from the Medicare and Medicaid programs.
As a result, the industry is sensitive to legislative changes and
reductions in governmental spending for such programs. Numerous other
factors may affect the industry, such as general and local economic
conditions; demand for services; expenses (including malpractice insurance
premiums); and competition among health care providers. In the future, the
following elements may adversely affect health care facility operations:
adoption of legislation proposing a national health insurance program;
other state or local health care reform measures; medical and technological
advances which dramatically alter the need for health services or the way
in which such services are delivered; changes in medical coverage which
alter the traditional fee-for-service revenue stream; and efforts by
employers, insurers, and governmental agencies to reduce the costs of
health insurance and health care services.
HOUSING. Housing revenue bonds are generally issued by a state, county,
city, local housing authority, or other public agency. They generally are
secured by the revenues derived from mortgages purchased with the proceeds
of the bond issue. It is extremely difficult to predict the supply of
available mortgages to be purchased with the proceeds of an issue or the
future cash flow from the underlying mortgages. Consequently, there are
risks that proceeds will exceed supply, resulting in early retirement of
bonds, or that homeowner repayments will create an irregular cash flow.
Many factors may affect the financing of multi-family housing projects,
including acceptable completion of construction, proper management,
occupancy and rent levels, economic conditions, and changes to current laws
and regulations.
EDUCATION. In general, there are two types of education-related bonds;
those issued to finance projects for public and private colleges and
universities, and those representing pooled interests in student loans.
Bonds issued to supply educational institutions with funds are subject to
the risk of unanticipated revenue decline, primarily the result of
decreasing student enrollment or decreasing state and federal funding.
Among the factors that may lead to declining or insufficient revenues are
restrictions on students' ability to pay tuition, availability of state and
federal funding, and general economic conditions. Student loan revenue
bonds are generally offered by state (or substate) authorities or
commissions and are backed by pools of student loans. Underlying student
loans may be guaranteed by state guarantee agencies and may be subject to
reimbursement by the United States Department of Education through its
guaranteed student loan program. Others may be private, uninsured loans
made to parents or students which are supported by reserves or other forms
of credit enhancement. Recoveries of principal due to loan defaults may be
applied to redemption of bonds or may be used to re-lend, depending on
program latitude and demand for loans. Cash flows support student loan
revenue bonds are impacted by numerous factors, including the rate of
student loan defaults, seasoning of the loan portfolio, and student
repayment deferral during periods of forbearance. Other risks associated
with student loan revenue bonds include potential changes in federal
legislation regarding student loan revenue bonds, state guarantee agency
reimbursement and continued federal interest and other program subsidiaries
currently in effect.
WATER AND SEWER. Water and sewer revenue bonds are often considered to have
relatively secure credit as a result of their issuer's importance, monopoly
status, and generally unimpeded ability to raise rates. Despite this, lack
of water supply due to insufficient rain, run-off, or snow pack is a
concern that has led to past defaults. Further, public resistance to rate
increases, costly environmental litigation, and Federal environmental
mandates are challenges faced by issuers of water and sewer bonds.
TRANSPORTATION. Transportation debt may be issued to finance the
construction of airports, toll roads, highways, or other transit
facilities. Airport bonds are dependent on the general stability of the
airline industry and on the stability of a specific carrier who uses the
airport as a hub. Air traffic generally follows broader economic trends and
is also affected by the price and availability of fuel. Toll road bonds are
also affected by the cost and availability of fuel as well as toll levels,
the presence of competing roads and the general economic health of an area.
Fuel costs and availability also affect other transportation-related
securities, as do the presence of alternate forms of transportation, such
as public transportation.
PUT FEATURES entitle the holder to sell a security back to the issuer or a
third party at any time or at specified intervals. They are subject to the
risk that the put provider is unable to honor the put feature (purchase the
security). Put providers often support their ability to buy securities on
demand by obtaining letters of credit or other guarantees from other
entities. Demand features, standby commitments, and tender options are
types of put features.
QUALITY AND MATURITY. Pursuant to procedures adopted by the Board of
Trustees, the fund may purchase only high-quality securities that FMR
believes present minimal credit risks. To be considered high-quality, a
security must be 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 are those deemed to be in the highest
rating category (e.g., Standard & Poor's A-1 or SP-1), and second tier
securities are those deemed to be in the second highest rating category
(e.g., Standard & Poor's A-2 or SP-2).
The fund currently intends to limit its investments to securities with
remaining maturities of 397 days or less, and to maintain a dollar-weighted
average maturity of 90 days or less. When determining the maturity of a
security, the fund may look to an interest rate reset or demand feature.
REPURCHASE AGREEMENTS. In a repurchase agreement, the fund purchases a
security and simultaneously commits to sell that security back to the
original seller at an agreed-upon price. 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. To protect the fund
from the risk that the original seller will not fulfill its obligation, the
securities are held in an account of the fund at a bank, marked-to-market
daily, and maintained at a value at least equal to the sale price plus the
accrued incremental amount. While it does not presently appear possible to
eliminate all risks from these transactions (particularly the possibility
that the value of the underlying security will be less than the resale
price, as well as delays and costs to the fund in connection with
bankruptcy proceedings), it is the fund's current policy to engage in
repurchase agreement transactions with parties whose creditworthiness has
been reviewed and found satisfactory by FMR.
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, the fund 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 it 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. However, in general, the fund anticipates holding
restricted securities to maturity or selling them in an exempt transaction.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, the fund
sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the instrument
at a particular price and time. While a reverse repurchase agreement is
outstanding, the fund will maintain appropriate liquid assets in a
segregated custodial account to cover its obligation under the agreement.
The fund will enter into reverse repurchase agreements only with parties
whose creditworthiness has been found satisfactory by FMR. Such
transactions may increase fluctuations in the market value of the fund's
assets and may be viewed as a form of leverage.
SOURCES OF CREDIT OR LIQUIDITY SUPPORT. FMR may rely on its evaluation of
the credit of a bank or another entity in determining whether to purchase a
security supported by a letter of credit guarantee, insurance or other
source of credit or liquidity. In evaluating the credit of a foreign bank
or other foreign entities, FMR will consider whether adequate public
information about the equity is available and whether the entity may be
subject to unfavorable political or economic developments, currency
controls, or other government restrictions that might affect its ability to
honor its commitment.
VARIABLE AND FLOATING RATE SECURITIES provide for periodic adjustments of
the interest rate paid on the security. Variable rate securities provide
for a specified periodic adjustment in the interest rate, while floating
rate securities have interest rates that change whenever there is a change
in a designated benchmark rate. Some variable or floating rate securities
have put features.
ZERO COUPON BONDS do not make regular interest payments. Instead, they are
sold at a deep discount from their face value and are redeemed at face
value when they mature. Because zero coupon bonds do not pay current
income, their prices can be very volatile when interest rates change. In
calculating its daily dividend, the fund takes into account as income a
portion of the difference between a zero coupon bond's purchase price and
its face value.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of the fund by FMR pursuant to authority contained in the fund's
management contract. FMR has granted investment management authority to the
sub-adviser (see the section entitled "Management Contract"), and the
sub-adviser is authorized to place orders for the purchase and sale of
portfolio securities, and will do so in accordance with the policies
described below. 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
fund generally 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 considers 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 fund may execute portfolio transactions with broker-dealers who provide
research and execution services to the fund or 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; and the availability of
securities or the purchasers or sellers of securities. In addition, such
broker-dealers may furnish analyses and reports concerning issuers,
industries, securities, economic factors and trends, portfolio strategy,
and performance of accounts; effect securities transactions, and perform
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 money market
fund are placed with broker-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 generally is 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 fund may be useful to FMR in rendering investment management
services to the fund 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 fund. 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
fund 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
fund 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 fund, 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 subsidiary of FMR Corp., if the commissions are fair,
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
fund and review the commissions paid by the fund over representative
periods of time to determine if they are reasonable in relation to the
benefits to the fund.
For fiscal 1995, 1994, and 1993, the fund paid no brokerage commissions.
During fiscal 1995, the fund paid no commissions to brokerage firms
that provided research services .
From time to time the Trustees will review whether the recapture for the
benefit of the fund of some portion of the brokerage commissions or similar
fees paid by the fund on portfolio transactions is legally permissible and
advisable. The fund seeks 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 fund to seek such recapture.
Although the Trustees and officers of the fund are substantially the same
as those of other funds managed by FMR, investment decisions for the fund
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 and accounts
are managed by the same investment adviser, particularly when the same
security is suitable for the investment objective of more than one fund or
account.
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 procedures believed to be appropriate and equitable for each fund. In
some cases this system could have a detrimental effect on the price or
value of the security as far as the fund is concerned. In other cases,
however, the ability of the fund to participate in volume transactions will
produce better executions and prices for the fund. It is the current
opinion of the Trustees that the desirability of retaining FMR as
investment adviser to the fund outweighs any disadvantages that may be said
to exist from exposure to simultaneous transactions.
VALUATION
Fidelity Service Co. (FSC) normally determines the fund's NAV at
12:00 p.m. and 4:00 p.m. Eastern time. The valuation of portfolio
securities is determined as of these times for the purpose of computing the
fund's NAV.
Portfolio securities and other assets are valued on the basis of amortized
cost. This technique involves initially valuing an instrument at its cost
as adjusted for amortization of premium or accretion of discount rather
than its current market value. The amortized cost value of an instrument
may be higher or lower than the price the fund would receive if it sold the
instrument.
During periods of declining interest rates, the fund's yield based on
amortized cost valuation may be higher than would result if the fund used
market valuations to determine its NAV. The converse would apply during
periods of rising interest rates.
Valuing the fund's investments on the basis of amortized cost and use of
the term "money market fund" are permitted pursuant to Rule 2a-7 under the
1940 Act. The fund must adhere to certain conditions under Rule 2a-7, as
summarized in the section entitled "Quality and Maturity" on page 5.
The Board of Trustees oversees FMR's adherence to the provisions of Rule
2a-7 and has established procedures designed to stabilize the fund's NAV at
$1.00. At such intervals as they deem appropriate, the Trustees consider
the extent to which NAV calculated by using market valuations would deviate
from $1.00 per share. If the Trustees believe that a deviation from the
fund'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.
PERFORMANCE
The fund may quote performance in various ways. All performance information
supplied by the fund in advertising is historical and is not intended to
indicate future returns. The fund's yield and total return fluctuate in
response to market conditions and other factors.
YIELD CALCULATIONS. To compute the fund's yield for a period, 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. The net change is then divided by the value of the account at the
beginning of the period to obtain a base period return. This base period
return is annualized to obtain a current annualized yield. The fund also
may calculate an effective yield by compounding the base period return over
a one-year period. In addition to the current yield, the fund may quote
yields in advertising based on any historical seven-day period. Yields for
the fund are calculated on the same basis as other money market funds, as
required by applicable regulations.
Yield information my be useful in reviewing the fund's performance and in
providing a basis for comparison with other investment alternatives.
However, the fund's yield fluctuates, unlike investments that pay a fixed
interest rate over a stated period of time. When comparing investment
alternatives, investors should also note the quality and maturity of the
portfolio securities of respective investment companies they have chosen to
consider.
Investors should recognize that in periods of declining interest rates the
fund's yield will tend to be somewhat higher than prevailing market rates,
and in periods of rising interest rates the fund's yield will tend to be
somewhat lower. Also, when interest rates are falling, the inflow of net
new money to the fund from the continuous sale of its shares will likely be
invested in instruments producing lower yields than the balance of the
fund's holdings, thereby reducing the fund's current yield. In periods of
rising interest rates, the opposite can be expected to occur.
The fund's tax-equivalent yield is the rate an investor would have to earn
from a fully taxable investment before taxes to equal the fund's tax-free
yield. Tax-equivalent yields are calculated by dividing the fund's yield by
the result of one minus a stated federal or combined federal and state tax
rate. If only a portion of the fund's yield is tax-exempt, only that
portion is adjusted in the calculation.
The following table shows the effect of a shareholder's tax status on
effective yield under federal income tax laws for 1995. It shows the
approximate yield a taxable security must provide at various income
brackets to produce after-tax yields equivalent to those of hypothetical
tax-exempt obligations yielding from 2.00% to 8.00%. Of
course, no assurance can be given that a class will achieve any specific
tax-exempt yield. While Daily Tax-Exempt invests principally in
obligations whose interest is exempt from federal income tax, other income
received by the fund may be taxable.
EXPECTED 199 6 TAX RATES AND TAX-EQUIVALENT YIELDS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Federal If individual tax-exempt yield is:
Taxable Income* Tax 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Single Return Joint Return Bracket** Then taxable-equivalent yield is
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0 - $ 24,000 $ 0 - $ 40,100 15 .0% 2.78% 4.17% 5.56% 6.94% 8.33% 9.72% 11.11%
$ 24,001 - $ 58,160 $ 40,401 - $ 96,900 28 .0% 2.90% 4.35% 5.80% 7.25% 8.70% 10.14% 11.59%
$ 58,161 - $ 121,300 $ 96,901 - $ 147,700 31 .0% 3.13% 4.69% 6.25% 7.81% 9.38% 10.94% 12.50%
$ 121,301 - $ 263,750 $ 147,701 - $ 263,750 36% 3.31% 4.97% 6.62% 8.28% 9.93% 11.59% 13.25%
$ 263,751 - $ + $ 263,751 - $ + 39.6%
</TABLE>
* Net amount subject to federal income tax after deductions and
exemptions. Assumes ordinary income only.
** Excludes the impact of the phaseout of personal exemptions, limitations
on itemized deductions, and other credits, exclusions, and adjustments
which may increase a taxpayer's marginal tax rate. An increase in a
shareholder's marginal tax rate would increase that shareholder's
tax-equivalent yield.
The fund may invest a portion of its assets in obligations that are subject
to federal income tax. When the fund invests in these obligations, its
tax-equivalent yields will be lower. In the table above, tax-equivalent
yields are calculated assuming investments are 100% federally tax-free.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of the fund's return, including the effect of reinvesting dividends
and capital gain distributions, and any change in the fund's NAV over a
stated period. Average annual total returns are calculated by determining
the growth or decline in value of a hypothetical historical investment in
the fund over a stated period, and then calculating the annually compounded
percentage rate that would have produced the same result if the rate of
growth or decline in value had been constant over the period. For example,
a cumulative total return of 100% over ten years would produce an average
annual total return of 7.18%, which is the steady annual rate of return
that would equal 100% growth on a compounded basis in ten years. While
average annual total returns are a convenient means of comparing investment
alternatives, investors should realize that the fund's performance is not
constant over time, but changes from year to year, and that average annual
total returns represent averaged figures as opposed to the actual
year-to-year performance of the fund.
In addition to average annual total returns, the fund may quote unaveraged
or cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total
returns may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a series of
redemptions, over any time period. Total returns may be broken down into
their components of income and capital (including capital gains and changes
in share price) in order to illustrate the relationship of these factors
and their contributions to total return. Total returns may be quoted on a
before-tax or after-tax basis. Total returns, yields, and other performance
information may be quoted numerically or in a table, graph, or similar
illustration.
HISTORICAL FUND RESULTS. The following table shows the fund's 7-day yields,
tax-equivalent yields, and total returns for the period ended October
31, 1995.
The tax-equivalent yield is based on a 36 % federal income tax rate.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Average Annual Total Returns Cumulative Total Returns
</TABLE>
<TABLE>
<CAPTION>
<S><C> <C> <C> <C> <C> <C> <C> <C>
Seven-Day Tax- One Five Ten One Five Ten
Yield Equivalent Year Years Years Year Years Years
Yield
3.30 % 5.16 % 3.36 % 3.01 % 3.91 % 3.36 % 15.99 % 46.74 %
</TABLE>
Note: If FMR had not reimbursed certain fund expenses during these periods,
the fund's yield would have been 3.18 % and total returns would have
been lower.
The following table shows the income and capital elements of the fund's
cumulative total return. The table compares the fund's return to the record
of the Standard & Poor's Composite Index of 500 Stocks (S&P 500), the Dow
Jones Industrial Average (DJIA), and the cost of living (measured by the
Consumer Price Index, or CPI) over the same period. The CPI information is
as of the month end closest to the initial investment date for the fund.
The S&P 500 and DJIA comparisons are provided to show how the fund's total
return compared to the record of a broad average of common stocks and a
narrower set of stocks of major industrial companies, respectively, over
the same period. Of course, since the fund invests in short-term
fixed-income securities, common stocks represent a different type of
investment from the fund. Common stocks generally offer greater growth
potential than the fund, but generally experience greater price volatility,
which means greater potential for loss. In addition, common stocks
generally provide lower income than a fixed-income investment such as the
fund. Figures for the S&P 500 and DJIA are based on the prices of unmanaged
groups of stocks and, unlike the fund's returns, do not include the effect
of paying brokerage commissions or other costs of investing.
During the ten year period ended October 31, 1995, a hypothetical $10,000
investment in Daily Tax-Exempt Money Fund would have grown to
$ 14,674 , assuming all distributions were reinvested. This was a
period of fluctuating interest rates and the figures below should not be
considered representative of the dividend income or capital gain or loss
that could be realized from an investment in the fund today.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of INDICES
Year Initial Reinvested Reinvested
Ended $10,000 Dividend Capital Gain Total S&P Cost of
10/31 Investment Distributions Distributions Value 500 DJIA Living **
1986 $10,000 $ 452 $ 0 $ 10,452 $ 13,320 $ 14,170 $ 10,147
1987 10,000 862 0 10,862 14,174 15,506 10,607
1988 10,000 1,357 0 11,357 16,272 17,323 11,058
1989 10,000 2,006 0 12,006 20,568 22,129 11,555
1990 10,000 2,651 0 12,651 19,027 21,238 12,282
1991 10,000 3,216 0 13,216 25,403 27,625 12,640
1992 10,000 3,603 0 13,603 27,937 29,905 13,045
1993 10,000 3,890 0 13,890 32,113 35,122 13,404
1994 10,000 4,197 0 14,197 33,355 38,320 13,753
1995 10,000 4,674 0 14,674 42,174 47,811 14,140
</TABLE>
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 made on October
31, 198 5 , the net amount invested in fund shares was $10,000. The
cost of the initial investment ($10,000), together with the aggregate cost
of reinvested distributions for the period covered (their cash value at the
time they were reinvested), amounted to $ 14,674 . If distributions
had not been reinvested, the amount of distributions earned from the fund
over time would have been smaller, and cash payments (dividends) for the
period would have amounted to $ 3,842 . The fund did not distribute
any capital gains during the period. Tax consequences of different
investments have not been factored into the above figures.
PERFORMANCE COMPARISONS. The fund's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular 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 funds based on
yield. In addition to the mutual fund rankings, the fund's performance may
be compared to stock, bond, and money market mutual fund performance
indices prepared by Lipper or other organizations. When comparing these
indices, it is important to remember the risk and return characteristics of
each type of investment. For example, while stock mutual funds may offer
higher potential returns, they also carry the highest degree of share price
volatility. Likewise, money market funds may offer greater stability of
principal, but generally do not offer the higher potential returns
available from stock mutual funds.
From time to time, the fund's performance may also be compared to other
mutual funds tracked by financial or business publications and periodicals.
For example, the fund 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. 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.
The fund may be compared in advertising to Certificates of Deposit (CDs) or
other investments issued by banks or other depository institutions. Mutual
funds differ from bank investments in several respects. For example, the
fund may offer greater liquidity or higher potential returns than CDs, the
fund does not guarantee your principal or your return, and fund shares are
not FDIC insured.
Fidelity may provide information designed to help individuals understand
their investment goals and explore various financial strategies. Such
information may include information about current economic, market, and
political conditions; materials that describe general principles of
investing, such as asset allocation, diversification, risk tolerance, and
goal setting; questionaires designed to help create a personal financial
profile; worksheets used to project savings needs based on assumed rates of
inflation and hypothetical rates of return; and action plans offering
investment alternatives. Materials may also include discussions of
Fidelity's asset allocation funds and other Fidelity funds, products, and
services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the CPI), and combinations of
various capital markets. The performance of these capital markets is based
on the returns of different indices.
Fidelity funds may use the performance of these capital markets in order to
demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any
of these capital markets. The risks associated with the security types in
any capital market may or may not correspond directly to those of the
funds. Ibbotson calculates total returns in the same method as the funds.
The funds may also compare performance to that of other compilations or
indices that may be developed and made available in the future.
The fund may compare its performance or the performance of securities in
which it may invest to averages published by IBC USA (Publications), Inc.
of Ashland, Massachusetts. These averages assume reinvestment of
distributions. The IBC/Donoghue's MONEY FUND
AVERAGES(trademark)/Tax-Exempt, which is reported in the MONEY FUND
REPORT(registered trademark), covers over 391 tax-exempt money
market funds.
In advertising materials, Fidelity may reference or discuss its products
and services, which may include other Fidelity funds; retirement investing;
brokerage products and services; model portfolios or allocations; saving
for college or other goals; charitable giving; and the Fidelity credit
card. In addition, Fidelity may quote or reprint financial or business
publications and periodicals as they relate to current economic and
political conditions, fund management, portfolio composition, investment
philosophy, investment techniques, the desirability of owning a particular
mutual fund, and Fidelity services and products. Fidelity may also reprint,
and use as advertising and sales literature, articles from Fidelity Focus,
a quarterly magazine provided free of charge to Fidelity fund shareholders.
The fund may present its fund number, Quotron(trademark) number, and CUSIP
number, and discuss or quote its current portfolio manager.
As of October 31, 1995, FMR advised over $ 26.5 billion in tax-free
fund assets, over $80 billion in money market fund assets, over
$ 224 billion in equity fund assets, over $ 51
billion in international fund assets, and over $ 23
billion in Spartan fund assets. The fund may reference the growth and
variety of money market mutual funds and the adviser's innovation and
participation in the industry. The equity funds under management figure
represents the largest amount of equity fund assets under management by a
mutual fund investment adviser in the United States, making FMR America's
leading equity (stock) fund manager. FMR, its subsidiaries, and affiliates
maintain a worldwide information and communications network for the purpose
of researching and managing investments abroad.
In addition to performance rankings, the fund may compare its total expense
ratio to the average total expense ratio of similar funds tracked by
Lipper. A fund's total expense ratio is a significant factor in comparing
bond and money market investments because of its effect on yield.
ADDITIONAL PURCHASE, EXCHANGE , AND REDEMPTION INFORMATION
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 the fund'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.
Pursuant to Rule 11a-3 under the 1940 Act, the fund is required to give
shareholders at least 60 days' notice prior to terminating or modifying its
exchange privilege. Under the Rule, 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 an exchange, or (ii) the fund suspends
the redemption of the shares to be exchanged as permitted under the 1940
Act or the rules and regulations thereunder, or the fund to be acquired
suspends the sale of its shares because it is unable to invest amounts
effectively in accordance with its investment objective and policies.
In the Prospectus, the fund has notified 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 fund would be unable to
invest effectively in accordance with its investment objective and
policies, or would otherwise potentially be adversely affected.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to you and the
U.S. Postal Service cannot deliver your checks, or if your checks remain
uncashed for six months, Fidelity may reinvest your distributions at the
then-current NAV. All subsequent distributions will then be reinvested
until you provide Fidelity with alternate instructions.
DIVIDENDS. To the extent that the fund's income is designated as federally
tax-exempt interest, the daily dividends declared by the fund are also
federally tax-exempt. Short-term capital gains are distributed as dividend
income, but do not qualify for the dividends-received deduction. These
gains will be taxed as ordinary income. The fund will send each shareholder
a notice in January describing the tax status of dividend and capital gain
distributions (if any) for the prior year.
Shareholders are required to report tax-exempt income on their federal tax
returns. Shareholders who earn other income, such as Social Security
benefits, may be subject to federal income tax of up to 85% of such
benefits to the extent that their income, including tax-exempt income,
exceeds certain base amounts.
The fund purchases securities that are free of federal income tax based on
opinions of counsel regarding the tax status. These opinions will generally
be based on covenants by the issuers or other parties regarding continuing
compliance with federal tax requirements. If at any time the covenants are
not compiled with, distribution to shareholders of interest on a security
could become federally taxable retroactive to the date the security was
issued. For certain types of structured securities, opinions of counsel may
also be based on the effect of the structure on the federal tax treatment
of the income.
As a result of the Tax Reform Act of 1986, interest on certain "private
activity" securities is subject to the federal alternative minimum tax
(AMT), although the interest continues to be excludable from gross income
for other tax purposes. Interest from private activity securities will be
considered tax-exempt for purposes of the fund's policies of investing so
that at least 80% of its income distribution is free from federal income
tax. Interest from private activity securities is a tax preference item for
the purposes of determining whether a taxpayer is subject to the AMT and
the amount of AMT to be paid, if any. Private activity securities issued
after August 7, 1986 to benefit a private or industrial user or to finance
a private facility are affected by this rule.
A portion of the gain on bonds purchased with market discount after April
30, 1993 and short-term capital gains distributed by the fund are taxable
to shareholders as dividends, not as capital gains. Dividend distributions
resulting from a recharacterization of gain from the sale of bonds
purchased with market discount after April 30, 1993 are not considered
income for purposes of the fund's policy of investing so that at least 80%
of its income distribution s is free from federal income tax. The
fund may distribute any net realized short-term capital gains and taxable
market discount once a year or more often, as necessary, to maintain its
NAV at $1.00.
It is the current position of the staff of the SEC that a fund that uses
the term "tax-exempt" in its name may not derive more than 20% of its
income from municipal obligations that pay interest that is a preference
item for purposes of the AMT. According to this position, at least 80% of
the fund's income distribution would have to be exempt from the AMT as well
as from federal income taxes.
Corporate investors should note that a tax preference item for purposes of
the corporate AMT is 75% of the amount by which adjusted current earnings
(which includes tax-exempt interest) exceeds the alternative minimum
taxable income of the corporation. If a shareholder receives an
exempt-interest dividend and sells shares at a loss after holding them for
a period of six months or less, the loss will be disallowed to the extent
of the amount of the exempt-interest dividend.
CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by the fund on
the sale of securities and distributed to shareholders are federally
taxable as long-term capital gains, regardless of the length of time
shareholders have held their shares. If a shareholder receives a long-term
capital gain distribution on shares of the fund, and such shares are held
six months or less and are sold at a loss, the portion of the loss equal to
the amount of the long-term capital gain distribution will be considered a
long-term loss for tax purposes. Short-term capital gains distributed by
the fund are taxable to shareholders as dividends, not as capital gains.
The fund does not anticipate distributing long-term capital gains.
As of October 31, 1995, the fund had a capital loss carryforward
aggregating approximately $ 24,000 which will expire on October
31, 2000 .
FOREIGN TAXES. Foreign governments may withhold taxes on dividends and
interest paid with respect to foreign securities. Foreign governments may
also impose taxes on other payments or gains with respect to foreign
securities. Because the fund does not currently anticipate that securities
of foreign issuers will constitute more than 50% of its total assets at the
end of its fiscal year, shareholders should not expect to claim a foreign
tax credit or deduction on their federal income tax returns with respect to
foreign taxes withheld.
TAX STATUS OF THE FUND. The fund intends to qualify each year as a
"regulated investment company" for tax purposes so that it will not be
liable for federal tax on income and capital gains distributed to
shareholders. In order to qualify as a regulated investment company and
avoid being subject to federal income or excise taxes at the fund level,
the fund intends to distribute substantially all of its net investment
income and net realized capital gains within each calendar year as well as
on a fiscal year basis.
OTHER TAX INFORMATION. The information above is only a summary of some of
the tax consequences generally affecting the fund and its shareholders, and
no attempt has been made to discuss individual tax consequences. In
addition to federal income taxes, shareholders may be subject to state and
local taxes on fund distributions, and shares may be subject to state and
local personal property taxes. Investors should consult their tax advisers
to determine whether the fund is suitable to their particular tax
situation.
FMR
All of the stock of FMR is owned by FMR Corp., its parent organized in
1972. The voting common stock of FMR Corp. is divided into two classes.
Class B is held predominantly by members of the Edward C. Johnson 3d family
and is entitled to 49% of the vote on any matter acted upon by the voting
common stock. Class A is held predominantly by non-Johnson family member
employees of FMR Corp. and its affiliates and is entitled to 51% of the
vote on any such matter. The Johnson family group and all other Class B
shareholders have entered into a shareholders' voting agreement under which
all Class B shares will be voted in accordance with the majority vote of
Class B shares. Under the 1940 Act, control of a company is presumed where
one individual or group of individuals owns more than 25% of the voting
stock of that company. Therefore, through their ownership of voting common
stock and the execution of the shareholders' voting agreement, members of
the Johnson family may be deemed, under the 1940 Act, to form a controlling
group with respect to FMR Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by three of its divisions as follows: FSC, which is the transfer
and shareholder servicing agent for certain of the funds advised by FMR;
Fidelity Investments Institutional Operations Company (FIIOC), which
performs shareholder servicing functions for institutional customers and
funds sold through intermediaries; and Fidelity Investments Retail
Marketing Company, which provides marketing services to various companies
within the Fidelity organization.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that sets forth all employees'
fiduciary responsibilities regarding the funds, establishes procedures for
personal investing and restricts certain transactions. For example, all
personal trades in most securities require pre-clearance, and participation
in initial public offerings is prohibited. In addition, restrictions on the
timing of personal investing in relation to trades by Fidelity funds and on
short-term trading have been adopted.
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 to Daily Tax-Exempt Money Fund prior to the fund's conversion
from a series of a Massachusetts business trust served in identical
capacities. All persons named as Trustees also serve in similar capacities
for other funds advised by FMR. The business address of each Trustee and
officer who is an "interested person" (as defined in the 1940 Act) is 82
Devonshire Street, Boston, Massachusetts 02109, which is also the address
of FMR. The business address of all the other Trustees is Fidelity
Investments, P.O. Box 9235, Boston, Massachusetts 02205-9235. Those
Trustees who are "interested persons" by virtue of their affiliation with
either the trust or FMR are indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d (65), 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., Fidelity Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
*J. GARY BURKHEAD (54), Trustee and Senior Vice President, is President of
FMR; and President and a Director of FMR Texas Inc., Fidelity Management &
Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc.
RALPH F. COX (63), Trustee (1991), is a consultant to Western Mining
Corporation (1994). Prior to February 1994, he was 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
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 (6 4 ), Trustee (1992). Prior to her retirement in
September 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 she previously
served as a Director of Hallmark Cards, Inc. (1985-1991) and Nabisco
Brands, Inc. In addition, she is a member of the President's Advisory
Council of The University of Vermont School of Business Administration.
RICHARD J. FLYNN (71), 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 Trustee of
College of the Holy Cross and Old Sturbridge Village, Inc, and he
previously served as a Director of Mechanics Bank (1971-1995).
E. BRADLEY JONES (6 8 ), Trustee (1990). Prior to his retirement in
1984, Mr. Jones was Chairman and Chief Executive Officer of LTV Steel
Company. He is a Director of TRW Inc. (original equipment and replacement
products), Cleveland-Cliffs Inc (mining), Consolidated Rail Corporation,
Birmingham Steel Corporation, and RPM, Inc. (manufacturer of chemical
products, 1990), and he previously served as a Director of NACCO
Industries, Inc. (mining and marketing, 1985-1995) and Hyster-Yale
Materials Handling, Inc.(1985-1995). In addition, he serves as a Trustee of
First Union Real Estate Investments, a Trustee and member of the Executive
Committee of the Cleveland Clinic Foundation, a Trustee and member of the
Executive Committee of University School (Cleveland), and a Trustee of
Cleveland Clinic Florida.
DONALD J. KIRK (6 3 ), Trustee, is Executive-in-Residence (1995) at
Columbia University Graduate School of Business and a financial consultant.
From 1987 to January 1995, Mr. Kirk was a Professor at Columbia University
Graduate School of Business. Prior to 1987, he was Chairman of the
Financial Accounting Standards Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance), and he previously served as a Director of
Valuation Research Corp. (appraisals and valuations, 1993-1995). In
addition, he serves as Chairman of the Board of Directors of the National
Arts Stabilization Fund, Vice Chairman of the Board of Trustees of the
Greenwich Hospital Association, and as a Member of the Public Oversight
Board of the American Institute of Certified Public Accountants' SEC
Practice Section (1995).
*PETER S. LYNCH (52), Trustee (1990) is Vice Chairman and Director of FMR
(1992). Prior to May 31, 1990, he was a Director of FMR 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) and Morrison Knudsen Corporation (engineering and
construction). In addition, he serves as a Trustee of Boston College,
Massachusetts Eye & Ear Infirmary, Historic Deerfield 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 (66), Trustee, 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), York International Corp.
(air conditioning and refrigeration), Commercial Intertech Corp. (water
treatment equipment, 1992), and Associated Estates Realty Corporation (a
real estate investment trust, 1993).
EDWARD H. MALONE (7 1 ), 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). In addition, he serves as a Trustee of
Corporate Property Investors, the EPS Foundation at Trinity College, the
Naples Philharmonic Center for the Arts, and Rensselaer Polytechnic
Institute, and he is a member of the Advisory Boards of Butler Capital
Corporation Funds and Warburg, Pincus Partnership Funds.
MARVIN L. MANN (62), 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 (67), Trustee, is President of The Wales Group, Inc.
(management and financial 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., and AppleSouth,
Inc. (restaurants, 1992).
FRED L. HENNING, JR.(56), Vice President, is Vice President of Fidelity's
money market (1994) and fixed-income (1995) funds and Senior Vice President
of FMR Texas Inc.
SCOTT A. ORR (33), Vice President (1995) is also Vice President of other
funds advised by FMR and an employee of FMR Texas, Inc.
ARTHUR S. LORING (48), Secretary, is Senior Vice President (1993) and
General Counsel of FMR, Vice President-Legal of FMR Corp., and Vice
President and Clerk of FDC.
KENNETH A. RATHGEBER (48), Treasurer (1995), is Treasurer of the Fidelity
funds and is an employee of FMR (1995). Before joining FMR, Mr. Rathgeber
was a Vice President of Goldman Sachs & Co. (1978-1995), where he served in
various positions, including Vice President of Proprietary Accounting
(1988-1992), Global Co-Controller (1992-1994), and Chief Operations Officer
of Goldman Sachs (Asia) LLC (1994-1995).
THOMAS D. MAHER (50), 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). Prior to 1990, Mr. Maher was an
employee of FMR.
JOHN H. COSTELLO (49), Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH (49), Assistant Treasurer (1994), is an employee of FMR
(1994). Prior to becoming Assistant Treasurer of the Fidelity funds, Mr.
Rush was Chief Compliance Officer of FMR Corp. (1993-1994); Chief Financial
Officer of Fidelity Brokerage Services, Inc. (1990-1993); and Vice
President, Assistant Controller, and Director of the Accounting Department
- - First Boston Corp. (1986-1990).
The following table sets forth information describing the compensation of
each current Trustee of the fund for his or her services as trustee for the
fiscal year ended October 31, 1995.
COMPENSATION TABLE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Trustees Aggregate Pension or Estimated Annual Total
Compensation Retirement Benefits Upon Compensation
from Benefits Accrued Retirement from from the Fund
the Fund as Part of Fund the Fund Complex*
Expenses from the Complex*
Fund Complex*
J. Gary Burkhead ** $ 0 $ 0 $ 0 $ 0
Ralph F. Cox 214 5,200 52,000 125,000
Phyllis Burke Davis 206 5,200 52,000 122,000
Richard J. Flynn 270 0 52,000 154,500
Edward C. Johnson 3d ** 0 0 0 0
E. Bradley Jones 214 5,200 49,400 123,500
Donald J. Kirk 214 5,200 52,000 125,000
Peter S. Lynch ** 0 0 0 0
Gerald C. McDonough 214 5,200 52,000 125,000
Edward H. Malone 214 5,200 44,200 128,000
Marvin L. Mann 214 5,200 52,000 125,000
Thomas R. Williams 212 5,200 52,000 126,500
</TABLE>
* Information is as of December 31, 1994 for 206 funds in the complex.
** Interested trustees of the fund are compensated by FMR.
The non-interested Trustees may elect to defer receipt of all or a
percentage of their annual fees in accordance with the terms of a Deferred
Compensation Plan (the Plan). Under the Plan, compensation deferred by a
Trustee is periodically adjusted as though an equivalent amount had been
invested and reinvested in shares of one or more funds in the complex
designated by such Trustee (designated securities). The amount paid to the
Trustee under the Plan will be determined based upon the performance of
such investments. Deferral of Trustees' fees in accordance with the Plan
will have a negligible effect on the fund's assets, liabilities, and net
income per share, and will not obligate the fund to retain the services of
any Trustee or to pay any particular level of compensation to the Trustee.
The fund may invest in such designated securities under the Plan without
shareholder approval.
Under a retirement program adopted in July 1988, the non-interested
Trustees, upon reaching age 72, become eligible to participate in a
retirement program under which they receive payments during their lifetime
from a fund based on their basic trustee fees and length of service. The
obligation of a fund to make such payments is not secured or funded.
Trustees become eligible if, at the time of retirement, they have served on
the Board for at least five years. Currently, Messrs. Ralph S. Saul,
William R. Spaulding, Bertram H. Witham, and David L. Yunich, all former
non-interested Trustees, receive retirement benefits under the program.
On December 1, 1995 the Trustees and officers of the fund
owned, in the aggregate, less than 1 % of the fund's total
outstanding shares.
As of December 1, 1995 the following owned of record or beneficially
5% or more of outstanding shares of the fund. Texas Commerce Bank, N.A.,
Houston, Texas - 18.93%; First National Bank of Commerce, New Orleans LA -
9.5%; Bank of New York, New York, NY - 6.2%.
A shareholder owning of record or beneficially more than 25% of the fund's
outstanding shares may be considered a controlling person. That
shareholder's vote could have a more significant effect on matters
presented at a shareholders' meeting than votes of other shareholders of
the fund.
MANAGEMENT CONTRACT
The fund employs FMR to furnish investment advisory and other services.
Under its management contract with the fund, FMR acts as investment adviser
and, subject to the supervision of the Board of Trustees, directs the
investments of the fund in accordance with its investment objective,
policies, and limitations. FMR also provides the fund with all necessary
office facilities and personnel for servicing the fund's investments,
compensates all officers of the fund and all Trustees who are "interested
persons" of the fund or of FMR, and of 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, provide the management and administrative services necessary
for the operation of the fund. These services include providing facilities
for maintaining the fund's organization; supervising relations with
custodians, transfer and pricing agents, accountants, underwriters, and
other persons dealing with the fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining the fund's
records and the registration of the fund's shares under federal and state
laws; developing management and shareholder services for the fund; and
furnishing reports, evaluations, and analyses on a variety of subjects to
the Trustees.
In addition to the management fee payable to FMR and the fees payable to
UMB, the fund pays all its expenses, without limitation, that are not
assumed by those parties. The fund pays for the typesetting, printing, and
mailing of its proxy materials to shareholders, legal expenses, and the
fees of the custodian, auditor and non-interested Trustees. Although the
fund's current management contract provides that the fund will pay for
typesetting, printing, and mailing prospectuses, SAIs, notices, and reports
to shareholders, the trust, on behalf of the fund has entered into a
revised transfer agent agreement with UMB, pursuant to which UMB bears the
costs of providing these services to existing shareholders. Other expenses
paid by the fund include interest, taxes, brokerage commissions, and the
fund's proportionate share of insurance premiums and Investment Company
Institute dues. The fund is also liable for such non-recurring expenses as
may arise, including costs of any litigation to which the fund may be a
party, and any obligation it may have to indemnify its officers and
Trustees with respect to litigation.
FMR is the fund's manager pursuant to a management contract dated December
30, 1991 which was approved by shareholders on October 23, 1991.
For the services of FMR under the contract, the fund pays FMR a monthly
management fee at the annual rate of 0. 50 % of the average net assets
of the fund throughout the month. For the fiscal years ended October 31,
199 5 , 1994, and 199 3 , FMR received $1,873,021 (after
reimbursement) , $ 2,474,888 (after reimbursement) , and
$2,524,338 , respectively.
FMR may, from to time, voluntarily reimburse all or a portion of the fund's
operating expenses (exclusive of interest, taxes, brokerage commissions,
and extraordinary expenses). FMR retains the ability to be repaid for these
expense reimbursements in the amount that expenses fall below the limit
prior to the end of the fiscal year. Expense reimbursements by FMR will
increase the fund's total returns and yield and repayment of the
reimbursement by the fund will lower its total returns and yield.
Effective December 30, 1991, FMR voluntarily agreed, subject to revision or
termination, to reimburse the fund if and to the extent that its aggregate
operating expenses, including management fees, were in excess of an annual
rate of 0.65% of average net assets of the fund. If this reimbursement had
not been in effect, for the fiscal years ended October 31 , 1995
and 1994 , the management fee would have amount ed
to $ 2,432,962 and $ 2,592,124 , respectively .
To comply with the California Code of Regulations, FMR will reimburse the
fund if and to the extent that the fund's aggregate annual operating
expenses exceed specified percentages of its average net assets. The
applicable percentages are 2 1/2% of the first $30 million, 2% of the next
$70 million, and 1 1/2% of average net assets in excess of $100 million.
When calculating the fund's expenses for purposes of this regulation, the
fund may exclude interest, taxes, brokerage commissions, and extraordinary
expenses, as well as a portion of its custodian fees attributable to
investments in foreign securities.
SUB-ADVISER. FMR has entered into a sub-advisory agreement with FMR Texas
pursuant to which FMR Texas has primary responsibility for providing
portfolio investment management services to the fund.
Under the sub-advisory agreement, dated December 30, 1991, which was
approved by shareholders on October 23, 1991, FMR pays FMR Texas fees equal
to 50% of the management fee payable to FMR under its management contract
with the fund, after payments by FMR pursuant to the fund's 12b-1 plan, if
any. 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.
On behalf of the fund, for the fiscal years ending
199 5 , 1994, and 199 3 , FMR paid FMR Texas fees of
$582,239 , $594,149 and $553,772 , respectively.
CONTRACTS WITH FMR AFFILIATES
UMB is the transfer agent and shareholder servicing agent for the
fund. UMB has entered into a sub-arrangement with FIIOC pursuant to which
FIIOC serves as transfer, dividend disbursing, and shareholder servicing
agent for the fund. FIIOC is paid an annual fee and an asset-based fee
based on account size. With respect to certain retirement accounts, FIIOC
receives asset-based fees only. With respect to certain other retirement
accounts, FIIOC receives annual account fees and asset-based fees based on
fund type.
FIIOC pays out-of-pocket expenses associated with providing transfer agent
services. In addition, FIIOC bears the expense of typesetting, printing,
and mailing prospectuses, SAIs, and all other reports, notices, and
statements to shareholders, with the exception of proxy statements.
UMB has a sub-arrangement with FSC pursuant to which FSC performs the
calculations necessary to determine the fund's NAV and dividends, and
maintains the fund's accounting records. The fee rates for pricing and
bookkeeping services are based on the fund'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. Pricing and
bookkeeping fees, including related out-of-pocket expenses, paid to FSC
for the fiscal years ending 199 5 , 1994, and
199 3 were $102,002 , $102,238, and $107,107 ,
respectively.
UMB is entitled to reimbursement from the fund for fees paid to FIIOC or
FSC.
The fund has a distribution agreement with FDC, a Massachusetts corporation
organized on July 18, 1960. FDC 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 FDC to use
all reasonable efforts, consistent with its other business, to secure
purchasers for shares of the fund, which are continuously offered at NAV.
Promotional and administrative expenses in connection with the offer and
sale of shares are paid by FMR.
DISTRIBUTION AND SERVICE PLAN
The Trustees have approved a Distribution and Service Plan on behalf of the
fund (the Plan) pursuant to Rule 12b-1 under 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 primarily intended to result
in the sale of shares of a fund except pursuant to a plan approved on
behalf of the fund under the Rule. The Plan, as approved by the Trustees,
allows the fund and FMR to incur certain expenses that might be considered
to constitute indirect payment by the fund of distribution expenses.
Under the Plan, if the payment of management fees by the fund to FMR is
deemed to be indirect financing by the fund of the distribution of its
shares, such payment is authorized by the Plan. The Plan specifically
recognizes that FMR may use its management fee revenue, as well as its past
profits , or other resources from any other source to reimburse FDC
for payments made to third parties that assist in selling shares of
the fund, or to third parties, including banks, that render shareholder
support services.
Under the Plan, p ayments made by FMR to FDC during the fiscal year
ended October 31, 199 5 amounted to $1,268,485.
Prior to approving the Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of the Plan, and have
determined that there is a reasonable likelihood that the Plan will benefit
the fund and its shareholders. In particular, the Trustees noted that the
Plan does not authorize payments by the fund other than those made to FMR
under its management contract with the fund. To the extent that the Plan
gives FMR and FDC greater flexibility in connection with the distribution
of shares of the fund, additional sales of fund shares may result.
Furthermore, certain shareholder support services may be provided more
effectively under the Plan by local entities with whom shareholders have
other relationships.
The Plan was approved by shareholders of the fund on October 23, 1991. The
fund's Plan was approved by shareholders, in connection with a
reorganization transaction on December 20, 1991 , pursuant to an
Agreement and Plan of Conversion.
The Plan allows FDC to make payments to certain third parties with
whom FDC has entered into written Service Contracts and who assist or have
assisted in selling shares of the fund or who provide shareholder support
services ( i nvestment p rofessionals), for assistance in
selling shares of the fund or for providing shareholder support services.
The Plan authorizes FMR to make payments from its management fee, its
past profits or any other source available to it, to reimburse FDC
for these payments to investment professionals, provided that such
payments cannot exceed the amount of the management fee. The maximum
amount payable to investment professionals under the Plan, as determined by
the Board of Trustees, is currently at the annual rate of 0.38% of the
average net asset value of the fund for shareholder support or
distribution services.
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 by the courts or
appropriate regulatory agencies, FDC believes that the Glass-Steagall Act
should not preclude a bank from performing shareholder support services, or
servicing and recordkeeping functions. FDC intends to engage banks only to
perform 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, would be necessary to continue to provide efficient and effective
shareholder services. In such event, changes in the operation of the fund
might occur, including possible termination of any automatic investment or
redemption or other services then 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 other financial institutions may be required to
register as dealers pursuant to state law.
The fund may execute portfolio transactions with, and purchase securities
issued by, depository institutions that receive payments under the Plan. No
preference for the instruments of such depository institutions will be
shown in the selection of investments.
DESCRIPTION OF THE FUND
FUND ORGANIZATION. Daily Tax-Exempt Money Fund is an open-end management
investment company, organized as a Delaware business trust. Originally, the
trust was organized as a Massachusetts business trust by a Declaration of
Trust dated July 16, 1982, which was amended and restated November 1, 1989.
The Delaware Trust (established on June 20, 1991) acquired all of the
assets of the Massachusetts trust and succeeded to the latter's name and
operations on December 30,1991 pursuant to a plan approved by shareholders
on October 23, 1991. Currently, the fund is the only fund of the Delaware
trust, although the Trust Instrument permits the Trustees to create
additional funds.
In the event that FMR ceases to be the investment adviser to the fund, the
right of the fund to use the identifying name "Fidelity" may be withdrawn.
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
the fund's property of any shareholder or former shareholder held
personally liable for the obligations of the fund. The Trust Instrument
also provides that the fund shall, upon request, assume the defense of any
claim made against any shareholder for any act or obligation of the fund
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 fund 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. The fund's capital consists of shares of beneficial interest
allocated to a single fund. 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 the 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 may, as set forth in the Trust Instrument, call meetings of the fund
for any purpose related to the fund, including the purpose of voting on
removal of one or more Trustees.
The fund may be terminated upon the sale of its assets to, or merger with,
another open-end management investment company or series thereof, 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; however, the Trustees may, without prior shareholder
approval, change the form of organization of the fund by merger,
consolidation, or incorporation. If not so terminated or reorganized, the
fund 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.
CUSTODIAN. UMB, 1010 Grand Avenue, Kansas City, MO, is custodian of the
assets of the fund. The custodian is responsible for the safekeeping of a
fund's assets and the appointment of the subcustodian banks and clearing
agencies. The custodian takes no part in determining the investment
policies of a fund or in deciding which securities are purchased or sold by
a fund. However, a fund may invest in obligations of the custodian and may
purchase securities from or sell securities to the custodian. The Bank of
New York and Chemical Bank, each headquartered in New York, also may
serve as a special purpose custodian of certain assets in connection with
pooled repurchase agreement transactions.
FMR, its officers and directors, its affiliated companies, and the Board of
Trustees may, from time to time, conduct transactions with various banks,
including banks serving as custodians for certain 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. Price Waterhouse LLP, 2001 Ross Avenue, Suite 1800, Dallas, TX
75201-2997, serves as the fund's independent accountant. The auditor
examines financial statements for the fund and provides other audit, tax,
and related services.
FINANCIAL STATEMENTS
The fund's financial statements for the fiscal year ended October
31, 1995 are included in the fund's Annual Report, which is attached
to the prospectus. The fund's financial statements are
incorporated herein by reference.
APPENDIX
The descriptions that follow are examples of eligible ratings for the fund.
The fund may, however, consider the ratings of 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 RATINGS OF STATE AND
MUNICIPAL NOTES:
Moody's ratings for state and municipal and other short-term obligations
will be designated Moody's Investment Grade (MIG, or VMIG for variable rate
obligations). This distinction is in recognition of the difference between
short-term credit risk and long-term credit risk. Factors affecting the
liquidity of the borrower and short-term cyclical elements are critical in
short-term ratings, while other factors of major importance in bond risk,
long-term secular trends for example, may be less important over the short
run. Symbols used will be as follows:
MIG-1/VMIG-1 - This designation denotes best quality. There is
present strong protection by established cash flows, superior liquidity
support, or demonstrated broad-based access to the market for refinancing.
MIG-2/VMIG-2 - This designation denotes high quality. Margins of
protection are ample although not so large as in the preceding group.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S RATINGS OF STATE AND
MUNICIPAL NOTES:
SP-1 - Very strong or strong capacity to pay principal and interest.
Those issues determined to possess overwhelming safety characteristics will
be given a plus (+) designation.
SP-2 - Satisfactory capacity to pay principal and interest.
DESCRIPTION OF MOODY'S INVESTORS SERVICES, INC.'S MUNICIPAL BOND
RATINGS:
AAA - Bonds 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
issues.
AA - Bonds 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.
Those bonds in the Aa group which Moody's believes possess the strongest
investment attributes are designated by the symbol Aa1.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S MUNICIPAL BOND RATINGS:
AAA - Debt rated AAA has the highest rating assigned by Standard &
Poor's to a debt obligation. 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 higher-rated debt issues only in small
degree.
The AA rating may be modified by the addition of a plus or minus to show
relative standing within the rating category.
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements and Financial Highlights, included in the Annual
Report for Daily Tax-Exempt Money Fund for the fiscal year ended October
31, 1995 are incorporated by reference into the fund's Statement of
Additional Information and were filed on December 14, 1995 for Daily
Tax-Exempt Money Fund (811-3518) pursuant to Rule 30d-1 under the
Investment Company Act of 1940 and are incorporated herein by reference.
(b) Exhibits:
(1) (a) Trust Instrument for Daily Tax-Exempt Money Fund II, dated June 20,
1991 was electronically filed and is incorporated herein by reference to
Exhibit 1(a) to Post-Effective Amendment No. 20.
(b) Certificate of Trust for Daily Tax-Exempt Money Fund II, dated June 20,
1991, was electronically filed and is incorporated herein by reference to
Exhibit 1(b) to Post-Effective Amendment No. 17.
(c) Certificate of Amendment of Daily Tax-Exempt Money Fund II to Daily
Tax-Exempt Money Fund, dated January 29, 1992 is electronically filed
herein as Exhibit 1(c).
(2) (a) ByLaws of the Trust effective June 20, 1991 were electronically
filed and are incorporated herein by reference to Exhibit 2(a) to Fidelity
Union Street Trust II's Post-Effective Amendment No. 17.
(3) Not applicable.
(4) Not applicable.
(5) (a) Management Contract, dated December 30, 1991, between Daily
Tax-Exempt Money Fund II and Fidelity Management & Research Co. is
electronically filed herein as Exhibit 5(a).
(b) Sub-Advisory Agreement dated December 30, 1991, between Fidelity
Management & Research Co. and FMR Texas Inc. (with respect to Daily
Tax-Exempt Money Fund II) is electronically filed herein as Exhibit 5(b).
(6) (a) General Distribution Agreement dated December 30, 1991, between
Daily Tax-Exempt Money Fund II and Fidelity Distributors Corporation is
electronically filed herein as Exhibit 6(a).
(b) Service Contract between Fidelity Distributors Corporation and
"Qualified Recipients" with respect to shares of Daily Tax-Exempt Money
Fund is electronically filed herein as Exhibit 6(b).
(c) Service Contract (Administrative and Recordkeeping Services Only)
between Fidelity Distributors Corporation and "Qualified Recipients" with
respect to shares of Daily Tax-Exempt Money Fund is electronically filed
herein as Exhibit 6(c).
(7) Retirement Plan for Non-Interested Person Trustees' Retirement Plan,
Directors or General Partners, effective November 1, 1989, was
electronically filed and is incorporated herein by reference to Exhibit 7
to Union Street's Post-Effective Amendment No. 87.
(8) (a) Custodian Agreement, Appendix A, Appendix B, and Appendix C, dated
December 1, 1994, between UMB Bank, n.a. and Daily Tax-Exempt Money Fund on
behalf of Daily Tax-Exempt Money Fund was electronically filed and is
incorporated herein by reference to Exhibit 8 to Fidelity California
Municipal Trust's Post-Effective Amendment No. 28 (File No. 2-83367).
(9) (a) Transfer Agent Agreement dated December 30, 1991, between Daily
Tax-Exempt Money Fund II and United Missouri was electronically filed and
is incorporated herein by reference to Exhibit 9(a) to Post-Effective
Amendment No. 20.
(b) Schedule A to the Transfer Agent Agreement for Daily Tax-Exempt Money
Fund, dated January 1, 1993 was electronically filed and is incorporated
herein by reference as Exhibit 9(b) to Post-Effective Amendment No. 20.
(c) Appointment of Sub-Transfer Agent for Daily Tax-Exempt Money Fund II,
dated December 30, 1991, is electronically filed herein as Exhibit 9(c).
(d) Service Agent Agreement, dated December 30, 1991, between Daily
Tax-Exempt Money Fund II, United Missouri, and Fidelity Management &
Research Co. was electronically filed and is incorporated herein by
reference to Exhibit 9(d) to Post-Effective Amendment No. 20.
(e) Schedules B and C to the Service Agreement for Daily Tax-Exempt Money
Fund, dated March 12, 1992 and December 31, 1991, respectively, were
electronically filed and are incorporated herein by reference to Exhibit
9(e) to Post Effective Amendment No. 20.
(f) Appointment of Sub-Servicing Agent for Daily Tax-Exempt Money Fund II,
dated December 30, 1991, is electronically filed herein as Exhibit 9(f).
(10) Not applicable.
(11) Consent of Price Waterhouse LLP is electronically filed herein as
Exhibit 11.
(12) None.
(13) None.
(14) (a) Fidelity Individual Retirement Account, as currently in effect,
was electronically filed and is incorporated herein by reference to Exhibit
14(a) to Union Street Trust's Post-Effective Amendment No. 87.
(b) Portfolio Advisory Services Individual Retirement Account, as
currently in effect, was electronically filed and is incorporated herein by
reference as Exhibit 14(i) to Union Street Trust's Post-Effective Amendment
No. 87.
(c) National Financial Services Corporation Individual Retirement Account,
as currently in effect, was electronically filed and is incorporated herein
by reference to Exhibit 14(h) to Union Street Trust's Post-Effective
Amendment No. 87.
(d) National Financial Services Defined Contribution Plan, as currently in
effect, was electronically filed and is incorporated herein by reference to
Exhibit 14(k) to Union Street's Trust Post-Effective Amendment No. 87.
(e) Fidelity Institutional Individual Retirement Account Custodian
Agreement and Disclosure Statement, as currently in effect, was
electronically filed and is incorporated herein by reference to Exhibit
14(d) to Union Street Trust's Post-Effective Amendment No. 87.
(f) Fidelity Advisor Funds Individual Retirement Account Custodial
Agreement Disclosure Statement in effect as of January 1, 1994 was filed
electronically and is incorporated herein by reference to Exhibit 14(b) to
Advisor Series I Post-Effective Amendment No. 22.
(g) Plymouth Defined Contribution Plan, as currently in effect, was
electronically filed and is incorporated herein by reference to Exhibit
14(o) to Commonwealth Trust's Post-Effective Amendment No. 57.
(15) (a) Service Plan pursuant to Rule 12b-1 for Daily Tax-Exempt Money
Fund II is electronically filed herein as Exhibit 15(a).
(16) Schedule for computation of performance quotations is electronically
filed herein as Exhibit 16.
(17) A Financial Data Schedule is electronically filed herein as Exhibit
17.
Item 25. Persons Controlled by or under Common Control with Registrant
The Board of Trustees of Registrant is the same as the Board of Trustees
of other funds advised by FMR, each of which has Fidelity Management and
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
Title of Class: Shares of Beneficial Interest
Name of Series Number of Record Holders
Daily Tax-Exempt Money Fund 14,280
Item 27. Pursuant to Del. Code Ann. title 12 (sub-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
expenses 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 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
believe 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 officer 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 the 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:
(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 an 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 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
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY
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.
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 of
funds advised by FMR.
Peter S. Lynch Vice Chairman and Director of FMR.
Robert Beckwitt Vice President of FMR and of funds advised by
FMR.
David Breazzano Vice President of FMR (1993) and of a fund
advised by FMR.
Stephan Campbell Vice President of FMR (1993).
Dwight Churchill Vice President of FMR (1993).
William Danoff 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.
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 Senior 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.
Michael S. Gray Vice President of FMR and of funds advised by
FMR.
Lawrence Greenberg Vice President of FMR (1993).
Barry A. Greenfield Vice President of FMR and of a fund advised by
FMR.
William J. Hayes Senior Vice President of FMR; Equity Division
Leader.
Robert Haber Vice President of FMR and of funds advised by
FMR.
Richard Haberman Senior Vice President of FMR (1993).
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; Director of Technical
Research.
Curtis Hollingsworth Vice President of FMR (1993).
Stephen P. Jonas Treasurer and Vice President of FMR (1993));
Treasurer of FMR Texas Inc. (1993), Fidelity
Management & Research (U.K.) Inc. (1993), and
Fidelity Management & Research (Far East) Inc.
(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 Senior Vice President of FMR (1993); High
Income Division 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.
Malcolm W. MacNaught III Vice President of FMR (1993).
Robert H. Morrison Vice President of FMR; Director of Equity
Trading.
David Murphy Vice President of FMR and of funds advised by
FMR.
Andrew Offit Vice President of FMR (1993).
Judy Pagliuca Vice President of FMR (1993).
Jacques Perold Vice President of FMR.
Anne Punzak Vice President of FMR and of funds advised by
FMR.
Lee Sandwen Vice President of FMR (1993).
Patricia A. Satterthwaite Vice President of FMR (1993) and of a fund
advised by FMR.
Thomas T. Soviero Vice President of FMR (1993).
Richard Spillane Vice President of FMR; Senior Vice President and
Director of Operations and Compliance of FMR
U.K. (1993).
Robert E. Stansky Senior Vice President of FMR (1993) and of funds
advised by FMR.
Gary L. Swayze Vice President of FMR and of funds advised by
FMR; Tax-Free Fixed-Income Group Leader.
Thomas Sweeney Vice President of FMR (1993).
Beth F. Terrana Senior 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).
George A. Vanderheiden Senior Vice President of FMR; Vice President of
funds advised by FMR; Growth Group Leader.
Jeffrey Vinik Senior Vice President of FMR (1993) 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.; Secretary of funds advised by FMR.
Item 29. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for most
funds advised by FMR.
(b)
Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
Edward C. Johnson 3d Director Trustee and President
W. Humphrey Bogart Director None
Kurt A. Lange President and Treasurer None
Thomas W. Littauer Senior Vice President None
Arthur S. Loring Vice President and Clerk Secretary
* 82 Devonshire Street, Boston, MA
(c) Not applicable.
Item 30. Location of Accounts and Records
All accounts, books, and other documents required to be maintained by
Section 31a of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company or Fidelity Service
Co., 82 Devonshire Street, Boston, MA 02109, or the fund's custodian: UMB
Bank, n.a., 1010 Grand Avenue, Kansas City, MO.
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.
<TABLE>
<CAPTION>
<S> <C>
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; 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.
Fred L. Henning, Jr. Senior Vice President of FMR Texas; Fixed-Income
Division Leader (1995).
Robert Auld Vice President of FMR Texas (1993).
Leland Barron Vice President of FMR Texas and of funds advised by
FMR.
Robert Litterst Vice President of FMR Texas and of funds advised by
FMR (1993).
Thomas D. Maher Vice President of FMR Texas and Assistant Vice
President of funds advised by FMR.
Burnell R. Stehman Vice President of FMR Texas and of funds advised by
FMR.
John J. Todd Vice President of FMR Texas and of funds advised by
FMR.
Sarah H. Zenoble Vice President of FMR Texas; Money Market Division
Leader (1995).
Stephen P. Jonas Treasurer of FMR Texas Inc. (1993), Fidelity
Management & Research (U.K.) Inc. (1993), and Fidelity
Mangement & Research (Far East) Inc. (1993); Treasurer
and Vice President of FMR (1993).
David C. Weinstein Secretary of FMR Texas; Clerk of Fidelity Management
& Research (U.K.) Inc.; Clerk of Fidelity Management &
Research (Far East) Inc.
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for the effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Post-Effective Amendment No. 25 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 14th day
of December 1995.
DAILY TAX-EXEMPT MONEY FUND
By /s/Edward C. Johnson 3d (dagger)
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)
<TABLE>
<CAPTION>
<S> <C> <C>
/s/Edward C. Johnson 3d(dagger) President and Trustee December 14, 1995
Edward C. Johnson 3d (Principal Executive Officer)
</TABLE>
/s/Kenneth A. Rathgeber Treasurer December 14, 1995
Kenneth A. Rathgeber
/s/J. Gary Burkhead Trustee December 14, 1995
J. Gary Burkhead
/s/Ralph F. Cox * Trustee December 14, 1995
Ralph F. Cox
/s/Phyllis Burke Davis * Trustee December 14, 1995
Phyllis Burke Davis
/s/Richard J. Flynn * Trustee December 14, 1995
Richard J. Flynn
/s/E. Bradley Jones * Trustee December 14, 1995
E. Bradley Jones
/s/Donald J. Kirk * Trustee December 14, 1995
Donald J. Kirk
/s/Peter S. Lynch * Trustee December 14, 1995
Peter S. Lynch
/s/Edward H. Malone * Trustee December 14, 1995
Edward H. Malone
/s/Marvin L. Mann_____* Trustee December 14, 1995
Marvin L. Mann
/s/Gerald C. McDonough* Trustee December 14, 1995
Gerald C. McDonough
/s/Thomas R. Williams * Trustee December 14, 1995
Thomas R. Williams
(dagger) Signatures affixed by J. Gary Burkhead pursuant to a power of
attorney dated December 15, 1994 and filed herewith.
* Signature affixed by Robert C. Hacker pursuant to a power of attorney
dated December 15, 1994 and filed herewith.
POWER OF ATTORNEY
We, the undersigned Directors, Trustees or General Partners, as the case
may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Daily Money Fund Fidelity Institutional Tax-Exempt Cash Portfolios
Daily Tax-Exempt Money Fund Fidelity Institutional Investors Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust II
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Court Street Trust II Fidelity New York Municipal Trust II
Fidelity Hereford Street Trust Fidelity Phillips Street Trust
Fidelity Institutional Cash Portfolios Fidelity Union Street Trust II
</TABLE>
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 A. Djinis, 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 fifteenth day of December, 1994.
/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 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 /s/Thomas R. Williams
E. Bradley Jones Thomas R. Williams
POWER OF ATTORNEY
I, the undersigned President and Director, Trustee or General Partner, as
the case may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Daily Money Fund Fidelity Institutional Tax-Exempt Cash Portfolios
Daily Tax-Exempt Money Fund Fidelity Institutional Investors Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust II
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Court Street Trust II Fidelity New York Municipal Trust II
Fidelity Hereford Street Trust Fidelity Phillips Street Trust
Fidelity Institutional Cash Portfolios Fidelity Union Street Trust II
</TABLE>
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 December 15, 1994
Edward C. Johnson 3d
CERTIFICATE OF AMENDMENT
OF
DAILY TAX-EXEMPT MONEY FUND II
1. The name of the Trust has been amended. The new name of the Trust is:
Daily Tax-Exempt Money Fund
2. The business address and the registered office of the Trust and of the
registered
agent of the Trust for service of process has been changed. The new
address of
the Trust and of such agent is:
Delaware Corporation Organizers, Inc.
1201 N. Market Street
Wilmington, DE 19899-1347
3. This certificate shall be effective upon filing.
4. Notice is hereby given that the Trust is a series Trust. The debts,
liabilities,
obligations and expenses incurred, contracted for or otherwise existing
with respect
to a particular series of the Trust shall be enforceable against the
assets of such
series only and not against the assets of the Trust generally.
This Certificate is executed this 29th day of January, 1992, in the City of
Irving and the State of Texas.
By: /s/J. Gary Burkhead
J. Gary Burkhead
Trustee and Senior Vice President
MANAGEMENT CONTRACT
between
DAILY TAX-EXEMPT MONEY FUND II
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this 30th day of December, 1991 by and between Daily
Tax-Exempt Money Fund II, a Delaware business trust, which may issue one or
more series of shares of beneficial interest (hereinafter called the
"Fund") on behalf of its existing series of shares of beneficial interest
(hereinafter called the "Portfolio"), and Fidelity Management & Research
Company, a Massachusetts corporation (hereinafter called the "Adviser").
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the supervision
of the Fund's Board of Trustees, direct the investments of the Portfolio in
accordance with the investment objective, policies and limitations as
provided in the Portfolio's Prospectus or other governing instruments, as
amended from time to time, the Investment Company Act of 1940 and rules
thereunder, as amended from time to time (the "1940 Act"), and such other
limitations as the Portfolio may impose by notice in writing to the
Adviser. The Adviser shall also furnish for the use of the Portfolio
office space and all necessary office facilities, equipment and personnel
for servicing the investments of the Portfolio; and shall pay the salaries
and fees of all officers of the Fund, of all Trustees of the Fund who are
"interested persons" of the Fund or of the Adviser and of all personnel of
the Fund or the Adviser performing services relating to research,
statistical and investment activities. The Adviser is authorized, in its
discretion and without prior consultation with the Portfolio, to buy, sell,
lend and otherwise trade in any stocks, bonds and other securities and
investment instruments on behalf of the Portfolio. The investment policies
and all other actions of the Portfolio are and shall at all times be
subject to the control and direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for the
performance by its affiliates of) the management and administrative
services necessary for the operation of the Fund. The Adviser shall,
subject to the supervision of the Board of Trustees, perform various
services for the Portfolio, including but not limited to: (i) providing
the Portfolio with office space, equipment and facilities (which may be its
own) for maintaining its organization; (ii) on behalf of the Portfolio,
supervising relations with, and monitoring the performance of, custodians,
depositories, transfer and pricing agents, accountants, attorneys,
underwriters, brokers and dealers, insurers and other persons in any
capacity deemed to be necessary or desirable; (iii) preparing all general
shareholder communications, including shareholder reports; (iv) conducting
shareholder relations: (v) maintaining the Fund's existence and its
records; (vi) during such times as shares are publicly offered, maintaining
the registration and qualification of the Portfolio's shares under federal
and state law; and (vii) investigating the development of and developing
and implementing, if appropriate, management and shareholder services
designed to enhance the value or convenience of the Portfolio as an
investment vehicle.
The Adviser shall also furnish such reports, evaluations, information or
analyses to the Fund as the Fund's Board of Trustees may request from time
to time or as the Adviser may deem to be desirable. The Adviser shall make
recommendations to the Fund's Board of Trustees with respect to Fund
policies, and shall carry out such policies as are adopted by the Trustees.
The Adviser shall, subject to review by the Board of Trustees, furnish such
other services as the Adviser shall from time to time determine to be
necessary or useful to perform its obligations under this Contract.
The Adviser shall, in acting hereunder, be an independent contractor. The
Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Adviser as directors,
officers or otherwise and that directors, officers and stockholders of the
Adviser are or may be or become similarly interested in the Fund, and that
the Adviser may be or become interested in the Fund as a shareholder or
otherwise.
3. For the services and facilities to be furnished hereunder, the Adviser
shall receive a management fee payable monthly as soon as practicable after
the last day of each month and equivalent to an annual rate of .50% of
average daily net assets of the Fund.
4. It is understood that the Portfolio will pay all its expenses other
than those expressly stated to be payable by the Adviser hereunder, which
expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in
connection with the purchase or sale of securities and other investment
instruments; (iii) fees and expenses of the Fund's Trustees other than
those who are "interested persons" of the Fund or the Adviser; (iv) legal
and audit expenses; (v) custodian, registrar and transfer agent fees and
expenses; (vi) fees and expenses related to the registration and
qualification of the Fund and the Portfolio's shares for distribution under
state and federal securities laws; (vii) expenses of printing and mailing
reports and notices and proxy material to shareholders of the Portfolio;
(viii) all other expenses incidental to holding meetings of the Portfolio's
shareholders, including proxy solicitations therefor; (ix) a pro rata
share, based on relative net assets of the Portfolio and other registered
investment companies having Advisory and Service or Management Contracts
with the Adviser, of 50% of insurance premiums for fidelity and other
coverage; (x) its proportionate share of association membership dues; (xi)
expenses of typesetting for printing Prospectuses and Statements of
Additional Information and supplements thereto; (xii) expenses of printing
and mailing Prospectuses and Statements of Additional Information and
supplements thereto sent to existing shareholders; and (xiii) such
non-recurring or extraordinary expenses as may arise, including those
relating to actions, suits or proceedings to which the Portfolio is a party
and the legal obligation which the Portfolio may have to indemnify the
Fund's Trustees and officers with respect thereto.
5. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and engage
in other activities, provided, however, that such other services and
activities do not, during the term of this Contract, interfere, in a
material manner, with the Adviser's ability to meet all of its obligations
with respect to rendering services to the Portfolio hereunder. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser,
the Adviser shall not be subject to liability to the Portfolio or to any
shareholder of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security.
6. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 6, this Contract shall continue in force until June 30, 1992
and indefinitely thereafter, but only so long as the continuance after such
date shall be specifically approved at least annually by vote of the
Trustees of the Fund or by vote of a majority of the outstanding voting
securities of the Portfolio.
(b) This Contract may be modified by mutual consent, such consent on the
part of the Fund to be authorized by vote of a majority of the outstanding
voting securities of the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph 6, the terms of any continuance or modification of this Contract
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to the Contract or "interested persons" of any
such party, cast in person at a meeting called for the purpose of voting on
such approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without payment of
any penalty, by action of its Trustees or Board of Directors, as the case
may be, or with respect to the Portfolio by vote of a majority of the
outstanding voting securities of the Portfolio. This Contract shall
terminate automatically in the event of its assignment.
7. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Trust Instrument and
agrees that the obligations assumed by the Fund pursuant to this Contract
shall be limited in all cases to the Portfolio and its assets, and the
Adviser shall not seek satisfaction of any such obligation from the
shareholders or any shareholder of the Portfolio or any other Portfolios of
the Fund. In addition, the Adviser shall not seek satisfaction of any such
obligation from the Trustees or any individual Trustee. The Adviser
understands that the rights and obligations of any Portfolio under the
Trust Instrument are separate and distinct from those of any and all other
Portfolios.
8. This contract shall be governed by and construed in accordance with the
laws of the Commonwealth of Massachusetts, without giving effect to the
choice of laws provisions thereof.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have the
respective meanings specified in the 1940 Act, as now in effect or as
hereafter amended, and subject to such orders as may be granted by the
Securities and Exchange Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be signed in
their behalf by their respective officers thereunto duly authorized, and
their respective seals to be hereunto affixed, all as of the date written
above.
DAILY TAX-EXEMPT MONEY FUND II on behalf of Daily Money Fund
By __/s/ Gary French ________________
Treasurer
FIDELITY MANAGEMENT & RESEARCH COMPANY
By _/s/ J. Gary Burkhead______________________
President
SUB-ADVISORY AGREEMENT
between
FMR Texas Inc.
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this 30th day of December, 1991, by and between FMR Texas
Inc., a Texas corporation with principal offices at 400 East Las Colinas
Boulevard, Irving, Texas (hereinafter called the "Sub-Adviser") and
Fidelity Management & Research Company, a Massachusetts corporation with
principal offices at 82 Devonshire Street, Boston, Massachusetts
(hereinafter called the "Adviser").
WHEREAS the Adviser has entered into a Management Contract with Daily
Tax-Exempt Money Fund II, a Delaware business trust, which may issue one or
more series of shares of beneficial interest (hereinafter called the
"Fund") on behalf of the initial portfolio of the Fund (hereinafter called
the "Portfolio"), pursuant to which the Adviser is to act as investment
manager and adviser to the Portfolio, and
WHEREAS the Sub-Adviser was formed for the purpose of providing investment
management of money market mutual funds, both taxable and tax-exempt,
advising generally with respect to money market instruments, and managing
or providing advice with respect to cash management.
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the Adviser and the Sub-Adviser agree as follows:
1. (a) The Sub-Adviser shall, subject to the supervision of the Adviser,
direct the investments of the Portfolio in accordance with the investment
objective, policies and limitations as provided in the Portfolio's
Prospectus or other governing instruments, as amended from time to time,
the Investment Company Act of 1940 and rules thereunder, as amended from
time to time (the "1940 Act"), and such other limitations as the Portfolio
may impose by notice in writing to the Adviser or Sub-Adviser. The
Sub-Adviser shall also furnish for the use of the Portfolio office space
and all necessary office facilities, equipment and personnel for servicing
the investments of the Portfolio; and shall pay the salaries and fees of
all personnel of the Sub-Adviser performing services for the Portfolio
relating to research, statistical and investment activities. The
Sub-Adviser is authorized, in its discretion and without prior consultation
with the Portfolio or the Adviser, to buy, sell, lend and otherwise trade
in any stocks, bonds and other securities and investment instruments on
behalf of the Portfolio. The investment policies and all other actions of
the Portfolio are and shall at all times be subject to the control and
direction of the Fund's Board of Trustees.
(b) The Sub-Adviser shall also furnish such reports, evaluations,
information or analyses to the Portfolio and the Adviser as the Fund's
Board of Trustees or the Adviser may request from time to time or as the
Sub-Adviser may deem to be desirable. The Sub-Adviser shall make
recommendations to the Fund's Board of Trustees with respect to Portfolio
policies, and shall carry out such policies as are adopted by the Trustees.
The Sub-Adviser shall, subject to review by the Board of Trustees, furnish
such other services as the Sub-Adviser shall from time to time determine to
be necessary or useful to perform its obligations under this Agreement and
which are not otherwise furnished by the Adviser.
(c) The Sub-Adviser, at its own expense, shall place all orders for the
purchase and sale of portfolio securities for the Portfolio's account with
brokers or dealers selected by the Sub-Adviser, which may include brokers
or dealers affiliated with the Adviser or Sub-Adviser. The Adviser shall
use its best efforts to seek to execute portfolio transactions at prices
which are advantageous to the Portfolio and at commission rates which are
reasonable in relation to the benefits received. In selecting brokers or
dealers qualified to execute a particular transaction, brokers or dealers
may be selected who also provide brokerage and research services (as those
terms are defined in Section 28(e) of the Securities Exchange Act of 1934)
to the Portfolio and/or the other accounts over which the Sub-Adviser,
Adviser or their affiliates exercise investment discretion. The
Sub-Adviser is authorized to pay a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Sub-Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination
may be viewed in terms of either that particular transaction or the overall
responsibilities which the Sub-Adviser and its affiliates have with respect
to accounts over which they exercise investment discretion. The Trustees
of the Fund shall periodically review the commissions paid by the Portfolio
to determine if the commissions paid over representative periods of time
were reasonable in relation to the benefits to the Portfolio.
2. The Sub-Adviser will be compensated by the Adviser on the following
basis for the services to be furnished hereunder: the Adviser agrees to
pay the Sub-Adviser a monthly fee equal to 50% of the management fee which
the Portfolio is obligated to pay the Adviser under the Portfolio's
Management Contract with the Adviser. Such fee shall not be reduced to
reflect expense reimbursements or fee waivers by the Adviser, if any, in
effect from time to time.
3. It is understood that Trustees, officers of the Fund and shareholders
of the Portfolio are or may be or become interested in the Adviser or the
Sub-Adviser as directors, officers or otherwise and that directors,
officers and stockholders of the Adviser or the Sub-Adviser are or may be
or become similarly interested in the Fund, and that the Adviser or the
Sub-Adviser may be or become interested in the Fund as a shareholder or
otherwise.
4. It is understood that the Portfolio will pay all its expenses other
than those expressly stated to be payable by the Sub-Adviser hereunder or
by the Adviser under the Management Contract with the Portfolio, which
expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in
connection with the purchase or sale of securities and other investment
instruments; (iii) fees and expenses of the Fund's Trustees other than
those who are "interested persons" of the Fund, Sub-Adviser or the Adviser;
(iv) legal and audit expenses; (v) custodian, registrar and transfer agent
fees and expenses; (vi) fees and expenses related to the registration and
qualification of the Fund and the Portfolio's shares for distribution under
state and federal securities laws; (vii) expenses of printing and mailing
reports and notices and proxy material to shareholders of the Portfolio;
(viii) all other expenses incidental to holding meetings of the Portfolio's
shareholders, including proxy solicitations therefor; (ix) a pro rata
share, based on relative net assets of the Portfolio and other registered
investment companies having Advisory and Service or Management Contracts
with the Adviser, of 50% of insurance premiums for fidelity and other
coverage; (x) its proportionate share of association membership dues; (xi)
expenses of typesetting for printing Prospectuses and Statements of
Additional Information and supplements thereto; (xii) expenses of printing
and mailing Prospectuses and Statements of Additional Information and
supplements thereto sent to existing shareholders; and (xiii) such
non-recurring or extraordinary expenses as may arise, including those
relating to actions, suits or proceedings to which the Portfolio is a party
and the legal obligation which the Portfolio may have to indemnify the
Fund's Trustees and officers with respect thereto.
5. The Services of the Sub-Adviser to the Adviser are not to be deemed to
be exclusive, the Sub-Adviser being free to render services to others and
engage in other activities, provided, however, that such other services and
activities do not, during the term of this Agreement, interfere, in a
material manner, with the Sub-Adviser's ability to meet all of its
obligations with respect to rendering investment advice hereunder. The
Sub-Adviser shall for all purposes be an independent contractor and not an
agent or employee of the Adviser or the Fund. In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of the Sub-Adviser, the
Sub-Adviser shall not be subject to liability to the Adviser, the Fund or
to any shareholder of the Portfolio for any act or omission in the course
of, or connected with, rendering services hereunder or for any losses that
may be sustained in the purchase, holding or sale of any security.
6. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 6, this Agreement shall continue in force until June 30,
1992 and indefinitely thereafter, but only so long as the continuance after
such period shall be specifically approved at least annually by vote of the
Fund's Board of Trustees or by vote of a majority of the outstanding voting
securities of the Portfolio.
(b) This Agreement may be modified by mutual consent of the Adviser, the
Sub-Adviser
and the Portfolio, such consent on the part of the Portfolio to be
authorized by vote of
a majority of the outstanding voting securities of the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph 6, the
terms of any continuance or modification of the Agreement must have been
approved
by the vote of a majority of those Trustees of the Fund who are not
parties to such
Agreement or interested persons of any such party, cast in person at a
meeting called
for the purpose of voting on such approval.
(d) Either the Adviser, the Sub-Adviser or the Portfolio may, at any time
on sixty (60)
days' prior written notice to the other parties, terminate this Agreement,
without
payment of any penalty, by action of its Board of Trustees or Directors,
or by vote of
a majority of its outstanding voting securities. This Agreement shall
terminate
automatically in the event of its assignment.
7. The Sub-Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Trust Instrument of the Fund and
agrees that any obligation of the Fund or the Portfolio arising in
connection with this Agreement shall be limited in all cases to the
Portfolio and its assets, and the Sub-Adviser shall not seek satisfaction
of any such obligation from the shareholders or any shareholder of the
Portfolio. Nor shall the Sub-Adviser seek satisfaction of any such
obligation from the Trustees or any individual Trustee.
8. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested persons,"
when used herein, shall have the respective meanings specified in the
Investment Company Act of 1940 as now in effect or as hereafter amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to be
signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as of
the date written above.
FMR TEXAS INC.
By /s/ Charles F. Dornbush
Treasurer
FIDELITY MANAGEMENT & RESEARCH COMPANY
By /s/ J. Gary Burkhead
President
Accepted: Daily Tax-Exempt Money Fund II
By /s/ Gary French
Treasurer
GENERAL DISTRIBUTION AGREEMENT
between
DAILY TAX-EXEMPT MONEY FUND II
and
FIDELITY DISTRIBUTORS CORPORATION
Agreement made this 30th day of December, 1991, between Daily Tax-Exempt
Money Fund II, a Delaware business trust having its principal place of
business in Wilmington, Delaware and which may issue one or more series of
beneficial interest ("Issuer"), with respect to shares of its initial
series, and Fidelity Distributors Corporation, a Massachusetts corporation
having its principal place of business in Boston, Massachusetts
("Distributors").
In consideration of the mutual promises and undertakings herein contained,
the parties agree as follows:
1. Sale of Shares - The Issuer grants to the Distributor the right to sell
shares on behalf of the Issuer during the term of this Agreement and
subject to the registration requirements of the Securities Act of 1933, as
amended ("1933 Act"), and of the laws governing the sale of securities in
the various states ("Blue Sky Laws") under the following terms and
conditions: the Distributor (i) shall have the right to sell, as agent on
behalf of the Issuer, shares authorized for issue and registered under the
1933 Act, and (ii) may sell shares under offers of exchange, if available,
between and among the funds advised by Fidelity Management & Research
Company ("FMR").
2. Sale of Shares by the Issuer - The rights granted to the Distributor
shall be nonexclusive in that the Issuer reserves the right to sell its
shares to investors on applications received and accepted by the Issuer.
Further, the Issuer reserves the right to issue shares in connection with
the merger or consolidation, or acquisition by the Issuer through purchase
or otherwise, with any other investment company, trust, or personal holding
company.
3. Shares Covered by this Agreement - This Agreement shall apply to
unissued shares of the Issuer, shares of the Issuer held in its treasury in
the event that in the discretion of the Issuer treasury shares shall be
sold, and shares of the Issuer repurchased for resale.
4. Public Offering Price - Except as otherwise noted in the Issuer's
current Prospectus and/or Statement of Additional Information, all shares
sold to investors by the Distributor or the Issuer will be sold at the
public offering price. The public offering price for all accepted
subscriptions will be the net asset value per share, as determined in the
manner described in the Issuer's current Prospectus and/or Statement of
Additional Information, plus a sales charge (if any) described in the
Issuer's current Prospectus and/or Statement of Additional Information.
The Issuer shall in all cases receive the net asset value per share on all
sales. If a sales charge is in effect, the Distributor shall have the
right subject to such rules or regulations of the Securities and Exchange
Commission as may then be in effect pursuant to Section 22 of the
Investment Company Act of 1940 to pay a portion of the sales charge to
dealers who have sold shares of the Issuer. If a fee in connection with
shareholder redemptions is in effect, the Issuer shall collect the fee on
behalf of Distributors and, unless otherwise agreed upon by the Issuer and
Distributors, Distributors shall be entitled to receive all of such fees.
5. Suspension of Sales - If and whenever the determination of net asset
value is suspended and until such suspension is terminated, no further
orders for shares shall be processed by the Distributor except such
unconditional orders as may have been placed with the Distributor before it
had knowledge of the suspension. In addition, the Issuer reserves the
right to suspend sales and the Distributor's authority to process orders
for shares on behalf of the Issuer if, in the judgment of the Issuer, it is
in the best interests of the Issuer to do so. Suspension will continue for
such period as may be determined by the Issuer.
6. Solicitation of Sales - In consideration of these rights granted to the
Distributor, the Distributor agrees to use all reasonable efforts,
consistent with its other business, to secure purchasers for shares of the
Issuer. This shall not prevent the Distributor from entering into like
arrangements (including arrangements involving the payment of underwriting
commissions) with other issuers. This does not obligate the Distributor to
register as a broker or dealer under the Blue Sky Laws of any jurisdiction
in which it is not now registered or to maintain its registration in any
jurisdiction in which it is now registered. If a sales charge is in
effect, the Distributor shall have the right to enter into sales agreements
with dealers of its choice for the sale of shares of the Issuer to the
public at the public offering price only and fix in such agreements the
portion of the sales charge which may be retained by dealers, provided that
the Issuer shall approve the form of the dealer agreement and the dealer
discounts set forth therein and shall evidence such approval by filing said
form of dealer agreement and amendments thereto as an exhibit to its
currently effective Registration Statement under the 1933 Act.
7. Authorized Representations - The Distributor is not authorized by the
Issuer to give any information or to make any representations other than
those contained in the appropriate registration statements or Prospectuses
and Statements of Additional Information filed with the Securities and
Exchange Commission under the 1933 Act (as these registration statements,
Prospectuses and Statements of Additional Information may be amended form
time to time), or contained in shareholder reports or other material that
may be prepared by or on behalf of the Issuer for the Distributor's use.
This shall not be construed to prevent the Distributor from preparing and
distributing sales literature or other material as it may deem appropriate.
8. Portfolio Securities - Portfolio securities of the Issuer may be bought
or sold by or through the Distributor, and the Distributor may participate
directly or indirectly in brokerage commissions or "spreads" for
transactions in portfolio securities of the Issuer. However, all sums of
money received by the Distributor as a result of such purchases and sales
or as a result of such participation must, after reimbursement of actual
expenses of the Distributor in connection with such activity, be paid over
by the Distributor for the benefit of the Issuer.
9. Registration of Shares - The Issuer agrees that it will take all action
necessary to register shares under the 1933 Act (subject to the necessary
approval of its shareholders) so that there will be available for sale the
number of shares the Distributor may reasonably be expected to sell. The
Issuer shall make available to the Distributor such number of copies of its
currently effective Prospectus and Statement of Additional Information as
the Distributor may reasonably request. The Issuer shall furnish to the
Distributor copies of all information, financial statements and other
papers which the Distributor may reasonably request for use in connection
with the distribution of shares of the Issuer.
10. Expenses - The Issuer shall pay all fees and expenses (a) in connection
with the preparation, setting in type and filing of any registration
statement, Prospectus and Statement of Additional Information under the
1933 Act and amendments for the issuer of its shares, (b) in connection
with the registration and qualification of shares for sale in the various
states in which the Board of Trustees of the Issuer shall determine it
advisable to qualify such shares for sale (including registering the Issuer
as a broker or dealer or any officer of the Issuer as agent or salesman in
any state), (c) of preparing, setting in type, printing and mailing any
report or other communication to shareholders of the Issuer in their
capacity as such, and (d) of preparing, setting in type, printing and
mailing Prospectuses, Statements of Additional Information and any
supplements thereto sent to existing shareholders.
As provided in the Distribution and Service Plan adopted by the Issuer, it
is recognized by the Issuer that FMR may reimburse the Distributor for any
direct expenses incurred in the distribution of shares of the Issuer from
any source available to it, including advisory and service or management
fees paid to it by the Issuer.
11. Indemnification - The Issuer 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 (including the
reasonable cost of investigating or defending any alleged loss, liability,
claim, damages, or expense and reasonable counsel fees incurred in
connection therewith) 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 Issuer (as from time to time
amended) included an untrue statement of a material fact or omitted to
state a material fact required to be stated or necessary in order to make
the statements not misleading under the 1933 Act, or any other statute or
the common law. However, the Issuer 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 Issuer by or on behalf of the Distributor. In no case (i)
is the indemnity of the Issuer in favor of the Distributor or any person
indemnified to be deemed to protect the Distributor or any person against
any liability to the Issuer or its security holders to which the
Distributor or such person would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties
or by reason of its reckless disregard of its obligations and duties under
this Agreement, or (ii) is the Issuer to be liable under its indemnity
agreement contained in this paragraph with respect to any claim made
against the Distributor or any person indemnified unless the Distributor or
person, as the case may be, shall have notified the Issuer in writing of
the claim within a reasonable time after the summons or other first written
notification giving information of the nature of the claim shall have been
served upon the Distributor or any such person (or after the Distributor or
such person shall have received notice of service on any designated agent).
However, failure to notify the Issuer of any claim shall not relieve the
Issuer from any liability which it may have to the Distributor or any
person against whom such action is brought otherwise than on account of its
indemnity agreement contained in this paragraph. The Issuer shall be
entitled to participate at its own expense in the defense, or, if it so
elects, to assume the defense of any suit brought to enforce any claims,
but if the Issuer elects to assume the defense, the defense shall be
conducted by counsel chosen by it and satisfactory to the Distributor or
person or persons, defendant or defendants in the suit. In the event the
Issuer elects to assume the defense of any suit and retain counsel, the
Distributor, officers or directors or controlling person or persons,
defendant or defendants in the suit, shall bear the fees and expenses of
any additional counsel retained by them. If the Issuer does not elect to
assume the defense of any suit, it will reimburse the Distributor, officers
or directors or controlling person or persons, defendant or defendants in
the suit, for the reasonable fees and expenses of any counsel retained by
them. The Issuer agrees to notify the Distributor promptly of the
commencement of any litigation or proceedings against it or any of its
officers or trustees in connection with the issuance or sale of any of the
shares.
The Distributor also covenants and agrees that it will indemnify and hold
harmless the Issuer and each of its Board members and officers and each
person, if any, who controls the Issuer within the meaning of Section 15 of
the 1933 Act, against any loss, liability, damages, claim or expense
(including the reasonable cost of investigating or defending any alleged
loss, liability, damages, claim or expense and reasonable counsel fees
incurred in connection therewith) arising by reason of any person acquiring
any shares, based upon the 1933 Act or any other statute or common law,
alleging any wrongful act of the Distributor or any of its employees or
alleging that the registration statement, Prospectus, Statement of
Additional Information, shareholder reports or other information filed or
made public by the Issuer (as from time to time amended) included an untrue
statement of a material fact or omitted to state a material fact required
to be stated or necessary in order to make the statements not misleading,
insofar as the statement or omission was made in reliance upon, and in
conformity with information furnished to the Issuer by or on behalf of the
Distributor. In no case (i) is the indemnity of the Distributor in favor
of the Issuer or any person indemnified to be deemed to protect the Issuer
or any person against any liability to which the issuer or such person
would otherwise be subject by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties under this Agreement, or
(ii) is the Distributor to be liable under its indemnity agreement
contained in this paragraph with respect to any claim made against the
issuer or any person indemnified unless the Issuer or person, as the case
may be, shall have notified the Distributor in writing of the claim within
a reasonable time after the summons or other first written notification
giving information of the nature of the claim shall have been served upon
the Issuer or any such person (or after the Issuer or such person shall
have received notice of service on any designated agent). However, failure
to notify the Distributor of any claim shall not relieve the Distributor
from any liability which it may have to the Issuer or any person against
whom the action is brought otherwise than on account of its indemnity
agreement contained in this paragraph. In the case of any notice to the
Distributor, it shall be entitled to participate, at its own expense, in
the defense or, if it so elects, to assume the defense of any suit brought
to enforce the claim, but if the Distributor elects to assume the defense,
the defense shall be conducted by counsel chosen by it and satisfactory to
the Issuer, to its officers and Board and to any controlling person or
persons, defendant or defendants in the suit. In the event that the
Distributor elects to assume the defense of any suit and retain counsel,
the Issuer or controlling persons, defendant or defendants in the suit,
shall bear the fees and expense of any additional counsel retained by them.
If the Distributor does not elect to assume the defense of any suit, it
will reimburse the Issuer, officers and Board or controlling person or
persons, defendant or defendants in the suit, for the reasonable fees and
expenses of any counsel retained by them. The Distributor agrees to notify
the Issuer promptly of the commencement of any litigation or proceedings
against it in connection with the issue and sale of any of the shares.
12. Effective Date - This agreement shall be effective upon its execution,
and unless terminated as provided, shall continue in force until January
31, 1992 and thereafter from year to year, provided continuance is approved
annually by the vote of a majority of the Board members of the Issuer, and
by the vote of those Board members of the Issuer who are not "interested
persons" of the Issuer and, if a plan under Rule 12b-1 under the Investment
Company Act of 1940 is in effect, by the vote of those Board members of the
Issuer who are not "interested persons" of the Issuer and who are not
parties to the Distribution and Service Plan or this Agreement and have no
financial interest in the operation of the Distribution and Service Plan or
in any agreements related to the Distribution and Service Plan, cast in
person at a meeting called for the purpose of voting on the approval. This
Agreement shall automatically terminate in the event of its assignment. As
used in this paragraph, the terms "assignment" and "interested persons"
shall have the respective meanings specified in the Investment Company Act
of 1940 as now in effect or as hereafter amended. In addition to
termination by failure to approve continuance or by assignment, this
Agreement may at any time be terminated by either party upon not less than
sixty days' prior written notice to the other party.
13. Notice - Any notice required or permitted to be given by either party
to the other shall be deemed sufficient if sent by registered or certified
mail, postage prepaid, addressed by the party giving notice to the other
party at the last address furnished by the other party to the party giving
notice: if to the Issuer, at 82 Devonshire Street, Boston, Massachusetts,
and if to the Distributor, at 82 Devonshire Street, Boston, Massachusetts.
14. Limitation of Liability - The Distributor is expressly put on notice of
the limitation of shareholder liability as set forth in the Trust
Instrument of the Issuer and agrees that the obligations assumed by the
Issuer under this contract shall be limited in all cases to the Issuer and
its assets. The Distributor shall not seek satisfaction of any such
obligation from the shareholders or any shareholder of the Issuer. Nor
shall the Distributor seek satisfaction of any such obligation from the
Trustees or any individual Trustee of the Issuer. The Distributor
understands that the rights and obligations of each series of shares of the
Issuer under the Issuer's Trust Instrument are separate and distinct from
those of any and all other series.
IN WITNESS WHEREOF, the Issuer has executed this instrument in its name
and behalf, by one of its officers duly authorized, and the Distributor has
executed this instrument in its name and behalf, by one of its officers
duly authorized, as of the day and year first above written.
DAILY TAX-EXEMPT MONEY FUND II
By: /s/J. Gary Burkhead
Attest: /s/Arthur S. Loring
Secretary
FIDELITY DISTRIBUTORS CORPORATION
By: /s/Roger T. Servison
Attest: /s/Arthur S. Loring
Clerk
SERVICE CONTRACT
__________________________________________________________________________
__________
WITH RESPECT TO SHARES OF:
( ) Daily Money Fund: Money Market
Portfolio
( ) Daily Money Fund: U.S. Treasury Portfolio
(X) Daily Tax-Exempt Money Fund
To Fidelity Distributors Corporation:
We desire to enter into a Contract with you for activities
in connection with the distribution of shares and the ser-
vicing of shareholders of the Fund noted above (the
"Fund") of which you are the principal underwriter as
defined in the Investment Company Act of 1940 (the "Act") and for which you
are the agent for the continuous distribution of shares.
THE TERMS AND CONDITIONS OF THIS CONTRACT
ARE AS FOLLOWS:
1. We shall provide distribution and certain shareholder
services for our clients who own Fund shares ("clients"),
which services may include, without limitation: sale of
shares of the Fund; answering client inquiries regarding
the Fund; assistance to clients in changing dividend
options, account designations and addresses; performance
of subaccounting; processing purchase and redemption
transactions, including automatic investment and redemp-
tion of client account cash balances; providing periodic
statements showing a client's account balance and the
integration of such statements with other transactions;
arranging for bank wires; and providing such other infor-
mation and services as you reasonably may request.
2. We shall provide such office space and equipment,
telephone facilities and personnel (which may be all or
any part of the space, equipment and facilities currently
used in our business, or all or any personnel employed by
us) as is necessary or beneficial for providing information
and services to shareholders of the Fund, and to assist you
in servicing accounts of clients.
3. We agree to indemnify and hold you, the Fund, and
the Fund's adviser and transfer agent harmless from any
and all direct or indirect liabilities or losses resulting from
requests, directions, actions or inactions, of or by us or
our officers, employees or agents regarding the purchase,
redemption, transfer or registration of shares for our cli-
ents. Such indemnification shall survive the termination of
this Contract.
Neither we nor any of our officers, employees or agents
are authorized to make any representation concerning
Fund shares except those contained in the then current
Fund Prospectus, copies of which will be supplied by you
to us; and we shall have no authority to act as agent for
the Fund or for you.
4. In consideration of the services and facilities described
herein, we shall be entitled to receive, and you shall cause
to be paid to us by yourself or by Fidelity Management &
Research Company, investment adviser of the Fund, such
fees as are set forth in the accompanying "Fee Schedule
for Qualified Recipients." We understand that the payment
of such fees has been authorized pursuant to a Service
Plan approved by the Board of Trustees of the Fund, and
those Trustees who are not "interested persons" of the Fund
(as defined in the Act) and who have no direct or indirect
financial interest in the operation of the Service Plan or in
any agreements related to the Service Plan (hereinafter
referred to as "Qualified Trustees"), and shareholders of
the Fund, that such fees will be paid out of the fees paid
to the Fund's investment adviser, said adviser's past prof-
its or any other source available to said adviser; that the
cost to the Fund for such fees shall not exceed the amount
of the advisory and service fee; and that such fees are sub-
ject to change during the term of this Contract and shall be
paid only so long as this Contract is in effect.
5. We agree to conduct our activities in accordance with
any applicable federal or state laws, including securities
laws and any obligation thereunder to disclose to our cli-
ents the receipt of fees in connection with their investment
in the Fund.
6. You reserve the right, at your discretion and without
notice, to suspend the sale of shares or withdraw the sale
of shares of the Fund.
7. This Contract shall continue in force for one year from
the effective date (see below), and thereafter shall con-
tinue automatically for successive annual periods, pro-
vided such continuance is specifically subject to termi-
nation without penalty at any time if a majority of the
Fund's Qualified Trustees vote to terminate or not to con-
tinue the Service Plan. This Contract is also terminable
without penalty at any time the Service Plan is terminated
by vote of a majority of the Fund's outstanding voting
securities upon 60 days' written notice thereof to us. This
Contract may also be terminated by us, for any reason,
upon 15 days' written notice to you. Notwithstanding anything contained
herein, in the event that the Service Plan
shall terminate or we shall fail to perform the distribution
and shareholder servicing functions contemplated by this
Contract, such determination to be made in good faith by
the Fund or you, this Contract is terminable effective upon
receipt of notice thereof by us. This Contract will also
terminate automatically in the event of its assignment
(as defined in the Act).
8. All communications to you shall be sent to you at your offices, 82
Devonshire Street, Boston, MA 02109. Any
notice to us shall be duly given if mailed or telegraphed to
us at the address shown in this Contract.
9. This Contract shall be construed in accordance with the laws of the
Commonwealth of Massachusetts.
Very truly yours,
__________________________________________________________________________
____________________________
Name of Qualified Recipient (Please Print or Type)
__________________________________________________________________________
____________________________
Street City State
Zip Code
By
__________________________________________________________________________
_________________________
Authorized Signature
Date__________________________________________
NOTE: Please return two signed copies of this Service Contract to Fidelity
Distributors Corporation. Upon acceptance, one
countersigned copy will be returned to you.
FOR INTERNAL USE ONLY:
EFFECTIVE DATE __________________________________
10834-SA4
SERVICE CONTRACT
(ADMINISTRATIVE AND RECORDKEEPING SERVICES ONLY)
__________________________________________________________________________
__________
WITH RESPECT TO SHARES OF:
( ) Daily Money Fund: Money Market
Portfolio
( ) Daily Money Fund: U.S. Treasury Portfolio
(X) Daily Tax-Exempt Money Fund
To Fidelity Distributors Corporation:
We desire to enter into a Contract with you for activities
in connection with the servicing of beneficial owners of
shares of the Fund(s) noted above (the "Fund") of which
you are the principal underwriter as defined in the Invest-
ment Company Act of 1940 (the "Act") and for which you
are the agent for the continuous distribution of shares.
THE TERMS AND CONDITIONS OF THIS CONTRACT
ARE AS FOLLOWS:
1. We shall provide recordkeeping and certain Fund-
related services for our clients who beneficially own Fund
shares ("clients"), which services may include, without limitation:
answering client inquries regarding the Fund; assistance to clients in
changing dividend options, account designations and addresses; performance
of subaccounting; processing purchase and redemption transactions,
including automatic investment and redemption of client account cash
balances; providing periodic statements showing a client's account balance
and the integration of such statements with other transactions; arranging
for bank wires; and providing such other information and services as you or
our clients reasonably may request.
2. We shall provide such office space and equipment,
telephone facilities and personnel (which may be all or
any part of the space, equipment and facilities currently
used in our business, or all or any personnel employed by
us) as is necessary or beneficial for providing Fund-related information
and services to clients.
3. We agree to indemnify and hold you, the Fund, and
the Fund's adviser and transfer agent harmless from any
and all direct or indirect liabilities or losses resulting from
requests, directions, actions or inactions, of or by us or
our officers, employees or agents regarding the purchase,
redemption, transfer or registration of shares of the fund. Such
indemnification shall survive the termination of
this Contract.
Neither we nor any of our officers, employees or agents
are authorized to make any representation concerning
Fund shares except those contained in the then current
Fund Prospectus, and which are consistent with our capabilities under
applicable law; and we shall have no authority to act as agent for the Fund
or for you.
4. In consideration of the services and facilities described
herein, we shall be entitled to receive, and you shall cause
to be paid to us by yourself or by Fidelity Management
& Research Company, investment adviser of the Fund,
such fees as are set forth in the accompanying "Fee
Schedule for Qualified Recipients." We understand that
the payment of such fees has been authorized pursuant to
a Service Plan approved by the Board of Trustees of the
Fund, and those Trustees who are not "interested persons"
of the Fund (as defined in the Act) and who have no direct
or indirect financial interest in the operation of the Service
Plan or in any agreements related to the Service Plan
(hereinafter referred to as "Qualified Trustees"), and
shareholders of the Fund, that such fees will be paid out
of the fees paid to the Fund's investment adviser, said
adviser's past profits or any other source available to said
adviser; that the cost to the Fund for such fees shall not
exceed the amount of the advisory and service fee; and
that such fees are subject to change during the term of this
Contract and shall be paid only so long as this Contract is
in effect.
5. We agree to conduct our activities in accordance with
any applicable federal or state laws, including securities
laws and any obligation thereunder to disclose to our cli-
ents the receipt of fees in connection with their beneficial
ownership of shares of the Fund.
6. You reserve the right, at your discretion and without
notice, to suspend the sale of shares or withdraw the sale
of shares of the Fund.
7. This Contract shall continue in force for one year from
the effective date (see below), and thereafter shall con-
tinue automatically for successive annual periods, pro-
vided such continuance is specifically subject to termi-
nation without penalty at any time if a majority of the
Fund's Qualified Trustees vote to terminate or not to con-
tinue the Service Plan. This Contract is also terminable
without penalty at any time the Service Plan is terminated
by vote of a majority of the Fund's outstanding voting
securities upon 60 days' written notice thereof to us. This
Contract may also be terminated by us, for any reason,
upon 15 days' written notice to you. Notwithstanding anything contained
herein, in the event that the Service Plan
shall terminate or we shall fail to perform the record-
keeping and client servicing functions contemplated by
this Contract, such determination to be made in good faith
by the Fund or you, this Contract is terminable effective
upon receipt of notice thereof by us. This Contract will
also terminate automatically in the event of its assignment
(as defined in the Act).
8. All communications to you shall be sent to you at your offices, 82
Devonshire Street, Boston, MA 02109. Any
notice to us shall be duly given if mailed or telegraphed to
us at the address shown in this Contract.
9. This Contract shall be construed in accordance with the laws of the
Commonwealth of Massachusetts.
Very truly yours,
__________________________________________________________________________
____________________________
Name of Qualified Recipient (Please Print or Type)
__________________________________________________________________________
____________________________
Street City State
Zip Code
By
__________________________________________________________________________
_________________________
Authorized Signature
Date__________________________________________
NOTE: Please return two signed copies of this Service Contract to Fidelity
Distributors Corporation. Upon acceptance, one
countersigned copy will be returned to you.
FOR INTERNAL USE ONLY:
EFFECTIVE DATE __________________________________
10834-SAR3
APPOINTMENT OF SUB-TRANSFER AGENT
DAILY TAX-EXEMPT MONEY FUND
AGREEMENT dated as of December 30, 1991 between FMR Corp., a Massachusetts
corporation with principal offices at 82 Devonshire Street, Boston,
Massachusetts, Fidelity Investments Institutional Operations Company
(FIIOC), a division of FMR Corp. with principal offices at 82 Devonshire
Street, Boston, Massachusetts, and United Missouri Bank, N.A. (the Bank),
with principal offices at 1010 Grand Avenue, Kansas City, Missouri.
WHEREAS, the Bank has entered into a Transfer Agent Agreement dated
December 30, 1991 (the Agreement) with Daily Tax-Exempt Money Fund (the
Fund), a Delaware business trust with principal offices at 82 Devonshire
Street, Boston, Massachusetts, under which the Bank has assumed certain
responsibilities, including:
(i) receive for acceptance, orders for the purchase of Fund shares, and
promptly deliver payments received by it and appropriate documentation
therefor to the Fund's custodian;
(ii) pursuant to purchase orders, issue the appropriate number of Fund
shares and properly register such shares to the appropriate shareholder
account;
(iii) receive for acceptance, redemption requests and redemption
instructions (including redemptions by check transmitted to FIIOC by any
duly appointed check processing agent) and process payments for redemption
to shareholders in accordance with the terms, conditions and rules
governing each shareholder's account as set forth in the Fund's prospectus,
statement of additional information and each shareholder's account
application;
(iv) effect transfers of shares by the registered owners thereof upon
receipt of appropriate instructions; and
(v) prepare and mail to Fund shareholders such confirmations and statements
of account as may be required under applicable law and as may be reasonably
requested by the Fund.
Further, the Bank has assumed certain service agent responsibilities in
connection with dividend and capital gain distributions by the Fund,
including:
(i) for each Fund shareholder who has elected to receive dividends and/or
distributions in cash, send payments to shareholders in accordance with the
shareholder's election; and
(ii) for each Fund shareholder who has elected to receive dividends and/or
distributions in shares of the Fund or in shares of another mutual fund for
which FIIOC serves as transfer agent, credit the shareholder's account(s)
for the proper number of shares.
In addition to the foregoing services, the Bank has agreed to:
(i) perform all the customary administrative services related to its
transfer agent and dividend and distribution disbursing agent functions,
including, but not limited to:
(a) maintaining all shareholder accounts,
(b) preparing shareholder meeting lists, and supervising, but not paying
for, various agents and contractors employed to mail proxy materials and
receive and tabulate proxies,
(c) typesetting, printing and mailing shareholder reports and prospectuses
to current Fund shareholders,
(d) withholding taxes (including withholding for foreign taxes) for
shareholders for whom withholdings are required by federal or state
regulation and filing all required reports with respect thereto,
(e) preparing, distributing and filing all requisite shareholder tax
statements on appropriate forms and responding to inquiries with respect
thereto, and
(f) establishing and supervising the operation of bank accounts for the
receipt of funds for share purchases and the payment of dividends,
distributions and redemption proceeds;
(ii) furnish the Fund with all necessary reports of Fund shares sold in
each state in order to permit compliance with the state securities laws;
and
(iii) as required, respond to shareholder inquiries relating to the status
of their accounts, Fund performance, distributions, and share price, and
furnish shareholders with copies of account histories and make adjustments
to shareholder accounts to correct account files.
WHEREAS, the Bank wishes to retain FIIOC, and FIIOC is willing, to carry
out these functions on behalf of the Bank;
NOW THEREFORE, in consideration of the premises and the mutual promises
thereinafter set forth, FIIOC and the Bank hereby agree as follows:
1. The Bank hereby designates FIIOC as its agent pursuant to Paragraph 7
of the Agreement to carry out all of the responsibilities and functions of
the Bank under the Agreement (which is attached as Exhibit A hereto) and
FIIOC agrees to assume all of the Bank's obligations thereunder (including
its responsibility for certain expenses, costs and other charges allocated
to the Bank). The description of all responsibilities and functions
included in the Agreement is incorporated herein as if set forth at length
herein. FIIOC agrees to act as such and to carry out the responsibilities
set forth in the Agreement, upon the terms and conditions therein and
hereinafter set forth and in accordance with the principles of principal
and agent enunciated by the common law. The Bank agrees to supply FIIOC
with all documents, records and other information supplied to the Bank by
the Fund pursuant to the Agreement.
2. In full payment for FIIOC's performance hereunder, the Bank agrees to
pay to FIIOC any and all compensation received from the Fund by the Bank
pursuant to the Agreement and any written Schedules which may constitute
attachments thereto (Schedules). The Bank shall undertake to collect from
the Fund all compensation appropriately due and owing to it under the
Agreement.
3. The Bank is entitled to indemnification under the Agreement in
accordance with Paragraph 12. The Bank agrees to indemnify FIIOC for
FIIOC's losses, claims, damages, liabilities, and expenses (including
reasonable counsel fees and expenses) (losses) to the extent that the Bank
is entitled to and receives indemnification from the Fund pursuant to
Paragraph 12 of the Agreement in connection with the events upon which
FIIOC's indemnification claim is based. The Bank agrees to advise the Fund
of any claim of FIIOC for indemnification arising in connection with
FIIOC's activities in carrying out the responsibilities of the Bank as
provided in the Agreement. Otherwise, the Bank shall not be required to
indemnify FIIOC in connection with FIIOC's losses hereunder unless the
Bank's own negligence, willful misconduct or bad faith contributed to such
losses, and then only to the extent of the Bank's contribution thereto.
The Bank shall not be liable for any act or omission of FIIOC in carrying
out the responsibilities assigned to FIIOC. FIIOC shall hold the Bank
harmless from any losses in connection with the Agreement, except to the
extent that such losses were contributed to by the Bank's own negligence,
willful misconduct, or bad faith.
4. FIIOC represents and warrants that, to the best of its knowledge, the
various procedures and systems that FIIOC has implemented with regard to
safeguarding from loss or damage attributable to fire, theft or any other
cause (including provision for twenty-four hour a day restricted access)
the Fund's blank checks, records, certificates, and other data and FIIOC's
records, data, equipment, facilities and other property used in the
performance of its obligations hereunder are adequate and that it will make
such changes therein from time to time as in its judgment are required for
the secure performance of its obligations hereunder. FIIOC shall review
such systems and procedures on a period basis; and the Bank shall have no
obligation to review these systems and procedures.
5. Each party agrees to perform such further acts and execute such
further documents as are necessary to effectuate the purposes hereof. This
Agreement shall be construed and enforced in accordance with and governed
by the laws of the Commonwealth of Massachusetts. This Agreement may be
executed simultaneously in two counterparts, each of which taken together
shall constitute one and the same instrument.
6. The Bank shall not agree to any agreement or waiver of the provisions
of the Agreement without the written consent of FIIOC. This Agreement
shall continue in effect until December 31, 1992 and thereafter as the
parties may mutually agree; provided, however, that this agreement may be
terminated at any time by six months' written notice given by FIIOC to the
Bank or by the Bank to FIIOC; and further provided that this agreement may
be terminated immediately at any time by the Bank in the event that the
Agreement between the Fund and the Bank is terminated.
7. FIIOC and the Bank are hereby expressly put on notice of (i) the
limitation of shareholder liability as set forth in the Trust Instrument of
the Fund and (ii) of the provisions in the Trust Instrument permitting the
establishment of separate series (or Portfolio(s)) and limiting the
liability of each Portfolio to obligations of that Portfolio; the Bank
hereby agrees that obligations assumed by the Fund pursuant to this
Agreement are in all cases assumed on behalf of a particular Portfolio, and
each such obligation shall be limited in all cases to that Portfolio and
its assets. The Bank agrees that it shall not seek satisfaction of any
such obligation from the shareholders or any individual shareholder of the
Fund, nor from the Trustees or any individual Trustee of the Fund.
IN WITNESS WHEREOF, the parties have duly executed this agreement as of
the day and year first above written.
UNITED MISSOURI BANK, N.A. FMR CORP.
By /s/ Duane E. Schempp By /s/ Denis M. McCarthy
Vice President Sr VP & CFO
FIDELITY INVESTMENTS INSTITUTIONAL
OPERATIONS COMPANY
By /s/ Virginia M. Meany
Senior Vice President
APPOINTMENT OF SUB-SERVICING AGENT
DAILY TAX-EXEMPT MONEY FUND
AGREEMENT dated as of December 30, 1991 between FMR Corp., a Massachusetts
corporation with principal offices at 82 Devonshire Street, Boston,
Massachusetts, Fidelity Service Co. (Service), a division of FMR Corp. with
principal offices at 82 Devonshire Street, Boston, Massachusetts, and
United Missouri Bank, N.A. (the Bank), with principal offices at 1010 Grand
Avenue, Kansas City, Missouri.
WHEREAS, the Bank has entered into a Service Agreement dated December 30,
1991 (the Agreement) with Daily Tax-Exempt Money Fund (the Fund), a
Delaware business trust with principal offices at 82 Devonshire Street,
Boston, Massachusetts, under which the Bank has assumed certain
responsibilities, including (i) accounting relating to the Fund and all
fund transactions of the Fund, (ii) the determination of net asset value
per share of the outstanding shares of the Fund and the offering price, if
any, at which shares are to be sold, at the times and in the manner
described in the Trust Instrument of the Fund, as amended, and the
Prospectus of the Fund, if any, the determination of daily net interest
income, and the timely communication of such information to the person or
persons designated by the Fund, (iii) maintaining the books of account of
the Fund, and (iv) the recognition of, in conjunction with the Custodian,
all corporate actions, including but not limited to, cash and stock
distributions or dividends, stock split and reverse stock splits, taken by
companies whose securities are held by the Fund; and
WHEREAS, the Bank wishes to retain Service, and Service is willing, to
carry out these functions on behalf of the Bank;
NOW THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, Service and the Bank hereby agree as follows:
1. The Bank hereby designates Service as its agent pursuant to Paragraph
7 of the Agreement to carry out all of the responsibilities and functions
of the Bank under the Agreement (which is attached as Exhibit A hereto) and
Service agrees to assume all of Bank's obligations thereunder (including
its responsibilities for certain expenses, costs and other charges
allocated to the Bank). The description of all responsibilities and
functions included in the Agreement is incorporated herein as if set forth
at length herein. Service agrees to act as such and to carry out the
responsibilities set forth in the Agreement, upon the terms and conditions
therein and hereinafter set forth and in accordance with the principles of
principal and agent enunciated by the common law. The Bank agrees to
supply Service with all documents, records and other information supplied
to the Bank by the Fund pursuant to the Agreement.
2. In full payment for Service's performance hereunder, the Bank agrees
to pay to Service any and all compensation received from the Fund by the
Bank pursuant to the Agreement and any written Schedules which may
constitute attachments thereto (Schedules). The Bank shall undertake to
collect from the Fund all compensation appropriately due and owing to it
under the Agreement.
3. The Bank is entitled to indemnification under the Amended Agreement in
accordance with Paragraph 12. The Bank agrees to indemnify Service for
Service's losses, claims, damages, liabilities, and expenses (including
reasonable counsel fees and expenses) (losses) to the extent that the Bank
is entitled to and receives indemnification from the Fund pursuant to
Paragraph 12 of the Agreement in connection with the events upon which
Service's indemnification claim is based. The Bank agrees to advise the
Fund of any claim of Service for indemnification arising in connection with
Service's activities in carrying out the responsibilities of the Bank as
provided in this Agreement. Otherwise, the Bank shall not be required to
indemnify Service in connection with Service's losses hereunder unless the
Bank's own negligence, willful misconduct or bad faith contributed to such
losses, and then only to the extent of the Bank's contribution thereto.
The Bank shall not be liable for any act or omission of Service in carrying
out the responsibilities assigned to Service. Service shall hold the Bank
harmless from any losses in connection with Agreement, except to the extent
that such losses were contributed to by the Bank's own negligence, willful
misconduct, or bad faith.
4. Service represents and warrants that, to the best of its knowledge,
the various procedures and systems that Service has implemented with regard
to safeguarding from loss or damage attributable to fire, theft or any
other cause (including provision for twenty-four hour a day restricted
access) the Fund's blank checks, records, certificates, and other data and
Service's records, data, equipment, facilities and other property used in
the performance of its obligations hereunder are adequate and that it will
make such changes therein from time to time as in its judgment are required
for the secure performance of its obligations hereunder. Service shall
review such systems and procedures on a period basis; and the Bank shall
have no obligation to review these systems and procedures.
5. Each party agrees to perform such further acts and execute such
further documents as are necessary to effectuate the purposes hereof. This
agreement shall be construed and enforced in accordance with and governed
by the laws of the Commonwealth of Massachusetts. This agreement may be
executed simultaneously in two counterparts, each of which taken together
shall constitute one and the same instrument.
6. The Bank shall not agree to any agreement or waiver of the provisions
of the Agreement without the written consent of Service. This agreement
shall continue in effect until December 31, 1992 and thereafter as the
parties may mutually agree; provided, however, that this agreement may be
terminated at any time by six months' written notice given by Service to
the Bank or by the Bank to Service; and further provided that this
agreement may be terminated immediately at any time by the Bank in the
event that the Agreement between the Fund and the Bank is terminated.
7. Service and the Bank is hereby expressly put on notice of (i) the
limitation of shareholder liability as set forth in the Trust Instrument of
the Fund and (ii) of the provisions in the Trust Instrument permitting the
establishment of separate series (or Portfolio(s)) and limiting the
liability of each Portfolio to obligations of that Portfolio; the Bank
hereby agrees that obligations assumed by the Fund pursuant to this
Agreement are in all cases assumed on behalf of a particular Portfolio, and
each such obligation shall be limited in all cases to that Portfolio and
its assets. The Bank agrees that it shall not seek satisfaction of any
such obligation from the shareholders or any individual shareholder of the
Fund, nor from the Trustees or any individual Trustee of the Fund.
IN WITNESS WHEREOF, the parties have duly executed this agreement as of
the day and year first above written.
FMR CORP.
By /s/ Denis M. McCarthy
Sr VP & CFO
UNITED MISSOURI BANK, N.A. FIDELITY SERVICE CO.
By /s/ Duane E. Schempp By /s/ John P. Cotter Jr.
Vice President Sr Vice President
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Statement of
Additional Information constituting part of this Post-Effective Amendment
No. 25 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated December 8, 1995, relating to the financial
statements and financial highlights appearing in the October 31, 1995
combined Prospectus and Annual Report to Shareholders of Daily Tax-Exempt
Money Fund, which is also incorporated by reference into the Registration
Statement. We also consent to the references to us under the headings
"Financial Highlights" in the Prospectus and "Auditor" in the Statement of
Additional Information.
/s/PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
Dallas, Texas
December 11, 1995
SERVICE PLAN
THIS PLAN made as of the 30th day of December, 1991, by and between DAILY
TAX-EXEMPT MONEY FUND II, an unincorporated business trust organized and
existing under the laws of the State of Delaware, on behalf of its initial
series (the "Fund"), and FIDELITY MANAGEMENT & RESEARCH COMPANY (the
"Adviser") and FIDELITY DISTRIBUTORS CORPORATION (the "Distributor"),
corporations organized and existing under the laws of the Commonwealth of
Massachusetts;
WITNESSETH:
WHEREAS, the Fund is engaged in business as an open-end management
investment company and is registered as such under the Investment Company
Act of 1940 (the "Act"); and
WHEREAS, it has been proposed that the Adviser, through the Distributor,
make periodic payments, out of the fee paid to the Adviser, its past
profits or any other source available to it, to certain securities dealers,
financial institutions or other industry professionals for distribution,
administration and/or for servicing investors in Fund shares; and
WHEREAS, the Fund intends to distribute its shares of beneficial interest
("shares') in accordance with Rule 12b-1 under the Act, and desires to
adopt a Service Plan pursuant to such rule; and
WHEREAS, the Board of Trustees, in considering whether the Fund should
adopt and implement a written plan, has evaluated such information as it
deemed necessary to an informed determination as to whether a written plan
should be adopted and implemented and has considered such pertinent factors
as it deemed necessary to form the basis for a decision to use assets of
the Fund for such purposes and has determined that there is a reasonable
likelihood that adoption and implementation of a plan will benefit the Fund
and its shareholders.
NOW THEREFORE, the Fund hereby adopts a Service Plan (hereinafter referred
to as the "Plan") in accordance with Rule 12b-1 under the Act, and the
parties hereto agree to the following terms and conditions of the Plan:
1. There shall be paid periodically, to one or more securities dealers,
financial institutions or other industry professionals, such as investment
advisers, accountants and estate planning firms ("Qualified Recipients"), a
fee in respect of the Fund's shares owned by investors for whom the
Qualified Recipient is the dealer of record or holder of record, or with
whom the Qualified Recipient has a servicing relationship. Servicing
functions may include, among other things: services rendered in connection
with the distribution of Fund shares; answering client inquiries regarding
the Fund; processing purchase and redemption transactions, including
automatic investment and redemption of client cash account balances;
providing periodic statements showing a client's account balances and
integration of such statements with other client transactions; assisting
clients in changing dividend options, account registrations and addresses;
performing sub-accounting; arranging for bank wires; and providing such
other services as the Fund may reasonably request.
Fees paid to Qualified Recipients shall be paid out of the fee paid to the
Adviser, the Adviser's past profits or any other sources available to the
Adviser provided, that the indirect cost to the Fund for any period shall
not exceed the fee paid to the Adviser under the Advisory and Service
Contract with the Fund. The Adviser agrees that it will pay or reimburse
the Distributor for amounts paid to Qualified Recipients, pursuant to this
paragraph. The payment to a Qualified Recipient is subject to its entering
into a Service Contract with the Distributor in the form attached hereto
and to compliance by the Qualified Recipient with the terms of that Service
Contract. In implementing the terms of the Plan, the Distributor or the
Adviser shall have the responsibility and authority to select the Qualified
Recipients. The fee to be paid to a Qualified Recipient and the basis on
which payment will be made shall be determined by the Adviser, within the
limitations set forth above, provided, however, that a majority of the
Board of Trustees, including a majority of the Trustees who are not
"interested persons" of the Fund (as defined in the Act) and who have no
direct or indirect financial interest in the operation of this Plan or in
any agreements related to the Plan (hereinafter referred to as "Qualified
Trustees"), may at any time and from time to time decrease the maximum
percentage rate and/or maximum total amount payable to Qualified
Recipients.
For the purposes of determining the fees payable to a Qualified Recipient,
the value of the Fund's net assets shall be computed in the manner
specified in the Fund's then current Prospectus for computation in
connection with the determination of the net asset value of the Fund's
shares.
2. The Fund or the Adviser shall, from time to time, furnish or otherwise
make available to the Distributor such financial reports, proxy statements
and other information relating to the business and affairs of the Fund as
the Distributor may reasonably require in order to discharge its duties and
obligations hereunder.
3. Nothing herein contained shall be deemed to require the Fund to take
any action contrary to its Trust Instrument or By-Laws, or any applicable
statutory or regulatory requirement to which it is subject or by which it
is bound, or relieve or deprive the Board of Trustees of the Fund of the
responsibility for and control of the conduct of the affairs of the Fund.
4. This Plan shall become effective upon approval by a vote of at least a
"majority of the outstanding voting securities of the Fund," and upon
approval by a vote of the Trustees of the Fund, and of the Qualified
Trustees cast in person at a meeting called for the purpose of voting on
this Plan. For the purposes of this Plan, the terms "interested persons"
and "majority of the outstanding voting securities of the Fund" are used as
defined in the Act.
5. This Plan shall remain in effect until April 30, 1992, and from year to
year thereafter, provided, however, that such continuance is subject to
approval annually by a vote of the Trustees of the Fund and of the
Qualified Trustees cast in person at a meeting called for the purpose of
voting on this Plan. If such annual approval is not obtained, the Plan
shall expire 12 months after the date of the last approval. This Plan may
be amended at any time by the Board of Trustees, provided that (a) any
amendment to increase materially the amount to be spent for the services
described herein shall be effective only upon approval by a vote of a
majority of the outstanding shares of the Fund, and (b) any material
amendments of this Plan shall be effective only upon approval in the manner
provided in the first sentence in this paragraph.
6. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Qualified Trustees or by a vote of a
majority of the outstanding voting securities of the Fund, as defined in
the Act, and shall automatically terminate in the event of its assignment,
as defined in the Act.
7. Nothing herein contained shall limit the freedom of the Adviser or
Distributor or any "affiliated person" of either, as defined in the Act, to
render investment supervisory and corporate administrative Services to
other investment companies, to act as distributor, adviser or investment
counselor to other persons, firms or corporations and to engage in other
business activities.
8. Neither the Distributor, the Adviser nor any of their employees or
agents are authorized to make any representations concerning the shares
except those contained in the then current Fund prospectus.
9. The Adviser and Distributor shall use their best efforts in rendering
services hereunder, but in the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of its obligations hereunder,
neither the Adviser nor the Distributor shall be liable to the Fund or any
of its shareholders for any error of judgment or mistake of law or for any
act or omission or for any losses sustained by the Fund or its
shareholders, provided however, that the Adviser and Distributor shall be
liable to the Fund with respect to their negligence in selecting Qualified
Recipients.
10. The Distributor shall provide the Fund, for review by the Fund's Board
of Trustees, and the Trustees shall review, at least quarterly, a written
report of the amounts expended pursuant to the Plan and the purposes for
which such expenditures were made. Such written report shall be in a form
satisfactory to the Fund and shall supply all information necessary for the
Board to discharge its responsibilities, including its responsibilities
pursuant to Rule 12b-1.
11. While this Plan is in effect, the selection and nomination of
Qualified Trustees shall be committed to the discretion of the Trustees who
are not interested persons.
12. The Fund shall preserve copies of this Plan and any agreements related
to and all reports made pursuant to Section 10 hereof, for a period of not
less than six years from the date of this Plan or any such report, as the
case may be, the first two years in an easily accessible place.
13. This Plan shall be construed in accordance with the laws of the
Commonwealth of Massachusetts and the applicable provisions of the Act. To
the extent the applicable law of the Commonwealth of Massachusetts or any
of the provisions herein conflict with the applicable provisions of the
Act, the latter shall control.
14. The Adviser and the Distributor are hereby expressly put on notice of
the limitation of shareholder liability as set forth in the Fund's Trust
Instrument and agree that the obligations assumed by the Fund pursuant to
this Plan and any agreements related to this Plan shall be limited in all
cases to the Fund and its assets, and neither the Distributor, Adviser or
their agents shall seek satisfaction of any such obligation from the
shareholders or any shareholder of the Fund. In addition, neither the
Adviser, Distributor nor their agents shall seek satisfaction of any such
obligations from the Trustees or any individual Trustee.
15. If any provision of this Plan shall be held or made invalid by a court
decision, statute, rule or otherwise the remainder of the Plan shall not be
affected thereby.
Name: Daily Tax Exempt (084)
Notes:
Load:
Redemption:
FiscYear: 31-Oct
Reinvest Cum Total
Pay-date X-Date NAV MonthEnd Shares Value
1.00 Oct-85 10000.000 10000.00
1.00 Nov-85 10000.000 10000.00
1.00 Dec-85 10000.000 10000.00
1.00 Jan-86 10000.000 10000.00
1.00 Feb-86 10000.000 10000.00
1.00 Mar-86 10000.000 10000.00
1.00 Apr-86 10000.000 10000.00
1.00 May-86 10000.000 10000.00
1.00 Jun-86 10000.000 10000.00
1.00 Jul-86 10000.000 10000.00
1.00 Aug-86 10000.000 10000.00
1.00 Sep-86 10000.000 10000.00
1.00 Oct-86 10000.000 10000.00
1.00 Nov-86 10000.000 10000.00
1.00 Dec-86 10000.000 10000.00
1.00 Jan-87 10000.000 10000.00
1.00 Feb-87 10000.000 10000.00
1.00 Mar-87 10000.000 10000.00
1.00 Apr-87 10000.000 10000.00
1.00 May-87 10000.000 10000.00
1.00 Jun-87 10000.000 10000.00
1.00 Jul-87 10000.000 10000.00
1.00 Aug-87 10000.000 10000.00
1.00 Sep-87 10000.000 10000.00
1.00 Oct-87 10000.000 10000.00
1.00 Nov-87 10000.000 10000.00
1.00 Dec-87 10000.000 10000.00
1.00 Jan-88 10000.000 10000.00
1.00 Feb-88 10000.000 10000.00
1.00 Mar-88 10000.000 10000.00
1.00 Apr-88 10000.000 10000.00
1.00 May-88 10000.000 10000.00
1.00 Jun-88 10000.000 10000.00
1.00 Jul-88 10000.000 10000.00
1.00 Aug-88 10000.000 10000.00
1.00 Sep-88 10000.000 10000.00
1.00 Oct-88 10000.000 10000.00
1.00 Nov-88 10000.000 10000.00
1.00 Dec-88 10000.000 10000.00
1.00 Jan-89 10000.000 10000.00
1.00 Feb-89 10000.000 10000.00
1.00 Mar-89 10000.000 10000.00
1.00 Apr-89 10000.000 10000.00
1.00 May-89 10000.000 10000.00
1.00 Jun-89 10000.000 10000.00
1.00 Jul-89 10000.000 10000.00
1.00 Aug-89 10000.000 10000.00
1.00 Sep-89 10000.000 10000.00
1.00 Oct-89 10000.000 10000.00
1.00 Nov-89 10000.000 10000.00
1.00 Dec-89 10000.000 10000.00
1.00 Jan-90 10000.000 10000.00
1.00 Feb-90 10000.000 10000.00
1.00 Mar-90 10000.000 10000.00
1.00 Apr-90 10000.000 10000.00
1.00 May-90 10000.000 10000.00
1.00 Jun-90 10000.000 10000.00
1.00 Jul-90 10000.000 10000.00
1.00 Aug-90 10000.000 10000.00
1.00 Sep-90 10000.000 10000.00
1.00 Oct-90 10000.000 10000.00
1.00 Nov-90 10000.000 10000.00
1.00 Dec-90 10000.000 10000.00
1.00 Jan-91 10000.000 10000.00
1.00 Feb-91 10000.000 10000.00
1.00 Mar-91 10000.000 10000.00
1.00 Apr-91 10000.000 10000.00
1.00 May-91 10000.000 10000.00
1.00 Jun-91 10000.000 10000.00
1.00 Jul-91 10000.000 10000.00
1.00 Aug-91 10000.000 10000.00
1.00 Sep-91 10000.000 10000.00
1.00 Oct-91 10000.000 10000.00
1.00 Nov-91 10000.000 10000.00
1.00 Dec-91 10000.000 10000.00
1.00 Jan-92 10000.000 10000.00
1.00 Feb-92 10000.000 10000.00
1.00 Mar-92 10000.000 10000.00
1.00 Apr-92 10000.000 10000.00
1.00 May-92 10000.000 10000.00
1.00 Jun-92 10000.000 10000.00
1.00 Jul-92 10000.000 10000.00
1.00 Aug-92 10000.000 10000.00
1.00 Sep-92 10000.000 10000.00
1.00 Oct-92 10000.000 10000.00
1.00 Nov-92 10000.000 10000.00
1.00 Dec-92 10000.000 10000.00
1.00 Jan-93 10000.000 10000.00
1.00 Feb-93 10000.000 10000.00
1.00 Mar-93 10000.000 10000.00
1.00 Apr-93 10000.000 10000.00
1.00 May-93 10000.000 10000.00
1.00 Jun-93 10000.000 10000.00
1.00 Jul-93 10000.000 10000.00
1.00 Aug-93 10000.000 10000.00
1.00 Sep-93 10000.000 10000.00
1.00 Oct-93 10000.000 10000.00
1.00 Nov-93 10000.000 10000.00
1.00 Dec-93 10000.000 10000.00
1.00 Jan-94 10000.000 10000.00
1.00 Feb-94 10000.000 10000.00
1.00 Mar-94 10000.000 10000.00
1.00 Apr-94 10000.000 10000.00
1.00 May-94 10000.000 10000.00
1.00 Jun-94 10000.000 10000.00
1.00 Jul-94 10000.000 10000.00
1.00 Aug-94 10000.000 10000.00
1.00 Sep-94 10000.000 10000.00
1.00 Oct-94 10000.000 10000.00
1.00 Nov-94 10000.000 10000.00
1.00 Dec-94 10000.000 10000.00
1.00 Jan-95 10000.000 10000.00
1.00 Feb-95 10000.000 10000.00
1.00 Mar-95 10000.000 10000.00
1.00 Apr-95 10000.000 10000.00
1.00 May-95 10000.000 10000.00
1.00 Jun-95 10000.000 10000.00
1.00 Jul-95 10000.000 10000.00
1.00 Aug-95 10000.000 10000.00
1.00 Sep-95 10000.000 10000.00
1.00 Oct-95 10000.000 10000.00
Value of Value of
Rep Reinvst Reinvst Total
DIV CGLONG CGSHORT NAV Div Cap GainsValue
0.003771 1.00 10000.00
0.003728 1.00 37 0 10037
0.004353 1.00 81 0 10081
0.004941 1.00 131 0 10131
0.004036 1.00 172 0 10172
0.003837 1.00 211 0 10211
0.003674 1.00 248 0 10248
0.003623 1.00 285 0 10285
0.003265 1.00 319 0 10319
0.003319 1.00 353 0 10353
0.003430 1.00 389 0 10389
0.003177 1.00 422 0 10422
0.002924 1.00 452 0 10452
0.002759 1.00 481 0 10481
0.003096 1.00 513 0 10513
0.003160 1.00 547 0 10547
0.002879 1.00 577 0 10577
0.002983 1.00 609 0 10609
0.003310 1.00 644 0 10644
0.003654 1.00 683 0 10683
0.003099 1.00 716 0 10716
0.003131 1.00 749 0 10749
0.003272 1.00 784 0 10784
0.003382 1.00 821 0 10821
0.003843 1.00 862 0 10862
0.003736 1.00 903 0 10903
0.003917 1.00 946 0 10946
0.003739 1.00 987 0 10987
0.003373 1.00 1024 0 11024
0.003470 1.00 1062 0 11062
0.003366 1.00 1099 0 11099
0.003595 1.00 1139 0 11139
0.003466 1.00 1178 0 11178
0.003696 1.00 1219 0 11219
0.004102 1.00 1265 0 11265
0.003953 1.00 1310 0 11310
0.004148 1.00 1357 0 11357
0.004118 1.00 1403 0 11403
0.004577 1.00 1455 0 11455
0.004440 1.00 1506 0 11506
0.004272 1.00 1556 0 11556
0.005133 1.00 1615 0 11615
0.005040 1.00 1673 0 11673
0.005257 1.00 1735 0 11735
0.004702 1.00 1790 0 11790
0.004681 1.00 1845 0 11845
0.004568 1.00 1899 0 11899
0.004551 1.00 1953 0 11953
0.004383 1.00 2006 0 12006
0.004409 1.00 2059 0 12059
0.004701 1.00 2115 0 12115
0.004383 1.00 2168 0 12168
0.003833 1.00 2215 0 12215
0.004321 1.00 2268 0 12268
0.004416 1.00 2322 0 12322
0.004501 1.00 2378 0 12378
0.004183 1.00 2429 0 12429
0.004289 1.00 2483 0 12483
0.004346 1.00 2537 0 12537
0.004554 1.00 2594 0 12594
0.004564 1.00 2651 0 12651
0.004199 1.00 2705 0 12705
0.004882 1.00 2767 0 12767
0.003982 1.00 2817 0 12817
0.003300 1.00 2860 0 12860
0.003624 1.00 2906 0 12906
0.003568 1.00 2952 0 12952
0.003457 1.00 2997 0 12997
0.003119 1.00 3038 0 13038
0.003105 1.00 3078 0 13078
0.003499 1.00 3124 0 13124
0.003573 1.00 3171 0 13171
0.003409 1.00 3216 0 13216
0.003164 1.00 3258 0 13258
0.003448 1.00 3303 0 13303
0.002555 1.00 3337 0 13337
0.002211 1.00 3367 0 13367
0.002254 1.00 3397 0 13397
0.002529 1.00 3431 0 13431
0.002666 1.00 3467 0 13467
0.002098 1.00 3495 0 13495
0.001876 1.00 3520 0 13520
0.001956 1.00 3547 0 13547
0.002166 1.00 3576 0 13576
0.002021 1.00 3603 0 13603
0.001875 1.00 3629 0 13629
0.002098 1.00 3657 0 13657
0.001777 1.00 3682 0 13682
0.001508 1.00 3702 0 13702
0.001626 1.00 3725 0 13725
0.001669 1.00 3748 0 13748
0.001827 1.00 3773 0 13773
0.001568 1.00 3794 0 13794
0.001584 1.00 3816 0 13816
0.001838 1.00 3841 0 13841
0.001727 1.00 3865 0 13865
0.001801 1.00 3890 0 13890
0.001668 1.00 3914 0 13914
0.001700 1.00 3937 0 13937
0.001553 1.00 3959 0 13959
0.001466 1.00 3979 0 13979
0.001609 1.00 4002 0 14002
0.001670 1.00 4025 0 14025
0.001978 1.00 4053 0 14053
0.001749 1.00 4077 0 14077
0.001829 1.00 4103 0 14103
0.002078 1.00 4133 0 14133
0.002213 1.00 4164 0 14164
0.002324 1.00 4197 0 14197
0.002461 1.00 4232 0 14232
0.002941 1.00 4274 0 14274
0.002644 1.00 4311 0 14311
0.002635 1.00 4349 0 14349
0.002890 1.00 4390 0 14390
0.002944 1.00 4433 0 14433
0.003160 1.00 4478 0 14478
0.002698 1.00 4517 0 14517
0.002653 1.00 4556 0 14556
0.002718 1.00 4596 0 14596
0.002643 1.00 4634 0 14634
0.002731 1.00 4674 0 14674
DividendsCap GainsCost of
Received Received Reinvst
in Cash in Cash Distrib
37 0 37
81 0 81
130 0 131
171 0 172
209 0 211
246 0 248
282 0 285
315 0 319
348 0 353
382 0 389
414 0 422
443 0 452
471 0 481
502 0 513
533 0 547
562 0 577
592 0 609
625 0 644
661 0 683
692 0 716
724 0 749
756 0 784
790 0 821
829 0 862
866 0 903
905 0 946
943 0 987
976 0 1024
1011 0 1062
1045 0 1099
1081 0 1139
1115 0 1178
1152 0 1219
1193 0 1265
1233 0 1310
1274 0 1357
1316 0 1403
1361 0 1455
1406 0 1506
1448 0 1556
1500 0 1615
1550 0 1673
1603 0 1735
1650 0 1790
1697 0 1845
1742 0 1899
1788 0 1953
1832 0 2006
1876 0 2059
1923 0 2115
1967 0 2168
2005 0 2215
2048 0 2268
2092 0 2322
2137 0 2378
2179 0 2429
2222 0 2483
2265 0 2537
2311 0 2594
2357 0 2651
2399 0 2705
2447 0 2767
2487 0 2817
2520 0 2860
2556 0 2906
2592 0 2952
2627 0 2997
2658 0 3038
2689 0 3078
2724 0 3124
2760 0 3171
2794 0 3216
2825 0 3258
2860 0 3303
2885 0 3337
2908 0 3367
2930 0 3397
2955 0 3431
2982 0 3467
3003 0 3495
3022 0 3520
3041 0 3547
3063 0 3576
3083 0 3603
3102 0 3629
3123 0 3657
3141 0 3682
3156 0 3702
3172 0 3725
3189 0 3748
3207 0 3773
3223 0 3794
3239 0 3816
3257 0 3841
3274 0 3865
3292 0 3890
3309 0 3914
3326 0 3937
3341 0 3959
3356 0 3979
3372 0 4002
3389 0 4025
3409 0 4053
3426 0 4077
3444 0 4103
3465 0 4133
3487 0 4164
3511 0 4197
3535 0 4232
3565 0 4274
3591 0 4311
3617 0 4349
3646 0 4390
3676 0 4433
3707 0 4478
3734 0 4517
3761 0 4556
3788 0 4596
3814 0 4634
3842 0 4674
Exhibit 16
SCHEDULE FOR COMPUTATION OF PERFORMANCE CALCULATIONS
CUMULATIVE TOTAL RETURNS and their income and capital components are
described in the Fund's Statement of Additional Information, and are based
on the net asset values, dividends, capital gain distributions and
reinvestment prices of the historical period covered.
AVERAGE ANNUAL RETURNS are calculated according to the following formula:
Average Annual Return = [(1 + Cumulative Return)1/n] - 1
[where n = the number of years in the base period]
The 7-DAY YIELD AND EFFECTIVE YIELD are calculated according to the methods
prescribed in Form N-1A Item 22(a)(i) and (ii).
The 7-DAY YIELD is calculated according to the following formula:
7-Day Yield = (Base Period Return) x (365/7)
The EFFECTIVE YIELD is calculated according to the following formula:
Effective Yield = [(Base Period Return + 1)365/7] - 1
The TAX EQUIVALENT YIELD is calculated by formula as follows:
Tax Equivalent Yield =(yield)/(1-[tax rate])
[where the tax rate is expressed in decimal notation (i.e. 28% = 0.28)]
For any municipal portfolio that invests a portion of its assets in
obligations subject to state taxes, the tax equivalent yield is adjusted to
reflect these investments.
[Fund Name]
[Schedule of YIELD data provided by Fund Accounting. Schedule of TOTAL
RETURN data is supplied by Fund Performance. Both need to be filed with
this exhibit. Make sure each schedule of data is properly identified as
yield or total return.]
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000704207
<NAME> Daily Tax-Exempt Money Fund
<SERIES>
<NUMBER> 11
<NAME> Daily Tax-Exempt Money Fund
<MULTIPLIER> 1,000
<S>
<C>
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> oct-31-1995
<PERIOD-END> Oct-31-1995
<INVESTMENTS-AT-COST> 557,787
<INVESTMENTS-AT-VALUE> 557,787
<RECEIVABLES> 5,089
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 562,876
<PAYABLE-FOR-SECURITIES> 3,000
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 703
<TOTAL-LIABILITIES> 3,703
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 559,197
<SHARES-COMMON-STOCK> 559,197
<SHARES-COMMON-PRIOR> 454,315
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (24)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 559,173
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 19,271
<OTHER-INCOME> 0
<EXPENSES-NET> 3,163
<NET-INVESTMENT-INCOME> 16,108
<REALIZED-GAINS-CURRENT> 33
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 16,141
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 16,108
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,737,542
<NUMBER-OF-SHARES-REDEEMED> 1,646,762
<SHARES-REINVESTED> 14,102
<NET-CHANGE-IN-ASSETS> 104,914
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (56)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,433
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,723
<AVERAGE-NET-ASSETS> 486,592
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> .033
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> .033
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
