SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (No. 2-78548)
UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 30 [X]
and
REGISTRATION STATEMENT (No. 811-3518)
UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. [X]
Newbury Street Trust
(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).
( ) on ( ) pursuant to paragraph (b).
( ) 60 days after filing pursuant to paragraph (a)(1).
(X) on October 6, 1997 pursuant to paragraph (a)(1) of Rule 485
( ) 75 days after filing pursuant to paragraph (a)(2).
( ) on ( ) pursuant to paragraph (a)(2) 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 filed The Notice required by such Rule
on December 18, 1996.
TREASURY FUND -CAPITAL RESERVES CLASS
PRIME FUND -CAPITAL RESERVES CLASS
TAX-EXEMPT FUND -CAPITAL RESERVES CLASS
NEWBURY STREET TRUST
CROSS REFERENCE SHEET
Form N-1A Item Number
Part A Prospectus Caption
1 Cover Page
2 Expenses
3 a *
b *
c Performance
d Performance
4 a(i) Charter
(ii) Investment Principles and Risks; Securities and Investment
Practices
b Securities and Investment Practices
c Who May Want To Invest; Investment Principals and Risks; Securities and
Investment Practices
5 a Charter
b(i) Cover Page; FMR and Its Affiliates
b(ii) FMR and Its Affiliates; Charter; Breakdown of Expenses
b(iii) Expenses; Breakdown of Expenses
c,d Cover Page; Charter; Breakdown of
Expenses; FMR and Its Affiliates
e FMR and Its Affiliates; Breakdown of Expenses
f Expenses
g Expenses; FMR and Its Affiliates
5A *
6 a(i) Charter
a(ii) How to Buy Shares; How to Sell Shares; Transaction Details;
Exchange Restrictions
a(iii) *
b FMR and Its Affiliates
c Exchange Restrictions; Transaction Details
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;Expenses
c *
d How to Buy Shares
e *
f Expenses; Breakdown of 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 each
fund invests and the services available to shareholders.
To learn more about each fund and its investments, you can obtain a copy of
a fund's most recent financial report and portfolio listing or a copy of
the Statement of Additional Information (SAI) dated October 6, 1997. The
SAI has been filed with the Securities and Exchange Commission (SEC) and is
available along with other related materials on the SEC's Internet Web site
(http:/www.sec.gov). The SAI is incorporated herein by reference (legally
forms a part of the prospectus). For a free copy of either document,
contact Fidelity Client Services at 1-800-843-3001, or your investment
professional.
INVESTMENTS IN THE FUNDS ARE NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT A 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 RISKS, 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, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION
PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
DMFR-pro-1097
TREASURY FUND -
CAPITAL RESERVES CLASS
(fund number 077)
PRIME FUND -
CAPITAL RESERVES CLASS
(fund number 076)
TAX-EXEMPT FUND -
CAPITAL RESERVES CLASS
(fund number 079)
Treasury Fund and Prime Fund each seeks to obtain as high a level of
current income as is consistent with the preservation of capital and
liquidity.
Tax-Exempt Fund seeks to obtain 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
DATED OCTOBER 6, 1997
(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA 02109
CONTENTS
<TABLE>
<CAPTION>
<S> <C>
KEY FACTS WHO MAY WANT TO INVEST
EXPENSES Capital Reserves Class's yearly
operating expenses.
PERFORMANCE
THE FUNDS IN DETAIL CHARTER How each fund is organized.
INVESTMENT PRINCIPLES AND RISKS Each 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, including tax-sheltered retirement plans.
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
KEY FACTS
</TABLE>
WHO MAY WANT TO INVEST
Each fund offers individual and institutional investors a convenient way to
invest in a professionally managed portfolio of money market instruments.
Each fund is designed for investors who would like to earn current income
while preserving the value of their investment.
The rate of income will vary from day to day, generally reflecting
short-term interest rates.
Each fund is managed to keep its share price stable at $1.00. Treasury Fund
offers an added measure of safety with its focus on U.S. Treasury
securities.
These funds do not constitute a balanced investment plan. However, because
they emphasize stability, they could be well-suited for a portion of your
investments. Each fund (except for Treasury Fund - Advisor B Class shares)
offers free checkwriting to give you easy access to your money.
Each fund is composed of multiple classes of shares. All classes of a fund
have a common investment objective and investment portfolio. Each fund
offers Daily Money Class shares and Capital Reserves Class shares. Treasury
Fund also offers Advisor B Class (Class B) shares and Advisor C Class
(Class C) shares. Daily Money Class and Capital Reserves Class shares do
not have a sales charge, but do pay a 12b-1 fee. Class B and Class C shares
do not have a front-end sales charge, but do have a contingent deferred
sales charge(CDSC), and pay a 12b-1 fee . Class B and Class C shares may be
purchased directly only in connection with the Fidelity Advisor Systematic
Exchange Program (the Program) for purposes of exchanging into Class B or
Class C shares, as applicable, of the Fidelity Advisor funds. You may
obtain more information about Daily Money Class shares, Class B shares and
Class C shares, which are not offered through this prospectus, from your
investment professional or by calling Fidelity Client Services at
1-800-843-3001.
The performance of one class of shares of a fund may be different from the
performance of another class of shares of the same fund because of
different sales charges and class expenses. Contact your investment
professional to discuss which class is appropriate for you.
In determining which class of shares is appropriate for you, you should
consider, among other factors, the amount you plan to invest, the length of
time you intend to hold your shares, and the package of services provided
to you by your investment professional and the overall costs of those
services.
In general, Daily Money Class shares have lower costs than Capital Reserves
Class, Class B and Class C shares because Daily Money Class shares do not
have a sales charge and have lower 12b-1 fees. Class B shares have higher
costs than Class C shares over a short holding period because Class B
shares have a higher CDSC that declines over six years, and Class B shares
have lower costs than Class C shares over a longer period because Class B
shares convert to Daily Money Class shares after a maximum of seven years.
If you sell your Class B shares within six years, you will normally pay a
CDSC that varies depending on how long you have held your shares. If you
sell your Class C shares within one year, you will normally pay a 1.00%
CDSC. Class C shares do not convert to another class of shares.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you may pay when you buy or
sell Capital Reserves Class shares of a fund.
TREASURY FUND - CAPITAL RESERVES CLASS
Maximum sales charge on purchases and None
reinvested distributions
Maximum deferred sales None
charge
Redemption fee None
Exchange fee None
PRIME FUND - CAPITAL RESERVES CLASS
Maximum sales charge on purchases and None
reinvested distributions
Maximum deferred sales None
charge
Redemption fee None
Exchange fee None
TAX-EXEMPT FUND - CAPITAL RESERVES CLASS
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 each fund's assets. Each fund
pays a management fee to Fidelity Management & Research Company (FMR). Each
fund also incurs other expenses for services such as maintaining
shareholder records and furnishing shareholder statements and financial
reports.
12b-1 fees are paid by the Capital Reserves Class of each fund to the
distributor for services and expenses in connection with the distribution
of Capital Reserves Class shares of each fund. 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.
Capital Reserves Classes' 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 figures are based on estimated expenses of Capital Reserves
Class of each fund and are calculated as a percentage of average net assets
of Capital Reserves Class of each fund. A portion of the brokerage
commissions that A FUND pays is used to reduce that fund's expenses. In
addition, each fund has entered into arrangements with its custodian and
transfer agent whereby credits realized as a result of uninvested cash
balances are used to reduce custodian and transfer agent expenses.
Including these reductions, the total Class operating expenses presented in
the table would have been __% ________.
TREASURY FUND - CAPITAL RESERVES CLASS
Management fee 0.25
%
12b-1 fee (Distribution Fee) 0.50
%
Other expenses (after reimbursement) 0.15
%
Total operating expenses 0.90
%
PRIME FUND - CAPITAL RESERVES CLASS
Management fee 0.25
%
12b-1 fee (Distribution Fee) 0.50
%
Other expenses (after reimbursement) 0.15
%
Total operating expenses 0.90
%
TAX-EXEMPT FUND - CAPITAL RESERVES CLASS
Management fee 0.25
%
12b-1 fee (Distribution Fee) 0.50
%
Other expenses (after reimbursement) 0.15
%
Total operating expenses 0.90
%
EXPENSE TABLE EXAMPLE: You would pay the following expenses, on a $1,000
investment in Capital Reserves Class shares, assuming a 5% annual return
and full redemption at the end of each time period:
1 Year 3
Years
Treasury Fund $ $
Prime Fund $ $
Tax-Exempt Fund $ $
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 Capital Reserves Class of each fund
to the extent that total operating expenses (as a percentage of its
respective average net assets) exceed 0.90%. If these agreements were not
in effect, the other expenses and total operating expenses, as a percentage
of average net assets, of Capital Reserves Class of each fund would have
been, __% and __% for Treasury Fund; __% and __% for Prime Fund; and __%,
and __% for Tax-Exempt Fund. Expenses eligible for reimbursement do not
include interest, taxes, brokerage commissions, and extraordinary expenses.
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 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. Average annual total returns covering periods
of less than one year assume that performance will remain constant for the
rest of the year.
YIELD refers to the income generated by an investment in a 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 funds performance and holdings are detailed twice a year in financial
reports, which are sent to all shareholders.
THE FUNDS IN DETAIL
CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders' money
and invests it toward a specified goal. Each fund is a diversified fund of
Newbury Street Trust, an open-end management investment company organized
as a Delaware business trust on December 30, 1991.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet periodically throughout the year to oversee the funds'
activities, review contractual arrangements with companies that provide
services to the funds, and review the funds' performance. The trustees
serve as trustees for other Fidelity funds. The majority of trustees are
not otherwise affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL SHAREHOLDER 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. The number of
votes you are entitled to is based upon the dollar value of your
investment.
Separate votes are taken by each class of shares, fund, or trust, if a
matter affects just that class of shares, fund, or trust, respectively.
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 funds employ various Fidelity
companies to perform activities required for their operation.
The funds are managed by FMR, which handles their business affairs. FMR
Texas Inc. (FMR Texas), located in Irving, Texas, has primary
responsibility for providing investment management services.
As of __, 19_, FMR advised funds having approximately __million shareholder
accounts with a total value of more than $__ billion.
Fidelity investment personnel may invest in securities for their own
accounts 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, Inc. (FIIOC)
performs transfer agent servicing functions for Capital Reserves Class
shares of Prime Fund and Treasury Fund. UMB Bank, n.a. (UMB) is the
transfer agent for Tax-Exempt Fund and is located at 1010 Grand Avenue,
Kansas City, Missouri. UMB employs FIIOC to perform transfer agent
servicing functions for Capital Reserves Class of Tax-Exempt 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.
To carry out the funds' transactions, FMR may use its broker-dealer
affiliates and other firms that sell fund shares, provided that a fund
receives services and commission rates comparable to those of other
broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
EACH FUND'S INVESTMENT APPROACH
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 funds will maintain
a stable $1.00 share price. The funds follow industry-standard guidelines
on the quality, maturity, and diversification of their investments, which
are designed to help maintain a stable $1.00 share price. The funds will
purchase only high-quality securities that FMR believes present minimal
credit risks and will observe maturity restrictions on securities they buy.
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 funds' investments could
cause their share prices (and the value of your investment) to change.
The funds earn income at current money market rates. Each fund stresses
preservation of capital, liquidity, and income (tax-free income in the case
of Tax-Exempt Fund) and does not seek the higher yields or capital
appreciation that more aggressive investments may provide. Each fund's
yield will vary from day to day and generally reflects current short-term
interest rates and other market conditions. It is important to note that
neither the funds nor their yields are guaranteed by the U.S. Government.
TREASURY FUND seeks to obtain as high a level of current income as is
consistent with the preservation of capital and liquidity.
The fund invests only in U.S. Treasury securities and repurchase agreements
for these securities. The fund does not enter into reverse repurchase
agreements.
PRIME FUND seeks to obtain as high a level of current income as is
consistent with the preservation of capital and liquidity.
The fund invests only in U.S. dollar-denominated money market securities of
domestic and foreign issuers rated in the highest rating category by at
least two nationally recognized rating services, U.S. Government
securities, and repurchase agreements. The fund also may enter into reverse
repurchase agreements.
TAX-EXEMPT 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.
The fund invests in high-quality municipal money market securities of all
types. The fund normally invests so that at least 80% of its income
distributions is exempt from federal income tax. The fund does not
currently intend to purchase municipal securities whose interest is subject
to the federal alternative minimum tax.
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 a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related risks.
Any restrictions listed supplement those discussed earlier in this section.
A complete listing of each fund's limitations and more detailed information
about each fund's investments are contained in the fund's SAIs. 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 a fund's investment
objective and policies and that doing so will help a fund achieve its goal.
Fund holdings are detailed in each fund's financial reports, which are sent
to shareholders twice a year. For a free SAI or financial report, call
Fidelity Client Services at 1-800-843-3001 or your investment professional.
MONEY MARKET SECURITIES are high-quality, short-term instruments issued by
the U.S. Government, corporations, financial institutions, municipalities,
local and state governments, and other entities. These securities may
carry fixed, variable, or floating interest rates. Some money market
securities employ a trust or 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.
U.S. TREASURY MONEY MARKET SECURITIES are short-term debt obligations
issued by the U.S. Treasury and include bills, notes, and bonds. U.S.
Treasury securities are backed by the full faith and credit of the United
States.
U.S. GOVERNMENT MONEY MARKET SECURITIES are short-term debt instruments
issued or guaranteed by the U.S. Treasury or by an agency or
instrumentality of the U.S. Government. Not all U.S. Government securities
are backed by the full faith and credit of the United States. For example,
U.S. Government securities such as those issued by Fannie Mae are supported
by the instrumentality's right to borrow money from the U.S. Treasury under
certain circumstances. Other U.S. Government securities, such as those
issued by the Federal Farm Credit Banks Funding Corporation, are supported
only by the credit of the entity that issued them.
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 fully or partially backed by the local government, or by the credit
of a private issuer or the current or anticipated revenues from specific
projects or assets. Because many municipal securities are issued to
finance similar types of projects, especially those relating to education,
health care, housing, transportation, and utilities, the municipal markets
can be affected by conditions in those sectors. In addition, all municipal
securities may be affected by uncertainties regarding their tax status,
legislative changes, or rights of municipal securities holders. A municipal
security may be owned directly or through a participation interest.
CREDIT AND LIQUIDITY SUPPORT. Issuers may employ various forms of credit
and liquidity enhancement, including letters of credit, guarantees, puts
and demand features, and insurance, provided by foreign or domestic
entities such as banks and other financial institutions. These arrangements
expose a fund to the credit risk of the entity providing the credit or
liquidity support. Changes in the credit quality of the provider could
affect the value of the security and a fund's share price.
FOREIGN EXPOSURE. Securities issued by foreign entities, including foreign
governments, corporations, and banks, and securities issued by U.S.
entities with substantial foreign operations may involve additional risks
and considerations. Likewise, securities for which foreign entities provide
credit or liquidity support may involve different risks than those
supported by domestic entities. Extensive public information about the
foreign entity may not be available, and unfavorable political, economic,
or governmental developments in the foreign country involved could affect
the repayment of principal or payment of interest.
ASSET-BACKED SECURITIES include interests in pools of mortgages, loans,
receivables, or other assets. Payment of principal and interest may be
largely dependent upon the cash flows generated by the assets backing the
securities.
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.
STRIPPED SECURITIES are the separate income or principal components of a
debt security. The risks associated with stripped securities are similar to
those of other money market securities, although stripped securities may be
more volatile. U.S. Treasury securities that have been stripped by a
Federal Reserve Bank are obligations issued by the U.S. Treasury.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a security at
one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults
or becomes insolvent.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
temporarily transfers possession of a portfolio instrument to another party
in return for cash. This could increase the risk of fluctuation in the
fund's yield or in the market value of its assets.
OTHER MONEY MARKET SECURITIES may include commercial paper, certificates of
deposit, bankers' acceptances, and time deposits.
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 another party. In exchange for this benefit, a fund may 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 a fund.
RESTRICTIONS. A fund may not purchase a security if, as a result, more than
10% of its assets would be invested in illiquid securities.
WHEN-ISSUED AND FORWARD PURCHASE OR SALE TRANSACTIONS are trading practices
in which payment and delivery for the security take place at a later date
than is customary for that type of security. The market value of the
security could change during this period.
FINANCIAL SERVICES INDUSTRY. Companies in the financial services industry
are subject to various risks related to that industry, such as government
regulation, changes in interest rates, and exposure on loans, including
loans to foreign borrowers. If a fund invests substantially in this
industry, its performance may be affected by conditions affecting the
industry.
RESTRICTIONS: Prime Fund will invest more than 25% of its total assets in
the financial services industry.
CASH MANAGEMENT. A fund may invest in money market securities, in
repurchase agreements, and in a money market fund available only to funds
and accounts managed by FMR or its affiliates, whose goal is to seek a high
level of current income (exempt from federal income tax in the case of a
municipal money market fund) while maintaining a stable $1.00 share price.
A major change in interest rates or a default on the money market fund's
investments could cause its share price to change.
RESTRICTIONS: Tax-Exempt Fund will not invest in a money market fund and
does not currently intend to invest in repurchase agreements. Treasury Fund
and Prime Fund do not currently intend to invest in a money market fund.
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: Prime Fund may not invest more than 5% of its total assets in
any one issuer, except that it may invest up to 25% of its total assets in
the highest quality securities of a single issuer for up to three business
days.
With respect to 75% of its total assets, Tax-Exempt Fund may not purchase a
security if, as a result, more than 5% of its total assets would be
invested in the securities of a single issuer.
These limitations do not apply to U.S. Government securities or to
securities of other investment companies.
Tax-Exempt Fund may invest more than 25% of its total assets in tax-free
securities that finance similar types of projects.
BORROWING. Each 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: Prime Fund may borrow only for temporary or emergency
purposes, or engage in reverse repurchase agreements, but not in an amount
exceeding 331/3% of its total assets. Each of Treasury Fund and Tax-Exempt
Fund may borrow only for temporary or emergency purposes, but not in an
amount exceeding 331/3% of its total assets.
LENDING A fund may lend money to other funds advised by FMR.
RESTRICTIONS: Loans, in the aggregate, may not exceed 331/3% of a fund's
total assets. Treasury Fund and Tax-Exempt Fund do not lend money to other
funds advised by FMR.
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.
Each of Treasury Fund and Prime Fund seeks to obtain as high a level of
current income as is consistent with the preservation of capital and
liquidity.
Tax-Exempt 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.
The fund normally invests so that at least 80% of its income distributions
is free from federal income tax.
With respect to 75% of its total assets, Tax-Exempt Fund may not purchase a
security if, as a result, more than 5% of its total assets would be
invested in the securities of a single issuer. This limitation does not
apply to U.S. Government securities or to securities of other investment
companies.
Prime Fund will invest more than 25% of its total assets in the financial
services industry.
Prime Fund may borrow only for temporary or emergency purposes, or engage
in reverse repurchase agreements, but not in an amount exceeding 331/3% of
its total assets. Tax-Exempt Fund may borrow only for temporary or
emergency purposes, but not in an amount exceeding 331/3% of its total
assets.
Loans, in the aggregate, may not exceed 331/3% of a fund's total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of each class's assets are reflected in that
class's share price or dividends; they are neither billed directly to
shareholders nor deducted from shareholder accounts.
Each 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. Each fund also pays OTHER EXPENSES, which
are explained on page 13.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month. Each fund
pays a fee at an annual rate of 0.25% of its average net assets.
FMR Texas is the funds' sub-adviser and has primary responsibility for
managing its investments. FMR is responsible for providing other management
services. FMR pays FMR Texas 50% of its management fee (before expense
reimbursements) for FMR Teases services. FMR paid FMR Texas fees equal to
___% (annualized) of Treasury Fund's and ____% (annualized) of Prime Fund's
average net assets for the three month period ended October 31, 1996 but
after payments made by FMR pursuant to the funds' Distribution and Service
Plans. FMR paid FMR Texas a fee equal to ___% of Tax-Exempt Fund's average
net assets for the fiscal year ended October 31, 1996.
OTHER EXPENSES
While the management fee is a significant component of each fund's annual
operating costs, the funds have other expenses as well.
FIIOC performs transfer agency, dividend disbursing and shareholder
servicing functions for Capital Reserves Class shares of Treasury Fund and
Prime Fund (the Taxable Funds). Fidelity Service Company, Inc. (FSC)
calculates the net asset value per share (NAV) and dividends for each
Taxable Fund, and maintains the general accounting records for each Taxable
Fund.
For the fiscal year ended October, 31, 1997, pricing and bookkeeping fees
paid (as a percentage of average net assets) amounted to the following.
Pricing
and
Bookkeep
ing Fees
Paid by
Fund
Treasury Fund %
Prime Fund %
UMB is the transfer agent for Tax-Exempt Fund. UMB has entered into a
sub-agreement with FIIOC. FIIOC performs transfer agency, dividend
disbursing and shareholder servicing functions for Capital Reserves Class
shares of Tax-Exempt Fund. UMB has also entered into a sub-agreement with
FSC. FSC calculates the NAV and dividends for Capital Reserves Class shares
of Tax-Exempt Fund, and maintains the general accounting records for
ax-Exempt Fund. Under the terms of these sub-agreements, FIIOC and FSC
receive all related fees paid to UMB by Capital Reserves Class of
Tax-Exempt Fund.
For the fiscal year ended October 31, 1997, pricing and bookkeeping fees
paid (as a percentage of average net assets) amounted to the following.
Pricing
and
Bookkeep
ing Fees
Paid by
Fund
Tax--Exempt Fund %
Each 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.
Capital Reserves Class of each fund has adopted a DISTRIBUTION AND SERVICE
PLAN. Under the Plans, Capital Reserves Class of each fund is authorized to
pay FDC a monthly distribution fee as compensation for its services and
expenses in connection with the distribution of Capital Reserves Class
shares. Capital Reserves Class of each fund pays FDC a monthly distribution
fee at an annual rate of 0.50% of its average net assets throughout the
month. FDC may compensate intermediaries that provide shareholder support
services, engage in the sale of Capital Reserves Class shares or pay
distribution expenses at an annual rate of up to 0.50% of average net
assets they maintain.
The Capital Reserves Class Plans specifically recognize that FMR may make
payments from its management fee revenue, past profits, or other resources
to FDC for expenses incurred in connection with the distribution of Capital
Reserves Class shares, including payments made to intermediaries that
provide shareholder support services or engage in the sale of Capital
Reserves Class shares. The Board of Trustees of each fund has authorized
such payments to intermediaries at an annual rate of up to 0.10% of the
average net assets they maintain.
Independent of the Capital Reserves Class Plans, intermediaries that
maintain an average balance of $10 million or more in a single omnibus
account may receive an additional recordkeeping fee of up to 0.15% of the
average net assets they maintain. The recordkeeping fee will be paid by FMR
or its affiliates, not by the fund, and will not be paid for distribution
services.
YOUR ACCOUNT
TYPES OF ACCOUNTS
If you invest through an investment professional, your investment
professional, including a broker-dealer or financial institution, may
charge you a transaction fee with respect to the purchase and sale of fund
shares. Read your investment professional's program materials in
conjunction with this prospectus for additional service features or fees
that may apply. Certain features of the funds, such as minimum initial or
subsequent investment amounts, may be modified.
The different ways to set up (register) your account with Fidelity are
listed below.
The account guidelines that follow may not apply to certain funds or to
certain retirement accounts. For instance, municipal funds are not
available for purchase in retirement accounts. If you are investing through
a retirement account or if your employer offers a fund through a retirement
program, you may be subject to additional fees. For more information,
please refer to your program materials, contact your employer, or call your
retirement benefits number or your investment professional directly, as
appropriate.
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).
RETIREMENT (THE FOLLOWING OPTIONS ARE AVAILABLE ONLY FOR TAXABLE FUNDS)
TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES
Retirement plans allow individuals to shelter investment income and
capital gains from current taxes. In addition, contributions to these
accounts may be tax deductible. Retirement accounts require special
applications and typically have lower minimums.
(solid bullet) INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow anyone of legal
age and under 701/2 with earned income to invest up to $2,000 per tax year.
Individuals can also invest in a spouse's IRA if the spouse has earned
income of less than $250.
(solid bullet) ROLLOVER IRAS retain special tax advantages for certain
distributions from employer-sponsored retirement plans.
(solid bullet) 401(K) PLANS allow employees of corporations of all sizes to
contribute a percentage of their wages on a tax-deferred basis. These
accounts need to be established by the trustee of the plan.
(solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide small
business owners or those with self-employed income (and their eligible
employees) with many of the same advantages as a Keogh, but with fewer
administrative requirements.
(solid bullet) SIMPLE IRAS provide small business owners and those with
self-employed income (and their eligible employees) with many of the
advantages of a 401(k) plan, but with fewer administrative requirements.
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
Contact your investment professional.
HOW TO BUY SHARES
EACH CLASS'S SHARE PRICE, called NAV, is calculated every business day. The
funds are managed to keep share prices stable at $1.00.
Shares are purchased at the next NAV calculated after your order is
received and accepted. NAV is normally calculated at the times indicated
in the table below.
NAV Calculation Times
Fund (Eastern Time)
Treasury Fund 2:00 p.m. and 4:00 p.m.
Prime Fund 2:00 p.m. and 4:00 p.m.
Tax-Exempt Fund 12:00 noon and 4:00 p.m.
It is the responsibility of your investment professional to transmit your
order to buy shares to Fidelity before the close of business on the day you
place your order.
Shareholders of record as of the times indicated in the table below will be
entitled to dividends declared that day.
Fund Dividend
Times
(Eastern
Time)
Treasury Fund 2:00 p.m.
Prime Fund 2:00 p.m.
Tax-Exempt Fund 12:00 noon
Shares purchased after the times indicated in the table above will begin to
earn income dividends on the following business day.
Share certificates are not available for Capital Reserves Class.
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
Treasury Fund, Prime Fund or Tax-Exempt Fund (as appropriate)
FIIOC
P.O. Box 770002
Cincinnati, OH 45277-0081
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 an order and wire money into your account,
(small solid bullet) Open your account by exchanging from Capital Reserves
Class of Prime Fund, Treasury Fund or Tax-Exempt 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 in which you plan to invest. 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. You must sign up for the wire feature before using it. 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 funds 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 and accepted by the transfer agent at the
applicable fund's designated wire bank.
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
For Fidelity IRA, Rollover IRA, SEP-IRA
and Keogh accounts $500
TO ADD TO AN ACCOUNT $250
For Fidelity IRA, Rollover IRA, SEP-IRA and Keogh accounts $100
MINIMUM BALANCE $500
For Fidelity IRA, Rollover IRA, SEP-IRA and Keogh accounts $500
There is no minimum account balance or initial or subsequent investment
minimum for certain retirement accounts funded through salary deduction, or
accounts opened with the proceeds of distributions from such Fidelity
retirement accounts. Refer to the program materials for details.
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 NAV is
normally calculated at the times indicated in the table on page __.
TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the methods
described on these two pages.
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 transmit your
order to redeem shares to Fidelity before the close of business on the day
you place your order.
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 your
investment professional or Fidelity Client Services for further
instructions.
BY WIRE. Redemptions may be made by calling Fidelity
Client Services:
Nationwide 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 funds 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 and
accepted by the transfer agent before the times indicated in the "Dividend
Times" table on page ___ redemption proceeds will normally be wired on that
day. If your redemption request is received and accepted by the transfer
agent after the times indicated in the "Dividend Times" table on page
________ redemption proceeds will normally be wired on the following
business day.
A 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.
STATEMENTS AND REPORTS that Fidelity sends to you include the following:
(small solid bullet) Confirmation statements (after every transaction
except reinvestments or systematic withdrawals that affect your account
balance or your account registration)
(small solid bullet) Account statements (monthly/quarterly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed, even if you have more than one account in a
fund. Call Fidelity Client Services or your investment professional if you
need additional copies of financial reports, prospectuses 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.
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
Each 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 each fund, dividends relating to Capital
Reserves Class shares redeemed during the month can be distributed on the
day of redemption. Each fund reserves the right to limit this service.
DISTRIBUTION OPTIONS
When you open an account, specify on your account application how you want
to receive your distributions. Capital Reserves Class offers two options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions, if
any, will be automatically reinvested in additional shares of the same
class 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.
For retirement accounts, all distributions are automatically reinvested.
When you are over 59 years old, you can receive distributions in cash.
Dividends will be reinvested at each fund's Capital Reserves Class 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 the funds
could affect you. Below are some of the funds' tax implications.
TAXES ON DISTRIBUTIONS. Interest income that Tax-Exempt Fund earns is
distributed to shareholders as income dividends. Interest that is federally
tax-free remains tax-free when it is distributed. Distributions from the
Taxable Funds, however, are subject to federal income tax and may also be
subject to state or local taxes. If you live outside the United States,
your distributions from these funds could also be taxed by the country in
which you reside.
For federal tax purposes, each Taxable Fund's income and short-term capital
gain distributions are taxed as dividends; long-term capital gain
distributions if any, are taxed as long-term capital gains.
However, for shareholders of Tax-Exempt Fund, 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, if any, are taxed as
long-term capital gains.
Mutual fund dividends from U.S. Government securities are generally free
from state and local income taxes. However, particular states may limit
this benefit, and some types of securities, such as repurchase agreements
and some agency-backed securities, may not qualify for the benefit. In
addition, some states may impose intangible property taxes. You should
consult your own tax adviser for details and up-to-date information on the
tax laws in your state.
For the fiscal year ended __________, __% of Tax-Exempt Fund's, ___% of
Treasury Fund's and ___% of Prime Fund's income distributions were derived
from interest on U.S. Government securities which is generally exempt from
state income tax.
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, Fidelity will send you and the IRS a statement showing the
taxable distributions paid to you in the previous year.
A portion of Tax-Exempt 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, Fidelity will send you a breakdown of Tax-Exempt Fund's income
from each state to help you calculate your taxes.
During the fiscal year ended October 31, 1996, 100% of Tax-Exempt Fund's
income dividends was free from federal income tax.
There are tax requirements that all funds must follow in order to avoid
federal taxation. In its effort to adhere to these requirements, a fund may
have to limit its investment activity in some types of instruments.
TRANSACTION DETAILS
EACH FUND IS OPEN FOR BUSINESS and each class's NAV is normally calculated
each day the New York Stock Exchange (NYSE) is open. The following holiday
closings have been scheduled for 1997: New Year's Day, Martin Luther King's
Birthday, Washington's Birthday, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day, and Christmas Day. Although FMR expects
the same holiday schedule to be observed in the future, the NYSE may modify
its holiday schedule at any time. On any day that 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 NYSE is closed, each class'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.
A CLASS'S NAV is the value of a single share. The NAV of Capital Reserves
Class of each fund is computed by adding Capital Reserves Class's pro rata
share of the value of the fund's investments, cash, and other assets,
subtracting Capital Reserves Class's pro rata share of the value of the
fund's liabilities, subtracting the liabilities allocated to Capital
Reserves Class, and dividing the result by the number of Capital Reserves
Class shares of that fund that are outstanding. Each 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 each fund
maintain a stable $1.00 share price.
A CLASS'S OFFERING PRICE (price to buy one share) is its NAV. A class's
REDEMPTION PRICE (price to sell one share) is 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 a 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 Fidelity Client Services for instructions.
Additional documentation may be required from corporations, associations,
and certain fiduciaries.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods
of unusual market activity), consider placing your order by mail.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. Each 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 a fund.
TO ALLOW FMR TO MANAGE THE FUNDS 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. 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) The funds do 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) Each 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 a fund or the
transfer agent has incurred.
Shareholders of record as of the times indicated in the "Dividend Times"
table on page __will be entitled to dividends declared that day.
Shares purchased after the times indicated in the "Dividend Times" table on
page __ 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. Note the
following:
(small solid bullet) Shares redeemed before the times indicated in the
"Dividend Times" table on page __ do not receive the dividend declared on
the day of redemption. Shares redeemed after the times indicated in the
"Dividend Times" table on page __ do receive the dividend declared on the
day of redemption.
(small solid bullet) A 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 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, a
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 you will be given 30 days' notice
to reestablish the minimum balance. If you do not increase your balance,
Fidelity reserves the right to close your account and send the proceeds to
you. Your shares will be redeemed at the NAV on the day your account is
closed.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
FDC may, at its own expense, provide promotional incentives to qualified
recipients who support the sale of shares of the funds without
reimbursement from the funds. Qualified recipients are securities dealers
who have sold fund shares or others, including banks and other financial
institutions, under special arrangements in connection with FDC's sales
activities. In some instances, these incentives may be offered only to
certain institutions whose representatives provide services in connection
with the sale or expected sale of significant amounts of shares.
EXCHANGE RESTRICTIONS
As a shareholder you have the privilege of exchanging shares of a fund for
Capital Reserves Class shares of Prime Fund, Treasury Fund or Tax-Exempt
Fund or shares of other Fidelity 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 a fund is open for
business by calling Fidelity Client Services at the numbers listed on page
__ 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, class
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, Capital Reserves Class shares
will be redeemed at the next determined NAV after your order is received
and accepted. Shares of the fund or class to be acquired will be purchased
at its next determined NAV after redemption proceeds are made available.
You should note that, under certain circumstances, a 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 or class you are exchanging into must be
available 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 or class, read its
prospectus.
(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 a fund, nor are there any administrative or redemption
fees applicable to exchanges out of a fund.
(small solid bullet) Each 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 a 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 a fund.
Although the funds will attempt to give you prior notice whenever they are
reasonably able to do so, they may impose these restrictions at any time.
The funds reserve the right to terminate or modify these exchange
privileges in the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose fees
of up to 1.00% on purchases, 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 funds or FDC. This Prospectus and the related SAI do not
constitute an offer by the funds or by FDC to sell or to buy shares of the
funds to any person to whom it is unlawful to make such offer.
TREASURY FUND -CAPITAL RESERVES CLASS
PRIME FUND -CAPITAL RESERVES CLASS
TAX-EXEMPT FUND -CAPITAL RESERVES CLASS
NEWBURY STREET TRUST
CROSS REFERENCE SHEET
Form N-1A Item Number
Part B Statement of Additional Information
10 a,b Cover Page
11 Table of Contents
12 Description of Trust
13 a,b,c Investment Policies and Limitations
d *
14 a,b,c Trustees and Officers
15 a *
b *
c Trustees and Officers
16 a(i) FMR
a(ii) Trustees and Officers
a(iii),b Management Contracts
c *
d Management Contracts
e *
f Distribution and Service Plans
g *
h Description of the Trust
i Contracts with FMR Affiliates
17 a Portfolio Transactions
b *
c Portfolio Transactions
d,e *
18 a Description of the Trust
b *
19 a Additional Purchase, Exchange, and
Redemption Information
b Valuation
c *
20 Distributions and Taxes
21 a(i,ii) Contracts with FMR Affiliates;
Distribution and Service Plans
a(iii),b,c *
22 a Performance
22 b *
23 *
_______________
*Not Applicable
TREASURY FUND - CAPITAL RESERVES CLASS
PRIME FUND - CAPITAL RESERVES CLASS
TAX-EXEMPT FUND - CAPITAL RESERVES CLASS
FUNDS OF NEWBURY STREET TRUST
STATEMENT OF ADDITIONAL INFORMATION
OCTOBER 6, 1997
This Statement of Additional Information (SAI) is not a prospectus but
should be read in conjunction with the funds' current Prospectus for
Capital Reserves Class shares (dated October 6, 1997). Please retain this
document for future reference. The funds' Annual Reports are separate
documents supplied with this SAI. To obtain a free additional copy of the
Prospectus or an Annual Report, please call Fidelity Client Services at
1-800-843-3001 or your investment professional.
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 Contracts
Contracts with FMR Affiliates
Distribution and Service Plans
Description of the Trust
Financial Statements
Appendix
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
INVESTMENT SUB-ADVISER
FMR Texas Inc. (FMR Texas)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT FOR TREASURY FUND AND PRIME FUND (THE TAXABLE FUNDS)
Fidelity Investments Institutional Operations Company, Inc. (FIIOC)
TRANSFER AGENT FOR TAX-EXEMPT FUND
UMB Bank, n.a. (UMB)
DMFR-ptb-1097
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 a 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 a fund's investment policies and
limitations.
A 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 (the 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 TREASURY FUND
THE FOLLOWING ARE TREASURY FUND'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, or securities of
other investment companies) 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) borrow money, except that the fund may (i) borrow money for temporary
or emergency purposes (not for leveraging or investment) and (ii) engage in
reverse repurchase agreements for any purpose; provided that (i) and (ii)
in combination do not exceed 33 1/3% of the fund's total assets (including
the amount borrowed) less liabilities (other than borrowings). Any
borrowings that come to exceed this amount will be reduced within three
days (not including Sundays and holidays) to the extent necessary to comply
with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments; or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements;
(9) 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 objectives, policies and limitations as the fund.
THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT
SHAREHOLDER APPROVAL:
(i) The fund does not currently intend to purchase a security (other than
securities issued or guaranteed by the U.S. Government or any of its
agencies or instrumentalities) if, as a result, more than 5% of its total
assets would be invested in securities of a single issuer; provided that
the fund may invest up to 25% of its total assets in the first tier
securities of a single issuer for up to three business days. (This limit
does not apply to securities of other open-end investment companies managed
by FMR or a successor or affiliate purchased pursuant to an exemptive order
granted by the SEC.)
(ii) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(iii) Subject to revision upon 60 days' notice to shareholders, the fund
does not currently intend to purchase securities on margin, except that the
fund may obtain such short-term credits as are necessary for the clearance
of transactions, and provided that margin payments in connection with
futures contracts and options on futures contracts shall not constitute
purchasing securities on margin.
(iv) 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. The fund will not purchase any security while borrowings
(excluding reverse repurchase agreements) 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.
(v) 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.
(vi) 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.
(vii) The fund does not currently intend to make loans, but this limitation
does not apply to purchases of debt securities or to repurchase agreements.
(viii) 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.
INVESTMENT LIMITATIONS OF PRIME FUND
THE FOLLOWING ARE PRIME FUND'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, or securities of
other investment companies) 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) borrow money, except that the fund may (i) borrow money for temporary
or emergency purposes (not for leveraging or investment) and (ii) engage in
reverse repurchase agreements for any purpose; provided that (i) and (ii)
in combination do not exceed 33 1/3% of the fund's total assets (including
the amount borrowed) less liabilities (other than borrowings). Any
borrowings that come to exceed this amount will be reduced within three
days (not including Sundays and holidays) to the extent necessary to comply
with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry, except that the fund will
invest more than 25% of its total assets in the financial services
industry;
(6) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments; or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
(9) 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 objectives, policies and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to purchase a security (other than
securities issued or guaranteed by the U.S. government or any of its
agencies or instrumentalities) if, as a result, more than 5% of its total
assets would be invested in securities of a single issuer; provided that
the fund may invest up to 25% of its total assets in the first tier
securities of a single issuer for up to three business days. (This limit
does not apply to securities of other open-end investment companies managed
by FMR or a successor or affiliate purchased pursuant to an exemptive order
granted by the SEC.)
(ii) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(iii) Subject to revision upon 60 days notice to shareholders, the fund
does not currently intend to purchase securities on margin, except that the
fund may obtain such short-term credits as are necessary for the clearance
of transactions, and provided that margin payments in connection with
futures contracts and options on futures contracts shall not constitute
purchasing securities on margin.
(iv) 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. The fund will not purchase any security while borrowings
(excluding reverse repurchase agreements) 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.
(v) 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.
(vi) 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.
(vii) The fund does not currently intend to lend assets other than
securities to other parties, except by lending money (up to 10% of the
fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser. (This limitation
does not apply to purchases of debt securities or to repurchase
agreements.)
(viii) 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.
INVESTMENT LIMITATIONS OF TAX-EXEMPT FUND
THE FOLLOWING ARE TAX-EXEMPT FUND'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, or securities of
other investment companies), 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 exceeding 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 the 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 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
limitation 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.
For purposes of limitation (1), certain securities subject to credit
guarantees or puts from third parties are not considered securities of
their issuer in accordance with industry standard requirements for money
market funds. For purposes of limitations (1) and (7), FMR identifies the
issuer of a security depending on its terms and conditions. In the case of
identifying the issuer, FMR will consider the entity or entities
responsible for payment of interest and repayment of principal and the
source of such payments; the way in which assets and revenues of an issuing
political subdivision are separated from those of other political entities;
and whether a government or other entity is guaranteeing the security.
THE FOLLOWING 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 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 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.
(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 engage in repurchase agreements
or make loans, but this limitation does not apply to purchases of debt
securities.
(vi) 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 the funds' policies on quality and maturity, see the section entitled
"Quality and Maturity" on page .
SHAREHOLDER NOTICE. Treasury Fund invests only in U.S. Treasury securities
and repurchase agreements for those securities. This operating policy may
be changed only upon 90 days notice to shareholders. Each of Treasury Fund
and Prime Fund do not intend to purchase futures contracts or options on
futures contracts. This operating policy may be changed only upon approval
by the Board of Trustees and 60 days' notice to shareholders.
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related risks.
FMR may not buy all of these instruments or use all of these techniques
unless it believes that doing so will help the fund achieve its goal.
AFFILIATED BANK TRANSACTIONS. A 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.
ASSET-BACKED SECURITIES include pools of mortgages, loans, receivables, or
other assets. Payment of principal and interest may be largely dependent
upon the cash flows generated by the assets backing the securities and, in
certain cases, supported by letters of credit, surety bonds, or other
credit enhancements. The value of asset-backed securities may also be
affected by the creditworthiness of the servicing agent for the pool, the
originator of the loans or receivables, or the entities providing the
credit support.
DELAYED-DELIVERY TRANSACTIONS. Each fund may buy and sell securities on a
delayed-delivery or when-issued basis. These transactions involve a
commitment by a 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, each fund assumes
the rights and risks of ownership, including the risk of price and yield
fluctuations. Because a 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 a 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 a 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.
Each 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.
DOMESTIC AND FOREIGN ISSUERS. Investments may be made in U.S.
dollar-denominated time deposits, certificates of deposit, and bankers'
acceptances of U.S. banks and their branches located outside of the United
States, U.S. branches and agencies of foreign banks, and foreign branches
of foreign banks. A fund may also invest in U.S. dollar-denominated
securities issued or guaranteed by other U.S. or foreign issuers, including
U.S. and foreign corporations or other business organizations, foreign
governments, foreign government agencies or instrumentalities, and U.S. and
foreign financial institutions, including savings and loan institutions,
insurance companies, mortgage bankers, and real estate investment trusts,
as well as banks.
The obligations of foreign branches of U.S. banks may be general
obligations of the parent bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation and by governmental
regulation. Payment of interest and principal on these obligations may also
be affected by governmental action in the country of domicile of the branch
(generally referred to as sovereign risk). In addition, evidence of
ownership of portfolio securities may be held outside of the United States
and a fund may be subject to the risks associated with the holding of such
property overseas. Various provisions of federal law governing the
establishment and operation of U.S. branches do not apply to foreign
branches of U.S. banks.
Obligations of U.S. branches and agencies of foreign banks may be general
obligations of the parent bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation and by federal and state
regulation, as well as by governmental action in the country in which the
foreign bank has its head office.
Obligations of foreign issuers involve certain additional risks. These
risks may include future unfavorable political and economic developments,
withholding taxes, seizures of foreign deposits, currency controls,
interest limitations, or other governmental restrictions that might affect
payment of principal or interest, or the ability to honor a credit
commitment. Additionally, there may be less public information available
about foreign entities. Foreign issuers may be subject to less governmental
regulation and supervision than U.S. issuers. Foreign issuers also
generally are not bound by uniform accounting, auditing, and financial
reporting requirements comparable to those applicable to U.S. issuers.
FEDERALLY TAXABLE OBLIGATIONS. Under normal conditions, Tax-Exempt 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 Tax-Exempt 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 Tax-Exempt 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 objectives 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 a fund's investments and, through reports from FMR, the
Board monitors investments in illiquid instruments. In determining the
liquidity of a 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).
Investments currently considered by the funds to be illiquid include
repurchase agreements not entitling the holder to payment of principal and
interest within seven days. Also, FMR may determine some restricted
securities, municipal lease obligations, and time deposits to be illiquid.
In the absence of market quotations, illiquid investments are valued for
purposes of monitoring amortized cost valuation at fair value as determined
in good faith by a committee appointed by the Board of Trustees. If through
a change in values, net assets, or other circumstances, a fund were in a
position where more than 10% of its net assets were invested in illiquid
securities, it would seek to take appropriate steps to protect liquidity.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive order
issued by the SEC, each fund has received permission to lend money to, and
borrow money from, other funds advised by FMR or its affiliates. Treasury
Fund and Tax-Exempt Fund currently intend to participate in this program
only as borrowers. A fund will borrow through the program only when the
costs are equal to or lower than the cost of bank loans. Interfund loans
and borrowings normally extend overnight, but can have a maximum duration
of seven days. Loans may be called on one day's notice. A fund will lend
through the program only when the returns are higher than those available
from an investment in repurchase agreements. A fund may have to borrow from
a bank at a higher interest rate if an interfund loan is called or not
renewed. Any delay in repayment to a lending fund could result in a lost
investment opportunity or additional borrowing costs.
MONEY MARKET 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 funds.
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 funds 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 a 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 MARKET 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 per share.
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 supporting 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 subsidies
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 does 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 funds 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). Split-rated securities may be
determined to be either first or second tier based on applicable
regulations.
The Taxable Funds may not invest more than 5% of its total assets in second
tier securities. In addition, the Taxable funds may not invest more than 1%
of its total assets or $1 million (whichever is greater) in the second tier
securities of a single issuer.
A 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, a fund may look to an interest rate reset or demand feature.
REPURCHASE AGREEMENTS. In a repurchase agreement, a 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 a 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 a fund in connection with bankruptcy
proceedings), it is a 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, a 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, a fund might obtain a
less favorable price than prevailed when it decided to seek registration of
the security. However, in general, each fund anticipates holding restricted
securities to maturity or selling them in an exempt transaction.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a 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. A
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.
SHORT SALES "AGAINST THE BOX." A fund may sell securities short when it
owns or has the right to obtain securities equivalent in kind or amount to
the securities sold short. Short sales could be used to protect the net
asset value per share of the fund in anticipation of increased interest
rates, without sacrificing the current yield of the securities sold short.
If a fund enters into a short sale against the box, it will be required to
set aside securities equivalent in kind and amount to the securities sold
short (or securities convertible or exchangeable into such securities) and
will be required to hold such securities while the short sale is
outstanding. The fund will incur transaction costs, including interest
expenses, in connection with opening, maintaining, and closing short sales
against the box.
SOURCES OF CREDIT OR LIQUIDITY SUPPORT. FMR may rely on its evaluation of
the credit of a bank or other entity in determining whether to purchase a
security supported by a letter of credit guarantee, put or demand feature,
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 entity 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.
STRIPPED GOVERNMENT SECURITIES. Stripped government securities are created
by separating the income and principal components of a U.S. Government
security and selling them separately. STRIPS (Separate Trading of
Registered Interest and Principal of Securities) are created when the
coupon payments and the principal payment are stripped from an outstanding
Treasury security by a Federal Reserve Bank.
Privately stripped government securities are created when a dealer deposits
a U.S. Treasury security or other U.S. Government security with a custodian
for safekeeping. The custodian issues separate receipts for the coupon
payments and principal payment, which the dealer then sells. Proprietary
receipts, such as Certificates of Accrual on Treasury Securities (CATS) and
Treasury Investment Growth Receipts (TIGRS), and generic receipts, such as
Treasury Receipts (TRs), are privately stripped U.S. Treasury securities.
Because the SEC does not consider privately stripped government securities
to be U.S. Government securities for purposes of Rule 2a-7, a fund must
evaluate them as it would non-government securities pursuant to regulatory
guidelines applicable to all money market funds.
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, a 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 each 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 Contracts"), 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 a
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 funds may execute portfolio transactions with broker-dealers who
provide research and execution services to the funds 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 a 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 funds may be useful to FMR in rendering investment management
services to the funds 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 funds. 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
each 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 funds 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 funds or shares of other Fidelity
funds to the extent permitted by law. FMR may use research services
provided by and place agency transactions with National Financial Services
Corporation (NFSC) and Fidelity Brokerage Services (FBS), indirect
subsidiaries of FMR Corp., if the commissions are fair, reasonable, and
comparable to commissions charged by non-affiliated, qualified brokerage
firms for similar services. From September 1992 through December 1994, FBS
operated under the name Fidelity Brokerage Services Limited (FBSL). As of
January 1995, FBSL was converted to an unlimited liability company and
assumed the name FBS.
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 NFSC to execute portfolio transactions on national securities
exchanges in accordance with approved procedures and applicable SEC rules.
Each fund's Trustees periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio transactions
on behalf of the funds and review the commissions paid by each fund over
representative periods of time to determine if they are reasonable in
relation to the benefits to the fund.
For the fiscal years ended _______, 199_, 199_, and 199_, Tax-Exempt Fund
paid _____ brokerage commissions. For the fiscal period ended _______, and
the fiscal years ended _____, _____, _____, and 1994, Treasury Fund and
Prime Fund paid no brokerage commissions. During the fiscal year ended
_______ 199_, this amounted to approximately __% and __%, respectively, of
the aggregate brokerage commissions paid by each fund involving
approximately __% and __%, respectively, of the aggregate dollar amount of
transactions for which the funds paid brokerage commissions.
During the fiscal year ended ________ 199_, the Tax-Exempt paid $__ in
commissions to brokerage firms that provided research services involving
approximately $___of transactions; during the fiscal year ended_______
199_, the Treasury Fund paid $__ in commissions to brokerage firms that
provided research services involving approximately $___of transactions. The
provision of research services was not necessarily a factor in the
placement of all this business with such firms. During the fiscal year
ended ______ 199_, the fund(s) paid no fees to brokerage firms that
provided research services.
From time to time the Trustees will review whether the recapture for the
benefit of the funds of some portion of the brokerage commissions or
similar fees paid by the funds on portfolio transactions is legally
permissible and advisable. Each 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 each fund to seek such
recapture.
Although the Trustees and officers of each fund are substantially the same
as those of other funds managed by FMR, investment decisions for each 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 each fund is concerned. In other cases,
however, the ability of the funds to participate in volume transactions
will produce better executions and prices for the funds. It is the current
opinion of the Trustees that the desirability of retaining FMR as
investment adviser to each fund outweighs any disadvantages that may be
said to exist from exposure to simultaneous transactions.
VALUATION
Fidelity Service Company, Inc. (FSC) normally determines a class's net
asset value per share (NAV) at 2:00 p.m. and 4:00 p.m. Eastern time for
Treasury Fund and Prime Fund, and at 12:00 noon and 4:00 p.m. Eastern time
for Tax-Exempt Fund. The valuation of portfolio securities is determined
as of these times for the purpose of computing each class'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 a fund would receive if it sold the
instrument.
Securities of other open-end investment companies are valued at their
respective NAVs.
During periods of declining interest rates, a class'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 each 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
Investment Company Act of 1940 (1940 Act). Each fund must adhere to certain
conditions under Rule 2a-7, as summarized in the section entitled "Quality
and Maturity" on page ___.
The Board of Trustees oversees FMR's adherence to the provisions of Rule
2a-7 and has established procedures designed to stabilize each class's net
asset value per share (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 a 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 funds may quote performance in various ways. All performance
information supplied by the funds in advertising is historical and is not
intended to indicate future returns. Each class's yield and total return
fluctuate in response to market conditions and other factors.
YIELD CALCULATIONS. To compute a class'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. A 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 funds may quote
yields in advertising based on any historical seven-day period. Yields for
Capital Reserves Class of the funds are calculated on the same basis as
other money market funds, as required by applicable regulations.
Yield information may be useful in reviewing a class's performance and in
providing a basis for comparison with other investment alternatives.
However, each class'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 a
class's yield will tend to be somewhat higher than prevailing market rates,
and in periods of rising interest rates a class's yield will tend to be
somewhat lower. Also, when interest rates are falling, the inflow of net
new money to a 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 class's current yield. In periods of
rising interest rates, the opposite can be expected to occur.
A class's tax-equivalent yield is the rate an investor would have to earn
from a fully taxable investment before taxes to equal the class's tax-free
yield. Tax-equivalent yields are calculated by dividing a class's yield by
the result of one minus a stated federal income tax rate. If only a
portion of a class'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 1997. 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% to 7%. Of course, no assurance can
be given that a class will achieve any specific tax-exempt yield. While
Tax-Exempt Fund invests principally in obligations whose interest is exempt
from federal income tax, other income received by the funds may be taxable.
1997 TAX RATES AND TAX-EQUIVALENT YIELDS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Federal If individual tax-exempt yield is:
Taxable Income* Marginal 2% 3% 4% 5% 6% 7%
Single Return Joint Return Rate** Then taxable-equivalent yield is:
$ 0 - $ 24,650 $ 0 - $ 41,200 15.0% 2.35% 3.53% 4.71% 5.88% 7.06% 8.24%
$ 24,651 - $ 59,750 $ 41,201 - $ 99,600 28.0% 2.78% 4.17% 5.56% 6.94% 8.33% 9.72%
$ 59,750 - $ 124,650 $ 99,601 - $ 151,750 31.0% 2.90% 4.35% 5.80% 7.25% 8.70% 10.14%
$ 124,651 - $ 271,050 $ 151,750 - $ 271,050 36.0% 3.13% 4.69% 6.25% 7.81% 9.38% 10.94%
$ 271,050 + $ 271,050 + 39.6% 3.31% 4.97% 6.62% 8.28% 9.93% 11.59%
</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.
Tax-Exempt Fund may invest a portion of its assets in obligations that are
subject to federal income tax. When a 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 a class's return, including the effect of reinvesting dividends
and capital gain distributions, and any change in the class'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 a
class 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 a class'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 class.
In addition to average annual total returns, a class 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 7-day yields and total
returns for Capital Reserves Class of each fund and the tax-equivalent
yield for Capital Reserves Class of Tax-Exempt Fund for the period ended
April 30, 1997. The initial offering of Capital Reserves Class shares of
the funds is expected to begin on or about October 31, 1997. The figures
for periods prior to the initial offering date reflect the performance of
Daily Money Class, the original class of each fund, which did not have a
12b-1 fee during the periods shown. Capital Reserves Class figures would
have been lower had 12b-1 fees been reflected in all periods.
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
Seven-Day Tax- One Five Ten One Five Ten
Yield Equivalent Year Years Years/ Year Years Years/
Yield Life of Life of
Fund* Fund*
Treasury Fund % % % % % % % %
- -Capital Reserves
Class
Prime Fund - % % % % % % % %
Capital Reserves
Class
Tax-Exempt Fund % % % % % % % %
- - Capital Reserves
Class
</TABLE>
Note: If FMR had not reimbursed certain fund expenses during these periods,
the funds' total returns would have been lower and yields would have been:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
7-day Yield Tax-Equivalent Yield
Treasury Fund -Daily Money Class %
Prime Fund -Daily Money Class %
Tax-Exempt Fund -Daily Money Class % %
</TABLE>
The following tables show the income and capital elements of each fund's
Capital Reserves Class cumulative total return. The tables compare each
fund's Capital Reserves Class return to the record of the Standard & Poor's
500 Index (S&P 500), the Dow Jones Industrial Average (DJIA), and the cost
of living, as measured by the Consumer Price Index (CPI), over the same
period. The CPI information is as of the month-end closest to the initial
investment date for each class. The S&P 500 and DJIA comparisons are
provided to show how each fund's Capital Reserves Class total return
compared to the record of a broad unmanaged index of common stocks and a
narrower set of stocks of major industrial companies, respectively, over
the same period. Because each fund invests in short-term fixed-income
securities, common stocks represent a different type of investment from the
funds. Common stocks generally offer greater growth potential than the
funds, but generally experience greater price volatility, which means
greater potential for loss. In addition, common stocks generally provide
lower income than fixed-income investments such as the funds. The S&P 500
and DJIA returns are based on the prices of unmanaged groups of stocks and,
unlike each fund's Capital Reserves Class return, do not include the effect
of brokerage commissions or other costs of investing.
The initial offering of Capital Reserves Class shares is expected to begin
on or about October 31, 1997. The figures for periods prior to the initial
offering date reflect the performance of Daily Money Class, the original
class of each fund, which did not have a 12b-1 fee during the periods
shown. Capital Reserves Class figures would have been lower had 12b-1 fees
been reflected in all periods.
The following tables show the growth in value of a hypothetical $10,000
investment in the Capital Reserves Class of each fund during the 10-year
period ended October 31, 1996, assuming all distributions were reinvested.
The figures below reflect the fluctuating interest rates of the specified
periods and should not be considered representative of the dividend income
or capital gain or loss that could be realized from an investment in a
class today. Tax consequences of different investments have not been
factored into the figures below.
TREASURY FUND - CAPITAL RESERVES CLASS
HISTORICAL FUND RESULTS
During the 10-year period ended April 30, 1997, a hypothetical $10,000
investment in Capital Reserves Class of Treasury Fund would have grown to
_________.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Period Value of Value of Value of Total S&P 500 DJIA Cost of
Ended Initial Reinvested Reinvested Value Living
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1996 $ 10,000 $ $ 0 $ $ 39,291 $ 43,709 $ 14,352
1995 $ 10,000 $ $ 0 $ $ 31,662 $ 33,740 $ 13,935
1994 $ 10,000 $ $ 0 $ $ 25,041 $ 27,043 $ 13,554
1993 $ 10,000 $ $ 0 $ $ 24,109 $ 24,786 $ 13,209
1992 $ 10,000 $ $ 0 $ $ 20,974 $ 21,104 $ 12,856
1991 $ 10,000 $ $ 0 $ $ 19,071 $ 19,495 $ 12,457
1990 $ 10,000 $ $ 0 $ $ 14,284 $ 14,987 $ 12,103
1989 $ 10,000 $ $ 0 $ $ 15,441 $ 15,617 $ 11,387
1988 $ 10,000 $ $ 0 $ $ 12,216 $ 12,225 $ 10,898
1987 $ 10,000 $ $ 0 $ $ 10,641 $ 10,943 $ 10,453
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Capital
Reserves Class of Treasury Fund on November 1, 1997, the net amount
invested in Capital Reserves Class shares was $10,000. The cost of the
initial investment ($10,000) together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their cash
value at the time they were reinvested) amounted to $______. If
distributions had not been reinvested, the amount of distributions earned
from the fund over time would have been smaller, and cash payments for the
period would have amounted to $5,408. The class did not distribute any
capital gains during the period.
PRIME FUND - CAPITAL RESERVES CLASS
HISTORICAL FUND RESULTS
During the 10 year period ended April 30, 1997, a hypothetical $10,000
investment in Capital Reserves Class of Prime Fund would have grown to
$_____.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Period Value of Value of Value of Total S&P 500 DJIA Cost of
Ended Initial Reinvested Reinvested Value Living
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1996 $ 10,000 $ $ 0 $ $ 39,291 $ 43,709 $ 14,352
1995 $ 10,000 $ $ 0 $ $ 31,662 $ 33,740 $ 13,935
1994 $ 10,000 $ $ 0 $ $ 25,041 $ 27,043 $ 13,554
1993 $ 10,000 $ $ 0 $ $ 24,109 $ 24,786 $ 13,209
1992 $ 10,000 $ $ 0 $ $ 20,974 $ 21,104 $ 12,856
1991 $ 10,000 $ $ 0 $ $ 19,071 $ 19,495 $ 12,457
1990 $ 10,000 $ $ 0 $ $ 14,284 $ 14,987 $ 12,103
1989 $ 10,000 $ $ 0 $ $ 15,441 $ 15,617 $ 11,387
1988 $ 10,000 $ $ 0 $ $ 12,216 $ 12,225 $ 10,898
1987 $ 10,000 $ $ 0 $ $ 10,641 $ 10,943 $ 10,453
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Capital
Reserves Class of Prime Fund on November 1, 1997, the net amount invested
in Capital Reserves Class shares was $10,000. The cost of the initial
investment ($10,000) together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their cash
value at the time they were reinvested), amounted to $______. If
distributions had not been reinvested, the amount of distributions earned
from the fund over time would have been smaller, and cash payments for the
period would have amounted to $5,522 for dividends. The class did not
distribute any capital gains during the period.
TAX-EXEMPT FUND - CAPITAL RESERVES CLASS
HISTORICAL FUND RESULTS
During the 10-year period ended April 30, 1997, a hypothetical $10,000
investment in Capital Reserves Class of Tax-Exempt Fund would have grown to
$_______.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Period Value of Value of Value of Total S&P 500 DJIA Cost of
Ended Initial Reinvested Reinvested Value Living
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1996 $ 10,000 $ $ 0 $ $ 39,291 $ 43,709 $ 14,352
1995 $ 10,000 $ $ 0 $ $ 31,662 $ 33,740 $ 13,935
1994 $ 10,000 $ $ 0 $ $ 25,041 $ 27,043 $ 13,554
1993 $ 10,000 $ $ 0 $ $ 24,109 $ 24,786 $ 13,209
1992 $ 10,000 $ $ 0 $ $ 20,974 $ 21,104 $ 12,856
1991 $ 10,000 $ $ 0 $ $ 19,071 $ 19,495 $ 12,457
1990 $ 10,000 $ $ 0 $ $ 14,284 $ 14,987 $ 12,103
1989 $ 10,000 $ $ 0 $ $ 15,441 $ 15,617 $ 11,387
1988 $ 10,000 $ $ 0 $ $ 12,216 $ 12,225 $ 10,898
1987 $ 10,000 $ $ 0 $ $ 10,641 $ 10,943 $ 10,453
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in Capital
Reserves Class of Tax-Exempt Money Fund on November 1, 1997, the net amount
invested in Capital Reserves Class shares was $10,000. The cost of the
initial investment ($10,000) together with the aggregate cost of reinvested
dividends and capital gain distribuitions for the period covered (their
cash value at the time they were reinvested) amounted to $_______. If
distributions had not been reinvested, the amount of distributions earned
from the fund over time would have been smaller, and cash payments for the
period would have amounted to $3,697 for dividends. The class did not
distribute any capital gains during the period.
PERFORMANCE COMPARISONS. A 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. Generally, Lipper rankings are based on total
return, assume reinvestment of distributions, do not take sales charges or
redemption fees into consideration, and are prepared without regard to tax
consequences. Lipper may also rank funds based on yield. In addition to the
mutual fund rankings, a 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, a fund's performance may also be compared to other
mutual funds tracked by financial or business publications and periodicals.
For example, a 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.
A 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, a fund
may offer greater liquidity or higher potential returns than CDs, a 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; questionnaires 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.
A fund may compare its performance or the performance of securities in
which it may invest to averages published by IBC Financial Data, Inc. of
Ashland, Massachusetts. These averages assume reinvestment of
distributions. IBC's MONEY FUND REPORT AVERAGES(trademark)/All-Taxable,
which is reported in IBC's MONEY FUND REPORT(trademark), covers over 843
taxable money market funds and IBC MONEY FUND REPORT
AVERAGES(trademark)/All Tax-Free, which is reported in IBC's Money Fund
Report, covers over ___tax-free 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(Registered trademark), a quarterly magazine provided free of charge
to Fidelity fund shareholders.
A fund may present its fund number, Quotron(trademark) number, and CUSIP
number, and discuss or quote its current portfolio manager.
A fund may be available for purchase through retirement plans or other
programs offering deferral of, or exemption from, income taxes, which may
produce superior after-tax returns over time. For example, a $1,000
investment earning a taxable return of 10% annually would have an after-tax
value of $1,949 after ten years, assuming tax was deducted from the return
each year at a 31% rate. An equivalent tax-deferred investment would have
an after-tax value of $2,100 after ten years, assuming tax was deducted at
a 31% rate from the tax-deferred earnings at the end of the ten-year
period.
As of ___________, FMR advised over $______ billion in tax-free fund
assets, $__ billion in money market fund assets, $___ billion in equity
fund assets, $__ billion in international fund assets, and $___ billion in
Spartan fund assets. The funds 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, each class may compare its total
expense ratio to the average total expense ratio of similar funds tracked
by Lipper. A class'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 a class'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 (the Rule) under the 1940 Act, each 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 exchange, or (ii) a fund
suspends the redemption of the shares to be exchanged as permitted under
the 1940 Act or the rules and regulations thereunder, or a 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, each 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. Because each fund's income is primarily derived from interest,
dividends from the fund generally will not qualify for the
dividends-received deduction available to corporate shareholders. A portion
of each fund's dividends derived from certain U.S. Government obligations
may be exempt from state and local taxation.
To the extent that each 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.
Each 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 on up to 85% of such
benefits to the extent that their income, including tax-exempt income,
exceeds certain base amounts.
Tax-Exempt Fund purchases municipal securities whose interest FMR believes
is free from federal income tax. Generally, issuers or other parties have
entered into covenants requiring continuing compliance with federal tax
requirements to preserve the tax-free status of interest payments over the
life of the security. If at any time the covenants are not complied with,
or if the IRS determines that the issuer did not comply with relevant tax
requirements, interest payments from a security could become federally
taxable retroactive to the date the security was issued. For certain types
of structured securities, the tax status of the pass-through of tax-free
income may also be based on the federal tax treatment of the structure.
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 Tax-Exempt Fund's policy of investing
so that at least 80% of its income distributions 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 the purposes of Tax-Exempt Fund's policy of investing so that at
least 80% of its income distribution is free from federal income tax.
Tax-Exempt 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 net asset value at $1.00 per share.
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
Tax-Exempt Fund's income 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 the 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. Each fund may distribute any net realized
short-term capital gains once a year or more often as necessary, to
maintain its net asset value at $1.00 per share. Treasury Fund and Prime
Fund do not anticipate earning long-term capital gains on securities held
by each fund. Tax-Exempt Fund does not anticipate distributing long-term
capital gains.
As of the fiscal period ended ___________, Treasury Fund had capital loss
carryforwards aggregating approximately $__________. The loss carryforward
for Treasury Fund will expire on ___________ and is available to offset
future capital gains.
As of the fiscal period ended ___________, Prime Fund had capital loss
carryforwards aggregating approximately $_____. The loss carryforward for
Prime Fund, of which $______,_$______, $_______, and $_______ will expire
on ______, _____, ______, ________, and _______, respectively, is available
to offset future capital gains.
As of the fiscal period ended _________, Tax-Exempt Fund had capital loss
carryforwards aggregating approximately $__________. The loss carryforward
for Tax-Exempt Fund, of which $________ and $______ will expire on ________
and __________, respectively, is available to offset future capital gains.
STATE AND LOCAL TAX ISSUES. For mutual funds organized as business trusts,
state law provides for a pass-through of the state and local income tax
exemption afforded to direct owners of U.S. Government securities. Some
states limit this to mutual funds that invest a certain amount in U.S.
Government securities, and some types of securities, such as repurchase
agreements and some agency backed securities, may not qualify for this
benefit. The tax treatment of your dividend distributions from a fund will
be the same as if you directly owned your proportionate share of the U.S.
Government securities in the fund's portfolio. Because the income earned on
most U.S. Government securities in which a fund invests is exempt from
state and local income taxes, the portion of your dividends from the fund
attributable to these securities will also be free from income taxes. The
exemption from state and local income taxation does not preclude states
from assessing other taxes on the ownership of U.S. Government securities.
In a number of states, corporate franchise (income) tax laws do not exempt
interest earned on U.S. Government securities whether such securities are
held directly or through a fund.
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. If, at the close of its fiscal year, more than 50% of a fund's
total assets are invested in securities of foreign issuers, the fund may
elect to pass through foreign taxes paid and thereby allow shareholders to
take a credit or deduction on their individual tax returns.
TAX STATUS OF THE FUNDS. Each 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,
each 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.
Each fund is treated as a separate entity from the other funds of its
respective Trust for tax purposes.
OTHER TAX INFORMATION. The information above is only a summary of some of
the tax consequences generally affecting each 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 a 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 its division, 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
accounts 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, Members of the Advisory Board, 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.
All persons named as Trustees and Members of the Advisory Board, also serve
in similar capacities for other funds advised by FMR. The business address
of each Trustee, Member of the Advisory Board and officer who is an
"interested person" (as defined in the Investment Company Act of 1940) 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 and Members of the Advisory Board who are "interested persons" by
virtue of their affiliation with either the trust or FMR are indicated by
an asterisk (*).
*EDWARD C. JOHNSON 3d (_), Trustee and President, is Chairman, Chief
Executive Officer and a Director of FMR Corp.; a Director and Chairman of
the Board and of the Executive Committee of FMR; Chairman and a Director of
FMR Texas Inc., Fidelity Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
*J. GARY BURKHEAD (__), Member of the Advisory Board (1997), is Vice
Chairman and a Member of the Board of Directors of FMR Corp. (1997) and
President and Chief Executive Officer of the Fidelity Institutional Group
(1997), Previously, Mr. Burkhead served as President of Fidelity Management
& Research Co.
RALPH F. COX (_), Trustee, is President of Rabar Enterprises (management
consulting-engineering industry, 1994). Prior to February 1994, he was
President of Greenhill Petroleum Corporation (petroleum exploration and
production). Until March 1990, Mr. Cox was President and Chief Operating
Officer of Union Pacific Resources Company (exploration and production). He
is a Director of USA Waste Services, Inc. (non-hazardous waste, 1993), CH2M
Hill Companies (engineering), Rio Grande, Inc. (oil and gas production),
and Daniel Industries (petroleum measurement equipment manufacturer). In
addition, he is a member of advisory boards of Texas A&M University and the
University of Texas at Austin.
PHYLLIS BURKE DAVIS (_), 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), and 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.
ROBERT M. GATES (_), Trustee (1997), is a consultant, author, and lecturer
(1993). Mr. Gates was Director of the Central Intelligence Agency (CIA)
from 1991-1993. From 1989 to 1991, Mr. Gates served as Assistant to the
President of the United States and Deputy National Security Advisor. Mr.
Gates is currently a Trustee for the Forum For International Policy, a
Board Member for the Virginia Neurological Institute, and a Senior Advisor
of the Harvard Journal of World Affairs. In addition, Mr. Gates also serves
as a member of the corporate board for LucasVarity PLC (automotive
components and diesel engines), Charles Stark Draper Laboratory
(non-profit), NACCO Industries, Inc. (mining and manufacturing), and TRW
Inc. (original equipment and replacement products).
E. BRADLEY JONES (_), Trustee. 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),
Consolidated Rail Corporation, Birmingham Steel Corporation, and RPM, Inc.
(manufacturer of chemical products), and he previously served as a Director
of NACCO Industries, Inc. (mining and manufacturing, 1985-1995),
Hyster-Yale Materials Handling, Inc. (1985-1995), and Cleveland-Cliffs Inc
(mining), and as a Trustee of First Union Real Estate Investments. In
addition, he serves as a Trustee of the Cleveland Clinic Foundation, where
he has also been a member of the Executive Committee as well as Chairman of
the Board and President, a Trustee and member of the Executive Committee of
University School (Cleveland), and a Trustee of Cleveland Clinic Florida.
DONALD J. KIRK (_), 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, Chairman of the Board of Trustees of the Greenwich
Hospital Association, a Member of the Public Oversight Board of the
American Institute of Certified Public Accountants' SEC Practice Section
(1995), and as a Public Governor of the National Association of Securities
Dealers, Inc. (1996).
*PETER S. LYNCH (_), Trustee, 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 (1989) and Society
for the Preservation of New England Antiquities, and as an Overseer of the
Museum of Fine Arts of Boston.
WILLIAM O. McCOY (_), Trustee (1997), is the Vice President of Finance for
the University of North Carolina (16-school system, 1995). Prior to his
retirement in December 1994, Mr. McCoy was Vice Chairman of the Board of
BellSouth Corporation (telecommunications, 1984) and President of BellSouth
Enterprises (1986). He is currently a Director of Liberty Corporation
(holding company, 1984), Weeks Corporation of Atlanta (real estate, 1994),
Carolina Power and Light Company (electric utility, 1996), and the Kenan
Transport Co. (1996). Previously, he was a Director of First American
Corporation (bank holding company, 1979-1996). In addition, Mr. McCoy
serves as a member of the Board of Visitors for the University of North
Carolina at Chapel Hill (1994) and for the Kenan-Flager Business School
(University of North Carolina at Chapel Hill, 1988).
GERALD C. McDONOUGH (_), Trustee and Chairman of the non-interested
Trustees, 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 Brush-Wellman Inc. (metal
refining), York International Corp. (air conditioning and refrigeration),
Commercial Intertech Corp. (hydraulic systems, building systems, and metal
products, 1992), CUNO, Inc. (liquid and gas filtration products, 1996), and
Associated Estates Realty Corporation (a real estate investment trust,
1993). Mr. McDonough served as a Director of ACME-Cleveland Corp. (metal
working, telecommunications, and electronic products) from 1987-1996.
MARVIN L. MANN (_), 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.
*ROBERT C. POZEN (51), Trustee (1991) and Senior Vice President, is also
President and a Director of FMR (1997); and President and a Director of FMR
Texas Inc. (1997), Fidelity Management & Research (U.K.) Inc. (1997), and
Fidelity Management & Research (Far East) Inc. (1997). Previously, Mr.
Pozen served as General Counsel, Managing Director, and Senior Vice
President of FMR Corp.
THOMAS R. WILLIAMS (_), 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).
BOYCE GREER (__), Vice President (1997).
ROBERT K. DUBY (__), Vice President of Prime Fund (1996), is Vice President
of other funds advised by FMR and an employee of FMR Texas Inc.
ROBERT LITTERST (__), Vice President of Treasury Fund (1997), is Vice
President of other funds advised by FMR and an employee of FMR Texas, Inc.
SCOTT A. ORR (__), Vice President of Tax-Exempt Fund (1995), is Vice
President of other funds advised by FMR and an employee of FMR Texas Inc.
ARTHUR S. LORING (__), Secretary, is Senior Vice President (1993) and
General Counsel of FMR, Vice President-Legal of FMR Corp., and Vice
President and Clerk of FDC.
RICHARD A. SILVER (__), Treasurer (1997), is Treasurer of the Fidelity
funds and is an employee of FMR (1997). Before joining FMR, Mr. Silver
served as Executive Vice President, Fund Accounting & Administration at
First Data Investor Services Group, Inc. (1996-1997). Prior to 1996, Mr.
Silver was Senior Vice President and Chief Financial Officer at The
Colonial Group, Inc. Mr. Silver also served as Chairman of the
Accounting/Treasurer's Committee of the Investment Company Institute
(1987-1993).
THOMAS D. MAHER (_), Assistant Vice President, is Assistant Vice President
of Fidelity's municipal bond funds (1996) and of Fidelity's money market
funds and Vice President and Associate General Counsel of FMR Texas Inc.
JOHN H. COSTELLO (_), Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH (_), 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) and Chief
Financial Officer of Fidelity Brokerage Services, Inc. (1990-1993).
THOMAS J. SIMPSON (__), Assistant Treasurer, is Assistant Treasurer of
Fidelity's municipal bond funds (1996) and of Fidelity's money market funds
(1996) and an employee of FMR (1996). Prior to joining FMR, Mr. Simpson was
Vice President and Fund Controller of Liberty Investment Services
(1987-1995).
The following table sets forth information describing the compensation of
each Trustee and Member of the Advisory Board of each fund for his or her
services for the fiscal year period _____________, or calendar year ended
___________, as applicable.
COMPENSATION TABLE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Trustees Aggregate Aggregate Aggregate Total
Compensation Compensation Compensation Compensation
from from from from the
Treasury FundB,C Prime FundB,D,F Tax-Exempt Fund Complex* A
FundB,E
J. Gary Burkhead ** $ $ $ $
Ralph F. Cox
Phyllis Burke Davis
Richard J. Flynn***
Robert M. Gates ****
Edward C. Johnson 3d **
E. Bradley Jones
Donald J. Kirk
Peter S. Lynch **
William O. McCoy*****
Gerald C. McDonough
Edward H. Malone***
Marvin L. Mann
Robert C. Pozen**
Thomas R. Williams
</TABLE>
* Information is for the calendar year ended December 31, 1996 for 235
funds in the complex.
** Interested Trustees of the funds and Mr. Burkhead are compensated by
FMR.
*** Richard J. Flynn and Edward H. Malone served on the Board of Trustees
through December 31, 1996.
**** During the period from May 1, 1996 through December 31, 1996, William
O. McCoy served as a Member of the Advisory Board of Newbury Street Trust.
Mr. McCoy was elected to the Board of Trustees of Newbury Street Trust
effective May 9, 1997.
A Compensation figures include cash, a pro rata portion of benefits accrued
under the retirement program for the period ended December 30, 1996 and
required to be deferred, and may include amounts deferred at the election
of Trustees.
B Compensation figures include cash, and may include amounts required to be
deferred, a pro rata portion of benefits accrued under the retirement
program for the period ended December 30, 1996 and required to be deferred,
and amounts deferred at the election of Trustees.
C The following amounts are required to be deferred by each non-interested
Trustee, most of which is subject to vesting: Ralph F. Cox, $ , Phyllis
Burke Davis, $ , Richard J. Flynn, $ , Robert M. Gates, $ , E. Bradley
Jones, $ , Donald J. Kirk, $ , William O. McCoy, $ , Gerald C. McDonough,
$ , Edward H. Malone, $ , Marvin L. Mann, $ , and Thomas R. Williams, $.
D The following amounts are required to be deferred by each non-interested
Trustee, most of which is subject to vesting: Ralph F. Cox, $ , Phyllis
Burke Davis, $ , Richard J. Flynn, $ , Robert M. Gates, $, E. Bradley
Jones, $ , Donald J. Kirk, $ , William O. McCoy, $ , Gerald C. McDonough,
$ , Edward H. Malone, $ , Marvin L. Mann, $ , and Thomas R. Williams, $
.
E The following amounts are required to be deferred by each non-interested
Trustee, most of which is subject to vesting: Ralph F. Cox, $ , Phyllis
Burke Davis, $ , Richard J. Flynn, $ , Robert M. Gates, $, E. Bradley
Jones, $, Donald J. Kirk, $, William O. McCoy, $, Gerald C. McDonough, $,
Edward H. Malone, $, Marvin L. Mann, $, and Thomas R. Williams, $.
F For the fiscal period ended October 31, 1996, certain of the
non-interested Trustees' aggregate compensation from a fund includes
accrued voluntary deferred compensation as follows: Prime Fund (Malone, $
)
Under a retirement program adopted in July 1988 and modified in November
1995 and November 1996, each non-interested Trustee who retired before
December 30, 1996 may receive payments from a Fidelity fund during his or
her lifetime based on his or her basic trustee fees and length of service.
The obligation of a fund to make such payments is neither secured nor
funded. A Trustee became eligible to participate in the program at the end
of the calendar year in which he or she reached age 72, provided that, at
the time of retirement, he or she had served as a Fidelity fund Trustee for
at least five years.
Under a deferred compensation plan adopted in September 1995 and amended in
November 1996 (the Plan), non-interested Trustees must defer receipt of a
portion of, and may elect to defer receipt of an additional portion of,
their annual fees. Amounts deferred under the Plan are treated as though
equivalent dollar amounts had been invested in shares of a cross-section of
Fidelity funds including funds in each major investment discipline and
representing a majority of Fidelity's assets under management (the
Reference Funds). The amounts ultimately received by the Trustees under the
Plan will be directly linked to the investment performance of the Reference
Funds. Deferral of fees in accordance with the Plan will have a negligible
effect on a fund's assets, liabilities, and net income per share, and will
not obligate a fund to retain the services of any Trustee or to pay any
particular level of compensation to the Trustee. A fund may invest in the
Reference Funds under the Plan without shareholder approval.
As of December 30, 1996, the non-interested Trustees terminated the
retirement program for Trustees who retire after such date. In connection
with the termination of the retirement program, each then-existing
non-interested Trustee received a credit to his or her Plan account equal
to the present value of the estimated benefits that would have been payable
under the retirement program. The amounts credited to the non-interested
Trustees' Plan accounts are subject to vesting and are treated as though
equivalent dollar amounts had been invested in shares of the Reference
Funds. The amounts ultimately received by the Trustees in connection with
the credits to their Plan accounts will be directly linked to the
investment performance of the Reference Funds. The termination of the
retirement program and related crediting of estimated benefits to the
Trustees' Plan accounts did not result in a material cost to the funds.
As of ______________, approximately __% of ___________'s total outstanding
shares was held by an FMR affiliate. FMR Corp. is the ultimate parent
company of this FMR affiliate. By virtue of his ownership interest in FMR
Corp., as described in the "FMR" section on page ___, Mr. Edward C. Johnson
3d, President and Trustee of the fund, may be deemed to be a beneficial
owner of these shares. As of the above date, with the exception of Mr.
Johnson 3d's deemed ownership of ________'s shares, the Trustees, Members
of the Advisory Board and officers of the funds owned, in the aggregate,
less than __% of each fund's total outstanding shares.
MANAGEMENT CONTRACTS
FMR is manager of Treasury Fund, Prime Fund and Tax-Exempt Fund pursuant to
management contracts dated May 31, 1997, which were approved by
shareholders of each fund on May 9, 1997. Prior to May 31, 1997, FMR was
each fund's manager pursuant to management contracts dated September 30,
1993 for Treasury Fund and Prime Fund, and December 30, 1991 for Tax-Exempt
Fund, which were approved by shareholders of Treasury Fund and Prime Fund
on March 24, 1993 and shareholders of Tax-Exempt Fund on October 23, 1991.
MANAGEMENT SERVICES. Each fund employs FMR to furnish investment advisory
and other services. Under the terms of its management contract with each
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 each
fund with all necessary office facilities and personnel for servicing the
fund's investments, compensates all officers of each fund and all Trustees
who are "interested persons" of the trust or of FMR, and all personnel of
each 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 each fund. These services include providing facilities
for maintaining each fund's organization; supervising relations with
custodians, transfer and pricing agents, accountants, underwriters, and
other persons dealing with each fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining each
fund's records and the registration of each fund's shares under federal
securities laws and making necessary filings under state securities laws;
developing management and shareholder services for each fund; and
furnishing reports, evaluations, and analyses on a variety of subjects to
the Trustees.
MANAGEMENT-RELATED EXPENSES. In addition to the management fee payable to
FMR and the fees payable to the transfer, dividend disbursing, and
shareholder servicing agent and pricing and bookkeeping agent, each fund or
each class thereof, as applicable, pays all of its expenses that are not
assumed by those parties. Each 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. Each fund's
management contract further provides that the fund will pay for
typesetting, printing, and mailing prospectuses, statements of additional
information, notices, and reports to shareholders; however, under the terms
of each fund's transfer agent agreement, the transfer agent bears the costs
of providing these services to existing shareholders of the applicable
classes. Other expenses paid by each fund, or each class thereof, as
applicable, include interest, taxes, brokerage commissions, the fund's
proportionate share of insurance premiums and Investment Company Institute
dues, and the costs of registering shares under federal securities laws and
making necessary filings under state securities laws. Each 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.
MANAGEMENT FEES. For the services of FMR under each management contract,
each fund pays FMR a monthly management fee at the annual rate of 0.25% of
its average net assets throughout the month.
The following table shows the amount of management fees paid by each fund
to FMR for the past three fiscal years.
Fund Fiscal Year
Ended Management Fees Paid to FMR**
Treasury Fund 10/31/96* $
7/31/96
7/31/95
7/31/94
Prime Fund 10/31/96*
7/31/96
7/31/95
7/31/94
Tax-Exempt Fund 10/31/96
10/31/95
10/31/94
* For the period August 1, 1996 through October 31, 1996. The fiscal
year-end of Treasury Fund and Prime Fund changed from July 31 to October 31
in October 1996.
** Management fees paid to FMR reflect the management fee rate of 0.50%
that was in effect for each fund prior to May 31, 1997. Only a portion of
this fee was retained by FMR. The remainder was paid to FDC in connection
with each fund's Distribution and Service Plan.
FMR may, from time to time, voluntarily reimburse all or a portion of
Capital Reserves Class'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 a class's total returns and
yield, and repayment of the reimbursement by a class will lower its total
returns and yield.
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 funds.
Under the terms of the sub-advisory agreements, dated May 31, 1997 for
Treasury Fund and Prime Fund and approved by Daily Money Fund as the then
sole shareholder of each fund in conjunction with an agreement and plan of
reorganization approved by shareholders of each fund on May 9, 1997, and
dated December 30, 1991 for Tax-Exempt Fund and approved by shareholders on
October 23, 1991, FMR pays FMR Texas fees equal to 50% of the management
fees payable to FMR under its management contract with each fund, if any.
For Prime Fund and Treasury Fund, aside from reflecting the funds'
reorganization from one Delaware business trust to another, each contract
is substantially identical to each fund's prior contract dated September
30, 1993 and approved by shareholders on March 24, 1993. 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.
Fees paid to FMR Texas by FMR by FMR on behalf of each fund for the past
three fiscal years are shown in the the table below.
Fund Fiscal Year
Ended Fees Paid to FMR Texas by FMR
Treasury Fund 10/31/96* $
7/31/96
7/31/95
7/31/94
Prime Fund 10/31/96*
7/31/96
7/31/95
7/31/94
Tax-Exempt Fund 10/31/96
10/31/95
10/31/94
* For the period August 1, 1996 through October 31, 1996. The fiscal
year-end of Treasury Fund and Prime Fund changed from July 31 to October 31
in October 1996.
CONTRACTS WITH FMR AFFILIATES
Prime Fund and Treasury Fund have entered into a transfer agent agreement
with FIIOC, an affiliate of FMR. Under the terms of the agreements, FIIOC
performs transfer agency, dividend disbursing, and shareholder services for
the Capital Reserves Class.
Tax-Exempt Fund has entered into a transfer agent agreement with UMB. Under
the terms of the agreement, UMB provides transfer agency, dividend
disbursing, and shareholder services for the Capital Reserves Class. UMB in
turn has entered into a sub-transfer agent agreement with FIIOC. Under the
terms of the sub-agreement, FIIOC performs all processing activities
associated with providing these services for the Capital Reserves Class and
receives all related transfer agency fees paid to UMB.
For providing transfer agency services, FIIOC receives an annual
asset-based fee. This fee is subject to increase based on postal rate
changes.
FIIOC pays out-of-pocket expenses associated with providing transfer agent
services. In addition, FIIOC bears the expense of typesetting, printing,
and mailing prospectuses, statements of additional information, and all
other reports, notices, and statements to existing shareholders, with the
exception of proxy statements.
Treasury Fund and Prime Fund have entered into a service agent agreement
with FSC, an affiliate of FMR. Under the terms of the agreements, FSC
calculates the NAV and dividends for the Capital Reserves Class and
maintains each fund's portfolio and general accounting records.
Tax-Exempt Fund has also entered into a service agent agreement with UMB.
Under the terms of the agreements, UMB provides pricing and bookkeeping
services for the fund. UMB in turn has entered into a sub-service agent
agreement with FSC. Under the terms of the sub-agreement, FSC performs all
processing activities associated with providing these services, including
calculating the NAV and dividends for the Capital Reserves Class and
maintaining the fund's portfolio and general accounting records, and
receives all related pricing and bookkeeping fees paid to UMB.
For providing pricing and bookkeeping services, FSC receives a monthly fee
based on each fund's average daily net assets throughout the month. The
annual fee rates for pricing and bookkeeping services are 0.0175% of the
first $500 million of average net assets and 0.0075% of average net assets
in excess of $500 million. The fee, not including reimbursement for
out-of-pocket expenses, is limited to a minimum of $40,000 and a maximum of
$800,000 per year.
Pricing and bookkeeping fees, including reimbursement for out-of-pocket
expenses, paid by the funds to FSC for the past three fiscal years are
shown in the table below.
Fund Fiscal Year
Ended Fees Paid to FSC
Treasury Fund 10/31/96* $
7/31/96
7/31/95
7/31/94
Prime Fund 10/31/96*
7/31/96
7/31/95
7/31/94
Tax-Exempt 10/31/96
10/31/95
10/31/94
* For the period August 1, 1996 through October 31, 1996. The fiscal
year-end of Treasury Fund and Prime Fund changed from July 31 to October 31
in October 1996.
Each fund has entered into a distribution agreement with FDC, an affiliate
of FMR organized as a Massachusetts corporation on July 18, 1960. FDC is a
broker-dealer registered under the Securities Exchange Act of 1934 and a
member of the National Association of Securities Dealers, Inc. The
distribution agreements call 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 PLANS
The Trustees have approved Distribution and Service Plans on behalf of
Capital Reserves Class of each fund (the Plans) 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 the fund except
pursuant to a plan approved on behalf of the fund under the Rule. The
Plans, as approved by the Trustees, allow Capital Reserves Class of the
funds and FMR to incur certain expenses that might be considered to
constitute direct or indirect payment by the funds of distribution
expenses.
Pursuant to each Plan, FDC is paid a monthly distribution fee at an annual
rate of 0.50% of Capital Reserves Class's average net assets determined at
the close of business on each day throughout the month. FDC may compensate
intermediaries that provide shareholder support services, engage in the
sale of Capital Reserves Class shares or to pay distribution expenses at an
annual rate of up to 0.50% of average net assets they maintain.
Under each Capital Reserves Class 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. Each
Capital Reserves Class Plan specifically recognizes that FMR may use its
management fee revenue, as well as its past profits, or its other
resources, to pay FDC for expenses incurred in connection with the
distribution of Capital Reserves Class shares, including payments made to
third parties that engage in the sale of Capital Reserves Class shares or
to third parties, including banks, that render shareholder support
services. Currently, the Board of Trustees has authorized such payments.
Prior to approving each Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of the Plan, and
determined that there is a reasonable likelihood that the Plan will benefit
the Capital Reserves Class, of the fund and its shareholders. To the extent
that each Capital Reserves Class Plan gives FMR and FDC greater flexibility
in connection with the distribution of Capital Reserves Class shares,
additional sales of fund shares may result. Furthermore, certain
shareholder support services may be provided more effectively under the
Plans by local entities with whom shareholders have other relationships.
Each Capital Reserves Class Plan does not provide for specific payments by
Capital Reserves Class of any of the expenses of FDC or obligate FDC or FMR
to perform any specific type or level of distribution activities or incur
any specific level of expense in connection with distribution activities.
After payments by FDC for advertising, marketing and distribution, and
payments to third parties, the amounts remaining, if any, may be used as
FDC may elect.
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 funds
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.
Each fund may execute portfolio transactions with, and purchase securities
issued by, depository institutions that receive payments under the Plans.
No preference for the instruments of such depository institutions will be
shown in the selection of investments.
Independent of the Capital Reserves Class Plans, intermediaries that
maintain an average balance of $10 million or more in a single omnibus
account may receive an additional recordkeeping fee of up to 0.15% of the
assets they maintain. The recordkeeping fee will be paid by FMR or its
affiliates, will not be paid by the fund, and will be considered a
servicing expense by FMR.
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Each fund is a fund of Newbury Street Trust, an
open-end management investment company originally organized as a
Massachusetts business trust on July 16, 1982, pursuant to a Declaration of
Trust that was amended and restated on November 1, 1989. On December 30,
1991, the trust was converted to a Delaware business trust pursuant to an
agreement approved by shareholders on October 23, 1991. The Delaware trust,
which was organized on June 20, 1991 under the name Daily Tax-Exempt Money
Fund II, succeeded to the name Daily Tax-Exempt Money Fund on December 30,
1991 and succeeded to the name Newbury Street Trust on May 30, 1997.
Currently, there are three funds of the trust: Treasury Fund, Prime Fund,
and Tax-Exempt Fund. The Trust Instrument permits the Trustees to create
additional funds. Prior to May 30, 1997, Treasury Fund and Prime Fund were
funds of Daily Money Fund, an open-end management investment company
originally organized as a Massachusetts business trust on June 7, 1982,
pursuant to a Declaration of Trust that was amended and restated on
September 1, 1989. On September 29, 1993, Daily Money Fund was converted to
a Delaware business trust pursuant to an agreement approved by shareholders
on March 24, 1993. The Delaware Daily Money Fund trust, which was organized
on June 20, 1991 under the name Daily Money Fund II, succeeded to the name
Daily Money Fund on July 14, 1995.
In the event that FMR ceases to be the investment adviser to the trust or a
fund, the right of the trust or fund to use the identifying name "Fidelity"
may be withdrawn. There is a remote possibility that one fund might become
liable for any misstatement in its prospectus or statement of additional
information about another fund.
The assets of the trust received for the issue or sale of shares of each
fund and all income, earnings, profits, and proceeds thereof, subject only
to the rights of creditors, are especially allocated to such fund, and
constitute the underlying assets of such fund. The underlying assets of
each fund are segregated on the books of account, and are to be charged
with the liabilities with respect to such fund and with a share of the
general expenses of the trust. Expenses with respect to the trust are to be
allocated in proportion to the asset value of the respective funds, except
where allocations of direct expense can otherwise be fairly made. The
officers of the trust, subject to the general supervision of the Board of
Trustees, have the power to determine which expenses are allocable to a
given fund, or which are general or allocable to all of the funds. In the
event of the dissolution or liquidation of the trust, shareholders of each
fund are entitled to receive as a class the underlying assets of such fund
available for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. The trust 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 trust and requires
that a disclaimer be given in each contract entered into or executed by the
trust or the Trustees. The Trust Instrument provides for indemnification
out of each fund's property of any shareholder or former shareholder held
personally liable for the obligations of the fund. The Trust Instrument
also provides that each 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 trust 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. Claims
asserted against one class of shares may subject holders of another class
of shares to certain liabilities.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. As a shareholder, you receive one vote for each dollar value of
net asset value you own. 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
trust or a fund may, as set forth in the Trust Instrument, call meetings of
the trust or fund for any purpose related to the trust or fund, as the case
may be, including, in the case of a meeting of the entire trust, the
purpose of voting on removal of one or more Trustees.
The trust or any 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
trust or the fund, as determined by the current value of each shareholder's
investment in the fund or trust; however, the Trustees may, without prior
shareholder approval, change the form of organization of the trust by
merger, consolidation, or incorporation. If not so terminated or
reorganized, the trust and its funds will continue indefinitely.
Under the Trust Instrument, the Trustees may, without shareholder vote,
cause the trust to merge or consolidate into one or more trusts,
partnerships, or corporations, or cause the trust 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 trust registration
statement. Each fund may invest all of its assets in another investment
company.
CUSTODIAN. The Bank of New York, 110 Washington Street, New York, New
York, is custodian of the assets of Taxable Funds. UMB Bank, n.a., 1010
Grand Avenue, Kansas City, Missouri, is custodian of the assets of the
Tax-Exempt Fund. Each custodian is responsible for the safekeeping of a
fund's assets and the appointment of any subcustodian banks and clearing
agencies. A 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 its custodian and may purchase
securities from or sell securities to its custodian. The Chase Manhattan
Bank, headquartered in New York, also may serve as a special purpose
custodian of certain assets of the Taxable Funds in connection with
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.
AUDITORS. , 1999 Bryan Street, Dallas, Texas
serves as the Taxable Funds' independent accountant.
serves as Tax-Exempt Fund's independent accountant. The auditors examine
financial statements for the funds and provide other audit, tax, and
related services.
FINANCIAL STATEMENTS
Each fund's financial statements and financial highlights for the fiscal
year ended October 31, 1996, and reports of the auditors, and each fund's
financial statements and financial highlights for the period ended April
30, 1997, are included in each fund's Annual Report and Semi-Annual Report,
respectively, which are separate reports supplied with this SAI. The funds'
financial statements, including the financial highlights, and reports of
the auditors are incorporated herein by reference. For a free additional
copy of a fund's Annual or Semi-Annual Report, contact Client Services at
1-800-843-3001, or your investment professional.
APPENDIX
The descriptions that follow are examples of eligible ratings for the
funds. A fund may, however, consider the ratings for other types of
investments and the ratings assigned by other rating organizations when
determining the eligibility of a particular investment.
DESCRIPTION OF MOODY'S INVESTORS SERVICE RATINGS OF MUNICIPAL OBLIGATIONS
Moody's ratings for short-term municipal obligations will be designated
Moody's Investment Grade ("MIG"). A two-component rating is assigned to
variable rate demand obligations. The first component represents an
evaluation of the degree of risk associated with scheduled principal
repayment and interest payments and is designated by a long-term rating,
e.g., "Aaa" or "A." The second component represents an evaluation of the
degree of risk associated with the demand feature and is designated "VMIG."
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 RATINGS OF MUNICIPAL NOTES
Municipal notes maturing in three years or less will likely receive a
"note" rating symbol. Notes that have a put option or demand feature are
assigned a dual rating. The first rating addresses the likelihood of
repayment of principal and payment of interest due and for short-term
obligations is designated by a note rating symbol. The second rating
addresses only the demand feature, and is designated by a commercial paper
rating symbol, e.g., "A-1" or "A-2."
SP-1 - Strong capacity to pay principal and interest. Issues determined to
possess very strong characteristics are given a plus (+) designation.
SP-2 - Satisfactory capacity to pay principal and interest, with some
vulnerability to adverse financial and economic changes over the term of
the notes.
DESCRIPTION OF MOODY'S INVESTORS SERVICE RATINGS OF COMMERCIAL PAPER
Moody's assigns short-term debt ratings to obligations which have an
original maturity not exceeding one year.
Issuers rated PRIME-1 (or related supporting institutions) have a superior
ability for repayment of principal and payment of interest.
Issuers rated PRIME-2 (or related supporting institutions) have a strong
ability for repayment of principal and payment of interest.
DESCRIPTION OF STANDARD & POOR'S RATINGS OF COMMERCIAL PAPER
Debt issues considered short-term in the relevant market may be assigned a
Standard & Poor's commercial paper rating.
A-1 - This highest category indicates that the degree of safety regarding
timely payment is strong. Those issues determined to possess extremely
strong safety characteristics are denoted with a plus sign (+) designation.
A-2 - Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated A-1.
Newbury Street Trust
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements and Financial Highlights to be filed by subsequent
amendment.
(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 was electronically filed and
is incorporated herein by reference to Exhibit 1(c) to Post-Effective
Amendment No. 26.
(d) Supplement to Trust Instrument of Daily Tax-Exempt Money Fund, dated
March 31, 1997, was electronically filed and is Incorporated by reference
to Exhibit 1(d) to Post Effective Amendment No. 29.
(e) Certificate of Amendment of Daily Tax-Exempt Money Fund to Newbury
Street Trust is electronically filed herein as Exhibit 1(e).
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) Form of Management Contract between Fidelity Newbury Street Trust,
on behalf of Treasury Fund, and Fidelity Management & Research Company was
electronically filed and is Incorporated by reference to Exhibit 5(a) to
Post Effective Amendment No. 29.
(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 (currently known as Tax-Exempt Fund)) was
electronically filed and is incorporated herein by reference to Exhibit
5(b) to Post-Effective Amendment No. 25.
(c) Form of Management Contract between Fidelity Newbury Street Trust, on
behalf of Prime Fund, and Fidelity Management & Research Company was
electronically filed and is Incorporated by reference to Exhibit 5(c) to
Post Effective Amendment No. 29.
(d) Form of Management Contract between Fidelity Newbury Street Trust, on
behalf of Tax-Exempt Fund, and Fidelity Management & Research Company was
electronically filed and is Incorporated by reference to Exhibit 5(d) to
Post Effective Amendment No. 29.
(e) Form of Sub-Advisory Agreement between FMR Texas Inc. and Fidelity
Management & Research Company, on behalf of Prime Fund, was electronically
filed and is Incorporated by reference to Exhibit 5(e) to Post Effective
Amendment No. 29.
(f) Form of Sub-Advisory Agreement between FMR Texas Inc. and Fidelity
Management & Research Company, on behalf of Treasury Fund, was
electronically filed and is Incorporated by reference to Exhibit 5(f) to
Post Effective Amendment No. 29.
6. (a) General Distribution Agreement dated December 30, 1991, between
Daily Tax-Exempt Money Fund II and Fidelity Distributors Corporation was
electronically filed and is incorporated herein by reference to Exhibit
6(a) to Post-Effective Amendment No. 25.
(b) Service Contract between Fidelity Distributors Corporation and
"Qualified Recipients" with respect to shares of Daily Tax-Exempt Money
Fund (currently known as Tax-Exempt Fund) was electronically filed and is
incorporated herein by reference to Exhibit 6(b) to Post-Effective
Amendment No. 25.
(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 (currently known as
Tax-Exempt Fund) was electronically filed and is incorporated herein by
reference to Exhibit 6(c) to Post-Effective Amendment No. 25.
(d) Amendments to the General Distribution Agreement between Daily
Tax-Exempt Money Fund II on behalf of Daily Tax-Exempt Money Fund
(currently known as Tax-Exempt Fund) and Fidelity Distributors Corporation,
dated March 14, 1996 and July 15, 1996, was electronically filed and is
incorporated herein by reference to Exhibit 6(a) of Fidelity Court Street
Trust's Post-Effective Amendment No. 61 (File No. 2-58774).
(e) Amendment to the General Distribution Agreement between Daily
Tax-Exempt Money Fund II on behalf of Daily Tax-Exempt Money Fund
(currently known as Tax-Exempt Fund) and Fidelity Distributors Corporation,
dated October 1, 1996, was electronically filed and is incorporated herein
by reference to Exhibit 6(g) of Daily Money Fund's Post-Effective Amendment
No. 40 (File No. 2-77909).
(f) General Distribution Agreement dated September 30, 1993 between Daily
Money Fund, on behalf of Money Market Portfolio (currently known as Prime
Fund), and Fidelity Distributors Corporation was electronically filed and
is incorporated herein by reference as Exhibit 6(a) to Daily Money Fund's
Post-Effective Amendment No. 25.
(g) Service Contract between Fidelity Distributors Corporation and
"Qualified Recipients" with respect to shares of U.S. Treasury Portfolio
(currently Treasury Fund) and Money Market Portfolio (currently known as
Prime Fund) was electronically filed and is incorporated herein by
reference as Exhibit 6(g) to Daily Money Fund's Post-Effective Amendment
No. 34.
(h) Service Contract (Administrative and Recordkeeping Services Only)
between Fidelity Distributors Corporation and "Qualified Recipients" with
respect to shares of U.S. Treasury Portfolio (currently known as Treasury
Fund) and Money Market Portfolio (currently known as Prime Fund) was
electronically filed and is incorporated herein by reference as Exhibit
6(h) to Daily Money Fund's Post-Effective Amendment No. 34.
(i) Form of Selling Dealer Agreement for Bank Related Transactions (most
recently revised January, 1997) was electronically filed and is
incorporated herein by reference to Exhibit 6(i) to Post-Effective
Amendment No. 28.
(j) Form of Selling Dealer Agreement (most recently revised January, 1997)
was electronically filed and is incorporated herein by reference to Exhibit
6(j) to Post-Effective Amendment No. 28.
(k) Amendments to the General Distribution Agreement between Daily Money
Fund on behalf of U.S. Treasury Portfolio (currently known as Treasury
Fund) and Money Market Portfolio (currently known as Prime Fund) and
Fidelity Distributors Corporation, dated March 14, 1996 and July 15, 1996,
are incorporated herein by reference to Exhibit 6(a) of Fidelity Court
Street Trust's Post-Effective Amendment No. 61 (File No. 2-58774).
(l) Form of Bank Agency Agreement (most recently revised January, 1997)
was electronically filed and is incorporated herein by reference to Exhibit
6(l) to Post-Effective Amendment No. 28.
7. (a) Retirement Plan for Non-Interested Person Trustees, Directors or
General Partners, as amended on November 16, 1995, is incorporated herein
by reference to Exhibit 7(a) of Fidelity Select Portfolio's (File No.
2-69972) Post-Effective Amendment No. 54.
(b) The Fee Deferral Plan for Non-Interested Person Directors and Trustees
of the Fidelity Funds, effective as of September 14, 1995 and amended
through November 14, 1996, is incorporated herein by reference to Exhibit
7(b) of Fidelity Aberdeen Street Trust's (File No. 33-43529) Post-Effective
Amendment No. 19.
8. (a) Custodian Agreement, 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 (currently known as Tax-Exempt 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).
(b) Appendix A, dated October 17, 1996, to the Custodian Agreement, dated
December 1, 1994, between UMB Bank, n.a. and Daily Tax-Exempt Money Fund on
behalf of Daily Tax-Exempt Money Fund (currently known as Tax-Exempt Fund)
was electronically filed and is incorporated herein by reference to Exhibit
8(a) to Fidelity Court Street Trust's Post-Effective Amendment No. 61 (File
No. 2-58774).
(c) Custodian Agreement and Appendix C, dated December 1, 1994, between
The Bank of New York and the Fidelity Daily Money Fund Trust on behalf of
Money Market Portfolio (currently known as Prime Fund) and U.S. Treasury
Portfolio (currently known as Treasury Fund) and Money Market Portfolio
(currently known as Prime Fund) is incorporated herein by reference to
Exhibit 8(a) of Fidelity Hereford Street Trust's Post-Effective Amendment
No. 4 (File No. 33-52577).
(d) Appendix A, dated August 31, 1996, to the Custodian Agreement, dated
December 1, 1994, between The Bank of New York and Daily Money Fund on
behalf of Money Market Portfolio (currently known as Prime Fund) and U.S.
Treasury Portfolio (currently known as Treasury Fund) was electronically
filed and is incorporated herein by reference to Exhibit 8(b) to Daily
Money Fund's Post-Effective Amendment No. 40.
(e) Appendix B, dated July 31, 1996, to the Custodian Agreement, dated
December 1, 1994, between The Bank of New York and Fidelity Daily Money
Fund Trust on behalf of Money Market Portfolio (currently known as Prime
Fund) and U.S. Treasury Portfolio (currently known as Treasury Fund) is
incorporated herein by reference to Exhibit 8(c) of Fidelity Income Fund's
Post-Effective Amendment No. 35 (File No. 2-92661).
(f) Fidelity Group Repo Custodian Agreement among The Bank of New York, J.
P. Morgan Securities, Inc., and the Fidelity Funds, was electronically
filed and is incorporated herein by reference to Exhibit 8(d) to Fidelity
Institutional Cash Portfolio's Post-Effective Amendment No. 31.
(g) Schedule 1 to the Fidelity Group Repo Custodian Agreement among The
Bank of New York, J. P. Morgan Securities, Inc., and the Fidelity Funds was
electronically filed and is incorporated herein by reference to Exhibit
8(e) to Daily Money Fund's Post-Effective Amendment No 31.
(h) Fidelity Group Repo Custodian Agreement among Chemical Bank, Greenwich
Capital Markets, Inc., and the Fidelity Funds was electronically filed and
is incorporated herein by reference to Exhibit 8(f) to Daily Money Fund's
Post-Effective Amendment No. 31.
(i) Joint Trading Account Custody Agreement between the The Bank of New
York and the Fidelity Funds was electronically filed and is incorporated
herein by reference to Exhibit 8(h) to Daily Money Fund's Post-Effective
Amendment No. 31.
(j) First Amendment to Joint Trading Account Custody Agreement between the
The Bank of New York and the Fidelity Funds was electronically filed and is
incorporated herein by reference to Exhibit 8(i) to Daily Money Fund's
Post-Effective Amendment No. 31.
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 (currently known as Tax-Exempt 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, was electronically filed and is incorporated
herein by reference to Exhibit 9(c) to Post-Effective Amendment No. 25.
(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, was electronically filed and is Incorporated by
reference to Exhibit 9(f) to Post Effective Amendment No. 29.
10. Not applicable.
11. (a) Not applicable.
(b) Not applicable.
12. None.
13. None.
14. (a) Fidelity Individual Retirement Account Custodial Agreement and
Disclosure Statement, as currently in effect, is incorporated herein by
reference to Exhibit 14(a) of Fidelity Union Street Trust's (File No.
2-50318) Post-Effective Amendment No. 87.
(b) Fidelity Institutional Individual Retirement Account Custodial
Agreement and Disclosure Statement, as currently in effect, is incorporated
herein by reference to Exhibit 14(d) of Fidelity Union Street Trust's (File
No. 2-50318) Post-Effective Amendment No. 87.
(c) National Financial Services Corporation Individual Retirement Account
Custodial Agreement and Disclosure Statement, as currently in effect, is
incorporated herein by reference to Exhibit 14(h) of Fidelity Union Street
Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(d) Fidelity Portfolio Advisory Services Individual Retirement Account
Custodial Agreement and Disclosure Statement, as currently in effect, is
incorporated herein by reference to Exhibit 14(i) of Fidelity Union Street
Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(e) Fidelity 403(b)(7) Custodial Account Agreement, as currently in
effect, is incorporated herein by reference to Exhibit 14(e) of Fidelity
Union Street Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(f) National Financial Services Corporation Defined Contribution
Retirement Plan and Trust Agreement, as currently in effect, is
incorporated herein by reference to Exhibit 14(k) of Fidelity Union Street
Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(g) The CORPORATEplan for Retirement Profit Sharing/401K Plan, as
currently in effect, is incorporated herein by reference to Exhibit 14(l)
of Fidelity Union Street Trust's (File No. 2-50318) Post-Effective
Amendment No. 87.
(h) The CORPORATEplan for Retirement Money Purchase Pension Plan, as
currently in effect, is incorporated herein by reference to Exhibit 14(m)
of Fidelity Union Street Trust's (File No. 2-50318) Post-Effective
Amendment No. 87.
(i) Fidelity Investments Section 403(b)(7) Individual Custodial Account
Agreement and Disclosure Statement, as currently in effect, is incorporated
herein by reference to Exhibit 14(f) of Fidelity Commonwealth Trust's (File
No. 2-52322) Post-Effective Amendment No. 57.
(j) Plymouth Investments Defined Contribution Retirement Plan and Trust
Agreement, as currently in effect, is incorporated herein by reference to
Exhibit 14(o) of Fidelity Commonwealth Trust's (File No. 2-52322)
Post-Effective Amendment No. 57.
(k) The Fidelity Prototype Defined Benefit Pension Plan and Trust Basic
Plan Document and Adoption Agreement, as currently in effect, is
incorporated herein by reference to Exhibit 14(d) of Fidelity Securities
Fund's (File No. 2-93601) Post-Effective Amendment No. 33.
(l) The Institutional Prototype Plan Basic Plan Document, Standardized
Adoption Agreement, and Non-Standardized Adoption Agreement, as currently
in effect, is incorporated herein by reference to Exhibit 14(o) of Fidelity
Securities Fund's (File No. 2-93601) Post-Effective Amendment No. 33.
(m) The CORPORATEplan for Retirement 100SM Profit Sharing/401(k) Basic
Plan Document, Standardized Adoption Agreement, and Non-Standardized
Adoption Agreement, as currently in effect, is incorporated herein by
reference to Exhibit 14(f) of Fidelity Securities Fund's (File No. 2-93601)
Post-Effective Amendment No. 33.
(n) The Fidelity Investments 401(a) Prototype Plan for Tax-Exempt
Employers Basic Plan Document, Standardized Profit Sharing Plan Adoption
Agreement, Non-Standardized Discretionary Contribution Plan No. 002
Adoption Agreement, and Non-Standardized Discretionary Contribution Plan
No. 003 Adoption Agreement, as currently in effect, is incorporated herein
by reference to Exhibit 14(g) of Fidelity Securities Fund's (File No.
2-93601) Post-Effective Amendment No. 33.
(o) Fidelity Investments 403(b) Sample Plan Basic Plan Document and
Adoption Agreement, as currently in effect, is incorporated herein by
reference to Exhibit 14(p) of Fidelity Securities Fund's (File No. 2-93601)
Post-Effective Amendment No. 33.
(p) Fidelity Defined Contribution Retirement Plan and Trust Agreement, as
currently in effect, is incorporated herein by reference to Exhibit 14(c)
of Fidelity Securities Fund's (File No. 2-93601) Post-Effective Amendment
No. 33.
(q) Fidelity SIMPLE-IRAPlan Adoption Agreement, Company Profile Form, and
Plan Document, as currently in effect, is incorporated herein by reference
to Exhibit 14(q) of Fidelity Aberdeen Street Trust's (File No. 33-43529)
Post-Effective Amendment No. 19.
15. (a) Distribution and Service Plan for Treasury Fund: Daily Money Class
was electronically filed and is incorporated herein by reference to Exhibit
15(a) to Post-Effective Amendment No. 29.
(b) Distribution and Service Plan for Prime Fund: Daily Money Class was
electronically filed and is incorporated herein by reference to Exhibit
15(b) to Post-Effective Amendment No. 29.
(c) Distribution and Service Plan for Tax-Exempt Fund: Daily Money Class
was electronically filed and is incorporated herein by reference to Exhibit
15(c) to Post-Effective Amendment No. 29.
(d) Distribution and Service Plan for Treasury Fund: Advisor B Class was
electronically filed and is incorporated herein by reference to Exhibit
15(d) to Post-Effective Amendment No. 29.
(e) Form of Distribution and Service Plan for Treasury Fund: Capital
Reserves Class is electronically filed herein as Exhibit 15(e) .
(f) Form of Distribution and Service Plan for Prime Fund: Capital Reserves
Class is electronically filed herein as Exhibit 15(f) .
(g) Form of Distribution and Service Plan for Tax-Exempt Fund: Capital
Reserves Class is electronically filed herein as Exhibit 15(g) .
16. Schedule for computation of performance quotations was electronically
filed and is incorporated herein by reference to Exhibit 16 to
Post-Effective Amendment No. 25.
17. Not applicable.
18. Rule 18f-3 Plan on behalf of U.S. Treasury Portfolio (currently known
as Treasury Fund), dated January 1, 1997, was electronically filed and is
incorporated herein by reference to Post-Effective Amendment No. 28.
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 as of June 30, 1997
Title of Class: Shares of Beneficial Interest
Name of Series Number of Record Holders
Prime Fund - Daily Money Class 232,927
Prime Fund - Capital Reserves Class 0
Tax-Exempt Fund - Daily Money Class 11,149
Tax-Exempt Fund - Capital Reserves Class 0
Treasury Fund - Daily Money Class 29,045
Treasury Fund - Advisor B Class 1,014
Treasury Fund - Capital Reserves Class 0
Item 27. Indemnification
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 Trust
Instrument 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 belief that his or her action was in the best interest of
the Registrant. In the event of a settlement, no indemnification may be
provided unless there has been a determination, as specified in the Trust
Instrument, 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 any liability to which they would be subject by reason of their own
disabling conduct.
Pursuant to the agreement by which Fidelity Investments Institutional
Operations Company, Inc. ("FIIOC") is appointed transfer agent, the
Registrant agrees to indemnify and hold FIIOC harmless against any losses,
claims, damages, liabilities or expenses (including reasonable counsel fees
and expenses) resulting from:
(1) any claim, demand, action or suit brought by any person other than the
Registrant, including by a shareholder, which names FIIOC and/or the
Registrant as a party and is not based on and does not result from FIIOC's
willful misfeasance, bad faith or negligence or reckless disregard of
duties, and arises out of or in connection with FIIOC's performance under
the Transfer Agency Agreement; or
(2) any claim, demand, action or suit (except to the extent contributed to
by FIIOC's willful misfeasance, bad faith or negligence or reckless
disregard of duties) which results from the negligence of the Registrant,
or from FIIOC's acting upon any instruction(s) reasonably believed by it to
have been executed or communicated by any person duly authorized by the
Registrant, or as a result of FIIOC's acting in reliance upon advice
reasonably believed by FIIOC to have been given by counsel for the
Registrant, or as a result of FIIOC'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)
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.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman of the Board of FMR; President and Chief
Executive Officer of FMR Corp.; Chairman of the
Board and Director of FMR, FMR Corp., FMR Texas
Inc., FMR (U.K.) Inc., and FMR (Far East) Inc.;
Chairman of the Board and Representative Director of
Fidelity Investments Japan Limited; President and
Trustee of funds advised by FMR.
Robert C. Pozen President and Director of FMR; President and Director
of FMR Texas Inc., FMR (U.K.) Inc., and FMR (Far
East) Inc.; General Counsel, Managing Director, and
Senior Vice President of FMR Corp.
J. Gary Burkhead President of FIIS; President and Director of FMR,
FMR Texas Inc., FMR (U.K.) Inc., and FMR (Far
East) Inc.; Managing Director of FMR Corp.; Senior
Vice President and Trustee of funds advised by FMR.
Peter S. Lynch Vice Chairman of the Board and Director of FMR.
Marta Amieva Vice President of FMR.
John Carlson Vice President of FMR.
Dwight D. Churchill Senior Vice President of FMR.
Barry Coffman Vice President of FMR.
Arieh Coll Vice President of FMR.
Stephen G. Manning Assistant Treasurer of FMR
William Danoff Senior Vice President of FMR and of a fund advised by
FMR.
Scott E. DeSano Vice President of FMR.
Craig P. Dinsell Vice President of FMR.
Penelope Dobkin Vice President of FMR and of a fund advised by FMR.
George C. Domolky Vice President of FMR.
Bettina Doulton Vice President of FMR and of funds advised by FMR.
Margaret L. Eagle Vice President of FMR and a fund advised by FMR.
Richard B. Fentin Senior Vice President of FMR and Vice President of a
fund advised by FMR.
Gregory Fraser Vice President of FMR and of a fund advised by FMR.
Jay Freedman Assistant Clerk of FMR; Clerk of FMR Corp., FMR
(U.K.) Inc., and FMR (Far East) Inc.; Secretary of
FMR Texas Inc.
Robert Gervis Vice President of FMR.
David L. Glancy Vice President of FMR and of a fund advised by FMR.
Kevin E. Grant Vice President of FMR and of funds advised by FMR.
Barry A. Greenfield Vice President of FMR and of a fund advised by FMR.
Boyce I. Greer Senior Vice President of FMR.
Robert Haber Vice President of FMR.
Richard C. Habermann Senior Vice President of FMR; Vice President of funds
advised by FMR.
William J. Hayes Senior Vice President of FMR; Vice President of
Equity funds advised by FMR.
Richard Hazlewood Vice President of FMR and of a fund advised by FMR.
Fred L. Henning Jr. Senior Vice President of FMR; Vice President of
Fixed-Income funds advised by FMR.
Bruce Herring Vice President of FMR.
John R. Hickling Vice President of FMR and of a fund advised by FMR.
Robert F. Hill Vice President of FMR; Director of Technical
Research.
Curt Hollingsworth Vice President of FMR and of funds advised by FMR.
Abigail P. Johnson Senior Vice President of FMR and of a fund advised by
FMR; Associate Director and Senior Vice President of
Equity funds advised by FMR.
David B. Jones Vice President of FMR.
Steven Kaye Vice President of FMR and of a fund advised by FMR.
Francis V. Knox Vice President of FMR; Compliance Officer of FMR
(U.K.) Inc.
David P. Kurrasch Vice President of FMR.
Robert A. Lawrence Senior Vice President of FMR; Associate Director and
Senior Vice President of Equity funds advised by
FMR; Vice President of High Income funds advised by
FMR.
Harris Leviton Vice President of FMR and of a fund advised by FMR.
Bradford E. Lewis Vice President of FMR and of funds advised by FMR.
Mark G. Lohr Vice President of FMR; Treasurer of FMR, FMR
(U.K.) Inc., FMR (Far East) Inc., and FMR Texas Inc.
Arthur S. Loring Senior Vice President, Clerk, and General Counsel of
FMR; Vice President/Legal, and Assistant Clerk of
FMR Corp.; Secretary of funds advised by FMR.
Richard R. Mace Jr. Vice President of FMR and of funds advised by FMR.
Charles Mangum Vice President of FMR.
Kevin McCarey Vice President of FMR.
Diane McLaughlin Vice President of FMR.
Neal P. Miller Vice President of FMR.
Robert H. Morrison Vice President of FMR; Director of Equity Trading.
David L. Murphy Vice President of FMR and of funds advised by FMR.
Scott Orr Vice President of FMR.
Jacques Perold Vice President of FMR.
Anne Punzak Vice President of FMR.
Kenneth A. Rathgeber Vice President of FMR; Treasurer of funds advised by
FMR.
Kennedy P. Richardson Vice President of FMR.
Mark Rzepczynski Vice President of FMR.
Lee H. Sandwen Vice President of FMR.
Patricia A. Satterthwaite Vice President of FMR and of a fund advised by FMR.
Fergus Shiel Vice President of FMR.
Carol Smith-Fachetti Vice President of FMR.
Steven J. Snider Vice President of FMR.
Thomas T. Soviero Vice President of FMR and of a fund advised by FMR.
Richard Spillane Senior Vice President of FMR; Associate Director and
Senior Vice President of Equity funds advised by
FMR; Senior Vice President and Director of
Operations and Compliance of FMR (U.K.) Inc.
Thomas Sprague Vice President of FMR.
Robert E. Stansky Senior Vice President of FMR; Vice President of a
fund advised by FMR.
Scott Stewart Vice President of FMR.
Cythia Straus Vice President of FMR.
Thomas Sweeney Vice President of FMR and of a fund advised by FMR.
Beth F. Terrana Senior Vice President of FMR; Vice President of a
fund advised by FMR.
Yoko Tilley Vice President of FMR.
Joel C. Tillinghast Vice President of FMR and of a fund advised by FMR.
Robert Tuckett Vice President of FMR.
Jennifer Uhrig Vice President of FMR and of funds advised by FMR.
George A. Vanderheiden Senior Vice President of FMR; Vice President of funds
advised by FMR.
</TABLE>
(2) FMR TEXAS INC. (FMR Texas)
FMR Texas provides investment advisory services to Fidelity Management &
Research Company. The directors and officers of the Sub-Adviser have held
the following positions of a substantial nature during the past two fiscal
years.
Edward C. Johnson 3d Chairman of the Board and Director of FMR
Texas, FMR, FMR Corp., FMR (Far East) Inc.,
and FMR (U.K.) Inc.; Chairman of the Board of
FMR; President and Chief Executive Officer of
FMR Corp.; Chairman of the Board and
Representative Director of Fidelity Investments
Japan Limited; President and Trustee of funds
advised by FMR.
J. Gary Burkhead President of FIIS; President and Director of
FMR Texas, FMR, FMR (Far East) Inc., and
FMR (U.K.) Inc.; Managing Director of FMR
Corp.; Senior Vice President and Trustee of
funds advised by FMR.
Robert C. Pozen President and Director of FMR; President and
Director of FMR Texas Inc., FMR (U.K.) Inc.,
and FMR (Far East) Inc.; General Counsel,
Managing Director, and Senior Vice President
of FMR Corp.
Robert H. Auld Vice President of FMR Texas.
Robert K. Duby Vice President of FMR Texas and of funds
advised by FMR.
Robert Litterst Vice President of FMR Texas and of funds
advised by FMR.
Thomas D. Maher Vice President of FMR Texas and Assistant Vice
President of Money Market funds advised by
FMR.
Scott A. Orr Vice President of FMR Texas and 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 Zenoble Vice President of FMR Texas and of Money
Market funds advised by FMR.
Mark G. Lohr Treasurer of FMR Texas, FMR (U.K.) Inc.,
FMR (Far East) Inc., and FMR; Vice President
of FMR.
Stephen G. Manning Assistant Treasurer of FMR Texas, FMR (U.K.)
Inc., FMR (Far East) Inc., and FMR; Vice
President and Treasurer of FMR Corp.
Jay Freedman Secretary of FMR Texas; Clerk of FMR (U.K.)
Inc., FMR (Far East) Inc., and FMR Corp.;
Assistant Clerk of 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
Michael Mlinac Director None
Mark Peterson Director None
Paul Hondros President None
Arthur S. Loring Vice President and Clerk Secretary
Caron Ketchum Treasurer and Controller None
Gary Greenstein Assistant Treasurer None
Jay Freedman Assistant Clerk None
Linda Holland Compliance Officer None
* 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
Company, Inc., 82 Devonshire Street, Boston, MA 02109, or the funds'
respective custodian: The Bank of New York, 110 Washington Street, New
York, N.Y. or UMB Bank, n.a., 1010 Grand Avenue, Kansas City, MO.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
The trustees and shareholders of Daily Money Fund have approved a plan of
reorganization ("Plan") between each of Daily Money Fund: U.S. Treasury
Portfolio (currently known as Treasury Fund) and Money Market Portfolio
(currently known as Prime Fund) ("Predecessor Funds"), and its successor
series of this trust whereby all of the assets and liabilities of the
predecessor funds will be transferred to this Trust. Registrant hereby
undertakes that it will submit by amendment to this registration statement
financial statements and financial highlights reflecting the reorganization
described in the Plan.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 30 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 6th day of August 1997.
NEWBURY STREET TRUST
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 August 6, 1997
Edward C. Johnson 3d (Principal Executive Officer)
/s/Richard A. Silver Treasurer August 6, 1997
Richard A. Silver
/s/Robert C. Pozen Trustee August 6, 1997
Robert C. Pozen
/s/Ralph F. Cox * Trustee August 6, 1997
Ralph F. Cox
/s/Phyllis Burke Davis * Trustee August 6, 1997
Phyllis Burke Davis
/s/Robert M. Gates ** Trustee August 6, 1997
Robert M. Gates
/s/E. Bradley Jones * Trustee August 6, 1997
E. Bradley Jones
/s/Donald J. Kirk * Trustee August 6, 1997
Donald J. Kirk
/s/Peter S. Lynch * Trustee August 6, 1997
Peter S. Lynch
/s/Marvin L. Mann * Trustee August 6, 1997
Marvin L. Mann
/s/William O. McCoy * Trustee August 6, 1997
William O. McCoy
/s/Gerald C. McDonough * Trustee August 6, 1997
Gerald C. McDonough
/s/Thomas R. Williams * Trustee August 6, 1997
Thomas R. Williams
</TABLE>
(dagger) Signatures affixed by Robert C. Pozen pursuant to a power of
attorney dated July 17, 1997 and filed herewith.
* Signature affixed by Robert C. Hacker pursuant to a power of attorney
dated December 19, 1996 and filed herewith.
** Signature affixed by Robert C. Hacker pursuant to a power of attorney
dated March 6, 1997 and filed herewith.
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>
Fidelity Aberdeen Street Trust Fidelity Hereford Street Trust
Fidelity Advisor Series I Fidelity Income Fund
Fidelity Advisor Series II Fidelity Institutional Cash Portfolios
Fidelity Advisor Series III Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series IV Fidelity Investment Trust
Fidelity Advisor Series V Fidelity Magellan Fund
Fidelity Advisor Series VI Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series VII Fidelity Money Market Trust
Fidelity Advisor Series VIII Fidelity Mt. Vernon Street Trust
Fidelity Beacon Street Trust Fidelity Municipal Trust
Fidelity Boston Street Trust Fidelity Municipal Trust II
Fidelity California Municipal Trust Fidelity New York Municipal Trust
Fidelity California Municipal Trust II Fidelity New York Municipal Trust II
Fidelity Capital Trust Fidelity Phillips Street Trust
Fidelity Charles Street Trust Fidelity Puritan Trust
Fidelity Commonwealth Trust Fidelity Revere Street Trust
Fidelity Concord Street Trust Fidelity School Street Trust
Fidelity Congress Street Fund Fidelity Securities Fund
Fidelity Contrafund Fidelity Select Portfolios
Fidelity Corporate Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Court Street Trust Fidelity Summer Street Trust
Fidelity Court Street Trust II Fidelity Trend Fund
Fidelity Covington Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Daily Money Fund Fidelity U.S. Investments-Government Securities
Fidelity Destiny Portfolios Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity Union Street Trust
Portfolio, L.P. Fidelity Union Street Trust II
Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Exchange Fund Newbury Street Trust
Fidelity Financial Trust Variable Insurance Products Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund II
Fidelity Government Securities Fund Variable Insurance Products Fund III
Fidelity Hastings Street Trust
</TABLE>
in addition to any other investment company for which Fidelity Management &
Research Company or an affiliate acts as investment adviser and for which
the undersigned individual serves as President and Director, Trustee, or
General Partner (collectively, the "Funds"), hereby constitute and appoint
Robert C. Pozen my true and lawful attorney-in-fact, with full power of
substitution, and with full power to him to sign for me and in my name in
the appropriate capacity, all Registration Statements of the Funds on Form
N-1A, Form N-8A, or any successor thereto, any and all subsequent
Amendments, Pre-Effective Amendments, or Post-Effective Amendments to said
Registration Statements on Form N-1A, Form N-8A, 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 on my behalf in connection therewith as said attorney-in-fact
deems necessary or appropriate, to comply with the provisions of the
Securities Act of 1933 and the Investment Company Act of 1940, and all
related requirements of the Securities and Exchange Commission. I hereby
ratify and confirm all that said attorney-in-fact or his substitutes may do
or cause to be done by virtue hereof. This power of attorney is effective
for all documents filed on or after August 1, 1997.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d_ July 17, 1997
Edward C. Johnson 3d
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>
Fidelity Aberdeen Street Trust Fidelity Government Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Institutional Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Portfolios Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity U.S. Investments-Government Securities
Portfolio, L.P. Fund, L.P.
Fidelity Devonshire Trust Fidelity Union Street Trust
Fidelity Exchange Fund Fidelity Union Street Trust II
Fidelity Financial Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Variable Insurance Products Fund II
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company or an affiliate acts as investment adviser and for which the
undersigned individual serves as Directors, Trustees, or General Partners
(collectively, the "Funds"), hereby constitute and appoint Arthur J. Brown,
Arthur C. Delibert, Stephanie A. Djinis, Robert C. Hacker, Thomas M.
Leahey, Richard M. Phillips, and Dana L. Platt, each of them singly, our
true and lawful attorneys-in-fact, with full power of substitution, and
with full power to each of them, to sign for us and in our names in the
appropriate capacities, all Registration Statements of the Funds on Form
N-1A, Form N-8A or any successor thereto, any and all subsequent
Amendments, 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
our names and behalf in connection therewith as said attorneys-in-fact
deems necessary or appropriate, to comply with the provisions of the
Securities Act of 1933 and the Investment Company Act of 1940, and all
related requirements of the Securities and Exchange Commission. I hereby
ratify and confirm all that said attorneys-in-fact or their substitutes may
do or cause to be done by virtue hereof. This power of attorney is
effective for all documents filed on or after January 1, 1997.
WITNESS our hands on this nineteenth day of December, 1996.
/s/Edward C. Johnson 3d___________ /s/Peter S. Lynch________________
Edward C. Johnson 3d Peter S. Lynch
/s/J. Gary Burkhead_______________ /s/William O. McCoy______________
J. Gary Burkhead William O. McCoy
/s/Ralph F. Cox __________________ /s/Gerald C. McDonough___________
Ralph F. Cox Gerald C. McDonough
/s/Phyllis Burke Davis_____________ /s/Marvin L. Mann________________
Phyllis Burke Davis Marvin L. Mann
/s/E. Bradley Jones________________ /s/Thomas R. Williams ____________
E. Bradley Jones Thomas R. Williams
/s/Donald J. Kirk __________________
Donald J. Kirk
POWER OF ATTORNEY
I, the undersigned Director, Trustee, or General Partner, as the case may
be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Government Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Institutional Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Portfolios Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity U.S. Investments-Government Securities
Portfolio, L.P. Fund, L.P.
Fidelity Devonshire Trust Fidelity Union Street Trust
Fidelity Exchange Fund Fidelity Union Street Trust II
Fidelity Financial Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Variable Insurance Products Fund II
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company or an affiliate acts as investment adviser and for which the
undersigned individual serves as Director, Trustee, or General Partner
(collectively, the "Funds"), hereby constitute and appoint Arthur J. Brown,
Arthur C. Delibert, Stephanie A. Djinis, Robert C. Hacker, Thomas M.
Leahey, Richard M. Phillips, and Dana L. Platt, each of them singly, my
true and lawful attorneys-in-fact, with full power of substitution, and
with full power to each of them, to sign for me and in my name in the
appropriate capacities, all Registration Statements of the Funds on Form
N-1A, Form N-8A or any successor thereto, any and all subsequent
Amendments, 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 the 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. This power of attorney is effective for
all documents filed on or after March 1, 1997.
WITNESS my hand on the date set forth below.
/s/Robert M. Gates March 6, 1997
Robert M. Gates
Exhibit 1(e)
CERTIFICATE OF AMENDMENT
OF
DAILY TAX-EXEMPT MONEY FUND
1. The name of the Trust has been amended. The new name of the Trust is:
Newbury Street Trust
2. This certificate will become effective upon filing.
3. 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 25th day of June 1997, in the city of
Boston and the Commonwealth of Massachusetts.
By: /s/ J.Gary Burkhead
J. Gary Burkhead
Trustee and Senior Vice President
FORM OF
Exhibit 15(e)
DISTRIBUTION AND SERVICE PLAN
NEWBURY STREET TRUST: TREASURY FUND
CAPITAL RESERVES CLASS
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by
Securities and Exchange Commission Rule 12b-1 under the Investment Company
Act of 1940, as amended (the "Act") for the Capital Reserves Class shares
(the "Capital Reserves Class"), a class of shares of Treasury Fund (the
"Fund"), a series of Newbury Street Trust (the "Trust").
2. The Trust has entered into a General Distribution Agreement on behalf
of the Fund with Fidelity Distributors Corporation (the "Distributor"),
under which the Distributor uses all reasonable efforts, consistent with
its other business, to secure purchasers of the Fund's shares of beneficial
interest (the "Shares"). Such efforts may include, but neither are required
to include nor are limited to, the following:
(1) formulation and implementation of marketing and promotional
activities, such as mail promotions and television, radio, newspaper,
magazine and other mass media advertising;
(2) preparation, printing and distribution of sales literature;
(3) preparation, printing and distribution of prospectuses of the Fund
and reports to recipients other than existing shareholders of the Fund;
(4) obtaining such information, analyses and reports with respect to
marketing and promotional activities as the Distributor may from time to
time, deem advisable;
(5) making payments to securities dealers and others engaged in the sales
of Shares or who engage in shareholder support services ("Investment
Professionals"); and
(6) providing training, marketing and support to Investment Professionals
with respect to the sale of Shares.
3. In consideration for the services provided and the expenses incurred by
the Distributor pursuant to the General Distribution Agreement and
paragraph 2 hereof, all with respect to Capital Reserves Class shares,
Capital Reserves Class of the Fund shall pay to the Distributor a fee at
the annual rate of up to 0.50% of average daily net assets of Capital
Reserves Class throughout the month, or such lesser amount as may be
established from time to time by the Trustees of the Trust, as specified in
paragraph 6 of this Plan; provided that, for any period during which the
total of such fee and all other expenses of the Fund (or of Capital
Reserves Class), would exceed the gross income of the Fund (or of Capital
Reserves Class), such fee shall be reduced by such excess. Such fee shall
be computed and paid monthly. The determination of daily net assets shall
be made at the close of business each day throughout the month and computed
in the manner specified in the Fund's then current Prospectus for the
determination of the net asset value of shares of Capital Reserves Class,
but shall exclude assets attributable to any other Class of the Fund. The
Distributor may, but may not be required to, use all or any portion of the
fee received pursuant to the Plan to compensate Investment Professionals
who have engaged in the sale of Capital Reserves Class Shares or in
shareholder support services with respect to Capital Reserves Class Shares
pursuant to agreements with the Distributor, or to pay any of the expenses
associated with other activities authorized under paragraph 2 thereof.
4. The Fund presently pays, and will continue to pay, a management fee to
Fidelity Management & Research Company (the "Adviser") pursuant to a
management agreement between the Fund and the Adviser (the "Management
Contract"). It is recognized that the Adviser may use its management fee
revenue, as well as its past profits or its resources from any other
source, to make payment to the Distributor for expenses incurred in
connection with the distribution of Capital Reserves Class Shares,
including the activities referred to in paragraphs 2 and 3 hereof. To the
extent that the payment of management fees by the Fund to the Adviser
should be deemed to be indirect financing of any activity primarily
intended to result in the sale of Capital Reserves Class Shares within the
meaning of Rule 12b-1, then such payment shall be deemed to be authorized
by this Plan. In addition to the payments made under paragraph 3, the
Distributor may use all or any portion of the payments received from the
Adviser pursuant to this paragraph to compensate Investment Professionals
in connection with the distribution of Capital Reserves Class Shares; such
payments shall not exceed on an annual basis the management fee set forth
in the Management Contract.
5. This Plan shall become effective upon the first business day of the
month following approval by a vote of at least a "majority of the
outstanding voting securities" (as defined in the Act) of Capital Reserves
Class, this Plan having been approved by a vote of a majority of the
Trustees of the Trust, including a majority of Trustees who are not
"interested persons" of the Trust (as defined in the Act) and who have no
direct or indirect financial interest in the operation of this Plan or in
any agreement related to the Plan (the "Independent Trustees"), cast in
person at a meeting called for the purpose of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain in
effect until May 31, 1998, and from year to year thereafter; provided,
however, that such continuance is subject to approval annually by a vote of
a majority of the Trustees of the Trust, including a majority of the
Independent Trustees, cast in person at a meeting called for the purpose of
voting on this Plan. This Plan may be amended at any time by the Board of
Trustees, provided that (a) any amendment to increase materially the fee
provided for in paragraph 3 hereof, or any amendment of the Management
Contract to increase the amount to be paid by the Fund thereunder, shall be
effective only upon approval by a vote of a majority of the outstanding
voting securities of Capital Reserves Class, in the case of the Plan, or
upon approval by a vote of a majority of the outstanding voting securities
of the Fund, in the case of the Management Contract, and (b) any material
amendment of this Plan shall be effective only upon approval in the manner
provided in the first sentence of this paragraph 6.
7. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of
a majority of the outstanding voting securities of the Class.
8. During the existence of this Plan, the Trust shall require the Adviser
and/or the Distributor to provide the Trust, for review by the Trustees,
and the Trustees shall review, at least quarterly, a written report of the
amounts expended in connection with financing any activity primarily
intended to result in the sale of Capital Reserves Class Shares (making
estimates of such costs where necessary or desirable) and the purposes for
which such expenditures were made.
9. This Plan does not require the Adviser or Distributor to perform any
specific type or level of distribution activities or to incur any specific
level of expenses for activities primarily intended to result in the sale
of Capital Reserves Class Shares.
10. Consistent with the limitation of shareholder liability as set forth
in the Trust's Trust Instrument, any obligation assumed by Capital Reserves
Class pursuant to this Plan or any agreement related to this Plan shall be
limited in all cases to Capital Reserves Class and its assets and shall not
constitute an obligation of any shareholder of the Trust or of any other
class of the Fund, series of the Trust or class of such series.
11. If any provision of the 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.
FORM OF
Exhibit 15(f))
DISTRIBUTION AND SERVICE PLAN
NEWBURY STREET TRUST: PRIME FUND
CAPITAL RESERVES CLASS
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by
Securities and Exchange Commission Rule 12b-1 under the Investment Company
Act of 1940, as amended (the "Act") for the Capital Reserves Class shares
(the "Capital Reserves Class"), a class of shares of Prime Fund (the
"Fund"), a series of Newbury Street Trust (the "Trust").
2. The Trust has entered into a General Distribution Agreement on behalf
of the Fund with Fidelity Distributors Corporation (the "Distributor"),
under which the Distributor uses all reasonable efforts, consistent with
its other business, to secure purchasers of the Fund's shares of beneficial
interest (the "Shares"). Such efforts may include, but neither are required
to include nor are limited to, the following:
(1) formulation and implementation of marketing and promotional
activities, such as mail promotions and television, radio, newspaper,
magazine and other mass media advertising;
(2) preparation, printing and distribution of sales literature;
(3) preparation, printing and distribution of prospectuses of the Fund
and reports to recipients other than existing shareholders of the Fund;
(4) obtaining such information, analyses and reports with respect to
marketing and promotional activities as the Distributor may from time to
time, deem advisable;
(5) making payments to securities dealers and others engaged in the sales
of Shares or who engage in shareholder support services ("Investment
Professionals"); and
(6) providing training, marketing and support to Investment Professionals
with respect to the sale of Shares.
3. In consideration for the services provided and the expenses incurred by
the Distributor pursuant to the General Distribution Agreement and
paragraph 2 hereof, all with respect to Capital Reserves Class shares,
Capital Reserves Class of the Fund shall pay to the Distributor a fee at
the annual rate of up to 0.50% of average daily net assets of Capital
Reserves Class throughout the month, or such lesser amount as may be
established from time to time by the Trustees of the Trust, as specified in
paragraph 6 of this Plan; provided that, for any period during which the
total of such fee and all other expenses of the Fund (or of Capital
Reserves Class), would exceed the gross income of the Fund (or of Capital
Reserves Class), such fee shall be reduced by such excess. Such fee shall
be computed and paid monthly. The determination of daily net assets shall
be made at the close of business each day throughout the month and computed
in the manner specified in the Fund's then current Prospectus for the
determination of the net asset value of shares of Capital Reserves Class,
but shall exclude assets attributable to any other Class of the Fund. The
Distributor may, but may not be required to, use all or any portion of the
fee received pursuant to the Plan to compensate Investment Professionals
who have engaged in the sale of Capital Reserves Class Shares or in
shareholder support services with respect to Capital Reserves Class Shares
pursuant to agreements with the Distributor, or to pay any of the expenses
associated with other activities authorized under paragraph 2 thereof.
4. The Fund presently pays, and will continue to pay, a management fee to
Fidelity Management & Research Company (the "Adviser") pursuant to a
management agreement between the Fund and the Adviser (the "Management
Contract"). It is recognized that the Adviser may use its management fee
revenue, as well as its past profits or its resources from any other
source, to make payment to the Distributor for expenses incurred in
connection with the distribution of Capital Reserves Class Shares,
including the activities referred to in paragraphs 2 and 3 hereof. To the
extent that the payment of management fees by the Fund to the Adviser
should be deemed to be indirect financing of any activity primarily
intended to result in the sale of Capital Reserves Class Shares within the
meaning of Rule 12b-1, then such payment shall be deemed to be authorized
by this Plan. In addition to the payments made under paragraph 3, the
Distributor may use all or any portion of the payments received from the
Adviser pursuant to this paragraph to compensate Investment Professionals
in connection with the distribution of Capital Reserves Class Shares; such
payments shall not exceed on an annual basis the management fee set forth
in the Management Contract.
5. This Plan shall become effective upon the first business day of the
month following approval by a vote of at least a "majority of the
outstanding voting securities" (as defined in the Act) of Capital Reserves
Class, this Plan having been approved by a vote of a majority of the
Trustees of the Trust, including a majority of Trustees who are not
"interested persons" of the Trust (as defined in the Act) and who have no
direct or indirect financial interest in the operation of this Plan or in
any agreement related to the Plan (the "Independent Trustees"), cast in
person at a meeting called for the purpose of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain in
effect until May 31, 1998, and from year to year thereafter; provided,
however, that such continuance is subject to approval annually by a vote of
a majority of the Trustees of the Trust, including a majority of the
Independent Trustees, cast in person at a meeting called for the purpose of
voting on this Plan. This Plan may be amended at any time by the Board of
Trustees, provided that (a) any amendment to increase materially the fee
provided for in paragraph 3 hereof, or any amendment of the Management
Contract to increase the amount to be paid by the Fund thereunder, shall be
effective only upon approval by a vote of a majority of the outstanding
voting securities of Capital Reserves Class, in the case of the Plan, or
upon approval by a vote of a majority of the outstanding voting securities
of the Fund, in the case of the Management Contract, and (b) any material
amendment of this Plan shall be effective only upon approval in the manner
provided in the first sentence of this paragraph 6.
7. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of
a majority of the outstanding voting securities of the Class.
8. During the existence of this Plan, the Trust shall require the Adviser
and/or the Distributor to provide the Trust, for review by the Trustees,
and the Trustees shall review, at least quarterly, a written report of the
amounts expended in connection with financing any activity primarily
intended to result in the sale of Capital Reserves Class Shares (making
estimates of such costs where necessary or desirable) and the purposes for
which such expenditures were made.
9. This Plan does not require the Adviser or Distributor to perform any
specific type or level of distribution activities or to incur any specific
level of expenses for activities primarily intended to result in the sale
of Capital Reserves Class Shares.
10. Consistent with the limitation of shareholder liability as set forth
in the Trust's Trust Instrument, any obligation assumed by Capital Reserves
Class pursuant to this Plan or any agreement related to this Plan shall be
limited in all cases to Capital Reserves Class and its assets and shall not
constitute an obligation of any shareholder of the Trust or of any other
class of the Fund, series of the Trust or class of such series.
11. If any provision of the 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.
FORM OF
Exhibit 15(g)
DISTRIBUTION AND SERVICE PLAN
NEWBURY STREET TRUST: TAX-EXEMPT FUND
CAPITAL RESERVES CLASS
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by
Securities and Exchange Commission Rule 12b-1 under the Investment Company
Act of 1940, as amended (the "Act") for the Capital Reserves Class shares
(the "Capital Reserves Class"), a class of shares of Tax-Exempt Fund (the
"Fund"), a series of Newbury Street Trust (the "Trust").
2. The Trust has entered into a General Distribution Agreement on behalf
of the Fund with Fidelity Distributors Corporation (the "Distributor"),
under which the Distributor uses all reasonable efforts, consistent with
its other business, to secure purchasers of the Fund's shares of beneficial
interest (the "Shares"). Such efforts may include, but neither are required
to include nor are limited to, the following:
(1) formulation and implementation of marketing and promotional
activities, such as mail promotions and television, radio, newspaper,
magazine and other mass media advertising;
(2) preparation, printing and distribution of sales literature;
(3) preparation, printing and distribution of prospectuses of the Fund
and reports to recipients other than existing shareholders of the Fund;
(4) obtaining such information, analyses and reports with respect to
marketing and promotional activities as the Distributor may from time to
time, deem advisable;
(5) making payments to securities dealers and others engaged in the sales
of Shares or who engage in shareholder support services ("Investment
Professionals"); and
(6) providing training, marketing and support to Investment Professionals
with respect to the sale of Shares.
3. In consideration for the services provided and the expenses incurred by
the Distributor pursuant to the General Distribution Agreement and
paragraph 2 hereof, all with respect to Capital Reserves Class shares,
Capital Reserves Class of the Fund shall pay to the Distributor a fee at
the annual rate of up to 0.50% of average daily net assets of Capital
Reserves Class throughout the month, or such lesser amount as may be
established from time to time by the Trustees of the Trust, as specified in
paragraph 6 of this Plan; provided that, for any period during which the
total of such fee and all other expenses of the Fund (or of Capital
Reserves Class), would exceed the gross income of the Fund (or of Capital
Reserves Class), such fee shall be reduced by such excess. Such fee shall
be computed and paid monthly. The determination of daily net assets shall
be made at the close of business each day throughout the month and computed
in the manner specified in the Fund's then current Prospectus for the
determination of the net asset value of shares of Capital Reserves Class,
but shall exclude assets attributable to any other Class of the Fund. The
Distributor may, but may not be required to, use all or any portion of the
fee received pursuant to the Plan to compensate Investment Professionals
who have engaged in the sale of Capital Reserves Class Shares or in
shareholder support services with respect to Capital Reserves Class Shares
pursuant to agreements with the Distributor, or to pay any of the expenses
associated with other activities authorized under paragraph 2 thereof.
4. The Fund presently pays, and will continue to pay, a management fee to
Fidelity Management & Research Company (the "Adviser") pursuant to a
management agreement between the Fund and the Adviser (the "Management
Contract"). It is recognized that the Adviser may use its management fee
revenue, as well as its past profits or its resources from any other
source, to make payment to the Distributor for expenses incurred in
connection with the distribution of Capital Reserves Class Shares,
including the activities referred to in paragraphs 2 and 3 hereof. To the
extent that the payment of management fees by the Fund to the Adviser
should be deemed to be indirect financing of any activity primarily
intended to result in the sale of Capital Reserves Class Shares within the
meaning of Rule 12b-1, then such payment shall be deemed to be authorized
by this Plan. In addition to the payments made under paragraph 3, the
Distributor may use all or any portion of the payments received from the
Adviser pursuant to this paragraph to compensate Investment Professionals
in connection with the distribution of Capital Reserves Class Shares; such
payments shall not exceed on an annual basis the management fee set forth
in the Management Contract.
5. This Plan shall become effective upon the first business day of the
month following approval by a vote of at least a "majority of the
outstanding voting securities" (as defined in the Act) of Capital Reserves
Class, this Plan having been approved by a vote of a majority of the
Trustees of the Trust, including a majority of Trustees who are not
"interested persons" of the Trust (as defined in the Act) and who have no
direct or indirect financial interest in the operation of this Plan or in
any agreement related to the Plan (the "Independent Trustees"), cast in
person at a meeting called for the purpose of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain in
effect until May 31, 1998, and from year to year thereafter; provided,
however, that such continuance is subject to approval annually by a vote of
a majority of the Trustees of the Trust, including a majority of the
Independent Trustees, cast in person at a meeting called for the purpose of
voting on this Plan. This Plan may be amended at any time by the Board of
Trustees, provided that (a) any amendment to increase materially the fee
provided for in paragraph 3 hereof, or any amendment of the Management
Contract to increase the amount to be paid by the Fund thereunder, shall be
effective only upon approval by a vote of a majority of the outstanding
voting securities of Capital Reserves Class, in the case of the Plan, or
upon approval by a vote of a majority of the outstanding voting securities
of the Fund, in the case of the Management Contract, and (b) any material
amendment of this Plan shall be effective only upon approval in the manner
provided in the first sentence of this paragraph 6.
7. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of
a majority of the outstanding voting securities of the Class.
8. During the existence of this Plan, the Trust shall require the Adviser
and/or the Distributor to provide the Trust, for review by the Trustees,
and the Trustees shall review, at least quarterly, a written report of the
amounts expended in connection with financing any activity primarily
intended to result in the sale of Capital Reserves Class Shares (making
estimates of such costs where necessary or desirable) and the purposes for
which such expenditures were made.
9. This Plan does not require the Adviser or Distributor to perform any
specific type or level of distribution activities or to incur any specific
level of expenses for activities primarily intended to result in the sale
of Capital Reserves Class Shares.
10. Consistent with the limitation of shareholder liability as set forth
in the Trust's Trust Instrument, any obligation assumed by Capital Reserves
Class pursuant to this Plan or any agreement related to this Plan shall be
limited in all cases to Capital Reserves Class and its assets and shall not
constitute an obligation of any shareholder of the Trust or of any other
class of the Fund, series of the Trust or class of such series.
11. If any provision of the 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.
