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U.S. Treasury Money Fund
PROSPECTUS
November 1, 1998
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PROSPECTUS
The 59 Wall Street U.S. Treasury Money Fund
21 Milk Street, Boston, Massachusetts 02109
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The 59 Wall Street U.S. Treasury Money Fund is an open-end investment
company which is a separate diversified portfolio of The 59 Wall Street Trust.
Shares of the Fund are offered by this Prospectus.
The Fund is a type of mutual fund commonly known as a money market fund.
It is designed to be a cost effective and convenient means of making substantial
investments in money market instruments. The Fund's investment objective is to
achieve as high a level of current income as is consistent with the preservation
of capital and the maintenance of liquidity. The net asset value of each of the
Fund's shares is expected to remain constant at $1.00. There can be no assurance
that the investment objective of the Fund will be achieved or that the net asset
value per share will not vary.
Investments in the Fund are neither insured nor guaranteed by the U.S.
Government. Shares of the Fund are not deposits or obligations of, or guaranteed
by, Brown Brothers Harriman & Co., and the shares are not insured by the Federal
Deposit Insurance Corporation or any other federal, state or other governmental
agency.
The Trust seeks to achieve the investment objective of the Fund by
investing only in short-term securities backed as to principal and interest
payments by the full faith and credit of the United States of America. Although
investments held for the Fund are issued by the U.S. Government, an investment
in the Fund is not insured or guaranteed by the U.S. Government.
Dividends from the Fund which are derived from interest on direct
obligations of the U.S. Government are generally expected to be exempt from
state and local income taxes in all states. However, a shareholder of the Fund
is subject to federal income tax on the dividends and capital gain distributions
received from the Fund.
Brown Brothers Harriman & Co. is the investment adviser to, and the
administrator and shareholder servicing agent of the Fund. Shares of the Fund
are offered at net asset value without a sales charge.
This Prospectus, which investors are advised to read and retain for future
reference, sets forth concisely the information about the Fund that a
prospective investor ought to know before investing. Additional information
about the Fund has been filed with the Securities and Exchange Commission in a
Statement of Additional Information, dated November 1, 1998. This information is
incorporated herein by reference and is available without charge upon request
from the Fund's distributor, 59 Wall Street Distributors, Inc., 21 Milk Street,
Boston, Massachusetts 02109.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this Prospectus is November 1, 1998.
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TABLE OF CONTENTS
Page
----
Expense Table............................................................ 3
Financial Highlights..................................................... 4
Investment Objective and Policies........................................ 4
Investment Restrictions.................................................. 6
Purchase of Shares....................................................... 6
Redemption of Shares..................................................... 7
Management of the Trust ................................................. 8
Net Asset Value.......................................................... 11
Dividends and Distributions.............................................. 12
Taxes.................................................................... 12
Description of Shares.................................................... 14
Additional Information .................................................. 15
TERMS USED IN THIS PROSPECTUS
Trust ........................ The 59 Wall Street Trust
Fund ......................... The 59 Wall Street U.S. Treasury Money Fund
Investment Adviser
and Administrator........... Brown Brothers Harriman & Co.
Subadministrator.............. 59 Wall Street Administrators, Inc.
("59 Wall Street Administrators")
Distributor................... 59 Wall Street Distributors, Inc.
("59 Wall Street Distributors")
1940 Act...................... The Investment Company Act of 1940, as amended.
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EXPENSE TABLE
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The following table provides (i) a summary of estimated expenses relating
to purchases and sales of shares of the Fund, and the aggregate annual operating
expenses of the Fund, as a percentage of average net assets of the Fund, and
(ii) an example illustrating the dollar cost of such estimated expenses on a
$1,000 investment in the Fund.
SHAREHOLDER TRANSACTION EXPENSES
Sales Load Imposed on Purchases......................................... None
Sales Load Imposed on Reinvested Dividends.............................. None
Deferred Sales Load..................................................... None
Redemption Fee.......................................................... None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Investment Advisory Fee..................................... 0.15%
12b-1 Fee................................................... None
Other Expenses
Administration Fee ....................................... 0.100%
Shareholder Servicing/Eligible Institution Fee............ 0.225
Other Expenses............................................ 0.076 0.41
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Total Fund Operating Expenses............................... 0.56%
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Example 1 year 3 years 5 years 10 years
------- ------ ------- ------- --------
A shareholder of the Fund would pay the
following expenses on a $1,000
investment, assuming (1) 5% annual
return, and (2) redemption at the
end of each time period:............... $6 $18 $31 $70
-- --- --- ---
The Example should not be considered a representation of past or future
expenses. Actual expenses may be greater or less than those shown. In connection
with the Example, please note that $1,000 is currently less than the Fund's
minimum purchase requirement. The purpose of this table is to assist investors
in understanding the various costs and expenses that shareholders of the Fund
bear directly or indirectly.
For more information with respect to the expenses of the Fund see
"Management of the Trust" herein.
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FINANCIAL HIGHLIGHTS
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The following information, has been audited by Deloitte & Touche LLP,
independent auditors. This information should be read in conjunction with the
financial statements and notes thereto, which are incorporated by reference in
the Statement of Additional Information. The ratios of expenses and net
investment income to average net assets are not indicative of future ratios.
<TABLE>
<CAPTION>
For the period
March 12, 1991
For the years ended June 30, (commencement
--------------------------------------------------------------------------- of operations)
1998 1997 1996 1995 1994 1993 1992 to June 30, 1991
-------- -------- -------- -------- -------- -------- -------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period...... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment
operations:
Net investment income.... 0.05 0.04 0.05 0.05 0.03 0.03 0.04 0.02
Dividends to
shareholders from
net investment
income................. (0.05) (0.04) (0.05) (0.05) (0.03) (0.03) (0.04) (0.02)
-------- -------- -------- -------- -------- -------- -------- --------
Net asset value, end of
period................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ======== ======== ========
Total return*.............. 4.78% 4.75% 4.96% 4.67% 2.74% 2.75% 4.48% 5.45%**
Ratios/supplemental data:
Net assets, end of
period (000's
omitted)............... $194,694 $160,458 $146,225 $144,969 $141,731 $136,584 $118,706 $ 70,241
Ratio of expenses to
average net assets* ... 0.56% 0.55% 0.56% 0.55% 0.55% 0.55% 0.55% 0.55%**
Ratio of net investment
income to average
net assets............. 4.70% 4.65% 4.78% 4.52% 2.72% 2.70% 4.35% 5.27%**
</TABLE>
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* Had the expense reimbursement agreement not been in place, the ratio of
expenses to average net assets, for the years ended June 30, 1996, 1995,
1994, 1993 and 1992 and the period March 12, 1991 (commencement of
operations) to June 30, 1991, would have been 0.57%, 0.58%, 0.57%, 0.55%,
0.56%, and 0.74%, respectively. For the same periods, the total return
would have been 4.91%, 4.64%, 2.72%, 2.75%, 4.47%, and 5.26%,
respectively. The expense reimbursement agreement terminated on February
1, 1996.
** Annualized.
INVESTMENT OBJECTIVE AND POLICIES
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The investment objective of the Fund is to achieve as high a level of
current income as is consistent with the preservation of capital and the
maintenance of liquidity.
The investment objective of the Fund is a fundamental policy and may be
changed only with the approval of the holders of a "majority of the Fund's
outstanding voting securities" (as defined in the 1940 Act). (See "Additional
Information" in this Prospectus.) However, the investment policies of the Fund
as described below are not fundamental and may be changed without such approval.
Investments for the Fund mature or are deemed to mature within 397 days
from the date of purchase and
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the average maturity of the investments held by the Fund (on a dollar-weighted
basis) is 90 days or less.
Assets of the Fund are invested only in securities backed as to principal
and interest payments by the full faith and credit of the United States of
America. These securities are issues of the U.S. Treasury, such as bills,
certificates of indebtedness, notes and bonds as well as unmatured interest
coupons of U.S. Treasury bonds and notes which have been separated and resold in
a custodial receipt program administered by the U.S. Treasury.
The Trust may, in the future, seek to achieve the Fund's investment
objective by investing all of the Fund's assets in a no-load, diversified,
open-end management investment company having substantially the same investment
objective as the Fund. Shareholders will receive 30 days prior written notice
with respect to any such investment.
Risk Factors
Although investments held for the Fund are issued by the U.S. Government,
an investment in the Fund is not insured or guaranteed by the U.S. Government.
The portfolio is subject to interest rate risk which causes fluctuations in the
amount of daily dividends, and, in extreme cases, could cause the net asset
value per share of the Fund to deviate from $1.00 per share. Interest rate risk
refers to the price fluctuation of a debt security in response to changes in
interest rates. In general, short-term securities have relatively small
fluctuations in price in a response to general changes in interest rates.
Portfolio Brokerage
Although the Fund generally holds investments until maturity and does not
seek profits through short-term trading, it may dispose of any portfolio
security prior to its maturity if it believes such disposition advisable.
U.S. Treasury securities are generally traded on a net basis and do not
normally involve either brokerage commissions or transfer taxes. Where possible
transactions on behalf of the Fund are entered directly with the issuer or
market maker for the securities involved. Purchases from dealers serving as
market makers may include a spread between the bid and asked price. The policy
of the Fund regarding purchases and sales of securities is that primary
consideration will be given to obtaining the most favorable prices and efficient
executions of transactions. In seeking to implement the Fund's policies, the
Investment Adviser effects transactions with those brokers and dealers who the
Investment Adviser believes provide the most favorable prices and are capable of
providing efficient executions. If the Investment Adviser believes such prices
and executions are obtainable from more than one broker or dealer, it may give
consideration to placing portfolio transactions with those brokers and dealers
who furnish research and other services to the Fund and or the Investment
Adviser. Such services may include, but are not limited to, any one or more of
the following: information as to the availability of securities for purchase or
sale; statistical or factual information or opinions pertaining to investment;
and appraisals or evaluations of portfolio securities. (See "Portfolio
Transactions" in the Statement of Additional Information.)
On those occasions when Brown Brothers Harriman & Co. deems the purchase
or sale of a security to be in the best interests of the Portfolio as well as
other customers, Brown Brothers Harriman & Co., to the extent permitted by
applicable laws and regulations, may, but is not obligated to, aggregate the
securities to be sold or purchased for the Fund with those to be sold or
purchased for other customers in order to obtain best execution, including lower
brokerage commissions, if appropriate. In such event, allocation of the
securities so purchased or sold as well as any expenses incurred in the
transaction are made by Brown Brothers Harriman & Co. in the manner it considers
to be most equitable and consistent with its fiduciary obligations to its
customers, including the Fund. In some instances, this procedure might adversely
affect the Fund.
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INVESTMENT RESTRICTIONS
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The Statement of Additional Information for the Fund includes a listing of
the specific investment restrictions which govern the Fund's investment
policies. Certain of these investment restrictions are deemed fundamental
policies and may be changed only with the approval of the holders of a "majority
of the Fund's outstanding voting securities" (as defined in the 1940 Act) (see
"Additional Information" in this Prospectus). Excluding the investment of all of
the Fund's assets in an open-end investment company with substantially the same
investment objective, policies and restrictions as the Fund, not more than 10%
of the net assets of the Fund may be invested in securities that are subject to
legal or contractual restrictions on resale. In addition, money is not borrowed
in an amount in excess of 331/3% of the assets of the Fund. It is intended that
money will be borrowed only from banks and only either to accommodate requests
for the redemption of shares while effecting an orderly liquidation of portfolio
securities or to maintain liquidity in the event of an unanticipated failure to
complete a portfolio security transaction or other similar situations.
As a non-fundamental policy, up to 5% of the Fund's assets may be invested
in repurchase agreements although it is the intention of the Adviser to do so
only when other means of efficiently investing cash flows are unavailable. All
repurchase agreement transactions are collateralized by U.S. Treasury securities
and are entered into only with "primary dealers" (as designated by the Federal
Reserve Bank of New York) in U.S. Government securities. A shareholder of the
Fund is subject to state and local income taxes in most jurisdictions on the
portion of dividends received from the Fund which is derived from income from
repurchase agreements. It is the intention of the Investment Adviser to minimize
the portion of the Fund's income which is derived from repurchase agreements to
the extent practicable.
The Fund is classified as "diversified" under the 1940 Act, which means
that at least 75% of its total assets is represented by cash; securities issued
by the U.S. Government, its agencies and instrumentalities; and other securities
limited in respect of any one issuer to an amount no greater than 5% of the
Fund's total assets (other than securities issued by the U.S. Government, its
agencies or instrumentalities).
PURCHASE OF SHARES
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Shares of the Fund are offered on a continuous basis at their net asset
value without a sales charge. The Trust reserves the right to determine the
purchase orders for Fund shares that it will accept. Shares of the Fund may be
purchased on any day the New York Stock Exchange is open for regular trading and
New York banks are open for business if the Trust receives the purchase order
and acceptable payment for such order prior to 12:00 P.M., New York time.
Purchases of Fund shares are then executed at the net asset value per share next
determined on that same day. Dividends are earned on the day that the purchase
is executed on the books of the Trust.
An investor who has an account with an Eligible Institution (see page 10)
or a Financial Intermediary (see page 10) may place purchase orders for Fund
shares with the Trust through that Eligible Institution or Financial
Intermediary, which holds such shares in its name on behalf of that customer
pursuant to arrangements made between that customer and that Eligible
Institution or Financial Intermediary. Each Eligible Institution and each
Financial Intermediary may establish and amend from time to time a minimum
initial and a minimum subsequent purchase requirement for its customers.
Currently, such minimum purchase requirements range from $1,000 to $5,000. Each
Eligible Institution or Financial Intermediary arranges payment for Fund shares
on behalf of its customers. A transaction fee may be charged by an Eligible
Institution or a Financial Intermediary on the purchase of Fund shares.
An investor who does not have an account with an Eligible Institution or a
Financial Intermediary must
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place purchase orders for Fund shares with the Trust through the Fund's
Shareholder Servicing Agent. Such an investor has such shares held directly in
the investor's name on the books of the Trust and is responsible for arranging
for the payment of the purchase price of Fund shares to the Trust's account at
State Street Bank and Trust Company, the Trust's custodian bank. Such payment
must be in the form of either (a) an inter-bank wire transfer of "available
funds" prior to 12:00 P.M., New York time, in which case a purchase order placed
prior to 12:00 P.M., New York time is executed that day, or (b) a cashier's
check drawn on a U.S. bank or a check certified by a U.S. bank, in which case a
purchase order is executed after such a check has been converted into
"available" funds, generally the next business day after the check is received
for the Trust by State Street Bank and Trust Company. Brown Brothers Harriman &
Co., as the Fund's Shareholder Servicing Agent, has established a minimum
initial purchase requirement for the Fund of $100,000 and a minimum subsequent
purchase requirement for the Fund of $25,000. These minimum purchase
requirements may be amended from time to time.
Inquiries regarding the manner in which purchases of Fund shares may be
effected and other matters pertaining to the Fund should be directed to Brown
Brothers Harriman & Co., the Fund's Shareholder Servicing Agent. (See back cover
for address and phone number.)
REDEMPTION OF SHARES
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A redemption request must be received by the Trust prior to 12:00 P.M.,
New York time on any day the New York Stock Exchange is open for regular trading
and New York banks are open for business. Such a redemption is executed at the
net asset value per share next determined on that same day. Proceeds of a
redemption are paid in "available" funds generally on the day the redemption
request is executed, and in any event within seven days. A shareholder continues
to receive each daily dividend declared prior to the day on which a redemption
request is executed on the books of the Trust.
Shares held by an Eligible Institution or a Financial Intermediary on
behalf of a shareholder must be redeemed through that Eligible Institution or
Financial Intermediary pursuant to arrangements made between that shareholder
and that Eligible Institution or Financial Intermediary. Proceeds of a
redemption are paid to that shareholder's account at that Eligible Institution
or Financial Intermediary on a date established by the Eligible Institution or
Financial Intermediary. A transaction fee may be charged by an Eligible
Institution or a Financial Intermediary on the redemption of Fund shares.
Shares held directly in the name of a shareholder on the books of the
Trust may be redeemed by submitting a redemption request in good order to the
Trust through the Fund's Shareholder Servicing Agent. (See back cover for
address and phone number.) Proceeds resulting from such redemption are paid by
the Trust directly to the shareholder.
A shareholder redeeming shares should be aware that the net asset value of
the Fund's shares may, in unusual circumstances, decline below $1.00 per share.
Accordingly, a redemption request may result in payment of a dollar amount which
differs from the number of shares redeemed. (See "Net Asset Value".)
Redemptions By the Trust
The Fund's Shareholder Servicing Agent (see page 10), each Eligible
Institution and each Financial Intermediary (see page 10) may establish and
amend from time to time for their respective customers a minimum account size.
If the value of a shareholder's holdings in the Fund falls below that amount
because of a redemption of shares, the shareholder's remaining shares may be
redeemed. If such remaining shares are to be redeemed, the shareholder is so
notified and is allowed 60 days to make an additional investment to enable the
shareholder to meet the minimum requirement before the redemption is processed.
Brown Brothers Harriman & Co., as the Fund's Shareholder Servicing Agent, has
established a minimum account size of $100,000.
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Further Redemption Information
In the event a shareholder redeems all shares held in the Fund at any time
during the month, all accrued but unpaid dividends are included in the proceeds
of the redemption and future purchases of shares of the Fund by such shareholder
would be subject to the Fund's minimum initial purchase requirements.
An investor should be aware that redemptions from the Fund may not be
processed if a completed account application with a certified taxpayer
identification number has not been received.
A shareholder's right to receive payment with respect to any redemption
may be suspended or the payment of the redemption proceeds postponed for up to
seven days and for such other periods as the 1940 Act may permit. (See
"Additional Information" in the Statement of Additional Information.)
MANAGEMENT OF THE TRUST
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Trustees and Officers
The Trustees, in addition to supervising the actions of the Administrator,
Investment Adviser and Distributor of the Fund, as set forth below, decide upon
matters of general policy. Because of the services rendered to the Trust by the
Investment Adviser and the Administrator, the Trust itself requires no employees
other than its officers, none of whom, other than the Chairman, receive
compensation from the Fund and all of whom, other than the Chairman, are
employed by 59 Wall Street Administrators. (See "Trustees and Officers" in the
Statement of Additional Information.)
The Trustees of the Trust are:
J.V. Shields, Jr.
Chairman and Chief Executive Officer of
Shields & Company
Eugene P. Beard
Vice Chairman, Finance and Operations of
The Interpublic Group of Companies
David P. Feldman
Retired, Chairman and Chief Executive
Officer of AT&T Investment Management
Corporation
Alan G. Lowy
Private Investor
Arthur D. Miltenberger
Retired, Vice President and Chief Financial
Officer of Richard K. Mellon and Sons
Investment Adviser
The Investment Adviser to the Fund is Brown Brothers Harriman & Co.,
Private Bankers, a New York limited partnership established in 1818. The firm is
subject to examination and regulation by the Superintendent of Banks of the
State of New York and by the Department of Banking of the Commonwealth of
Pennsylvania. The firm is also subject to supervision and examination by the
Commissioner of Banks of the Commonwealth of Massachusetts.
Brown Brothers Harriman & Co. provides investment advice and portfolio
management services to the Fund. Subject to the general supervision of the
Trust's Trustees, Brown Brothers Harriman & Co. makes the day-to-day investment
decisions for the Fund, places the purchase and sale orders for the portfolio
transactions of the Fund, and generally manages the Fund's investments. Brown
Brothers Harriman & Co. provides a broad range of investment management services
for customers in the United States and abroad. At June 30, 1998, it managed
total assets of approximately $30 billion.
As compensation for the services rendered and related expenses such as
salaries of advisory personnel borne by Brown Brothers Harriman & Co. under the
Investment Advisory Agreement, Brown Brothers Harriman & Co. receives from the
Fund an annual fee, computed daily and payable monthly, equal to 0.15% of the
Fund's average daily net assets. Brown Brothers Harriman & Co.
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also receives an annual administration fee from the Fund equal to 0.10% of the
Fund's average daily net assets and an annual shareholder servicing/eligible
institution fee from the Fund equal to 0.225% of the average daily net assets of
the Fund represented by shares owned during the period by customers for whom
Brown Brothers Harriman & Co. is the holder or agent of record.
The investment advisory services of Brown Brothers Harriman & Co. to the
Fund are not exclusive under the terms of the Investment Advisory Agreement.
Brown Brothers Harriman & Co. is free to and does render investment advisory
services to others, including other registered investment companies.
Pursuant to a license agreement between the Trust and Brown Brothers
Harriman & Co. dated August 24, 1989, as amended as of December 15, 1993, the
Trust may continue to use in its name "59 Wall Street", the current and historic
address of Brown Brothers Harriman & Co. The agreement may be terminated by
Brown Brothers Harriman & Co. at any time upon written notice to the Trust upon
the expiration or earlier termination of any investment advisory agreement
between the Trust or any investment company in which a series of the Trust
invests all of its assets and Brown Brothers Harriman & Co. Termination of the
agreement would require the Trust to change its name and the name of the Fund to
eliminate all reference to "59 Wall Street".
Pursuant to license agreements between Brown Brothers Harriman & Co. and
each of 59 Wall Street Administrators and 59 Wall Street Distributors (each a
"Licensee"), dated June 22, 1993 and June 8, 1990, respectively, each Licensee
may continue to use in its name "59 Wall Street", the current and historic
address of Brown Brothers Harriman & Co., only if Brown Brothers Harriman & Co.
does not terminate the respective license agreement, which would require the
Licensee to change its name to eliminate all reference to "59 Wall Street".
Administrator
Brown Brothers Harriman & Co. acts as Administrator of the Trust. (See
"Administrator" in the Statement of Additional Information.)
In its capacity as Administrator, Brown Brothers Harriman & Co.
administers all aspects of the Trust's operations subject to the supervision of
the Trust's Trustees except as set forth below under "Distributor". In
connection with its responsibilities as Administrator and at its own expense,
Brown Brothers Harriman & Co. (i) provides the Trust with the services of
persons competent to perform such supervisory, administrative and clerical
functions as are necessary in order to provide effective administration of the
Trust; (ii) oversees the performance of administrative and professional services
to the Trust by others, including the Fund's Custodian, Transfer and Dividend
Disbursing Agent; (iii) provides the Trust with adequate office space and
communications and other facilities; and (iv) prepares and/or arranges for the
preparation, but does not pay for, the periodic updating of the Trust's
registration statement and the Fund's prospectus, the printing of such documents
for the purpose of filings with the Securities and Exchange Commission and state
securities administrators, and the preparation of tax returns for the Trust and
for the Fund and reports to the Fund's shareholders and the Securities and
Exchange Commission.
For the services rendered to the Trust and related expenses borne by Brown
Brothers Harriman & Co., as Administrator, Brown Brothers Harriman & Co.
receives from the Fund an annual fee, computed daily and payable monthly, equal
to 0.10% of the Fund's average daily net assets.
Pursuant to a Subadministrative Services Agreement with Brown Brothers
Harriman & Co., 59 Wall Street Administrators performs such subadministrative
duties for the Trust as are from time to time agreed upon by the parties. The
offices of 59 Wall Street Administrators are located at 21 Milk Street, Boston,
Massachusetts 02109. 59 Wall Street Administrators is a wholly-owned subsidiary
of Signature Financial Group, Inc. ("SFG"). SFG is not affiliated with Brown
Brothers Harriman & Co. 59 Wall Street Administrators' subadministrative duties
may include providing equipment and clerical personnel necessary for maintaining
the organization of the Trust, participation in the preparation of documents
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required for compliance by the Trust with applicable laws and regulations,
preparation of certain documents in connection with meetings of Trustees and
shareholders of the Trust, and other functions that would otherwise be performed
by the Administrator as set forth above. For performing such subadministrative
services, 59 Wall Street Administrators receives such compensation as is from
time to time agreed upon, but not in excess of the amount paid to the
Administrator from the Fund.
Shareholder Servicing Agent
The Trust has entered into a shareholder servicing agreement with Brown
Brothers Harriman & Co. pursuant to which Brown Brothers Harriman & Co., as
agent for the Fund, among other things: answers inquiries from shareholders of
and prospective investors in the Fund regarding account status and history, the
manner in which purchases and redemptions of Fund shares may be effected and
certain other matters pertaining to the Fund; assists shareholders of and
prospective investors in the Fund in designating and changing dividend options,
account designations and addresses; and provides such other related services as
the Trust or a shareholder of or prospective investor in the Fund may reasonably
request. For these services, Brown Brothers Harriman & Co. receives from the
Fund an annual fee, computed daily and payable monthly, equal to 0.225% of the
average daily net assets of the Fund represented by shares owned during the
period for which payment was being made by shareholders who did not hold their
shares with an Eligible Institution.
Financial Intermediaries
From time to time, the Fund's Shareholder Servicing Agent enters into
contracts with banks, brokers and other financial intermediaries ("Financial
Intermediaries") pursuant to which a customer of the Financial Intermediary may
place purchase orders for Fund shares through that Financial Intermediary which
holds such shares in its name on behalf of that customer. Pursuant to such
contract, each Financial Intermediary as agent with respect to shareholders of
and prospective investors in the Fund who are customers of that Financial
Intermediary, among other things: provides necessary personnel and facilities to
establish and maintain certain shareholder accounts and records enabling it to
hold, as agent, its customers' shares in its name or its nominee name on the
shareholder records of the Trust; assists in processing purchase and redemption
transactions; arranges for the wiring of funds; transmits and receives funds in
connection with customer orders to purchase or redeem shares of the Fund;
provides periodic statements showing a customer's account balance and, to the
extent practicable, integrates such information with information concerning
other customer transactions otherwise effected with or through it; furnishes,
either separately or on an integrated basis with other reports sent to a
customer, monthly and annual statements and confirmations of all purchases and
redemptions of Fund shares in a customer's account; transmits proxy statements,
annual reports, updated prospectuses and other communications from the Trust to
its customers; and receives, tabulates and transmits to the Trust proxies
executed by its customers with respect to meetings of shareholders of the Fund.
For these services, the Financial Intermediary receives such fees from the
Shareholder Servicing Agent as may be agreed upon from time to time between the
Shareholder Servicing Agent and such Financial Intermediary.
Eligible Institutions
The Trust enters into eligible institution agreements with banks, brokers and
other financial institutions pursuant to which that financial institution as
agent for the Trust with respect to shareholders of and prospective investors in
the Fund who are customers of that financial institution among other things:
provides necessary personnel and facilities to establish and maintain certain
shareholder accounts and records enabling it to hold, as agent, its customers'
shares in its name or its nominee name on the shareholder records of the Trust;
assists in processing purchase and redemption transactions; arranges for the
wiring of funds; transmits and receives funds in connection with customer orders
to purchase or redeem shares of the Fund; provides periodic statements showing a
customer's account balance and, to the extent practicable, integrates such
information with information concerning other customer transactions otherwise
effected with or
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through it; furnishes, either separately or on an integrated basis with other
reports sent to a customer, monthly and annual statements and confirmations of
all purchases and redemptions of Fund shares in a customer's account; transmits
proxy statements, annual reports, updated prospectuses and other communications
from the Trust to its customers; and receives, tabulates and transmits to the
Trust proxies executed by its customers with respect to meetings of shareholders
of the Fund. For these services, each financial institution receives from the
Fund an annual fee, computed daily and payable monthly, equal to 0.225% of the
average daily net assets of the Fund represented by shares owned during the
period for which payment was being made by customers for whom the financial
institution was the holder or agent of record.
Distributor
59 Wall Street Distributors acts as exclusive Distributor of shares of the
Fund. Its office is located at 21 Milk Street, Boston, Massachusetts 02109. 59
Wall Street Distributors is a wholly-owned subsidiary of SFG. SFG and its
affiliates currently provide administration and distribution services for other
registered investment companies. The Trust pays for the preparation, printing
and filing of copies of the Trust's registration statement and the Fund's
prospectus as required under federal and state securities laws. (See
"Distributor" in the Statement of Additional Information.)
59 Wall Street Distributors holds itself available to receive purchase
orders for Fund shares.
Custodian, Transfer and
Dividend Disbursing Agent
State Street Bank and Trust Company ("State Street" or the "Custodian"),
225 Franklin Street, P.O. Box 351, Boston, Massachusetts 02110, is the Fund's
Custodian, Transfer and Dividend Disbursing Agent. As Custodian, it is
responsible for maintaining books and records of the Fund's portfolio
transactions and holding the Fund's portfolio securities and cash pursuant to a
custodian agreement with the Trust. Cash is held for the Fund in demand deposit
accounts at the Custodian. Subject to the supervision of the Administrator, the
Custodian maintains the Fund's accounting and portfolio transaction records and
for each day computes the Fund's net asset value, net investment income and
dividend payable. As Transfer and Dividend Disbursing Agent it is responsible
for maintaining the books and records detailing ownership of the Fund's shares.
Independent Auditors
Deloitte & Touche LLP are the independent auditors for the Fund.
NET ASSET VALUE
================================================================================
The Fund's net asset value per share is determined once daily at 4:00
P.M., New York time on each day the New York Stock Exchange is open for regular
trading and New York banks are open for business.
The determination of the Fund's net asset value per share is made by
subtracting from the value of the total assets of the Fund the amount of its
liabilities and dividing the difference by the number of shares of the Fund
outstanding at the time the determination is made. It is anticipated that the
net asset value per share of the Fund will remain constant at $1.00. No
assurance can be given that this goal can be achieved.
The Portfolio's assets are valued by using the amortized cost method of
valuation. This method involves valuing a security at its cost at the time of
purchase and thereafter assuming a constant amortization to maturity of any
discount or premium, regardless of the impact of fluctuating interest rates on
the market value of the instrument. The market value of the Fund's portfolio
securities fluctuates on the basis of the creditworthiness of the issuers of
such securities and on the levels of interest rates generally. While the
amortized cost method provides certainty in valuation, it may result in periods
when the value so determined is higher or lower than the price the Fund would
receive if the security were sold. (See "Net Asset Value" in the Statement of
Additional Information.)
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<PAGE>
DIVIDENDS AND DISTRIBUTIONS
================================================================================
All the Fund's net income and short-term capital gains and losses, if any,
are declared as a dividend daily and paid monthly.
Net income of the Fund consists of (i) accrued interest, accretion of
discount and amortization of premium, (ii) plus net short-term capital gains or
losses realized on sales of portfolio securities of the Fund, and (iii) less the
accrued expenses of the Fund applicable to that dividend period. (See "Net Asset
Value".)
Determination of the Fund's net income is made immediately prior to the
determination of the net asset value per share at 4:00 P.M., New York time on
each day the New York Stock Exchange is open for regular trading and New York
banks are open for business. Net income for days other than such business days
is determined as of 4:00 P.M., New York time on the immediately preceding
business day. Dividends declared are payable to shareholders of record on the
date of determination. Shares purchased through submission of a purchase order,
prior to 12:00 P.M., New York time on such business day begin earning dividends
on that business day. Shares redeemed do not qualify for a dividend on the
business day that the redemption is executed. (See "Redemption of Shares".)
Unless a shareholder whose shares are held directly in the shareholder's
name on the books of the Trust elects to have dividends paid in cash, dividends
are automatically reinvested in additional Fund shares without reference to the
minimum subsequent purchase requirement. Such shareholder who elects to have
dividends paid in cash receives a check in the amount of such dividends. In the
event a shareholder redeems all shares held at any time during the month, all
accrued but unpaid dividends are included in the proceeds of the redemption and
future purchases of shares by such shareholder will be subject to the minimum
initial purchase requirements. The Trust reserves the right to discontinue,
alter or limit the automatic reinvestment privilege at any time, but will
provide shareholders prior written notice of any such discontinuance, alteration
or limitation.
Each Eligible Institution and each Financial Intermediary may establish
its own policy with respect to the reinvestment of dividends in additional Fund
shares.
TAXES
================================================================================
Each year, the Trust intends to continue to qualify the Fund and elect
that the Fund be treated as a separate "regulated investment company" under the
Internal Revenue Code of 1986, as amended. Accordingly, the Fund is not subject
to federal income taxes on its net income and realized net capital gains that
are distributed to its shareholders. A 4% non-deductible excise tax is imposed
on the Fund to the extent that certain distribution requirements for the Fund
for each calendar year are not met. The Trust intends to continue to meet such
requirements.
Dividends of net income (as defined under "Dividends and Distributions")
and net short-term capital gains, if any, are taxable to shareholders of the
Fund as ordinary income, whether such dividends are paid in cash or reinvested
in additional shares. These distributions are not eligible for the
dividends-received deduction allowed to corporate shareholders.
Under U.S. Treasury regulations, the Trust and each Eligible Institution
are required to withhold and remit to the U.S. Treasury a portion (31%) of
dividends and capital gains distributions on the accounts of those shareholders
who fail to provide a correct taxpayer identification number (Social Security
Number for individuals) or to make required certifications, or who have been
notified by the Internal Revenue Service that they are subject to such
withholdings. Prospective investors should submit an IRS Form W-9 to avoid such
withholding.
State and Local Taxes
Assets of the Fund are invested in direct obligations of the U.S.
Government, the interest from which is
12
<PAGE>
specifically exempted from state and local income taxes when held directly by
taxpayers. All states by legislation or regulation allow the character of
interest income from direct obligations of the U.S. Government received by a
regulated investment company organized as a series of a Massachusetts business
trust, such as the Fund, to pass through to shareholders. However, a shareholder
of the Fund is subject to state and local income taxes in most jurisdictions on
the portion of dividends received from the Fund which is derived from income
from repurchase agreements. It is the intention of the Investment Adviser to
minimize the portion of the Fund's income which is derived from repurchase
agreements to the extent practicable. The Trust intends to advise shareholders
of the proportion of the Fund's dividends which is derived from interest on
direct obligations of the U.S. Government.
Dividends paid from the Fund which are derived from interest on direct
obligations of the U.S. Government are generally expected to be exempt from
income taxation in the District of Columbia and the following states:
Alabama Maine Ohio
Arizona Maryland Oklahoma
Arkansas Massachusetts Oregon
Colorado Michigan Pennsylvania
Delaware Minnesota Rhode Island
Georgia Missouri South Carolina
Hawaii Mississippi Tennessee
Idaho Montana Utah
Illinois Nebraska Vermont
Indiana New Hampshire Virginia
Iowa New Jersey West Virginia
Kansas New Mexico Wisconsin.
Kentucky North Carolina
Louisiana North Dakota
Such dividends are also generally expected to be so exempt in the
following states provided that a certain minimum percentage of the Fund's assets
consist of direct obligations of the U.S. Government. It is the Trust's
intention to meet these minimum percentage requirements, none of which is
greater than 50%.
California Connecticut New York.
There is currently no state income tax in the following states:
Alaska South Dakota Washington
Florida Texas Wyoming.
Nevada
Shareholders are urged to consult their tax advisors regarding the
possible exclusion for state and local income tax purposes of the portion of
dividends paid from the Fund which is derived from interest on direct
obligations of the U.S. Government.
Foreign Investors
The Fund is designed for investors who are either citizens of the United
States or aliens subject to United States income tax. Prospective investors who
are not citizens of the United States and who are not aliens subject to United
States income tax are subject to United States withholding tax on the entire
amount of all dividends. Therefore, such investors should not invest in the Fund
since alternative investments in money market instruments would not be subject
to United States withholding tax.
Other Information
Annual notification as to the tax status of capital gains distributions,
if any, is provided to shareholders shortly after June 30, the end of the Fund's
fiscal year. Additional tax information is mailed to shareholders in January.
This tax discussion is based on the tax laws and regulations in effect on
the date of this Prospectus, however such laws and regulations are subject to
change. Shareholders and prospective investors are urged to consult their tax
advisors regarding specific questions relevant to their particular
circumstances.
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<PAGE>
DESCRIPTION OF SHARES
================================================================================
The Trust is an open-end management investment company organized on June
7, 1983, as an unincorporated business trust under the laws of the Commonwealth
of Massachusetts. Its offices are located at 21 Milk Street, Boston,
Massachusetts 02109; its telephone number is (617) 423-0800.
Pursuant to the Trust's Declaration of Trust, the Trustees have authorized
the issuance of an unlimited number of full and fractional shares of each series
of the Trust, one of which is the Fund. The Trustees may divide or combine the
shares into a greater or lesser number of shares without thereby changing the
proportionate beneficial interest in the Trust and may authorize the creation of
additional series of shares, the proceeds of which would be invested in
separate, independently managed portfolios. Currently there are two series in
addition to the Fund.
The Trustees themselves have the power to alter the number and the terms
of office of the Trustees, to lengthen their own terms, or to make their terms
of unlimited duration subject to certain removal procedures, and to appoint
their own successors; provided that at least two-thirds of the Trustees have
been elected by the shareholders.
Each share of the Fund represents an equal proportional interest in the
Fund with each other share. Upon liquidation of the Fund, shareholders are
entitled to share pro rata in the net assets of the Fund available for
distribution to shareholders.
Shareholders of the Fund are entitled to a full vote for each full share
held and to a fractional vote for fractional shares. The voting rights of
shareholders are not cumulative. Shares have no preemptive or conversion rights.
The rights of redemption are described elsewhere herein. Shares when issued are
fully paid and nonassessable, except as set forth below. It is the intention of
the Trust not to hold meetings of shareholders annually. The Trustees may call
meetings of shareholders for action by shareholder vote as may be required by
the 1940 Act or as may be permitted by the Declaration of Trust or By-Laws.
Shareholders have under certain circumstances (e.g., upon application and
submission of certain specified documents to the Trustees by a specified number
of shareholders) the right to communicate with other shareholders in connection
with requesting a meeting of shareholders for the purpose of removing one or
more Trustees. Shareholders also have the right to remove one or more Trustees
without a meeting by a declaration in writing by a specified number of
shareholders.
The By-Laws of the Trust provide that the presence in person or by proxy
of the holders of record of one half of the shares of the Fund outstanding and
entitled to vote thereat shall constitute a quorum at all meetings of Fund
shareholders, except as otherwise required by applicable law. The By-Laws
further provide that all questions shall be decided by a majority of the votes
cast at any such meeting at which a quorum is present, except as otherwise
required by applicable law.
The Declaration of Trust provides that, at any meeting of shareholders of
the Fund, each Eligible Institution may vote any shares as to which that
Eligible Institution is the agent of record and which are otherwise not
represented in person or by proxy at the meeting, proportionately in accordance
with the votes cast by holders of all shares otherwise represented at the
meeting in person or by proxy as to which that Eligible Institution is the agent
of record. Any shares so voted by an Eligible Institution are deemed represented
at the meeting for purposes of quorum requirements.
The Trust is an entity of the type commonly known as a "Massachusetts
business trust". Under Massachusetts law, shareholders of such a business trust
may, under certain circumstances, be held personally liable as partners for its
obligations. However, the risk of a shareholder incurring financial loss because
of shareholder liability is limited to circumstances in which both inadequate
insurance existed and the Trust itself was unable to meet its obligations.
14
<PAGE>
ADDITIONAL INFORMATION
================================================================================
As used in this Prospectus, the term "majority of the Fund's outstanding
voting securities" (as defined in the 1940 Act) currently means the vote of (i)
67% or more of the Fund's shares present at a meeting, if the holders of more
than 50% of the outstanding voting securities of the Fund are present in person
or represented by proxy; or (ii) more than 50% of the Fund's outstanding voting
securities, whichever is less.
Fund shareholders receive semi-annual reports containing unaudited
financial statements and annual reports containing financial statements audited
by independent auditors.
The Fund's "yield" and "effective yield" may be used from time to time in
shareholder reports or other communications to shareholders or prospective
investors. Both yield figures are based on historical earnings and are not
intended to indicate future performance. Performance information may include the
Fund's investment results and/or comparisons of its investment results to
various unmanaged indexes (such as the 1-month LIBOR) and to investments for
which reliable performance data is available. Performance information may also
include comparisons to averages, performance rankings or other information
prepared by recognized mutual fund statistical services. To the extent that
unmanaged indexes are so included, the same indexes will be used on a consistent
basis. The Fund's investment results as used in such communications are
calculated in the manner set forth below.
The "yield" of the Fund refers to the income generated by an investment in
the Fund over a seven-day period (which period will be stated). This income is
then "annualized". That is, the amount of income generated by the investment
during that week is assumed to be generated each week over a 52-week period and
is shown as a percentage of the investment. The "effective yield" is calculated
similarly but, when annualized, the income earned by an investment in the Fund
is assumed to be reinvested. The "effective yield" is slightly higher than the
"yield" because of the compounding effect of this assumed reinvestment.
This Prospectus omits certain of the information contained in the
Statement of Additional Information and the Registration Statement filed with
the Securities and Exchange Commission. The Statement of Additional Information
may be obtained from 59 Wall Street Distributors without charge and the
Registration Statement may be obtained from the Securities and Exchange
Commission upon payment of the fee prescribed by the Rules and Regulations of
the Commission.
15
<PAGE>
The 59 Wall Street Trust
Investment Adviser and
Administrator
Brown Brothers Harriman & Co.
59 Wall Street
New York, New York 10005
Distributor
59 Wall Street Distributors, Inc.
21 Milk Street
Boston, Massachusetts 02109
Shareholder Servicing Agent
Brown Brothers Harriman & Co.
59 Wall Street
New York, New York 10005
(800) 625-5759
No dealer, salesman or any other person has been
authorized to give any information or to make any
representations, other than those contained in this
Prospectus and the Statement of Additional Information,
in connection with the offer contained in this Prospectus,
and if given or made, such other information or
representations must not be relied upon as having been
authorized by the Trust or the Distributor. This
Prospectus does not constitute an offer by the Trust or
by the Distributor to sell or the solicitation of any offer
to buy any of the securities offered hereby in any
jurisdiction to any person to whom it is unlawful for the
Trust or the Distributor to make such offer in such
jurisdiction.
