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Prudential Mutual Funds
(Money Market Funds)
Supplement dated December 30, 1996
Commencing January 13, 1997, the following procedures for the purchase and
redemption of shares of each of the money market funds listed below are in
effect.
SHAREHOLDER GUIDE
HOW TO BUY SHARES OF THE FUND/TRUST
General Information
Shares of the Fund are available through Prudential Securities Incorporated
(Prudential Securities), Pruco Securities Corporation (Prusec) or directly from
the Fund, through its Transfer Agent, Prudential Mutual Fund Services, Inc.
(PMFS or the Transfer Agent), Attention: Investment Services, P.O. Box 15020,
New Brunswick, New Jersey 08906-5020. Shareholders of the Fund who are clients
of Prudential Securities are subject to the procedures under ``Purchases through
Prudential Securities'' below.
Except as otherwise provided below, the minimum initial investment is $1,000
and the minimum subsequent investment is $100. The minimum initial investment
for the U.S. Treasury Money Market Series of Prudential Government Securities
Trust is $2,500. All minimum investment requirements are waived for certain
retirement and employee savings plans and custodial accounts for the benefit of
minors. For purchases made through the Automatic Savings Accumulation Plan, the
minimum initial and subsequent investment is $50. See ``Shareholder Services''
below. For automatic purchases made through Prudential Securities, the minimum
initial investment requirement is $1,000 ($2,500 for U.S. Treasury Money Market
Series) and there is no minimum subsequent investment requirement.
Shares of the Fund are sold through the Transfer Agent, without a sales
charge, at the NAV next determined after receipt and acceptance by the Transfer
Agent of a purchase order and payment in proper form [i.e., a check or Federal
Funds wired to State Street Bank and Trust Company (State Street), the Fund's
custodian]. See ``How the Fund Values its Shares.'' When payment is received by
the Transfer Agent prior to 4:30 P.M., New York time, in proper form, a share
purchase order will be entered at the price determined as of 4:30 P.M., on that
day, and the shares will begin to earn dividends on the following business day.
See ``Taxes, Dividends and Distributions.'' If your purchase is made through an
account at Prudential Securities or through Prusec or another dealer, your
dealer will forward a purchase order and payment to the Fund.
Investors who purchase their shares through a dealer other than Prudential
Securities or Prusec, which dealer has a clearing arrangement with respect to
shares of the Fund, may be able to participate in the automatic sweep feature
described below under ``Purchases through Prudential Securities--Automatic
Investment (Autosweep)'' and ``How to Sell Your Shares--Redemptions of Shares
Purchased through Prudential Securities.'' For further information, contact your
dealer.
Application forms for Prusec and direct accounts with the Transfer Agent
(e.g., non-Prudential Securities accounts) can be obtained from PMFS or Prusec.
If a stock certificate is desired, it must be requested in writing for each
transaction. Certificates are issued only for full shares. Shareholders who hold
their shares through Prudential Securities will not receive stock certificates.
Shareholders cannot utilize Expedited Redemption or Check Redemption or have a
Systematic Withdrawal Plan if they have been issued certificates.
The Fund reserves the right, in its discretion, to reject any purchase order
(including an exchange into the Fund) or to suspend or modify the continuous
offering of its shares. See ``How to Sell Your Shares'' below.
Transactions in Fund shares may be subject to postage and other charges
imposed by your dealer.
Purchases through Prudential Securities
Automatic Investment (Autosweep) (for Non-Command Accounts)
Prudential Securities has advised the Fund that it has automatic investment
procedures (Autosweep) pursuant to which it will make automatic investments of
free credit cash balances (Eligible Credit Balances) held in a client's
brokerage account in shares of the Fund, if the Fund is your Primary Money Sweep
Fund. You may designate the Fund (or certain other Prudential money market
funds) as your Primary Money Sweep Fund. If you do not designate a Primary Money
Sweep Fund, the Primary Money Sweep Fund will be Prudential MoneyMart Assets,
Inc. (If you are a client of Prudential Securities at the time this change in
Autosweep is instituted and you hold a money market fund position in your
account other than Prudential MoneyMart Assets, Inc., that other fund will be
your Primary Money Sweep Fund.) Prudential Securities' clients
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who have a Primary Money Sweep Fund can purchase shares of such fund only
through the automatic investment procedures described herein; no manual purchase
orders will be accepted for such fund. A Prudential Securities client has the
option to change his or her Primary Money Sweep Fund at any time by notifying
his or her Prudential Securities financial adviser. Under certain circumstances,
you may elect not to have a money market sweep feature for your account when you
open your account.
For accounts other than IRAs and Benefit Plans, as defined below, shares of
the Fund will be purchased by Prudential Securities as follows: in the case of
Eligible Credit Balances of $1,000 or more resulting from the proceeds of a
securities sale, maturity of a bond or call and Eligible Credit Balances of
$10,000 or more resulting from a non-trade related credit (e.g., receipt of a
dividend or interest payment or a cash payment into the securities account),
orders to purchase shares will be placed on the business day after such Eligible
Credit Balances become available in your account. For Eligible Credit Balances
of $1.00 or more not otherwise described above, orders to purchase shares will
be placed monthly on the last business day of the month. For IRAs and Benefit
Plans, having Eligible Credit Balances of $1.00 or more, orders to purchase
shares of the Fund will be placed by Prudential Securities (i) on the settlement
date of the securities sale, in the case of Eligible Credit Balances resulting
from the proceeds of a securities sale, and (ii) on the business day after
receipt by Prudential Securities of the non-trade related credit (including the
maturity of a bond or a call), in the case of Eligible Credit Balances resulting
from a non-trade related credit. Each time an order resulting from the
settlement of a securities sale is placed, any non-trade related credit in the
client's account will also be invested.
The following chart shows the frequency and amount of the sweep for accounts
other than IRAs and Benefit Plans.
<TABLE>
<CAPTION>
Daily Monthly
<S> <C> <C>
Eligible Credit Balances resulting from the proceeds of a
securities sale, maturity of a bond or call $1,000 or more
Eligible Credit Balances resulting from a non-trade related credit $10,000 or more
Remaining Eligible Credit Balances $1.00 or more
</TABLE>
All shares purchased pursuant to these automatic investment procedures will
be issued at the NAV computed on the business day the order is entered and will
begin earning dividends on the following business day. Purchases through
Autosweep are subject to the Fund's minimum initial investment requirement of
$1,000 ($2,500 for U.S. Treasury Money Market Series), which is waived for
certain retirement and employee savings plans and custodial accounts for the
benefit of minors. Prudential Securities will have the use of, and will retain
the benefits of, Eligible Credit Balances in a client's brokerage account until
monies are delivered to the Fund. (Prudential Securities delivers federal funds
on the business day after settlement). Eligible Credit Balances for purposes of
Autosweep are measured as of the close of business on the previous business day.
For the purposes of Autosweep, ``Benefit Plans'' include (i) employee
benefit plans as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974 (ERISA) other than governmental plans as defined in Section
3(32) of ERISA and church plans as defined in Section 3(33) of ERISA, (ii)
pension, profit-sharing or other employee benefit plans qualified under Section
401 of the Internal Revenue Code and (iii) deferred compensation and annuity
plans under Section 457 or 403(b)(7) of the Internal Revenue Code. ``IRAs'' are
Individual Retirement Accounts as defined in Section 408(a) of the Internal
Revenue Code.
Manual Investment
Prudential Securities will accept manual purchase orders for Prudential
money market fund shares only for those clients (i) who are purchasing shares of
a Prudential money market fund which is not their Primary Money Sweep Fund or
(ii) who do not have a money market sweep feature in their account, as described
above under ``Automatic Investment.''
Prudential Securities clients eligible to make manual purchases, as
described above, are subject to the minimum initial investment of $1,000 ($2,500
for U.S. Treasury Money Market Series) and the minimum subsequent investment of
$100, except that all minimum investment requirements are waived for certain
retirement and employee savings plans and custodial accounts for the benefit of
minors. On the business day after the purchase order is received, Prudential
Securities will place the order for shares of the Fund for settlement that day.
Shares will be issued at the NAV determined on that day and will begin earning
dividends the next business day, which is the second business day after receipt
of the purchase order by Prudential Securities. Prudential Securities will have
the use of, and will retain the benefits of, Eligible Credit Balances in the
client's brokerage account until monies are delivered to the Fund. (Prudential
Securities delivers federal funds on the business day after settlement).
The procedures for Purchases through Prusec, Purchase by Wire, Purchase by
Mail and The Prudential Advantage Account Program remain unchanged.
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HOW TO SELL YOUR SHARES
The following paragraph is restated in its entirety.
Redemption of Shares Purchased Through Prudential Securities
Prudential Securities has advised the Fund that it has established
procedures pursuant to which shares of the Fund held by a Prudential Securities
client having a deficiency in his or her Prudential Securities account will be
redeemed automatically to the extent of that deficiency to the nearest highest
dollar. The amount of the redemption will be the lesser of (a) the total net
asset value of Fund shares held in the client's Prudential Securities account or
(b) the deficiency in the client's Prudential Securities account at the close of
business on the date such deficiency is due. Accordingly, a Prudential
Securities client who wishes to pay for a securities transaction or satisfy any
other debit balance in his or her account other than through such automatic
redemption procedure must do so prior to the day of settlement for such
securities transaction or the date the debit balance is incurred. In the case of
certain automatic redemptions, where Prudential Securities cannot anticipate
debits in the brokerage account (e.g., checks written against the account),
Prudential Securities clients will not be entitled to dividends declared on the
date of redemption; such dividends will be retained by Prudential Securities.
TAXES, DIVIDENDS AND DISTRIBUTIONS
Dividends and Distributions
A shareholder generally begins to earn dividends on the first business day
after his or her order is placed with the Fund, as described above, and
continues to earn dividends through the day on which his or her shares are
redeemed. In the case of certain redemptions, however, Prudential Securities
clients will not be entitled to dividends declared on the date of redemption.
See ``How to Sell Your Shares--Redemption of Shares Purchased Through Prudential
Securities.''
Listed below are the names of the Prudential Mutual Funds and the dates of
the prospectuses to which this supplement relates.
Name of Fund Prospectus Date
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Prudential California Municipal Fund
(California Money Market Series) November 1, 1996
Prudential Government Securities Trust
(Money Market Series) January 29, 1996
(U.S. Treasury Money Market Series) January 29, 1996
Prudential MoneyMart Assets, Inc. March 1, 1996
Prudential Municipal Series Fund
(Connecticut Money Market Series) November 1, 1996
(Massachusetts Money Market Series) November 1, 1996
(New Jersey Money Market Series) November 1, 1996
(New York Money Market Series) November 1, 1996
Prudential Tax-Free Money Fund, Inc. February 29, 1996
MF960C-12
