SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (No. 2-92661)
UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 41 [X]
and
REGISTRATION STATEMENT (No. 811-4085)
UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 41 [X]
Fidelity Income Fund
(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, Massachusetts 02109
(Address Of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number: 617-570-7000
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 (November 29, 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 intends to file the Notice required
by such Rule before November 29, 1997.
FIDELITY GOVERNMENT SECURITIES FUND
CROSS REFERENCE SHEET
Form N-1A Item Number
Part A Prospectus Caption
1 Cover Page
2 a Expenses
b,c Contents; The Fund at a Glance; Who May Want to Invest
3 a **
b *
c,d Performance
4 a(i) Charter
a(ii) The Fund at a Glance; Investment Principles and Risks;
Securities and Investment Practices; Fundamental Investment Policies
and Restrictions
b Securities and Investment Practices
c Who May Want to Invest; Investment Principles and Risks;
Securities and Investment Practices
5 a Charter
b(i) Cover Page; The Fund at a Glance; FMR and Its Affiliates; Doing
Business with Fidelity
b(ii) Charter
b(iii) Expenses; Breakdown of Expenses
c Charter
d Charter; Breakdown of Expenses
e Cover Page; Charter
f Expenses
g Charter
5A Performance
6 a(i) Charter
a(ii) How to Buy Shares; How to Sell Shares; Investor Services;
Transaction Details; Exchange Restrictions
a(iii) Charter
b *
c Transaction Details; Exchange Restrictions
d *
e Doing Business with Fidelity; How to Buy Shares; How to Sell
Shares; Investor Services
f,g Dividends, Capital Gains, and Taxes
h *
7 a Cover Page; Charter
b Expenses; How to Buy Shares; Transaction Details
c *
d How to Buy Shares
e *
f Breakdown of Expenses
8 How to Sell Shares; Investor Services; Transaction Details;
Exchange Restrictions
9 *
* Not applicable
** To be filed by subsequent amendment
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how the
fund invests and the services available to shareholders.
To learn more about the fund and its investments, you can obtain a
copy of the fund's most recent financial report and portfolio listing,
or a copy of the Statement of Additional Information (SAI) dated
November __, 1997. The SAI has been filed with the Secur ities 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, call Fidelity at
1-800-544-8888.
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.
GOV-pro-1197
(fund number 054, trading symbol FGOVX)
T he fund invests in U.S. Government securities. The fund seeks high
current income with preservation of capital.
FIDELITY
GOVERNMENT
SECURITIES
FUND
PROSPECTUS
NOVEMBER __, 1997(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET,
BOSTON, MA 02109
CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
KEY FACTS THE FUND AT A GLANCE
WHO MAY WANT TO INVEST
EXPENSES The fund's yearly operating
expenses.
FINANCIAL HIGHLIGHTS A summary of
the fund's financial data.
PERFORMANCE How the fund has done
over time.
THE FUND IN DETAIL 11 CHARTER How the fund is organized.
INVESTMENT PRINCIPLES AND RISKS The
fund's overall approach to investing.
BREAKDOWN OF EXPENSES How
operating costs are calculated and what
they include.
YOUR ACCOUNT DOING BUSINESS WITH FIDELITY
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,
ACCOUNT POLICIES AND TAXES
TRANSACTION DETAILS Share price
calculations and the timing of
purchases and redemptions.
EXCHANGE RESTRICTIONS
</TABLE>
KEY FACTS
THE FUND AT A GLANCE
GOAL: High current income with preservation of capital. As with any
mutual fund, there is no assurance that the fund will achieve
its goal.
STRATEGY: Invests mainly in securities of any maturity issued or
guaranteed by the U.S. Government and its agencies.
MANAGEMENT: Fidelity Management & Research Company (FMR) is the
management arm of Fidelity Investments, which was established in 1946
and is now America's largest mutual fund manager.
SIZE: As of September 30, 1997, the fund had over $__
[m/b]illion in assets.
WHO MAY WANT TO INVEST
This non-diversified fund may be a ppropriate for investors who
seek high current income from a portfolio of U.S. Government
securities. The fund's level of risk and potential reward depend on
the quality and maturity of its investments.
The value of the fund's investments and the income they generate will
vary from day to day, and generally reflect interest rates, market
conditions, and other eco nomic and political news. The fund's
investments are also subject to prepayment risk, which can lower the
fund's yield, particularly in periods of declining interest rates.
When you sell your shares, they may be worth more or less than
what you paid for them. By itself, the fund does not constitute a
ba lanced investment plan.
[PLEASE CONSULT YOUR SPM AND APPROPRIATE FINANCIAL REPORTS TO
DETERMINE IF FUND'S STATUS AS A NON-DIVERSIFIED FUND ADDS SIGNIFICANT
RISK: Non-diversified funds may invest a greater portion of their
assets in securities of individual issuers than diversified funds. As
a result, changes in the market value of a single issuer could cause
greater fluctuations in share value than would occur in a more
diversified fund.]
THE SPECTRUM OF
FIDELITY FUNDS
BROAD CATEGORIES OF FIDELITY
FUNDS ARE PRESENTED HERE IN
ORDER OF ASCENDING RISK.
GENERALLY, INVESTORS SEEKING TO
MAXIMIZE RETURN MUST ASSUME
GREAT ER RISK. GOVERNMENT
SECURITIES IS IN THE INCOME
CATEGORY.
(SOLID BULLET) MONEY MARKET SEEKS
INCOME AND STABILITY BY
INVESTING IN HIGH-QUALITY,
SHORT-TERM INVESTMENTS.
(RIGHT ARROW) INCOME SEEKS INCOME BY
INVESTING IN BONDS.
(SOLID BULLET) GROWTH AND INCOME SEEKS
LONG-TERM GROWTH AND INCOME
BY INVESTING IN STOCKS AND
BONDS.
(SOLID BULLET) GROWTH SEEKS LONG-TERM
GROWTH BY INVESTING MAINLY IN
STOCKS.
(CHECKMARK)
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you may pay when you buy
or sell shares of a fund. In addition, you may be charged an annual
account maintenance fee if your account balance falls below $2,500.
See "Transac tion Details," page __, for an explanation of how
and when these charges apply.
Maximum sales charge on purchases None
and reinvested distributions
Deferred sales charge on redemptions None
Exchange fee None
Annual account maintenance fee (for accounts under $2,500) $12.00
ANNUAL FUND OPERATING EXPENSES are paid out of the fund's assets.
The fund pays a management fee to FMR. It also incurs other
expenses for services such as maintaining shareholder records and
furnishing shareholder state ments and financial reports. The
fund's expenses are factored into its share price or dividends and
are not charged directly to shareholder accounts (see "Breakdown of
Expenses" page ).
The following figures are based on historical expenses [ONLY IF A
FUND HAS A MATERIAL (AS DIRECTED BY FUND REPORTING) TRANSFER AGENT OR
REDEMPTION FEE REIMBURSEMENT, EXPENSE CAP CHANGE, OR MANAGEMENT
CONTRACT CHANGE OTHER THAN A BREAKPOINT CHANGE: , adjusted to reflect
current fees,] of the fund and are calculated as a percentage of
average net assets of the fund. [A portion of the brokerage
commissions that the fund pays is used to reduce the fund's expenses.
In addition, the fund has e ntered into arrangements with its
custodian and transfer agent whereby credits realized as a result
of uninvested cash balances are used to r educe custodian and
transfer agent expenses. Including these reductions, the total fund
operating expenses pre sented in the table would have been
__%.]
Management fee [(after reimbursement)] %
12b-1 fee None
Other expenses %
Total fund operating expenses %
EXAMPLES: Let's say, hypothetically, that the fund's annual return
is 5% and that its operating expenses are exactly as just
described. For every $1,000 you invested, here's how much you would
pay in total expenses if you close your account after the number of
years indicated:
After 1 year $
After 3 years $
After 5 years $
After 10 years $
These examples illustrate the effect of expenses, but are not meant to
suggest actual or expected costs or returns, all of which may vary.
[IF FUND IS IN REIMBURSEMENT: FMR has voluntarily agreed to
reimburse the fund to the extent that total operating expenses exceed
__% of its average net assets. If this agreement were not in effect,
the management fee, other expenses, and total operating expenses would
have been __%, __%, and __%, respectively. Expenses eligible for
reimbursement do not include interest, taxes, brokerage commissions,
or extraordinary expenses.]
UNDERSTANDING
EXPENSES
OPERATING A MUTUAL FUND
INVOLVES A VARIETY OF EXPENSES
FOR PORTFOLIO MANAGEMENT,
SHAREHOLDER STATEMENTS, TAX
REPORTING, AND OTHER SERVICES.
THESE COSTS ARE PAID FROM THE
FUND'S ASSETS; THEIR EFFECT IS
ALREADY FACTORED INTO ANY
QUOTED SHARE PRICE OR RETURN.
(CHECKMARK)
FINANCIAL HIGHLIGHTS
The financial highlights table that follows has been audited by
______________, independent a c countants. The fund's financial
high lights, financial statements, and report of the auditor are
included in the fund's Annual Report, and are incorporated by
reference into (are legally a part of) the fund's SAI. Contact
Fidelity for a free copy of the Annual Report or the SAI.
[FINANCIAL HIGHLIGHTS TO BE FILED BY SUBSEQUENT AMENDMENT.]
PERFORMANCE
Bond fund performance can be measured as TOTAL RETURN or YIELD. The
total returns that follow are based on historical fund results and do
not reflect the effect of taxes.
The fund's fiscal year runs from October 1 through September
30. The tables be low show the fund's performance over past
fiscal years compared to different measures, including a comparative
index and a competitive funds average. The chart on page __
presents calendar year performance.
AVERAGE ANNUAL TOTAL RETURNS
Fiscal periods ended Past 1 Past 5 Past 10
September 30, 1997 year years years
Government Securities % % %
Salomon Brothers % % %
Treasury/Agency Index
Lipper General U.S. % % %
Government Funds Average
CUMULATIVE TOTAL RETURNS
Fiscal periods ended Past 1 Past 5 Past 10
September 30, 1997 year years years
Government Securities % % %
Salomon Brothers % % %
Treasury/Agency Index
Lipper General U.S. % % %
Government Funds Average
UNDERSTANDING
PERFORMANCE
BECAUSE THIS FUND INVESTS IN
FIXED-INCOME SECURITIES, ITS
PERFORMANCE IS RELATED TO
CHANGES IN INTEREST RATES. FUNDS
THAT HOLD SHORT-TERM BONDS ARE
USUALLY LESS AFFECTED BY
CHANGES IN INTEREST RATES THAN
LONG-TERM BOND FUNDS. FOR THAT
REASON, LONG-TERM BOND FUNDS
TYPICALLY OFFER HIGHER YIELDS
AND CARRY MORE RISK THAN
SHORT-TERM BOND FUNDS.
(CHECKMARK)
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.
YIELD refers to the income generated by an investment in the fund over
a given period of time, expressed as an annual percentage rate. Yields
are calculated according to a standard that is required for all stock
and bond funds. Because this differs from other accounting methods,
the quoted yield may not equal the income actually paid to
shareholders.
SALOMON BROTHERS TREASURY/AGENCY INDEX is a market capitalization
weighted index of U.S. Treasury and U.S. Government agency securities
with fixed-rate coupons and weighted average lives of at least one
year.
Unlike the fund's returns, the total returns of the comparative
index do not include the effect of any brokerage commissions,
transaction fees, or other costs of investing.
THE CONSUMER INDEX is a widely recognized measure of inflation
calculated by the U.S. Government.
THE COMPETITIVE FUNDS AVERAGE is the Lipper General U.S.
Government Funds Average. As of September 30, 1997, the average
reflected the perfo r mance of ___ mutual funds with similar
investment objectives. This average,
published by Lipper Analytical Services, Inc., excludes the effect of
sales loads.
YEAR-BY-YEAR TOTAL RETURNS
Calendar years 1987 1988 1989 1990 1991 1992 1993 1994 1995
1996
Government Securities % % % % % % % % % %
Salomon Brothers Treasury/
Agency Index % % % % % % % % % %
Lipper General U.S. Government
Funds Average % % % % % % % % % %
Consumer Price Index % % % % % % % % % %
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 1, Col: 2, Value: nil
Row: 2, Col: 1, Value: nil
Row: 2, Col: 2, Value: nil
Row: 3, Col: 1, Value: nil
Row: 3, Col: 2, Value: nil
Row: 4, Col: 1, Value: nil
Row: 4, Col: 2, Value: nil
Row: 5, Col: 1, Value: nil
Row: 5, Col: 2, Value: nil
Row: 6, Col: 1, Value: nil
Row: 6, Col: 2, Value: nil
Row: 7, Col: 1, Value: nil
Row: 7, Col: 2, Value: nil
Row: 8, Col: 1, Value: nil
Row: 8, Col: 2, Value: nil
Row: 9, Col: 1, Value: nil
Row: 9, Col: 2, Value: nil
Row: 10, Col: 1, Value: nil
Row: 10, Col: 2, Value: nil
(large solid box) Government
Securities
The fund's recent strategies, performance, and holdings are detailed
twice a year in financial reports, which are sent to all shareholders.
For current performance or a free annual report, call 1-800-544-8888.
TOTAL RETURNS AND YIELDS ARE BASED ON PAST RESULTS AND ARE NOT AN
INDICATION OF FUTURE PERFORMANCE.
THE FUND IN DETAIL
CHARTER
GOVERNMENT SECURITIES IS A MUTUAL FUND: an investment that
pools shareholders' money and invests it toward a specified goal.
The fund is a non-diversified fund of Fidelity Income Fund, an
open-end management investment company organized as a Massachusetts
busi ness trust on August 7, 1984.
T HE 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 fund's activities, review contractual arrangements
with companies that provide services to the fund, and review the
fund's perfo rmance. The trustees serve as trustees for other
Fidelity funds. The majority of trustees are not otherwise affiliated
with Fidelity.
THE FUND 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. Fidelity 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.
FMR AND ITS AFFILIATES
The fund is managed by FMR, which chooses the fund's investments
and handles its business affairs.
Curt Hollingsworth is Vice President and manager of Government
Securities, which he has managed since February 1997. He also manages
several other Fidelity funds. Since joining Fidelity in 1983, Mr.
Hollingsworth has worked as a fixed-income trader and portfolio
manager.
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 Service Company , Inc. (FSC) performs transfer agent
servicing func tions for the fund.
FMR Corp. is the ultimate parent company of FMR. 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.
[NOTE: INCLUDE ONLY IF FMR AND ITS AFFILIATES TOGETHER HAVE GREATER
THAN 25% OWNERSHIP IN THE FUND: As of [DATE NOT EARLIER THAN 30 DAYS
PRIOR TO SEC FILING DATE], approximately ____% of the fund's total
outstanding shares were held by [FMR/FMR and [an] FMR
affiliate[s]/[an] FMR affiliate[s].]
[NOTE: INCLUDE ONLY IF A SHAREHOLDER (OTHER THAN FMR OR AN FMR
AFFILIATE) HAS GREATER THAN 25% OWNERSHIP IN THE FUND: As of [DATE NOT
EARLIER THAN 30 DAYS PRIOR TO SEC FILING DATE], approximately ____% of
the fund's total outstanding shares were held by [NAME OF
SHAREHOLDER].]
FMR may use its broker-dealer affiliates and other firms that sell
fund shares to carry out the fund's transactions, pr ovided that
the fund receives brokerage services and commission rates comparable
to those of other broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
BOND FUNDS IN GENERAL. The yield and share price of a bond fund
change daily based on changes in interest rates and market conditions,
and in response to other economic, political or financial events. The
types and maturities of the securities a bond fund purchases and the
credit quality of their issuers will impact a bond fund's reaction to
these events.
INTEREST RATE RISK. In general, bond prices rise when interest
rates fall and fall when interest rates rise. Longer-term bonds are
usually more sensitive to interest rate changes. In other words, the
longer the maturity of a bond, the greater the impact a change in
interest rates is likely to have on the bond's price. In addition,
short-term interest rates and long-term interest rates do not
necessarily move in the same amount or in the same direction. A
short-term bond tends to react to changes in short-term interest rates
and a long-term bond tends to react to changes in long-term interest
rates.
ISSUER RISK. The price of a bond is affected by the credit quality
of its issuer. Changes in the financial condition of an issuer,
changes in general economic conditions, and changes in specific
economic conditions that affect a particular type of issuer can impact
the credit quality of an issuer. Lower quality bonds generally tend to
be more sensitive to these changes than higher quality bonds.
PREPAYMENT RISK. Many types of debt securities, including mortgage
securities, are subject to prepayment risk. Prepayment risk occurs
when the issuer of a security can prepay principal prior to the
security's maturity. Securities subject to prepayment risk generally
offer less potential for gains during a declining interest rate
environment, and similar or greater potential for loss in a rising
interest rate environment. In addition, the potential impact of
prepayment features on the price of a debt security may be difficult
to predict and result in greater volatility.
FIDELITY'S APPROACH TO BOND FUN DS. The total return from a
bond includes both income and price gains or losses. In selecting
investments for a bond fund, FMR considers a bond's expected income
together with its potential for price gains or losses. While income is
the most important component of bond returns over time, a bond fund's
emphasis on income does not mean the fund invests only in the
highest-yielding bonds available, or that it can avoid losses of
principal.
FMR focuses on assembling a portfolio of income-producing bonds
that it believes will provide the best balance between risk and return
within the range of eligible investments for the fund. FMR's
evaluation of a potential investment includes an analysis of the
credit quality of the issuer, its structural features, its current
price compared to FMR's estimate of its long-term value, and any
short-term trading opportunities resulting from market inefficiencies.
In structuring a bond fund, FMR allocates assets among different
market sectors (for example, U.S. Treasury or U.S. Government agency
securities) and different maturities based on its view of the relative
value of each sector or maturity. The performance of the fund will
depend on how successful FMR is in pursuing this approach.
GOVERNMENT SECURITIES FUND seeks high current income, consistent
with preservation of principal, by investing in U.S. Government
securities and instruments related to U.S. Government securities under
normal conditions. Al- though the fund does not maintain an
average maturity within a specified range, FMR seeks to manage the
fund so that it generally reacts to changes in interest rates
similarly to government bonds with maturities between five and
12 years. In determining a security's maturity for purposes of
calculating the fund's average maturity, an estimate of the average
time for its principal to be paid may be used. This can be
substantially shorter than its stated final maturity. As of September
30, 1997, the fund's dollar weighted average maturity was
approximately __ years.
T he fund normally invests only in U.S. Government
securities, repurchase agreements and other instruments r elated to
U.S. Government securities. Un der normal conditions, FMR
will invest at least 65% of the fund's total assets in U.S. Government
securities and repurchase agreements for U.S. Government securities.
Other instruments may include futures or options on U.S. Government
securities or interests in U.S. Government securities that have been
repackaged by dealers or other third parties. It is important to note
that neither the fund's share price nor yield is guaranteed by the
U.S. Government.
FMR may use various techniques to hedge a portion of a fund's risks,
but there is no guarantee that these strategies will work as intended.
When you sell your shares of a fund, they may be worth more or less
than what you paid for them.
FMR normally invests the fund's assets according to its investment
strategy. The fund also reserves the right to i nvest without
limitation in investment-grade money market or short-term debt
instruments for temporary, defensive purposes.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which the fund may invest, strategies FMR may employ in
pursuit of the fund's investment objective, and a summary of
related risks. Any restrictions listed supplement those discussed
earlier in this section. A complete list ing of the fund's
limitations and more detailed information about the fund's investments
are contained in the fund's SAI. Policies and limitations are
considered at the time of purchase; the sale of instruments is not
required in the event of a subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these
techniques unless it believes that they are consistent with the
fund's investment objective and policies and that doing so will
help the fund achieve its goal. Fund holdings and recent
investment strategies are de tailed in the fund's financial
reports, which are sent to shareholders twice a year. For a free
SAI or financial report, call 1-800-544-8888.
DEBT SECURITIES. Bonds and other debt instruments are used by issuers
to borrow money from investors. The issuer generally pays the
investor a fixed, variable, or floating rate of interest, and must
repay the amount borrowed at maturity. Some debt securities, such as
zero coupon bonds, do not pay current interest, but are sold at a
discount from their face values.
Debt securities have varying levels of sensitivity to changes
in interest rates and varying degrees of credit quality. In
general, bond prices rise when interest rates fall, and fall when
interest rates rise. Longer-term bonds and zero coupon bonds are
generally more sensitive to interest rate changes. In addition, bond
prices are also affected by the credit quality of the issuer.
U.S. GOVERNMENT SECURITIES are high-quality 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
su pported 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.
MORTGAGE SECURITIES include interests in pools of commercial or
residential mortgages, and may include complex instruments such as
collateralized mortgage obligations and stripped mortgage-backed
securities. Mortgage securities may be issued by agencies or
instrumentalities of the U.S. Government or by private entities.
The price of a mortgage security may be significantly affected by
changes in interest rates. Some mortgage securities may have a
structure that makes their reaction to interest rates and other
factors difficult to predict, making their price highly volatile.
Also, mortgage securities, especially stripped mortgage-backed
securities, are subject to prepayment risk. Securities subject to
prepayment risk generally offer less potential for gains during a
declining i n terest rate environment, and similar or greater
potential for loss in a rising interest rate environment.
RESTRICTIONS: The fund may not invest more than 40% of its assets
in mortgage securities.
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 debt securities, although stripped
securities may be more volatile and the value of certain types of
stripped securities may move in the same direction as interest rates.
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, the 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.
ADJUSTING INVESTMENT EXPOSURE. The fund can use various techniques
to increase or decrease its exposure to changing security prices,
interest rates, or other factors that affect security values. These
techniques may involve derivative transactions such as buying and
selling options and futures contracts, entering into swap agreements
and purchasing indexed securities.
FMR can use these practices to adjust the risk and return
characteristics of the fund's portfolio of investments. If FMR
judges market conditions incorrectly or employs a strategy that does
not correlate well with the fund's inves tments, these
techniques could result in a loss, regardless of whether the intent
was to reduce risk or increase return. These techniques may increase
the vol atility of the fund and may involve a small investment
of cash relative to the magnitude of the risk assumed. In addition,
these techniques could result in a loss if the counterparty to the
transaction does not perform as promised.
ILLIQUID 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.
Difficulty in selling securities may result in a loss or may be
costly to the fund.
RESTRICTIONS: The fund may not pu rchase 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 TRANSACTION S 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.
CASH MANAGEMENT. The 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 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.
BORROWING. The fund may borrow from banks or from other funds
advised by FMR, or through reverse repurchase agreements. If the
fund borrows money, its share price may be subject to greater
fluctuation until the borrowing is paid off. If the fund makes
additional inves tments while borrowings are outstanding, this may
be considered a form of leverage.
RESTRICTIONS: The fund may borrow only for temporary or
emergency purposes, but not in an amount exceeding 331/3% of its total
assets.
LENDING securities to broker-dealers and institutions, including
Fidelity Brokerage Services, Inc. (FBSI), an affiliate of FMR, is a
means of earning income. This practice could result in a loss or a
delay in recovering the fund's securities. The fund may also lend
money to other funds advised by FM R.
RESTRICTIONS: Loans, in the aggregate, may not exceed 33 1/3 %
of the fund's total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages
are fundamental, that is, subject to change only by shareholder
approval. The following paragraphs restate all those that are
fundamental. All policies stated throughout this prospectus, other
than those identified in the following paragraphs, can be changed
without shareholder approval.
The fund s eeks a high level of current income, consistent with
preservation of principal. The fund invests in securities issued by
the U.S. Government or issued by U.S. Government agencies or
instrumentalities, and in certain options and futures contracts.
The fund may borrow only for temporary or emergency purposes,
but not in an amount exceeding 33 1/3 % of its total assets.
Loans, in the aggregate, may not exceed 331/3% of the fund's total
assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the fund pays fees related to its daily
operations. Expenses paid out of the fund's assets are reflected
in its share price or dividends; they are neither billed directly to
shareholders nor deducted from shareholder accounts.
The fund pays a MANAGEMENT FEE to FMR for managing its
investments and business affairs. The fund also pays OTHER
EXPENSES, which are explained on page .
FMR may, from time to time, agree to re imburse the fund for
management fees and other expenses above a specified limit. FMR
retains the ability to be repaid by the fund if expenses fall below
the specified limit prior to the end of the fiscal year. Reimbursement
arrangements, which may be terminated at any time without notice,
can decrease the fund's expenses and boost its performance.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month. The fee
is calculated by adding a group fee rate to an individual fund fee
rate, and multiplying the result by the fund's average net assets.
The group fee rate is based on the average net assets of all the
mutual funds advised by FMR. This rate cannot rise above 0 .37%,
and it drops as total assets under management increase.
[ IF THE FUND HAS AN EXPENSE GUARANTEE (NOT A REGULAR EXPENSE
CAP): FMR has voluntarily agreed to limit the fund's total
operating expenses to an annual rate of__% of average net assets. This
agreement will continue until __________.]
For September 1997, the group fee rate was 0. __%. The
individual fund fee rate is 0.30%.
[ INCLUDE THIS FIRST PHRASE IF FUND IS IN REIMBURSEMENT:
Because of a reimbursement arrangement,] [T / t]he total management
fee rate for the fiscal year ended September 30, 1997 was 0. __%.
[IF THE RATE IS AT LEAST .75%: This rate was higher than that of
most other mutual funds.]
UNDERSTANDING THE
MANAGEMENT FEE
THE MANAGEMENT FEE FMR
RECEIVES IS DESIGNED TO BE
RESPONSIVE TO CHANGES IN FMR'S
TOTAL ASSETS UNDER
MANAGEMENT. BUILDING THIS
VARIABLE INTO THE FEE
CALCULATION ASSURES
SHAREHOLDERS THAT THEY WILL PAY
A LOWER RATE AS FMR'S ASSETS
UNDER MANAGEMENT INCREASE.
(CHECKMARK)
OTHER EXPENSES
While the management fee is a significant component of the fund's
annual op erating costs, the fund has other expenses as well.
The fund contracts with FSC to perform transfer agency, dividend
disbursing, shareholder servicing, and accounting functions. These
services include processing shareholder transactions, valu ing the
fund's investments, handling securities loans, and calculating the
fund's share price and dividends.
For the fiscal year ended September 30, 1997, the fund paid
transfer agency and pricing and bookkeeping fees equal to 0.___% of
its average net assets. [FUND REPORTING TO ADD AS APPROPRIATE: This
amount is before expense reductions, if any.]
The fund also pays other expenses, such as legal, audit, and
custodian fees; in some instances, proxy solicitation costs; and
the compensation of trustees who are not affiliated with Fidelity.
A broker-dealer may use a portion of the commissions paid by the fund
to reduce the fund's custodian or transfer agent fees.
The fund has adopted a DISTRIBUTION AND SERVICE PLAN. This plan
recognizes that FMR may use its management fee revenues, as well as
its past profits or its resources from any other source, to pay FDC
for expenses incurred in connection with the distribution of fund
shares. FMR directly, or through FDC, may make payments to third
parties, such as banks or broker-dealers, that engage in the sale of,
or provide shar e holder support services for, the fund's shares.
Currently, the Board of Trustees has not authorized such payments.
The fund's portfolio turnover rate for the fiscal year ended
September 30, 1997 was __%. This rate varies from year to year.
[IF RATE IS 100% OR MORE: High turnover rates increase transaction
costs and may increase taxable capital gains. FMR considers these
effects when evaluating the anticipated bene fits of short-term
investing.]
YOUR ACCOUNT
DOING BUSINESS WITH FIDELITY
Fidelity Investments was established in 1946 to manage one of
America's first mutual funds. Today, Fidelity is the largest mutual
fund company in the country, and is known as an innovative provider of
high-quality financial services to individuals and institutions.
In addition to its mutual fund business, the company operates one of
America's leading discount brokerage firms, Fidelity Brokerage
Services, Inc. (FBSI). Fidelity is also a leader in providing
tax-sheltered retirement plans for individuals investing on their own
or through their employer.
Fidelity is committed to providing investors with practical
information to make investment decisions. Based in Boston, Fidelity
provides customers with complete service 24 hours a day, 365 days a
year, through a network of telephone service centers around the
country.
To reach Fidelity for general information, call these numbers:
(small solid bullet) For mutual funds, 1-800-544-8888
(small solid bullet) For brokerage, 1-800-544-7272
If you would prefer to speak with a representative in person, Fidelity
has over __ w alk-in Investor Centers across the country.
TYPES OF ACCOUNTS
You may set up an account directly in the fund or, if you own or
intend to pu rchase individual securities as part of your total
investment portfolio, you may consider investing in the fund
through a brokerage account.
You may purchase or sell shares of the fund through an investment
professio nal, including a broker, who may charge you a transaction
fee for this service. If you invest through FBSI, another financial
institution, or an investment professional, read their program
materials for any special provisions, additional service features or
fees that may apply to your investment in the fund. Certain
features of the fund, such as the minimum initial or subsequent
investment amounts, may be modified.
The different ways to set up (register) your account with Fidelity are
listed in the table that follows.
The account guidelines that follow may not apply to certain retirement
accounts. If you are investing through a retirement account or if your
employer offers the 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 Fidelity directly, as appropriate.
FIDELITY FACTS
Fidelity offers the broadest
selection of mutual funds
in the world.
(solid bullet) Number of Fidelity mutual
funds: over ___
(solid bullet) Assets in Fidelity mutual
funds: over $___ billion
(solid bullet) Number of shareholder
accounts: over __ million
(solid bullet) Number of investment
analysts and portfolio
managers: over __
(checkmark)
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
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 70 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) KEOGH OR CORPORATE PROFIT SHARING AND MONEY PURCHASE
PENSION PLANS allow self-employed individuals or small business owners
(and their employees) to make tax-deductible contributions for
themselves and any eligible employees up to $30,000 per year.
(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.
(solid bullet) 403(B) CUSTODIAL ACCOUNTS are available to employees of
most tax-exempt institutions, including schools, hospitals, and other
charitable organizations.
(solid bullet) 401(K) PROGRAMS 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.
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).
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR
OTHER GROUPS
Requires a special application.
HOW TO BUY SHARES
THE FUND'S SHARE PRICE, called net a sset value per share
(NAV), is calculated every business day. The fund's shares are
sold without a sales charge.
Shares are purchased at the next share price calculated after your
investment is received and accepted. Share price is normally
calculated at 4:00 p.m. Eastern time.
IF YOU ARE NEW TO FIDELITY, complete and sign an account application
and mail it along with your check. You may also open your account in
person or by wire as described on page . If there is no application
accompanying this prospectus, call 1-800-544-8888.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Mail in an application with a check, or
(small solid bullet) Open your account by exchanging from another
Fidelity fund.
IF YOU ARE INVESTING THROUGH A TAX-SHELTERED RETIREMENT PLAN, such as
an IRA, for the first time, you will need a special application.
Retirement investing also involves its own investment procedures. Call
1-800-544-8888 for more information and a retirement application.
If you buy shares by check or Fidelity Money Line(registered
trademark), and then sell those shares by any method other than by
exchange to another Fidelity fund, the payment may be delayed for up
to seven business days to ensure that your previous investment has
cleared.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $2,500
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 $250
Through regular investment plans* $100
MINIMUM BALANCE $2,000
For Fidelity IRA, Rollover IRA, SEP-IRA
and Keogh accounts $500
*For more information about regular investment plans, please refer to
"Investor Services," page __.
These minimums may vary for investments through Fidelity Portfolio
Advisory Services. 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 Fidelity retirement accounts . Refer to the
program materials for details.
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TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
PHONE 1-800-544-7777
(PHONE_GRAPHIC) (SMALL SOLID BULLET) EXCHANGE FROM ANOTHER FIDELITY FUND (SMALL SOLID BULLET) EXCHANGE FROM ANOTHER
FIDELITY FUND
ACCOUNT WITH THE SAME REGISTRATION, ACCOUNT WITH THE SAME REGISTRATION,
INCLUDING NAME, ADDRESS, AND INCLUDING NAME, ADDRESS, AND
TAXPAYER ID NUMBER. TAXPAYER ID NUMBER.
(SMALL SOLID BULLET) U SE FIDELITY MONEY LINE
TO TRANSFER
FROM YOUR BANK ACCOUNT. CALL BEFORE
YOUR FIRST USE TO VERIFY THAT THIS
SERVICE IS IN PLACE ON YOUR ACCOUNT.
MAXIMUM MONEY LINE: UP TO
$100,000 .
</TABLE>
<TABLE>
<CAPTION>
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MAIL
(MAIL_GRAPHIC) (SMALL SOLID BULLET) COMPLETE AND SIGN THE APPLICATION. (SMALL SOLID BULLET) MAKE YOUR CHECK PAYABLE TO
"FIDELITY
MAKE YOUR CHECK PAYABLE TO GOVERNMENT SECURITIES FUND."
"FIDELITY GOVERNMENT SECURITIES IND ICATE YOUR FUND ACCOUNT NUMBER
FUND." MAIL TO THE ADDRESS INDICATED ON YOUR CHECK AND MAIL TO THE
ON THE APPLICATION. ADDRESS PRINTED ON YOUR ACCOUNT
STATEMENT.
(SMALL SOLID BULLET) EXCHANGE BY MAIL: CALL
1-800-544-6666 FOR INSTRUCTIONS.
</TABLE>
<TABLE>
<CAPTION>
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IN PERSON
(HAND_GRAPHIC) (SMALL SOLID BULLET) BRING YOUR APPLICATION AND CHECK TO A (SMALL SOLID BULLET) BRING YOUR CHECK TO A
FIDELITY INVESTOR
FIDELITY INVESTOR CENTER. CALL CENTER. CALL 1-800-544-9797 FOR THE
1-800-544-9797 FOR THE CENTER CENTER NEAREST YOU.
NEAREST YOU.
</TABLE>
<TABLE>
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WIRE
(WIRE_GRAPHIC) (SMALL SOLID BULLET) CALL 1-800-544-7777 TO SET UP YOUR (SMALL SOLID BULLET) NOT AVAILABLE FOR RETIREMENT
ACCOUNTS.
ACCOUNT AND TO ARRANGE A WIRE (SMALL SOLID BULLET) WIRE TO:
TRANSACTION. NOT AVAILABLE FOR BANKERS TRUST COMPANY,
RETIREMENT ACCOUNTS. BANK ROUTING #021001033,
(SMALL SOLID BULLET) WIRE WITHIN 24 HOURS TO: ACCOUNT #00163053.
BANKERS TRUST COMPANY, SPECIFY THE COMPLETE NAME OF THE
BANK ROUTING #021001033, FUND AND INCLUDE YOUR ACCOUNT
ACCOUNT #00163053. NUMBER AND YOUR NAME.
SPECIFY THE COMPLETE NAME OF THE
FUND AND INCLUDE YOUR NEW ACCOUNT
NUMBER AND YOUR NAME.
</TABLE>
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AUTOMATICALLY (AUTOMATIC_GRAPHIC) (SMALL SOLID BULLET) NOT AVAILABLE. (SMALL SOLID BULLET) USE FIDELITY AUTOMATIC
ACCOUNT
BUILDER. SIGN UP FOR THIS SERVICE
WHEN OPENING YOUR ACCOUNT, OR CALL
1-800-544-6666 TO ADD IT.
</TABLE>
<TABLE>
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(TDD_GRAPHIC) TDD - SERVICE FOR THE DEAF AND HEARING IMPAIRED: 1-800-544-0118
</TABLE>
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 share price calculated after your order is received
and accepted. Share price is normally calculated at 4 p.m.
Eastern time.
TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the
methods described on these two pages.
TO SELL SHARES IN A FIDELITY RETIREMENT ACCOUNT, your request must be
made in writing, except for exchanges to other Fidelity funds, which
can be requested by phone or in writing. Call 1-800-544-6666 for a
retirement distribution form.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least
$2,000 worth of shares in the account to keep it open ($500 for
retirement accounts).
TO SELL SHARES BY BANK WIRE OR FIDELITY MONEY LINE, you will
need to sign up for these services in advance.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to
protect you and Fidelity from fraud. Your request must be made in
writing and include a signature guarantee if any of the following
situations apply:
(small solid bullet) You wish to redeem more than $100,000 worth of
shares,
(small solid bullet) Your account registration has changed within the
last 30 days,
(small solid bullet) The check is being mailed to a different address
than the one on your account (record address),
(small solid bullet) The check is being made payable to someone other
than the account owner, or
(small solid bullet) The redemption proceeds are being transferred to
a Fidelity account with a different registration.
You should be able to obtain a signature guarantee from a bank, broker
(including Fidelity Investor Centers), 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.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(small solid bullet) Your name,
(small solid bullet) The fund's name,
(small solid bullet) Your fund account number,
(small solid bullet) The dollar amount or number of shares to be
redeemed, and
(small solid bullet) Any other applicable requirements listed in the
table that follows.
Unless otherwise instructed, Fidelity will send a check to the record
address. Deliver your letter to a Fidelity Investor Center, or mail it
to:
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
CHECKWRITING
If you have a checkbook for your account, you may write an unlimited
number of checks. Do not, however, try to close out your account by
check.
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ACCOUNT TYPE SPECIAL REQUIREMENTS
PHONE 1-800-544-7777
(PHONE_GRAPHIC) ALL ACCOUNT TYPES EXCEPT (SMALL SOLID BULLET) MAXIMUM CHECK REQUEST: $100,000.
RETIREMENT (SMALL SOLID BULLET) FOR MONEY LINE TRANSFERS TO YOUR BANK ACCOUNT;
MINIMUM: $10; MAXIMUM: UP TO $100,000.
ALL ACCOUNT TYPES (SMALL SOLID BULLET) YOU MAY EXCHANGE TO OTHER FIDELITY FUNDS IF
BOTH ACCOUNTS ARE REGISTERED WITH THE SAME
NAME(S), ADDRESS, AND TAXPAYER ID NUMBER.
MAIL OR IN PERSON
(MAIL_GRAPHIC)
(HAND_GRAPHIC) INDIVIDUAL, JOINT TENANT, (SMALL SOLID BULLET) THE LETTER OF INSTRUCTION MUST BE SIGNED BY ALL
SOLE PROPRIETORSHIP, PERSONS REQUIRED TO SIGN FOR TRANSACTIONS,
UGMA, UTMA EXACTLY AS THEIR NAMES APPEAR ON THE ACCOUNT.
RETIREMENT ACCOUNT (SMALL SOLID BULLET) THE ACCOUNT OWNER SHOULD COMPLETE A
RETIREMENT DISTRIBUTION FORM. CALL
1-800-544-6666 TO REQUEST ONE.
TRUST (SMALL SOLID BULLET) THE TRUSTEE MUST SIGN THE LETTER INDICATING
CAPACITY AS TRUSTEE. IF THE TRUSTEE'S NAME IS NOT
IN THE ACCOUNT REGISTRATION, PROVIDE A COPY OF THE
TRUST DOCUMENT CERTIFIED WITHIN THE LAST 60 DAYS.
BUSINESS OR ORGANIZATION (SMALL SOLID BULLET) AT LEAST ONE PERSON AUTHORIZED BY CORPORATE
RESOLUTION TO ACT ON THE ACCOUNT MUST SIGN THE
LETTER.
(SMALL SOLID BULLET) INCLUDE A CORPORATE RESOLUTION WITH CORPORATE
SEAL OR A SIGNATURE GUARANTEE.
EXECUTOR, ADMINISTRATOR, (SMALL SOLID BULLET) CALL 1-800-544-6666 FOR INSTRUCTIONS.
CONSERVATOR, GUARDIAN
</TABLE>
<TABLE>
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WIRE (WIRE_GRAPHIC) ALL ACCOUNT TYPES EXCEPT (SMALL SOLID BULLET) YOU MUST SIGN UP FOR THE WIRE FEATURE BEFORE
RETIREMENT USING IT. TO VERIFY THAT IT IS IN PLACE, CALL
1-800-544-6666. MINIMUM WIRE: $5,000.
(SMALL SOLID BULLET) YOUR WIRE REDEMPTION REQUEST MUST BE RECEIVED
AND ACCEPTED BY FIDELITY BEFORE 4 P.M. EASTERN
TIME FOR MONEY TO BE WIRED ON THE NEXT
BUSINESS DAY.
</TABLE>
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CHECK (CHECK_GRAPHIC) ALL ACCOUNT TYPES (SMALL SOLID BULLET) MINIMUM CHECK: $500.
(SMALL SOLID BULLET) ALL ACCOUNT OWNERS MUST SIGN A SIGNATURE CARD
TO RECEIVE A CHECKBOOK.
</TABLE>
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(TDD_GRAPHIC) TDD - SERVICE FOR THE DEAF AND HEARING IMPAIRED: 1-800-544-0118
</TABLE>
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your
account.
INFORMATION SERVICES
FIDELITY'S TELEPHONE REPRESENTATIVES are available 24 hours a day, 365
days a year. Whenever you call, you can speak with someone equipped to
provide the information or service you need.
24-HOUR SERVICE
ACCOUNT ASSISTANCE
1-800-544-6666
ACCOUNT TRANSACTIONS
1-800-544-7777
PRODUCT INFORMATION
1-800-544-8888
RETIREMENT ACCOUNT ASSISTANCE
1-800-544-4774
TOUCHTONE XPRESSSM
1-800-544-5555
AUTOMATED SERVICE
(checkmark)
STATEMENTS AND REPORTS that Fidelity sends to you include the
following:
(small solid bullet) Confirmation statements (after every transaction,
except reinvestments, that affects your account balance or your
account registration)
(small solid bullet) Account statements (quarterly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed to your household, even if you have more
than one account in the fund. Call 1-800-544-6666 if you need copies
of financial reports, prospectuses, or historical account information.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of
other Fidelity funds by telephone or in writing.
Note that exchanges out of the fund are limited to four per
calendar year, and that they may have tax consequences for you. For
details on policies and restrictions governing exchanges, including
circumstances under which a shareholder's exchange privilege may be
suspended or revoked, see page .
SYSTEMATIC WITHDRAWAL PLANS let you set up periodic redemptions from
your account.
FIDELITY MONEY LINE(registered trademark) enables you to transfer
money by phone between your bank account and your fund account. Most
transfers are complete within three business days of your call.
REGULAR INVESTMENT PLANS
One easy way to pursue your financial goals is to invest money
regularly. Fidelity offers convenient services that let you transfer
money into your fund account, or between fund accounts, automatically.
While regular investment plans do not guarantee a profit and will not
protect you against loss in a declining market, they can be an
excellent way to invest for retirement, a home, educational expenses,
and other long-term financial goals. Certain restrictions apply for
retirement accounts. Call 1-800-544-6666 for more information.
REGULAR INVESTMENT PLANS
FIDELITY AUTOMATIC ACCOUNT BUILDERSM
TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND
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MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 MONTHLY OR QUARTERLY (SMALL SOLID BULLET) FOR A NEW ACCOUNT, COMPLETE THE APPROPRIATE SECTION ON THE FUND
APPLICATION.
(SMALL SOLID BULLET) FOR EXISTING ACCOUNTS, CALL 1-800-544-6666 FOR AN APPLICATION.
(SMALL SOLID BULLET) TO CHANGE THE AMOUNT OR FREQUENCY OF YOUR INVESTMENT, CALL
1-800-544-6666 AT LEAST THREE BUSINESS DAYS PRIOR TO YOUR NEXT
SCHEDULED INVESTMENT DATE.
</TABLE>
DIRECT DEPOSIT
TO SEND ALL OR A PORTION OF YOUR PAYCHECK OR GOVERNMENT CHECK TO A
FIDELITY FUNDA
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<S> <C> <C>
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 EVERY PAY PERIOD (SMALL SOLID BULLET) CHECK THE APPROPRIATE BOX ON THE FUND APPLICATION, OR CALL
1-800-544-6666 FOR AN AUTHORIZATION FORM.
(SMALL SOLID BULLET) CHANGES REQUIRE A NEW AUTHORIZATION FORM.
</TABLE>
FIDELITY AUTOMATIC EXCHANGE SERVICE
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY
FUND
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<S> <C> <C>
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly, bimonthly, (small solid bullet) To establish, call 1-800-544-6666 after both accounts are
quarterly, or annually opened.
(small solid bullet) To change the amount or frequency of your investment, call
1-800-544-6666.
</TABLE>
A BECAUSE ITS SHARE PRICE FLUCTUATES, THE FUND MAY NOT BE AN
APPROPRIATE CHOICE FOR DIRECT DEPOSIT OF YOUR ENTIRE CHECK.
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
The fund distributes substantially all of its net investment
income and capital gains to shareholders each year. Income dividends
are declared daily and paid monthly. Capital gains are normally
distributed in December.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. If the option you prefer is not listed on
the application, call 1-800-544-6666 for instruc tions. The fund
offers four options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions
will be automatically reinvested in additional shares of the fund. If
you do not indicate a choice on your application, you will be assigned
this option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested, but you will be sent a check for each
dividend distribution.
3. CASH OPTION. You will be sent a check for your dividend and capital
gain distributions.
4. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividend and
capital gain distributions will be automatically invested in another
identically registered Fidelity fund.
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 the fund's NAV on the last day of the
month. Capital gain distributions will be reinvested at the NAV as of
the date the fund deducts the distribution from its NAV. The mailing
of distribution checks will begin within seven days.
UNDERSTANDING
DISTRIBUTIONS
AS A FUND SHAREHOLDER, YOU ARE
ENTITLED TO YOUR SHARE OF THE
FUND'S NET INCOME AND GAINS
ON ITS INVESTMENTS. THE FUND
PASSES ITS EARNINGS ALONG TO ITS
INVESTORS AS DISTRIBUTIONS.
THE FUND EARNS INTEREST FROM ITS
INVESTMENTS. THESE ARE PASSED
ALONG AS DIVIDEND
DISTRIBUTIONS. THE FUND MAY
REALIZE CAPITAL GAINS IF IT SELLS
SECURITIES FOR A HIGHER PRICE
THAN IT PAID FOR THEM. THESE
ARE PASSED ALONG AS CAPITAL
GAIN DISTRIBUTIONS.
(CHECKMARK)
TAXES
As with any investment, you should consider how your investment in the
fund will be taxed. If your account is not a tax-deferred retirement
account, you should be aware of these tax implications.
TAXES ON DISTRIBUTIONS. Distributions 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 could also be taxed by
the country in which you reside. Your 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.
For federal tax purposes, the fund's i ncome and short-term
capital gain distributions are taxed as dividends; long-term capital
gain distributions are taxed as long-term capital gains. Every
January, Fidelity will send you and the IRS a statement showing the
taxable distributions paid to you in the previous year.
M utual 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. Ginnie Mae securities and other
mortgage-backed securities are notable exceptions in most states.
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.
TAXES ON TRANSACTIONS. Your redemptions - including exchanges to other
Fidelity funds - are subject to capital gains tax. A capital gain or
loss is the difference between the cost of your shares and the price
you receive when you sell them.
Whenever you sell shares of the fund, Fidelity will send you a
confirmation statement showing how many shares you sold and at what
price. You will also receive a consolidated transaction statement
every January. However, it is up to you or your tax preparer to
determine whether this sale resulted in a capital gain and, if so, the
amount of tax to be paid. Be sure to keep your regular account
statements; the information they contain will be essential in
calculating the amount of your capital gains.
"BUYING A DIVIDEND." If you buy shares when the fund has realized
but not yet distributed capital gains, you will pay the full price
for the shares and then receive a portion of the price back in the
form of a taxable distribution.
There are tax requirements that all funds must follow in order to
avoid federal taxation. In its effort to adhere to these
requirements, the fund may have to limit its investment activity
in some types of instruments.
TRANSACTION DETAILS
THE FUND IS OPEN FOR BUSINESS each day the New York Stock
Exchange (NYSE) is open. Fidelity normally cal culates the fund's
NAV as of the close of business of the NYSE, normally 4:00 p.m.
Eastern time.
THE FUND'S NAV is the value of a single share. The NAV is
computed by adding the value of the fund's investments, cash, and
other assets, subtracting its liabilities, and then dividing the
result by the number of shares outstanding.
The fund's assets are valued on the basis of information furnished
by a pricing service or market quotations, if available, or by another
method that the Board of Trustees believes accurately reflects fair
value. Short-term securities with remaining maturities of sixty days
or less for which quotations and information furnished by a pricing
service are not readily available are valued on the basis of amortized
cost. This method minimizes the effect of changes in a security's
market value.
THE FUND'S OFFERING PRICE (price to buy one share) is its NAV. The
fund's R EDEMPTION 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 the fund to withhold 31% of your taxable
distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity may only be
liable for losses resulting from unauthorized transactions if it does
not follow reasonable procedures designed to verify the identity of
the caller. Fidelity will request personalized security codes or other
information, and may also record calls. You should verify the accuracy
of your confirmation statements immediately after you receive them. If
you do not want the ability to redeem and exchange by telephone, call
Fidelity for instructions.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during
periods of unusual market activity), consider placing your order by
mail or by visiting a Fidelity Investor Center.
THE FUND RESERVES THE RIGHT TO SUS PEND THE OFFERING OF SHARES
for a pe riod of time. The fund also reserves the right to
reject any specific purchase order, including certain purchases by
exchange. See "Exchange Restrictions" on page . Purchase orders may be
refused if, in FMR's opinion, they would disrupt management of the
fund.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your order will be processed at
the next offering price 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) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check,
each check must have a value of at least $50.
(small solid bullet) The fund reserves the right to limit the
number of checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will
be cancelled and you could be liable for any losses or fees the
fund or its transfer agent has incurred.
(small solid bullet) You begin to earn dividends as of the first
business day following the day of your purchase.
TO AVOID THE COLLECTION PERIOD associated with check and Money Line
purchases, consider buying shares by bank wire, U.S. Postal money
order, U.S. Treasury check, Federal Reserve check, or direct deposit
instead.
CERTAIN FINANCIAL INSTITUTIONS that have entered into sales agreements
with FDC may enter confirmed purchase orders on behalf of customers by
phone, with payment to follow no later than the time when the fund
is priced on the following business day. If payment is not
received by that time, the financial institution could be held liable
for resulting fees or losses.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at
the next NAV calculated after your request is received and accepted.
Note the following:
(small solid bullet) Normally, redemption proceeds will be mailed to
you on the next business day, but if making immediate payment could
adversely affect the fund, it may take up to seven days to pay
you.
(small solid bullet) Shares will earn dividends through the date of
redemption; however, shares redeemed on a Friday or prior to a holiday
will continue to earn dividends until the next business day.
(small solid bullet) Fidelity Money Line redemptions generally will be
credited to your bank account on the second or third business day
after your phone call.
(small solid bullet) The fund may hold payment on r edemptions
until it is reasonably satisfied that investments made by check or
Fidelity Money Line have been collected, which can take up to seven
business days.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays),
when trading on the NYSE is restricted, or as permitted by the SEC.
(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.
TO SELL SHARES ISSUED WITH CERTIFICATES, call 1-800-544-6666
for instructions. The fund no longer issues share certificates.
FIDELITY RESERVES THE RIGHT TO DEDUCT AN ANNUAL MAINTENANCE FEE of
$12.00 from accounts with a value of less than $2,500, subject to an
annual maximum charge of $ 24.00 per shareholder. It is expected
that accounts will be valued on the second Friday in November of each
year. Accounts opened after September 30 will not be subject to the
fee for that year. The fee, which is payable to the transfer agent, is
designed to offset in part the relatively higher costs of servicing
smaller ac counts. This fee will not be deducted from Fidelity
brokerage accounts, r etirement accounts (except non-prototype
retirement accounts), accounts using regular investment plans, or if
total assets with Fidelity exceed $30,000. Eligibility for the
$30,000 waiver is determined by aggregating Fidelity accounts
maintained by FSC or FBSI which are registered under the same
social security number or which list the same social security
number for the custodian of a Uniform Gifts/Transfers to Minors
Act account.
IF YOUR ACCOUNT BALANCE FALLS BELOW $2,000, you will be given 30
days' n otice 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 fund
without reimbursement from the fund. Qualified recipients are
sec urities 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 the
fund for shares of other Fidelity funds. However, you should note the
following:
(small solid bullet) The fund 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, read its
prospectus.
(small solid bullet) If you exchange into a fund with a sales charge,
you pay the percentage-point difference between that fund's sales
charge and any sales charge you have previously paid in connection
with the shares you are exchanging. For example, if you had already
paid a sales charge of 2% on your shares and you exchange them into a
fund with a 3% sales charge, you would pay an additional 1% sales
charge.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Because excessive trading can hurt fund
performance and shareholders, the fund reserves the right to
temp orarily or permanently terminate the exchange privilege of any
investor who makes more than four exchanges out of the fund per
calendar year. Accounts under common ownership or control, including
accounts with the same taxpayer identification number, will be counted
together for purposes of the four exchange limit.
(small solid bullet) The exchange limit may be modified for accounts
in certain institutional retirement plans to conform to plan exchange
limits and Department of Labor regulations. See your plan materials
for further information.
(small solid bullet) The fund reserves the right to refuse
exchange purchases by any person or group if, in FMR's judgment, the
fund would be unable to invest the money effectively in accordance
with its investment objective and policies, or would otherwise
potentially be adversely affected.
(small solid bullet) Your exchanges may be restricted or refused if
the fund receives or antic ipates simultaneous orders affecting
significant portions of the fund's assets. In particular, a pattern of
exchanges that coincides with a "market timing" strategy may be
disruptive to the fund.
Although the fund will attempt to give you prior notice whenever it
is reasonably able to do so, it may impose these restrictions at any
time. The fund r e serves the right to terminate or modify
the exchange privilege in the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may
im pose 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.
From Filler pages
FIDELITY GOVERNMENT SECURITIES FUND
CROSS REFERENCE SHEET
Form N-1A Item Number
Part B Statement of Additional Information Caption
10a,b Cover Page
11 Cover Page
12 Description of the Trust
13a,b,c Investment Policies and Limitations
d Portfolio Transactions
14a,b,c Trustees and Officers
15a,b **
c Trustees and Officers
16a(i) FMR
a(ii) Trustees and Officers
a(iii),b,c Management Contract
d Contracts with FMR Affiliates
e *
f Distribution and Service Plan
g *
h Description of the Trust
i Contracts with FMR Affiliates
17a,b,c Portfolio Transactions
d,e *
18a Description of the Trust
b *
19a Additional Purchase and Redemption Information
b Valuation of Portfolio Securities
c *
20 Distributions and Taxes
21a,b Contracts with FMR Affiliates
c *
22a,b Performance
23 **
* Not applicable
** To be filed by subsequent amendment
FIDELITY GOVERNMENT SECURITIES FUND
A FUND OF FIDELITY INCOME FUND
STATEMENT OF ADDITIONAL INFORMATION
NOVEMBER __, 1997
This Statement of Additional Information (SAI) is not a prospectus
but should be read in conjunction with the fund's current Prospectus
(dated November __, 1997). Please retain this document for future
reference. The fund's Annual Report is a separate document supplied
with this SAI. To obtain a free additional copy of the Prospectus or
an Annual Report, please call Fidelity at 1-800-544-8888.
TABLE OF CONTENTS PAGE
Investment Policies and Limitations
Portfolio Transactions
Valuation 9
Performance
Additional Purchase and Redemption Information
Distributions and Taxes
FMR
Trustees and Officers
Management Contract 18
Distribution and Service Plan 20
Contracts with FMR Affiliates 21
Description of the Trust 21
Financial Statements
Appendix
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
Fidelity Service Company, Inc. (FSC)
GOV-ptb-1197
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in
the Prospectus. Unless otherwise noted, whenever an investment
policy or limitation states a maximum percentage of the fund's assets
that may be invested in any security or other asset, or sets forth
a policy regarding quality standards, such standard or percentage
limitation will be determined immediately after and as a result of the
fund's acquisition of such security or other asset. Accordingly, any
subsequent change in values, net assets, or other circumstances will
not be considered when determining whether the investment complies
with the fund's investment policies and limitations.
The fund's fundamental investment policies and limitations cannot
be changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940) 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. THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT
LIMITATIONS SET FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except as permitted under the
Investment Company Act of 1940;
(2) borrow money, except that the fund may borrow money for
temporary or emergency purposes (not for leveraging or investment) in
an amount not exceeding 33 1/3% of its 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;
(3) 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;
(4) 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;
(5) 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);
(6) purchase or sell physical commodities unless acquired as a
result of ownership of securities or other instruments (but this shall
not prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities);
(7) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties,
but this limit does not apply to purchases of debt securities or to
repurchase agreements; or
(8) invest in companies for the purpose of exercising control or
management.
(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 managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) In order to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended, the
fund currently intends to comply with certain diversification limits
imposed by Subchapter M.
(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) 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 (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (2)). 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.
(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 lend assets other than
securities to other parties, except by (a) lending money (up to 7.5%
of the fund's net assets) to a registered investment company or
portfolio for which FMR or an affiliate serves as investment adviser,
or (b) acquiring loans, loan participations, or other forms of direct
debt instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
(vii) The fund does not currently intend to invest all of its assets
in the securities of a single open-end management investment
company managed by Fidelity Management & Research Company or an
affiliate or successor with substantially the same fundamental
investment objective, policies, and limitations as the fund.
For purposes of limitation (i), Subchapter M generally requires the
fund to invest no more than 25% of its total assets in securities of
any one issuer and to invest at least 50% of its total assets so that
no more than 5% of the fund's total assets are invested in securities
of any one issuer. However, Subchapter M allows unlimited investments
in cash, cash items, government securities (as defined in Subchapter
M) and securities of other investment companies. These tax
requirements are generally applied at the end of each quarter of the
fund's taxable year.
For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options
Transactions" on page __.
It is the fund's position that proprietary strips, such as CATS
(Certificates of Accrual on Treasury Securities) and TIGRs
(Tre asury Investment Growth Receipts), are government securities.
However, the fund has been advised that the Staff of the SEC's
Division of Investment Management does not consider these to be
government securities, as defined under the 1940 Act. Accord ingly,
for purposes of investment limitation (4), the fund has defined the
following two industry groups: (1) Custodian banks for proprietary
strips that are direct obligations backed by the full faith and credit
of the U.S. Government; and (2) Custodian banks for proprietary
strips that are indirect obligations, not backed by the full faith and
credit of the U.S. Government. The fund will continue its efforts to
secure a favorable opinion from the SEC Staff that proprietary strips
are government securities. If the fund concludes that, under
applicable legal principles, any of these securities are government
securities, the fund will exclude these securities for the purposes of
the fund's investment limitation (i) above.
AFFILIATED BANK TRANSACTIONS. The fund may engage in transactions
with financial institutions that are, or may be considered to be,
"affiliated persons" of the fund under the Investment Company Act of
1940. These transactions may include repurchase agreements with
custodian banks; short-term obligations of, and repurchase agreements
with, the 50 largest U.S. banks (measured by deposits); municipal
securities; U.S. Government securities with affiliated financial
institutions that are primary dealers in these securities; short-term
currency transactions; and short-term borrowings. In accordance with
exemptive orders issued by the Securities and Exchange Commission
(SEC), the Board of Trustees has established and periodically reviews
procedures applic able to transactions involving affiliated
financial institutions.
DELAYED-DELIVERY TRANSACTIONS. The fund may buy and sell securities
on a delayed-delivery or when-issued basis. These transactions involve
a commitment by the fund to purchase or sell specific securities at a
predetermined price or yield, with pa yment 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. The fund may receive fees for entering into
delayed-delivery transactions.
When purchasing securities on a delayed-delivery basis, the fund
assumes the rights and risks of ownership, including the risk of price
and yield fluctuations. Because the fund is not required to pay for
securities until the delivery date, these risks are in addition to
the risks associated with the fund's other investments. If the fund
remains substantially fully invested at a time when delayed-delivery
purchases are outstanding, the delayed-delivery purchases may result
in a form of leverage. When delayed-delivery purchases are
outstanding, the fund will set aside appropriate liquid assets in a
segregated custodial account to cover its purchase obligations.
When the fund has sold a security on a delayed-delivery basis, the
fund does not participate in further gains or losses with respect
to the security. If the other party to a delayed-delivery transaction
fails to deliver or pay for the securities, the fund could miss a
favorable price or yield opportunity, or could suffer a loss.
The fund may renegotiate delayed-delivery transactions after they
are entered into, and may sell underlying securities before they
are delivered, which may result in capital gains or losses.
FUTURES AND OPTIONS. The following sections pertain to futures and
options: Asset Coverage for Futures and Options Positions, Combined
Positions, Correlation of Price Changes, Futures Contracts, Futures
Margin Payments, Limitations on Futures and Options Transactions,
Liquidity of Options and Futures Contracts, OTC Options, Purchasing
Put and Call Options, and Writing Put and Call Options.
ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. The fund will
comply with guidelines established by the Securities and Exchange
Commission with respect to coverage of options and futures strategies
by mutual funds, and if the guidelines so require will set aside
appropriate liquid assets in a segregated custodial account in the
amount prescribed. Securities held in a segregated account cannot be
sold while the futures or option strategy is outstanding, unless they
are replaced with other suitable assets. As a result, there is a
possibility that segregation of a large percentage of the fund's
assets could impede portfolio management or the fund's ability to meet
redemption requests or other current obligations.
COMBINED POSITIONS. The fund may purchase and write options in
combination with each other, or in combination with futures or
forward contracts, to adjust the risk and return characteristics of
the overall position. For example, the fund may purchase a put option
and write a call option on the same underlying instrument, in order to
construct a combined position whose risk and return characteristics
are similar to selling a futures contract. Another possible combined
position would involve writing a call option at one strike price and
buying a call option at a lower price, in order to reduce the risk of
the written call option in the event of a substantial price increase.
Because combined options positions involve multiple trades, they
result in higher transaction costs and may be more difficult to open
and close out.
CORRELATION OF PRICE CHANGES. Because there are a limited number of
types of exchange-traded options and futures contracts, it is
likely that the standardized contracts available will not match the
fund's current or anticipated investments exactly. The fund may
invest in options and futures contracts based on securities with
different issuers, maturities, or other characteristics from the
securities in which it typically invests, which involves a risk
that the options or futures position will not track the performance
of the fund's other investments.
Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match
the fund's investments well. Options and futures prices are affected
by such factors as current and anticipated short-term interest
rates, changes in volatility of the underlying instrument, and the
time remaining until expiration of the contract, which may not affect
security prices the same way. Imperfect correlation may also result
from differing levels of demand in the options and futures markets and
the securities markets, from structural differences in how options and
futures and securities are traded, or from imposition of daily
price fluctuation limits or trading halts. The fund may purchase or
sell options and futures contracts with a greater or lesser value
than the securities it wishes to hedge or intends to purchase in order
to attempt to compensate for differ ences in volatility between the
contract and the securities, although this may not be successful in
all cases. If price changes in the fund's options or futures
positions are poorly correlated with its other investments, the
positions may fail to produce anticipated gains or result in losses
that are not offset by gains in other investments.
FUTURES CONTRACTS. When the fund purchases a futures contract, it
agrees to purchase a specified underlying instrument at a specified
future date. When the fund sells a futures contract, it agrees to sell
the underlying instrument at a specified future date. The price at
which the purchase and sale will take place is fixed when the fund
enters into the contract. Some currently available futures contracts
are based on specific securities, such as U.S. Treasury bonds or
notes, and some are based on indices of securities prices, such as the
Bond Buyer Municipal Bond Index. Futures can be held until their
delivery dates, or can be closed out before then if a liquid secondary
market is available.
The value of a futures contract tends to increase and decrease in
tandem with the value of its underlying instrument. Therefore,
purchasing futures contracts will tend to increase the fund's
exposure to positive and negative price fluctuations in the underlying
instrument, much as if it had purchased the underlying instrument
directly. When the fund sells a futures contract, by contrast, the
value of its futures position will tend to move in a direction
contrary to the market. Selling futures contracts, therefore, will
tend to offset both positive and negative market price changes, much
as if the underlying instrument had been sold.
FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract
is not required to deliver or pay for the underlying instrument unless
the contract is held until the delivery date. However, both the
purchaser and seller are required to deposit "initial margin" with a
futures broker, known as a futures commission merchant (FCM), when the
contract is entered into. Initial margin deposits are typically equal
to a percentage of the contract's value. If the value of either
party's position declines, that party will be required to make
additional "variation margin" payments to settle the change in value
on a daily basis. The party that has a gain may be entitled to receive
all or a portion of this amount. Initial and variation margin payments
do not constitute purchasing securities on margin for purposes of the
fund's investment limitations. In the event of the bankruptcy of an
FCM that holds margin on behalf of the fund, the fund may be entitled
to return of margin owed to it only in proportion to the amount
received by the FCM's other customers, potentially resulting in losses
to the fund.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. T he fund has filed
a notice of eligibility for exclusion from the definition of the
term "commodity pool operator" with the Commodity Futures Trading
Commission (CFTC) and the National Futures Association, which regulate
trading in the futures markets. The fund intends to comply with Rule
4.5 under the Commodity Ex change Act, which limits the extent to
which the fund can commit assets to initial margin deposits and option
premiums.
In addition, the fund will not: (a) sell futures contracts,
purchase put options, or write call options if, as a result, more than
25% of the fund's total assets would be hedged with futures and
options under normal conditions; (b) purchase futures contracts or
write put options if, as a result, the fund's total obligations upon
settlement or exercise of purchased futures contracts and written put
options would exceed 25% of its total assets; or (c) purchase call
options if, as a result, the current value of option premiums for call
options purchased by the fund would exceed 5% of the fund's total
assets. These limitations do not apply to options attached to or
acquired or traded together with their underlying securities, and do
not apply to securities that incorporate features similar to options.
The fund further limits its options and futures investments to
options and futures contracts relating to U.S. Government securities.
The above limitations on the fund's investments in futures
contracts and options, and the fund's policies regarding futures
contracts and options discussed elsewhere in this SAI, may be changed
as regulatory agencies permit.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a
liquid secondary market will exist for any particular options or
futures contract at any particular time. Options may have relatively
low trading volume and liquidity if their strike prices are not close
to the underlying instrument's current price. In addition, exchanges
may establish daily price fluctuation limits for options and futures
contracts, and may halt trading if a contract's price moves upward or
downward more than the limit in a given day. On volatile trading days
when the price fluctuation limit is reached or a trading halt is
imposed, it may be impossible for the fund to enter into new positions
or close out existing positions. If the secondary market for a
contract is not liquid because of price fluctuation limits or
otherwise, it could prevent prompt liquidation of unfavorable
positions, and potentially could require the fund to continue to
hold a position until delivery or expiration regardless of changes in
its value. As a result, the fund's access to other assets held to
cover its options or futures positions could also be impaired.
OTC OPTIONS. Unlike exchange-traded options, which are standardized
with respect to the underlying instrument, expiration date, contract
size, and strike price, the terms of over-the-counter (OTC) options
(options not traded on exchanges) generally are established through
negotiation with the other party to the option contract. While this
type of arrangement allows the fund greater flexibility to tailor
an option to its needs, OTC options generally involve greater credit
risk than exchange-traded options, which are guaranteed by the
clearing organization of the exchanges where they are traded.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the
fund obtains the right (but not the obligation) to sell the
option's underlying instrument at a fixed strike price. In return for
this right, the fund pays the current market price for the option
(known as the option premium). Options have various types of
underlying instruments, including specific securities, indices of
securities prices, and futures contracts. The fund may terminate its
position in a put option it has purchased by allowing it to expire or
by exercising the option. If the option is allowed to expire, the fund
will lose the entire premium it paid. If the fund exercises the
option, it completes the sale of the underlying instrument at the
strike price. The fund may also terminate a put option position by
closing it out in the secondary market at its current price, if a
liquid secondary market exists.
The buyer of a typical put option can expect to realize a gain if
security prices fall substantially. However, if the underlying
instrument's price does not fall enough to offset the cost of
purchasing the option, a put buyer can expect to suffer a loss
(limited to the amount of the premium paid, plus related transaction
costs).
The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right
to purchase, rather than sell, the underlying instrument at the
option's strike price. A call buyer typically attempts to participate
in potential price increases of the underlying instrument with risk
limited to the cost of the option if security prices fall. At the same
time, the buyer can expect to suffer a loss if security prices do not
rise sufficiently to offset the cost of the option.
WRITING PUT AND CALL OPTIONS. When the fund writes a put option, it
takes the opposite side of the transaction from the option's
purchaser. In return for receipt of the premium, the fund assumes the
obligation to pay the strike price for the option's underlying
instrument if the other party to the option chooses to exercise it.
When writing an option on a futures contract, the fund will be
required to make margin payments to an FCM as described above for
futures contracts. The fund may seek to terminate its position in a
put option it writes before exercise by closing out the option in the
secondary market at its current price. If the secondary market is not
liquid for a put option the fund has written, however, the fund must
continue to be prepared to pay the strike price while the option is
outstanding, regardless of price changes, and must continue to set
aside assets to cover its position.
If security prices rise, a put writer would generally expect to
profit, although its gain would be limited to the amount of the
premium it received. If security prices remain the same over time, it
is likely that the writer will also profit, because it should be able
to close out the option at a lower price. If security prices fall, the
put writer would expect to suffer a loss. This loss should be less
than the loss from purchasing the underlying instrument directly,
however, because the premium received for writing the option should
mitigate the effects of the decline.
Writing a call option obligates the fund to sell or deliver the
option's underlying instrument, in return for the strike price,
upon exercise of the option. The characteristics of writing call
options are similar to those of writing put options, except that
writing calls generally is a profitable strategy if prices remain the
same or fall. Through receipt of the option premium, a call writer
mitigates the effects of a price decline. At the same time, because a
call writer must be prepared to deliver the underlying instrument in
return for the strike price, even if its current value is greater, a
call writer gives up some ability to participate in security price
increases.
ILLIQUID INVESTMENTS are investments that cannot be sold or disposed
of in the ordinary course of business at approximately the prices
at which they are valued. Under the supervision of the Board of
Trustees, FMR determines the liquidity of the fund's investments and,
through reports from FMR, the Board monitors investments in illiquid
instruments. In determining the liquidity of the fund's
investments, FMR may consider various factors, including (1) the
frequency of trades and quotations, (2) the number of dealers and
prospective purchasers in the marketplace, (3) dealer undertakings to
make a market, (4) the nature of the security (including any demand or
tender features), and (5) the nature of the marketplace for trades
(including the ability to assign or offset the fund's rights and
obligations relating to the investment).
Investments currently considered by the fund to be illiquid include
repurchase agreements not entitling the holder to payment of
principal and interest within seven days , non-government
stripped fixed-rate mortgage-backed securities, and
over-the-count er options. Also, FMR may determine some
government-stripped fixed-rate mortgage-backed securities to be
illiquid. However, with respect to over-the-counter options the fund
writes, all or a portion of the value of the underlying instrument may
be illiquid depending on the assets held to cover the option and the
nature and terms of any agreement the fund may have to close out the
option before expiration.
In the absence of market quotations, illiquid investments are priced
at fair value as determined in good faith by a committee appointed
by the Board of Trustees. If through a change in values, net assets,
or other circumstances, the fund were in a position where more
than 10% of its net assets was invested in illiquid securities, it
would seek to take appropriate steps to protect liquidity.
INDEXED SECURITIES. The fund may purchase securities whose prices
are indexed to the prices of other securities, securities indices,
or other financial indicators. Indexed securities typically, but not
always, are debt securities or deposits whose value at maturity or
coupon rate is determined by reference to a specific instrument or
statistic. A mortgage indexed security, for example, could be
synthesized to replicate the performance of mortgage securities and
the characteristics of direct ownership.
The performance of indexed securities depends to a great extent on the
performance of the security or other instrument to which they are
indexed, and may also be influenced by interest rate changes. At the
same time, indexed securities are subject to the credit risks
associated with the issuer of the security, and their values may
decline substantially if the issuer's creditworthiness deteriorates.
Indexed securities may be more volatile than the underlying
instruments.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive
order issued by the SEC, the fund has received permission to lend
money to, and borrow money from, other funds advised by FMR or its
affiliates, but it currently intends to partic ipate in this
program only as a borrower. Interfund borrowings normally extend
overnight but can have a maximum duration of seven days. The fund
will borrow through the program only when the costs are equal to or
lower than the costs of bank loans. Loans may be called on one day's
notice, and the fund may have to borrow from a bank at a higher
interest rate if an interfund loan is called or not renewed.
MORTGAGE-BACKED SECURITIES. The fund may purchase mortgage-backed
securities issued by government and non-government entities such as
banks, mortgage lenders, or other financial institutions. A
mortgage-backed security may be an obligation of the issuer backed
by a mortgage or pool of mortgages or a direct interest in an
underlying pool of mortgages. Some mortgage-backed securities, such as
collateralized mortgage obligations or CMOs, make payments of both
principal and interest at a variety of intervals; others make
semiannual interest payments at a predetermined rate and repay
principal at maturity (like a typical bond). Mortgage-backed
securities are based on different types of mortgages including those
on commercial real estate or resi dential properties. Other types of
mortgage-backed securities will likely be developed in the future, and
the fund may invest in them if FMR determines they are consistent
with the fund's investment objective and policies.
The value of mortgage-backed securities may change due to shifts in
the market's perception of issuers. In addition, regulatory or tax
changes may adversely affect the mortgage securities market as a
whole. Non-government mortgage-backed securities may offer higher
yields than those issued by government entities, but also may be
subject to greater price changes than government issues.
Mortgage-backed securities are subject to prepayment risk. Prepayment,
which occurs when unscheduled or early payments are made on the
underlying mortgages, may shorten the effective maturities of these
securities and may lower their total returns.
REPURCHASE AGREEMENTS. In a repurchase agreement, the fund
purchases a security and simultaneously commits to sell that security
back to the original seller at an agreed-upon price. The resale price
reflects the purchase price plus an agreed-upon incremental amount
which is unrelated to the coupon rate or maturity of the purchased
security. To protect the fund from risk that the original seller will
not fulfill its obligation, the securities are held in an account of
the fund at a bank, marked-to-market daily, and maintained at a value
at least equal to the sale price plus the accrued incremental amount.
While it does not presently appear possible to eliminate all risks
from these transactions (particularly the possibility that the value
of the underlying security will be less than the resale price, as
well as delays and costs to the fund in connection with bankruptcy
proceedings), it is the fund's current policy to engage in
repurchase agreement transactions with parties whose creditworthiness
has been reviewed and found satisfactory by FMR .
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement,
the fund sells a portfolio instrument to another party, such as a
bank or broker-dealer, in return for cash and agrees to repurchase the
instrument at a particular price and time. While a reverse repurchase
agreement is outstanding, the fund will maintain appropriate liquid
assets in a segregated custodial account to cover its obligation
under the agreement. The fund will enter into reverse repurchase
agreements only with parties whose credi tworthiness 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.
SECURITIES LENDING. The fund may lend securities to parties
such as broker-dealers or institutional investors, including Fidelity
Brokerage Services, Inc. (FBSI). FBSI is a member of the New York
Stock Exchange and a subsidiary of FMR Corp.
Securities lending allows the fund to retain ownership of the
securities loaned and, at the same time, to earn additional income.
Since there may be delays in the recovery of loaned securities, or
even a loss of rights in collateral supplied should the borrower fail
financially, loans will be made only to parties deemed by FMR to be of
good standing. Furthermore, they will only be made if, in FMR's
judgment, the consideration to be earned from such loans would justify
the risk.
FMR understands that it is the current view of the SEC Staff that a
fund may engage in loan transactions only under the following
conditions: (1) the fund must receive 100% collateral in the form of
cash or cash equivalents (e.g., U.S. Treasury bills or notes) from the
borrower; (2) the borrower must increase the collateral whenever the
market value of the securities loaned (determined on a daily basis)
rises above the value of the collateral; (3) after giving notice, the
fund must be able to terminate the loan at any time; (4) the fund must
receive reasonable interest on the loan or a flat fee from the
borrower, as well as amounts equivalent to any dividends, interest, or
other distributions on the securities loaned and to any increase in
market value; (5) the fund may pay only reasonable custodian fees in
connection with the loan; and (6) the Board of Trustees must be able
to vote proxies on the securities loaned, either by terminating the
loan or by entering into an alternative arrangement with the borrower.
Cash received through loan transactions may be invested in any
security in which the fund is authorized to invest. Investing this
cash subjects that investment, as well as the security loaned, to
market forces (i.e., capital appreciation or depreciation).
[ FOR BOND FUNDS, INCLUDE ONLY IF APPROPRIATE: STRIPPED
MORTGAGE-BACKED SECURITIES are created when a U.S. Government
agency or a financial institution separates the interest and principal
components of a mortgage-backed security and sells them as individual
securities. The holder of the "principal-only" security (PO) receives
the principal payments made by the underlying mortgage-backed
security, while the holder of the "interest-only" security (IO)
receives interest payments from the same underlying security.
The prices of stripped mortgage-backed securities may be particularly
affected by changes in interest rates. As interest rates fall,
prepayment rates tend to increase, which tends to reduce prices of IOs
and increase prices of POs. Rising interest rates can have the
opposite effect.]
SWAP AGREEMENTS. Swap agreements can be individually negotiated and
structured to include exposure to a variety of different types of
investments or market factors. Depending on their structure, swap
agreements may increase or decrease the fund's exposure to long- or
short-term interest rates, mortgage securities, corporate borrowing
rates, or other factors such as security prices or inflation rates.
Swap agreements can take many different forms and are known by a
variety of names. The fund is not limited to any particular form
of swap agreement if FMR determines it is consistent with the fund's
investment objective and policies.
In a typical cap or floor agreement, one party agrees to make payments
only under specified circumstances, usually in return for payment of a
fee by the other party. For example, the buyer of an interest rate cap
obtains the right to receive payments to the extent that a specified
interest rate exceeds an agreed-upon level, while the seller of an
interest rate floor is obligated to make payments to the extent that a
specified interest rate falls below an agreed-upon level. An interest
rate collar combines elements of buying a cap and selling a floor.
Swap agreements will tend to shift the fund's investment exposure
from one type of investment to another. For example, if the fund
agreed to pay fixed rates in exchange for floating rates while holding
fixed-rate bonds, the swap would tend to decrease the fund's exposure
to long-term interest rates. Caps and floors have an effect similar
to buying or writing options. Depending on how they are used, swap
agreements may increase or decrease the overall volatility of the
fund's investments and its share price and yield.
The most significant factor in the performance of swap agreements is
the change in the specific interest rate, or other factors that
determine the amounts of payments due to and from the fund. If a swap
agreement calls for payments by the fund, the fund must be
prepared to make such payments when due. In addition, if the
counterparty's creditworthiness declined, the value of a swap
agreement would be likely to decline, potentially resulting in losses.
The fund expects to be able to eliminate its exposure under swap
agreements either by assignment or other disposition, or by entering
into an offsetting swap agreement with the same party or a similarly
creditworthy party.
The fund will maintain appropriate liquid assets in a segregated
custodial account to cover its current obligations under swap
agreements. If the fund enters into a swap agreement on a net basis,
it will segregate assets with a daily value at least equal to the
excess, if any, of the fund's accrued obligations under the swap
agreement over the accrued amount the fund is entitled to receive
under the agreement. If the fund enters into a swap agreement on
other than a net basis, it will segregate assets with a value equal
to the full amount of the fund's accrued obligations under the
agreement.
VARIABLE OR FLOATING RATE OBLIGATIONS bear variable or floating
interest rates and carry rights that permit holders to demand payment
of the unpaid principal balance plus accrued interest from the issuers
or certain financial intermediaries. Floating rate instruments have
interest rates that change whenever there is a change in a designated
base rate while variable rate instruments provide for a specified
periodic adjustment in the interest rate. These formulas are designed
to result in a market value for the instrument that approximates its
par value.
[ FOR BOND FUNDS, INCLUDE ONLY IF APPROPRIATE: ZERO
COUPON BONDS. Zero coupon bonds do not make 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 dividends, the fund
takes into account as income a portion of the difference between a
zero coupon bond's purchase price and its face value.
A broker-dealer creates a DERIVATIVE ZERO by separating the interest
and principal components of a U.S. Treasury security and selling them
as two individual securities. CATS (Certificates of Accrual on
Treasury Securities), TIGRs (Treasury Investment Growth Receipts), and
TRs (Treasury Receipts) are examples of derivative zeros.
The Federal Reserve Bank creates STRIPS (Separate Trading of
Registered Interest and Principal of Securities) by separating the
interest and principal components of an outstanding U.S. Treasury bond
and selling them as individual securities. Bonds issued by the
Resolution Funding Corporation (REFCORP) and the Financing Corporation
(FICO) can also be separated in this fashion. ORIGINAL ISSUE ZEROS are
zero coupon securities originally issued by the U.S. Government, a
government agency, or a corporation in zero coupon form.]
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are
placed on behalf of the fund by FMR pursuant to authority
co ntained in the management contract. FMR is also responsible for
the placement of transaction orders for other investment companies and
accounts for which it or its affiliates act as investment adviser. In
selecting broker-dealers, subject to applicable limitations of the
federal securities laws, FMR considers various relevant factors,
including, but not limited to: the size and type of the transaction;
the nature and character of the markets for the security to be
purchased or sold; the execution efficiency, settlement capability,
and financial condition of the broker-dealer firm; the broker-dealer's
execution services rendered on a continuing basis; and the
reasonableness of any commissions.
The fund may execute portfolio transactions with broker-dealers who
provide research and execution services to the fund or other
accounts over which FMR or its affiliates exercise investment
discretion. Such services may include advice concerning the value of
securities; the advisability of investing in, purchasing, or selling
securities; and the availability of securities or the purchasers or
sellers of securities. In addition, such broker-dealers may furnish
analyses and reports concerning issuers, industries, securities,
economic factors and trends, portfolio strategy, and performance of
accounts; effect securities transactions, and perform functions
incidental thereto (such as clearance and settlement). The selection
of such broker-dealers generally is made by FMR (to the extent
possible consistent with execution considerations) based upon the
quality of research and execution services provided.
The receipt of research from broker-dealers that execute
transactions on behalf of the fund may be useful to FMR in rendering
investment management services to the fund or its other clients, and
conversely, such research provided by broker-dealers who have executed
transaction orders on behalf of other FMR clients may be useful to FMR
in carrying out its obligations to the fund. The receipt of such
research has not reduced FMR's normal independent research activities;
however, it enables FMR to avoid the additional expenses that could be
incurred if FMR tried to develop comparable information through its
own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that
are in excess of the amount of commissions charged by other
broker-dealers in recognition of their research and execu tion
services. In order to cause the fund to pay such higher commissions,
FMR must determine in good faith that such commissions are
reasonable in relation to the value of the brokerage and research
services provided by such executing broker-dealers, viewed in terms
of a particular transaction or FMR's overall responsibilities to the
fund and its other clients. In reaching this determination, FMR
will not attempt to place a specific dollar value on the brokerage and
research services provided, or to determine what portion of the
compensation should be related to those services.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided
assistance in the distribution of shares of the fund or shares of
other Fidelity funds to the extent permitted by law. FMR may use
research services provided by and place agency transactions with
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.
The Trustees periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio
transactions on behalf of the fund and review the commissions paid by
the fund over representative periods of time to determine if they
are reasonable in relation to the benefits to the fund.
For the fiscal periods ended September 30, 1997 and 1996, the
fund's portfolio turnover rates were __% and 124%, respectiv ely.
Because a high turnover rate increases transaction costs and may
increase taxable gains, FMR carefully weighs the anticipated
benefits of short-term investing against these consequences.
[EQUITY OR BOND FUNDS WITH A SUBSTANTIAL VARIANCE IN PORTFOLIO
TURNOVER RATES: An increased turnover rate is due to a greater
volume of shareholder purchase orders, short-term interest rate
volatility and other special market conditions.]
For the fiscal year ended September 30, 1997, the fund paid
brokerage commissions of $_______. The fund pays both commissions and
spreads in connection with the placement of portfolio transactions.
NFSC is paid on a commission basis. During the fiscal year ended
September 30, 1997, the fund paid brokerage commissions of $______ to
NFSC. During the fiscal year ended September 30, 1997, this amounted
to approximately __% of the aggregate brokerage commissions paid by
the fund for transactions involving approximately __% of the aggregate
dollar amount of transactions for which the fund paid brokerage
commissions. [IF APPROPRIATE: The difference between the
percentage of brokerage commissions paid to and the percentage of the
dollar amount of transactions effected through NFSC is a result of the
low commission rates charged by NFSC.] [IF THE FUND PAID NO BROKERAGE
COMMISSIONS: For the fiscal years ended September 30, 1997, 1996, and
1995, the fund paid no brokerage commissions.]
[USE ONLY IF FEES WERE PAID TO THESE AFFILIATES: During the fiscal
year ended September 30, 1997, the fund paid brokerage commissions of
$_______ to FBS. During the fiscal year ended September 30, 1997, the
fund paid brokerage commissions of $_____ to FBSL. During the fiscal
year ended September 30, 1997, this amounted to approximately __% of
the aggregate brokerage commissions paid by the fund involving
approximately __% of the aggregate dollar amount of transactions for
which the fund paid brokerage commissions. [IF THE PERCENTAGE OF
COMMISSIONS PAID TO FBS IS MATERIALLY LOWER THAN THE PERCENTAGE OF
DOLLAR AMOUNT OF TRANSACTIONS EFFECTED THROUGH FBS: The difference
between the percentage of brokerage commissions paid to and the
percentage of the dollar amount of transactions effected through FBS
is a result of the low commission rates charged by FBS.]]
During the fiscal year ended September 30, 1997, the 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. [IF APPLICABLE: During the fiscal year ended
September 30, 1997, the fund 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 fund of some portion of the brokerage
commissions or similar fees paid by the fund on portfolio transactions
is legally permissible and advisable. The fund seeks to recapture
soliciting broker-dealer fees on the tender of portfolio securities,
but at present no other recapture arrangements are in effect. The
Trustees intend to continue to review whether recapture opportunities
are available and are legally permissible and, if so, to determine
in the exercise of their business judgment whether it would be
advisable for the fund to seek such recapture.
Although the Trustees and officers of the fund are substantially
the same as those of other funds managed by FMR, investment decisions
for the fund are made independently from those of other funds managed
by FMR or accounts managed by FMR affil iates. It sometimes happens
that the same security is held in the portfolio of more than one of
these funds or accounts. Simultaneous transactions are inevitable when
several funds and accounts are managed by the same investment adviser,
particularly when the same security is suitable for the investment
objective of more than one fund or account.
When two or more funds are simultaneously engaged in the purchase or
sale of the same security, the prices and amounts are allocated in
accordance with procedures believed to be appropriate and equitable
for each fund. In some cases this system could have a detrimental
effect on the price or value of the security as far as the fund is
concerned. In other cases, however, the ability of the fund to
participate in volume transactions will produce better executions and
prices for the fund. It is the current opinion of the Trustees that
the desirability of retaining FMR as investment adviser to the fund
outweighs any disadvantages that may be said to exist from
exposure to simultaneous transactions.
VALUATION
Fidelity Service Company, Inc. (FSC) normally determines the fund's
net asset value per share (NAV) as of the close of the New York Stock
Exchange (NYSE) (normally 4:00 p.m. Eastern time). The valuation of
portfolio securities is determined as of this time for the purpose of
computing the fund's NAV.
P ortfolio securities are valued by various methods depending on
the primary market or exchange on which they trade. Fixed- income
securities and other assets for which market quotations are readily
available may be valued at market values determined by such
securities' most recent bid prices (sales prices if the principal
market is an exchange) in the principal market in which they normally
are traded, as furnished by recognized dealers in such securities or
assets.
Or, fixed-income securities may be valued on the basis of
information furnished by a pricing service that uses a valuation
matrix which incorporates both dealer-supplied valuations and
electronic data processing techniques. Use of pricing services has
been approved by the Board of Trustees. A number of pricing services
are available, and the fund may use various pricing services or
discontinue the use of any pricing service.
Futures contracts and options are valued on the basis of market
quotations, if available. Securities of other open-end investment
companies are valued at their respective NAVs.
Short-term securities with remaining maturities of sixty days or
less for which market quotations and information furnished by a
pricing service are not readily available are valued either at
amortized cost or at original cost plus accrued interest, both of
which approximate current value. In addition, securities and other
assets for which there is no readily available market value may be
valued in good faith by a committee appointed by the Board of
Trustees. The procedures set forth above need not be used to determine
the value of the securities owned by the fund if, in the opinion of a
committee appointed by the Board of Trustees, some other method would
more accurately reflect the fair market value of such securities.
PERFORMANCE
The fund may quote performance in various ways. All performance
information supplied by the fund in advertising is historical and is
not intended to indicate future returns. The fund's share price,
yield, and total return fluctuate in response to market conditions
and other factors, and the value of fund shares when redeemed may be
more or less than their original cost.
YIELD CALCULATIONS. Yields for the fund are computed by dividing
the fund's interest income for a given 30-day or one-month period,
net of expenses, by the average number of shares entitled to receive
distributions during the period, dividing this figure by the fund's
net asset value (NAV) at the end of the period, and annualizing the
result (assuming compounding of income) in order to arrive at an
annual percentage rate. Income is calculated for purposes of yield
quotations in accordance with standardized methods applicable to all
stock and bond funds. In general, interest income is reduced with
respect to bonds trading at a premium over their par value by
subtracting a portion of the premium from income on a daily basis, and
is increased with respect to bonds trading at a discount by adding a
portion of the discount to daily income. Capital gains and losses
generally are excluded from the calculation.
Income calculated for the purposes of calculating the fund's yield
differs from income as determined for other accounting purposes.
Because of the different accounting methods used, and because of the
compounding of income assumed in yield cal culations, the fund's
yield may not equal its distribution rate, the income paid to your
account, or the income reported in the fund's financial
statements.
Yield information may be useful in reviewing the fund's performance
and in providing a basis for comparison with other investment
alternatives. However, the fund's yield fluctuates, unlike investments
that pay a fixed interest rate over a stated period of time. When
comparing investment alternatives, investors should also note the
quality and maturity of the portfolio securities of respective
investment companies they have chosen to consider.
Investors should recognize that in periods of declining interest
rates the fund's yield will tend to be somewhat higher than
prevailing market rates, and in periods of rising interest rates the
fund's yield will tend to be somewhat lower. Also, when interest
rates are falling, the inflow of net new money to the fund from the
continuous sale of its shares will likely be invested in
instr uments producing lower yields than the balance of the fund's
holdings, thereby reducing the fund's current yield. In periods of
rising interest rates, the opposite can be expected to occur.
TOTAL RETURN CALCULATIONS. T otal returns quoted in advertising
reflect all aspects of the fund's return, including the effect of
reinvesting dividends and capital gain distributions, and any change
in the fund's NAV over a stated period. Average annual total
returns are calculated by determining the growth or decline in
value of a hypothetical historical investment in the fund over a
stated period, and then calculating the annually compounded percentage
rate that would have produced the same result if the rate of growth or
decline in value had been constant over the period. For example, a
cumulative total return of 100% over ten years would produce an
average annual total return of 7.18%, which is the steady annual rate
of return that would equal 100% growth on a compounded basis in ten
years. While average annual total returns are a convenient means of
comparing investment alterna tives, investors should realize that
the fund's performance is not constant over time, but changes from
year to year, and that ave rage annual total returns represent
averaged figures as opposed to the actual year-to-year performance of
the fund.
In addition to average annual total returns, the fund may quote
unaveraged or cumulative total returns reflecting the simple
change in value of an investment over a stated period. Average annual
and cumulative total returns may be quoted as a percentage or as a
dollar amount, and may be calculated for a single investment, a series
of investments, or a series of redemptions, over any time period.
Total returns may be broken down into their components of income and
capital (including capital gains and changes in share price) in order
to illustrate the relationship of these factors and their
contributions to total return. Total returns may be quoted on a
before-tax or after-tax basis. Total returns, yields, and other
performance information may be quoted numerically or in a table,
graph, or similar illustration.
NET ASSET VALUE. Charts and graphs using the fund's net asset
values, adjusted net asset values, and benchmark indices may be used
to exhibit performance. An adjusted NAV includes any distributions
paid by the fund and reflects all elements of its return. Unless
otherwise indicated, the fund's adjusted NAVs are not adjusted for
sales charges, if any.
HISTORICAL FUND RESULTS. The following table shows the fu nd's yield
and total returns for periods ended September 30, 1997.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Average Annual Total Returns Cumulative Total Returns
Thirty-Day One Five Ten One Five Ten
Yield Year Years Years Year Years Years
Government
Securities % % % % % % %
</TABLE>
[IF FUND IS OR HAS BEEN IN REIMBURSEMENT: Note: If FMR had not
reimbursed certain fund expenses during these periods, the fund's
[IF CURRENTLY IN REIMBURSEMENT: yield and] total returns would
have been lower.]
The following table shows the income and capital elements of the
fund's cumulative total return. The table compares the fund's
return to the record of the Standard & Poor's 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 the fund. The S&P 500 and DJIA comparisons are
provided to show how the fund's total return compared to the
record of a broad unmanaged index of common stocks and a narrower set
of stocks of major industrial companies, respectively, over the
same period. Because the fund invests in fixed-income securities,
common stocks represent a different type of investment from the fund.
Common stocks generally offer greater growth potential than the fund,
but generally experience greater price volatility, which means
greater potential for loss. In addition, common stocks generally
provide lower income than a fixed-income investment such as the
fund. The S&P 500 and DJIA returns are based on the prices of
unmanaged groups of stocks and, unlike the fund's returns, do not
include the effect of brokerage commissions or other costs of
investing.
During the 10-year period ended September 30, 1997, a hypothetical
$10,000 investment in Fidelity Government Securities Fund would have
grown to $_______, assuming all distributions were reinvested. This
was a period of fluctuating interest rates and bond prices and the
figures below should not be considered representative of the dividend
income or capital gain or loss that could be realized from an
investment in the fund today. Tax consequences of different
investments have not been factored into the figures below.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FIDELITY GOVERNMENT SECURITIES FUND INDICES
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Year Ended Value of Value of Value of Total S&P 500 DJIA Cost of
Initial Reinvested Reinvested Value Living
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1997 $ $ $ $ $ $ $
1996 $ $ $ $ $ $ $
1995 $ $ $ $ $ $ $
1994 $ $ $ $ $ $ $
1993 $ $ $ $ $ $ $
1992 $ $ $ $ $ $ $
1991 $ $ $ $ $ $ $
1990 $ $ $ $ $ $ $
1989 $ $ $ $ $ $ $
1988 $ $ $ $ $ $ $
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in the
fund on October 1, 1987, the net amount invested in fund shares
was $10,000. The cost of the initial investment ($10,000) together
with the aggregate cost of reinvested dividends and capital gain
distributions for the period covered (their cash value at the time
they were reinvested) amounted to $______. If di stributions 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 $______ for dividends and $_____ for capital
gain distributions.
PERFORMANCE COMPARISONS. The fund's performance may be compared to
the performance of other mutual funds in general, or to the
performance of particular types of mutual funds. These comparisons may
be expressed as mutual fund rankings prepared by Lipper Analytical
Services, Inc. (Lipper), an independent service located in Summit, New
Jersey that monitors the performance of mutual funds. 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, the fund's performance may be compared to stock,
bond, and money market mutual fund performance indices prepared by
Lipper or other organizations. When comparing these indices, it is
important to remember the risk and return characteristics of each type
of investment. For example, while stock mutual funds may offer higher
potential returns, they also carry the highest degree of share price
volatility. Likewise, money market funds may offer greater stability
of principal, but generally do not offer the higher potential returns
available from stock mutual funds.
From time to time, the fund's performance may also be compared to
other mutual funds tracked by financial or business publ ications
and periodicals. For example, the fund may quote Morningstar, Inc. in
its advertising materials. Morningstar, Inc. is a mutual fund rating
service that rates mutual funds on the basis of risk-adjusted
performance. Rankings that compare the performance of Fidelity funds
to one another in appropriate categories over specific periods of time
may also be quoted in advertising.
The fund's performance may also be compared to that of a benchmark
index representing the universe of securities in which the fund may
invest. The total return of a benchmark index reflects reinvestment of
all dividends and capital gains paid by securities included in the
index. Unlike the fund's returns, however, the index returns do not
reflect brokerage commissions, transaction fees, or other costs of
investing directly in the securities included in the index.
Government Securities may compare its performance to that of the
Salomon Brothers Treasury/Agency Index, a market capitalization
weighted index of U.S. Treasury and U.S. Government agency securities
with fixed-rate coupons and weighted average lives of at least one
year. For U.S. Treasury issues, the entry and exit amounts are $1
billion public amount outstanding. For U.S. Government agency issues,
the entry and exit amounts are $100 million and $75 million,
respectively.
The fund may be compared in advertising to Certificates of Deposit
(CDs) or other investments issued by banks or other depository
institutions. Mutual funds differ from bank investments in several
respects. For example, the fund may offer greater liquidity or higher
potential returns than CDs, the fund does not guarantee your principal
or your return, and fund shares are not FDIC insured.
Fidelity may provide information designed to help individuals
understand their investment goals and explore various financial
strategies. Such information may include information about current
economic, market, and political conditions; materials that describe
general principles of investing, such as asset allocation,
diversification, risk tolerance, and goal setting; 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.
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.
The fund may present its fund number, Quotron(trademark) number,
and CUSIP number, and discuss or quote its current portfolio
ma nager.
VOLATILITY. The fund may quote various measures of volatility and
benchmark correlation in advertising. In addition, the fund may
compare these measures to those of other funds. Measures of volatility
seek to compare the fund's historical share price fluctuations or
total returns to those of a benchmark. Measures of benchmark
correlation indicate how valid a comparative bench mark may be. All
measures of volatility and correlation are calculated using averages
of historical data. In advertising, the fund may also discuss or
illustrate examples of interest rate sensitivity.
MOMENTUM INDICATORS indicate the fund's price movements over
specific periods of time. Each point on the momentum ind icator
represents the fund's percentage change in price movements over that
period.
The fund may advertise examples of the effects of periodic
investment plans, including the principle of dollar cost
averaging. In such a program, an investor invests a fixed dollar
amount in a fund at periodic intervals, thereby purchasing fewer
shares when prices are high and more shares when prices are low. While
such a strategy does not assure a profit or guard against loss in a
declining market, the investor's average cost per share can be lower
than if fixed numbers of shares are purchased at the same intervals.
In evaluating such a plan, investors should consider their ability to
continue purchasing shares during periods of low price levels.
The 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 September 30, 1997, 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 fund may
refe rence the growth and variety of money market mutual funds and
the adviser's innovation and participation in the industry. The equity
funds under management figure represents the largest amount of equity
fund assets under management by a mutual fund investment adviser in
the United States, making FMR America's leading equity (stock) fund
manager. FMR, its subsidiaries, and affiliates maintain a worldwide
information and communications network for the purpose of researching
and managing investments abroad.
In addition to performance rankings, the fund may compare its total
expense ratio to the average total expense ratio of similar funds
tracked by Lipper. The fund's total expense ratio is a significant
factor in comparing bond and money market investments because of
its effect on yield.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
The fund is open for business and its net asset value per share
(NAV) is calculated each day the New York Stock Exchange (NYSE) is
open for trading. The NYSE has designated the following holiday
closings for 1997: New Year's Day, President's Day (observed),
Good Friday, Memorial Day (observed), 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. In addition, the fund will
not process wire purchases and redemptions on days when the Federal
Reserve Wire System is closed.
FSC normally determines the fund's NAV as of the close of the NYSE
(normally 4:00 p.m. Eastern time). However, NAV may be calculated
earlier if trading on the NYSE is restricted or as permitted by the
Securities and Exchange Commission (SEC). To the extent that portfolio
securities are traded in other markets on days when the NYSE is
closed, the fund's NAV may be affected on days when investors do not
have access to the fund to purchase or redeem shares. In addition,
trading in some of the fund's portfolio securities may not occur
on days when the fund is open for business.
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are
valued in computing the fund's NAV. Sharehol ders receiving
securities or other property on redemption may realize a gain or loss
for tax purposes, and will incur any costs of sale, as well as the
associated inconveniences.
Pursuant to Rule 11a-3 under the Investment Company Act of 1940
(the 1940 Act), the fund is required to give shareholders at least
60 days' notice prior to terminating or modifying its exchange
privilege. Under the Rule, the 60-day notification requirement may be
waived if (i) the only effect of a modification would be to reduce or
eliminate an administrative fee, redemption fee, or deferred sales
charge ordinarily payable at the time of an exchange, or (ii) the fund
suspends the redemption of the shares to be exchanged as permitted
under the 1940 Act or the rules and regulations thereunder, or the
fund to be acquired suspends the sale of its shares because it is
unable to invest amounts effectively in accordance with its investment
objective and policies.
In the Prospectus, the fund has notified shareholders that it
reserves the right at any time, without prior notice, to refuse
e xchange 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 the 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.
Short-term capital gains are distributed as dividend income, but do
not qualify for the dividends received deduction. A portion of the
fund's dividends derived from certain U.S. Go vernment obligations
may be exempt from state and local taxation. Mo rtgage security
paydown gains (losses) are generally taxable as ordinary income
and, therefore, increase (decrease) taxable dividend distributions.
The fund will send each shareholder a n otice in January describing
the tax status of dividend and capital gain distributions for the
prior year.
CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by the
fund on the sale of securities and distributed to sharehol ders are
federally taxable as long-term capital gains, regardless of the length
of time shareholders have held their shares. If a share holder
receives a long-term capital gain distribution on shares of the fund,
and such shares are held six months or less and are sold at a
loss, the portion of the loss equal to the amount of the long-term
capital gain distribution will be considered a long-term loss for
tax purposes. Short-term capital gains distributed by the fund are
taxable to shareholders as dividends, not as capital gains.
[FOR FUNDS DECLARING A CAPITAL GAIN DIVIDEND: As of September 30,
199 7, the fund hereby designates approximately $_______ as a
capital gain dividend for the purpose of the dividend-paid
deduction.]
As of September 30, 1997, the fund had a capital l oss carryforward
aggregating approximately $____. This loss carryforward, of which
$___, $___, and $___will expire on September 30, 199_, ___, ____,
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 the 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 the 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.
TAX STATUS OF THE FUND. The fund intends to qualify each year as a
"regulated investment company" for tax purposes so that it will
not be liable for federal tax on income and capital gains distributed
to shareholders. In order to qualify as a regulated invest ment
company and avoid being subject to federal income or excise taxes at
the fund level, the fund intends to distribute substantially all of
its net investment income and net realized capital gains within each
calendar year as well as on a fiscal year basis. The fund intends
to comply with other tax rules applicable to regulated investment
companies, including a requirement that capital gains from the sale of
securities held less than three months constitute less than 30% of the
fund's gross income for each fiscal year. Gains from some futures
contracts and options are included in this 30% calculation, which may
limit the fund's investments in such instruments.
The fund is treated as a separate entity from the other funds of
Fidelity Income Fund for tax purposes.
OTHER TAX INFORMATION. The information above is only a summary of
some of the tax consequences generally affecting the fund and its
shareholders, and no attempt has been made to discuss individual tax
consequences. In addition to federal income taxes, shareholders may be
subject to state and local taxes on fund distributions, and shares may
be subject to state and local personal property taxes. Investors
should consult their tax advisers to determine whether the fund is
suitable to their particular tax situation.
FMR
All of the stock of FMR is owned by FMR Corp., its parent organized in
1972. The voting common stock of FMR Corp. is divided into two
classes. Class B is held predominantly by members of the Edward C.
Johnson 3d family and is entitled to 49% of the vote on any matter
acted upon by the voting common stock. Class A is held predominantly
by non-Johnson family member employees of FMR Corp. and its affiliates
and is entitled to 51% of the vote on any such matter. The Johnson
family group and all other Class B shareholders have entered into a
shareholders' voting agreement under which all Class B shares will be
voted in accordance with the majority vote of Class B shares. Under
the Investment Company Act of 1940 (1940 Act), control of a
comp any 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, a nd 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 who are "interested persons" by virtue of their
affiliation with either the trust or FMR are indicated by an asterisk
(*).
* EDWARD C. JOHNSON 3d (67), 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 (56), 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 (65), 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 produc tion). 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 (65), 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 (54), 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 (69), 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 (64), 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 addi tion, 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 (54), 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 (63), 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 (68), 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 (64), Trustee (1993), is Chairman of the Board,
President, and Chief Executive Officer of Lexmark I nternational,
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 (1997) 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 ( 69 ), 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).
D WIGHT D. CHURCHILL (43), is Vice President of Bond Funds,
Group Leader of the Bond Group, and Senior Vice Presi dent of FMR
(1997). Mr. Churchill joined Fidelity in 1993 as Vice President and
Group Leader of Taxable Fixed-Income Investments. Prior to joining
Fidelity, he spent three years as president and CEO of CSI Asset
Management, Inc. in Chicago, an investment management subsidiary of
The Prudential.
FRED L. HENNING, JR. (58), i s Vice President of Fidelity's
fixed-income funds (1995) and Senior Vice President of FMR (1995).
CURT HOLLINGSWORTH ( 40 ), is Vice President of Fidelity
Government Securities Fund (1997) and an employee of FMR
(1983) .
ARTHUR S. LORING (49), 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 ( 50) , 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).
JOHN H. COSTELLO (51), Assistant Treasurer, is an employee of
FMR.
LEONARD M. RUSH (51), 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).
The following table sets forth information describing the
compensation of each Trustee and Member of the Advisory Board of the
fund for his or her services for the fiscal year ended September 30,
1997, or calendar year ended December 31, 1996, as applicable.
COMPENSATION TABLE
<TABLE>
<CAPTION>
<S> <C> <C>
Trust ees and Members of the Advisory Board Aggregate Total
Compensation Compensation
from from the
Fidelity Government Fund Complex*
Securities Fund [B,]C A
J. Gary Burkhead ** $ $ 0
Ralph F. Cox $ 137,700
Phyllis Burke Davis $ 134,700
Richard J. Flynn*** $ 168,000
Edward C. Johnson 3d ** $ 0
E. Bradley Jones $ 134,700
Donald J. Kirk $ 136,200
Peter S. Lynch ** $ 0
William O. McCoy**** $ 85,333
Gerald C. McDonough $ 136,200
Edward H. Malone*** $ 136,200
Marvin L. Mann $ 134,700
Thomas R. Williams $ 136,200
</TABLE>
* Information is for the calendar year ended December 31, 1996 for
235 funds in the complex.
** Interested Trustees of the fund 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 Fidelity
Government Securities Fund.
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, $0, E. Bradley
Jones, $__, Donald J. Kirk $__, Gerald C. McDonough, $__, Edward H.
Malone, $__, Marvin L. Mann, $__, and Thomas R. Williams, $__.
D For the fiscal year ended September 30, 1997, certain of the
non-interested Trustees' aggregate compensation from the fund includes
accrued voluntary deferred compensation as follows: [trustee name,
dollar amount of deferred compensation, fund name]; [trustee name,
dollar amount of deferred compensation, fund name]; and [trustee name,
dollar amount of deferred compensation, fund name].
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 [DATE NOT EARLIER THAN 30 DAYS PRIOR TO SEC FILING DATE],
approximately __% of the fund's total outstanding shares was held by
[an] FMR affiliate[s]. FMR Corp. is the ultimate parent company of
[this/these] FMR affiliate[s]. 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 the fund's shares,
the Trustees, Members of the Advisory Board, and officers of the fund
owned, in the aggregate, less than __% of the fund's total outstanding
shares.
As of [DATE NOT EARLIER THAN 30 DAYS PRIOR TO SEC FILING DATE], the
Trustees, Members of the Advisory Board, and officers of the fund
owned, in the aggregate, less than __% of the fund's total outstanding
shares.]
As of [DATE NOT EARLIER THAN 30 DAYS PRIOR TO SEC FILING DATE], the
following owned of record or beneficially 5% or more of the fund's
outstanding shares:
(IF FUND HAS A SHAREHOLDER WHO OWNS 25% OR MORE): A
shareholder owning of record or beneficially more than 25% of the
fund's outstanding shares may be considered a controlling person. That
shareholder's vote could have a more significant effect on matters
presented at a shareholders' meeting than votes of other shareholders
of the fund.
MANAGEMENT CONTRACT
FMR is the fund's manager pursuant to a management contract dated
December 1, 1997, which was approved by shareholders on November 19,
1997.
MANAGEMENT SERVICES. The fund employs FMR to furnish investment
advisory and other services. Under the terms of its management
contract with the fund, FMR acts as investment adviser and, subject to
the supervision of the Board of Trustees, directs the investments
of the fund in accordance with its investment objective, policies, and
limitations. FMR also provides the fund with all necessary office
facilities and personnel for servicing the fund's investments,
compensates all officers of the fund and all Trustees who are
"interested persons" of the trust or of FMR, and all personnel of the
fund or FMR performing services relating to research, statistical,
and investment activities.
In addition, FMR or its affiliates, subject to the supervision of the
Board of Trustees, provide the management and administra tive
services necessary for the operation of the fund. These services
include providing facilities for maintaining the fund's
org anization; supervising relations with custodians, transfer and
pricing agents, accountants, underwriters, and other persons dealing
with the fund; preparing all general shareholder communications and
conducting shareholder relations; maintaining the fund's records and
the registration of the fund's shares under federal securities laws
and making necessary filings under state securities laws; developing
management and shareholder services for the fund; and furnishing
reports, evaluations, and analyses on a var iety 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, pricing and bookkeeping
agent, and securities lending agent, the fund pays all of
its expenses that are not assumed by those parties. The fund pays for
the typesetting, printing, and mailing of its proxy materials to
shareholders, legal expenses, and the fees of the custodian, auditor
and non-interested Trustees. The 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 the fund's
transfer agent agreement, the transfer agent bears the costs of
providing these services to existing shareholders. Other expenses paid
by the fund 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. The fund is also liable for such non-recurring expenses as may
arise, including costs of any litigation to which the fund may be a
party, and any obligation it may have to indemnify its officers
and Trustees with respect to litigation.
MANAGEMENT FEE. For the services of FMR under the management
contract, the fund pays FMR a monthly management fee which has two
components: a group fee rate and an individual fund fee rate.
The group fee rate is based on the monthly average net assets of all
of the registered investment companies with which FMR has management
contracts.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Annualized Group Net Effective Annual
Assets Rate Assets Fee Rate
0 - $3 billion .3700% $ 0.5 billion .3700%
3 - 6 .3400 25 .2664
6 - 9 .3100 50 .2188
9 - 12 .2800 75 .1986
12 - 15 .2500 100 .1869
15 - 18 .2200 125 .1793
18 - 21 .2000 150 .1736
21 - 24 .1900 175 .1695
24 - 30 .1800 200 .1658
30 - 36 .1750 225 .1629
36 - 42 .1700 250 .1604
42 - 48 .1650 275 .1583
48 - 66 .1600 300 .1565
66 - 84 .1550 325 .1548
84 - 120 .1500 350 .1533
120 - 174 .1450 400 .1507
174 - 228 .1400
228 - 282 .1375
282 - 336 .1350
Over 336 .1325
Prior to December 1, 1997, the group fee rate was based on a
schedule with breakpoints ending at .1500% for average group assets in
excess of $84 billion. The group fee rate breakpoints shown above for
average group assets in excess of $120 billion and under $228
billion were voluntarily adopted by FMR on January 1, 1992. The
additional breakpoints shown above for average group assets in excess
of $228 billion were voluntarily adopted by FMR on November 1, 1993.
On August 1, 1994, FMR voluntarily revised the prior extensions to the
group fee rate schedule, and added new breakpoints for average group
assets in excess of $156 billion and under $372 billion as shown in
the schedule below. The revised group fee rate schedule is
identical to the above schedule for average group assets under $156
billion.
On January 1, 1996, FMR voluntarily added new breakpoints to the
revised schedule for average group assets in excess of $372 billion.
The revised group fee rate schedule and its extensions provide for
lower management fee rates as FMR's assets under management
increase. The fund's current management contract reflects the group
fee rate schedule above for average group assets under $156 billion
and the group fee rate schedule below for average group assets in
excess of $156 billion.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Annualized Group Net Effective Annual
Assets Rate Assets Fee Rate
120 - $156 billion .1450% $ 150 billion .1736%
156 - 192 .1400 175 .1690
192 - 228 .1350 200 .1652
228 - 264 .1300 225 .1618
264 - 300 .1275 250 .1587
300 - 336 .1250 275 .1560
336 - 372 .1225 300 .1536
372 - 408 .1200 325 .1514
408 - 444 .1175 350 .1494
444 - 480 .1150 375 .1476
480 - 516 .1125 400 .1459
Over 516 .1100 425 .1443
450 .1427
475 .1413
500 .1399
525 .1385
550 .1372
The group fee rate is calculated on a cumulative basis pursuant to
the graduated fee rate schedule shown above on the left. The schedule
above on the right shows the effective annual group fee rate at
various asset levels, which is the result of cumulatively applying the
annualized rates on the left. For example, the effective annual fee
rate at $___ billion of group net assets - the approximate level for
September 1997 - was ___%, which is the weighted average of the
respective fee rates for each level of group net assets up to $__
billion.
The fund's individual fund fee rate is 0.30%. Based on the average
group net assets of the funds advised by FMR for September 1997, the
fund's annual management fee rate would be calculated as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Group Fee Rate Individual Fund Fee Rate Management Fee Rate
Fidelity Government Securities Fund 0.___% + 0.30% = 0.___%
</TABLE>
One-twelfth of this annual management fee rate is applied to the
fund's net assets averaged for the most recent month, giving a
dollar amount, which is the fee for that month.
For the fiscal years ended September 30, 1997, 1996, and 1995, the
fund paid FMR management fees of $_________, $4,286,520 ,
and $3,601,721, respectively.
FMR may, from time to time, voluntarily reimburse all or a portion
of the fund's operating expenses (exclusive of interest, taxes,
brokerage commissions, and extraordinary expenses). FMR retains the
ability to be repaid for these expense reimbursements in the amount
that expenses fall below the limit prior to the end of the fiscal
year.
Expense reimbursements by FMR will increase the fund's total
returns and yield, and repayment of the reimbursement by the fund
will lower its total returns and yield.
Effective [Date], FMR voluntarily agreed, subject to revision or
termination, to reimburse the fund if and to the extent that its
aggregate operating expenses, including management fees, were in
excess of an annual rate of __% of its average net assets. For the
fiscal years ended [Fiscal Year End] 199_, 199_, and 199_, management
fees incurred under the fund's contract prior to reimbursement
amounted to $_________, $___________, and $_________, respectively,
and management fees reimbursed by FMR amounted to $_________,
$___________, and $_________, respectively.
DISTRIBUTION AND SERVICE PLAN
The Trustees have approved a Distribution and Service Plan on
behalf of the fund (the Plan) pursuant to Rule 12b-1 under the 1940
Act (the Rule). The Rule provides in substance that a mutual fund may
not engage directly or indirectly in financing any activity that is
primarily intended to result in the sale of shares of the fund except
pursuant to a plan approved on behalf of the fund under the Rule. The
Plan, as approved by the Trustees, allows the fund and FMR to incur
certain expenses that might be considered to constitute indirect
payment by the fund of distribution expenses.
Under the Plan, if the payment of management fees by the fund to
FMR is deemed to be indirect financing by the fund of the distribution
of its shares, such payment is authorized by the Plan. The Plan
specifically recognizes that FMR may use its management fee revenue,
as well as its past profits or its other resources, to pay FDC for
expenses incurred in connection with the distribution of fund shares.
In addition, the Plan provides that FMR, directly or through FDC, may
make payments to third parties, such as banks or broker-dealers, that
engage in the sale of fund shares, or provide shareholder support
services. Currently, the Board of Trustees has not authorized such
payments for Fidelity Government Securities Fund shares.
[IF FMR MADE ANY DEFENSIVE THIRD PARTY PAYMENTS IN CALENDAR YEAR:
Payments made by FMR either directly or through FDC to third
parties for the fiscal year ended 1997 amounted to $______].
[IF FMR DID NOT MAKE ANY DEFENSIVE THIRD PARTY PAYMENTS IN CALENDAR
YEAR: FMR made no payments either directly or through FDC to third
parties for the fiscal year ended 1997.
Prior to approving the 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 fund and its shareholders. In particular, the Trust ees
noted that the Plan does not authorize payments by the fund other than
those made to FMR under its management contract with the fund. To the
extent that the Plan gives FMR and FDC greater flexibility in
connection with the distribution of fund shares, additional sales
of fund shares may result. Furthermore, certain shareholder support
services may be provided more effectively under the Plan by local
entities with whom shareholders have other relationships.
The Plan was approved by shareholders of Fidelity Government
Securities Fund on ________, 199_.
The Glass-Steagall Act generally prohibits federally and state
chartered or supervised banks from engaging in the business of
underwriting, selling, or distributing securities. Although the scope
of this prohibition under the Glass-Steagall Act has not been clearly
defined by the courts or appropriate regulatory agencies, FDC believes
that the Glass-Steagall Act should not preclude a bank from performing
shareholder support services, or servicing and recordkeeping
functions. FDC intends to engage banks only to perform such functions.
However, changes in federal or state statutes and regulations
pertaining to the permissible activities of banks and their affiliates
or subsidiaries, as well as further judicial or administrative
decisions or interpretations, could prevent a bank from continuing to
perform all or a part of the contemplated services. If a bank were
prohibited from so acting, the Trustees would consider what actions,
if any, would be necessary to continue to provide efficient and
effective shareholder services. In such event, changes in the
operation of the fund might occur, including possible termination of
any automatic investment or redem ption or other services then
provided by the bank. It is not expected that shareholders would
suffer any adverse financial consequences as a result of any of these
occurrences. In addition, state securities laws on this issue may
differ from the interpretations of federal law expressed herein, and
banks and other financial institutions may be required to register as
dealers pursuant to state law.
The fund may execute portfolio transactions with, and purchase
securities issued by, depository institutions that receive payments
under the Plan. No preference for the instruments of such depository
institutions will be shown in the selection of inves tments.
CONTRACTS WITH FMR AFFILIATES
The fund has entered into a transfer agent agreement with FSC,
an affiliate of FMR. Under the terms of the agreement, FSC performs
transfer agency, dividend disbursing, and shareholder services for the
fund.
For providing transfer agency services , FSC receives an annual
account fee and an asset-based fee each based on account size and fund
type for each retail account and certain institutional accounts. With
respect to certain institutional retirement accounts, FSC receives an
annual account fee and an asset-based fee based on account type or
fund type. These annual account fees are subject to increase based on
postal rate changes.
FSC also collects small account fees from certain accounts with
balances of less than $2,500.
In addition, FSC receives the pro rata portion of the transfer
agency fees applicable to shareholder accounts in each Fidelity
Freedom Fund, a fund of funds managed by an FMR affiliate, according
to the percentage of the Freedom Fund's assets that is invested in the
fund.
FSC pays out-of-pocket expenses associated with providing transfer
agent services. In addition, FSC 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.
The fund has also entered into a service agent agreement with FSC.
Under the terms of the agreement, FSC calculates the NAV and dividends
for the fund, maintains the fund's portfolio and general accounting
records, and administers the fund's securities lending program.
For providing pricing and bookkeeping services, FSC receives a
monthly fee based on the fund's average daily net assets throughout
the month. The annual fee rates for pricing and bookkeeping services
are .0400% of the first $500 million of average net assets and .0200%
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 $60,000 and a maximum of $800,000 per year.
For the fiscal years ended September 30 1 997, 1996, and 1995, the
fund paid FSC pricing and bookkeeping fees, including reimbursement
for related out-of-pocket expenses, of $____, $295,277, and $261,630,
respectively.
For administering the fund's securities lending program, FSC
receives fees based on the number and duration of individual
securities loans.
For the fiscal years ended September 30, 1997, 1996, and 1995, the
fund paid no securities lending fees.
For the fiscal year ended September 30, 1997, the fund paid
securities lending fees of $_____.
The 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 agreement calls for FDC to
use all reasonable efforts, consistent with its other business, to
secure purchasers for shares of the fund, which are continuously
offered at NAV. Promotional and administr ative expenses in
connection with the offer and sale of shares are paid by FMR.
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Fidelity Government Securities Fund is a fund
of Fidelity Income Fund, an open-end management investment company
organized as a Massachusetts business trust on August 7, 1984. On
October 25, 1987, the trust's name was changed from Fidelity Mortgage
Securities Fund to Fidelity Income Fund. Currently, there are four
funds of the trust: Fidelity Ginnie Mae Fund, Fidelity Advisor
Mortgage Securities Fund, Spartan Limited Maturity Government Fund,
and Fidelity Government Securities Fund. The Declaration of Trust
permits the Trustees to create additional funds. Prior to November 30,
1997, Fidelity Government Securities Fund was a fund of Fidelity
Government Securities Fund, an open-end management investment company
organized as a Massachusetts business trust as of September 20, 1991.
Fidelity Government Securities Fund was originally organized as a
limited partnership in the State of Nebraska on August 25, 1978. On
December 31, 1991, the limited partnership transferred all of its
assets to the Massachusetts business trust.
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
identif ying name "Fidelity" may be withdrawn.
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 an entity of the
type commonly known as a "Massachusetts business trust." Under
Massachusetts law, shareholders of such a trust may, under certain
circumstances, be held personally liable for the obliga tions of the
trust. The Declaration of Trust provides that the trust shall not have
any claim against shareholders except for the payment of the
purchase price of shares and requires that each agreement, obligation,
or instrument entered into or executed by the trust or the Trustees
include a provision limiting the obligations created thereby to the
trust and its assets. The Declaration of Trust provides for
indemnification out of each fund's property of any shareholder held
personally liable for the obligations of the fund. The Declaration
of Trust 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 finan cial loss on account of
shareholder liability is limited to circumstances in which a fund
itself would be unable to meet its oblig ations. FMR believes that,
in view of the above, the risk of personal liability to shareholders
is remote.
The Declaration of Trust further provides that the Trustees, if
they have exercised reasonable care, will not be liable for any
neglect or wrongdoing, but nothing in the Declaration of Trust
protects Trustees against any liability to which they would otherwise
be subject by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the
conduct of their office.
VOTING RIGHTS. Each 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 Declaration of Trust, call meetings of the trust or a
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 another open-end
management investment company, or upon liquidation and distribution of
its assets, if 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. If not so terminated,
the trust and its funds will continue indefinitely. 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 the fund. The custodian is
responsible for the safekeeping of a fund's assets and the appointment
of any subcustodian banks and clearing agen cies. The custodian
takes no part in determining the investment policies of a fund or in
deciding which securities are purchased or sold by a fund. However, a
fund may invest in obligations of its custodian and may purchase
securities from or sell securities to the custodian. The Chase
Manhattan Bank, h eadquartered in New York, also may serve as a
special purpose custodian of certain assets 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.
AUDITOR. _________________ serves as the fund's independent
accountant. The auditor examines financial statements for the fund and
provides other audit, tax, and related services.
FINANCIAL STATEMENTS
The fund's financial statements and financial highlights for the
fiscal year ended September 30, 1997, and report of the
auditor, are included in the fund's Annual Report, which is a separate
report supplied with this SAI. The fund's financial statements,
including the financial highlights, and report of the auditor are
incorporated herein by reference. For a free additional copy of the
fund's Annual Report, contact Fidelity at 1-800-544-8888, 82
Devonshire Street, Boston, MA 02109.
APPENDIX
DOLLAR-WEIGHTED AVERAGE MATURITY is derived by multiplying the value
of each investment by the time remaining to its maturity, adding these
calculations, and then dividing the total by the value of the fund's
portfolio. An obligation's maturity is typically determined on a
stated final maturity basis, although there are some exceptions to
this rule.
For example, if it is probable that the issuer of an instrument will
take advantage of a maturity-shortening device, such as a call,
refunding, or redemption provision, the date on which the instrument
will probably be called, refunded, or redeemed may be considered to be
its maturity date. Also, the maturities of mortgage-backed securities,
including collateralized mortgage obligations, and some asset-backed
securities are determined on a weighted average life basis, which is
the average time for principal to be repaid. For a mortgage security,
this average time is calculated by estimating the timing of principal
payments, including unscheduled prepayments, during the life of the
mortgage. The weighted average life of these securities is likely to
be substantially shorter than their stated final maturity.
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) (1) Financial Statements and Financial Highlights, included in
the Annual Report for Fidelity Government Securities Fund for the
fiscal year ended September 30, 1997 will be filed by subsequent
amendment.
(b) Exhibits:
(1) Amended and Restated Declaration of Trust, dated September 15,
1994, is incorporated herein by reference to Exhibit (1) of
Post-Effective Amendment No. 31.
(2) Bylaws of Fidelity Income Fund, as currently in effect, are
incorporated herein by reference to Exhibit 2 of Fidelity Union Street
Trust's Post-Effective Amendment No. 87 (File No. 2-50318).
(3) Not applicable.
(4) Not applicable.
(5)(a) Management Contract, dated August 1, 1994, between Fidelity
Mortgage Securities Portfolio (currently known as Fidelity Advisor
Mortgage Securities Fund) and Fidelity Management and Research Company
is incorporated herein by reference to Exhibit 5(a) of Post-Effective
Amendment No. 31.
(b) Management Contract, dated August 1, 1994, between Fidelity
Ginnie Mae Portfolio (currently known as Fidelity Ginnie Mae Fund) and
Fidelity Management and Research Company is incorporated herein by
reference to Exhibit 5(b) of Post-Effective Amendment No. 31.
(c) Management Contract, dated December 1, 1990, between Spartan
Limited Maturity Government Fund and Fidelity Management and Research
Company is incorporated herein by reference to Exhibit 5(c) of
Post-Effective Amendment No. 31.
(d) Management Contract, dated December 31, 1991, between Fidelity
Government Securities Fund and Fidelity Management and Research
Company is incorporated herein by reference to Exhibit 5 of Fidelity
Government Securities Fund's Post-Effective Amendment No. 42 (File No.
2-62529).
(e) Sub-Advisory Agreement, dated August 1, 1994, between Fidelity
Management & Research Company and Fidelity Management & Research
(U.K.) Inc., on behalf of Fidelity Mortgage Securities Portfolio
(currently known as Fidelity Advisor Mortgage Securities Fund) is
incorporated herein by reference to Exhibit 5(d) of Post-Effective
Amendment No. 31.
(f) Sub-Advisory Agreement, dated August 1, 1994, between Fidelity
Management & Research Company and Fidelity Management & Research (Far
East) Inc. on behalf of Fidelity Mortgage Securities Portfolio
(currently known as Fidelity Advisor Mortgage Securities Fund) is
incorporated herein by reference to Exhibit 5(e) of Post-Effective
Amendment No. 31.
(g) Sub-Advisory Agreement, dated August 1, 1994, between Fidelity
Management & Research Company and Fidelity Management & Research
(U.K.) Inc., on behalf of Fidelity Ginnie Mae Portfolio (currently
known as Fidelity Ginnie Mae Fund) is incorporated herein by reference
to Exhibit 5(f) of Post-Effective Amendment No. 31.
(h) Sub-Advisory Agreement, dated August 1, 1994, between Fidelity
Management & Research Company and Fidelity Management & Research (Far
East) Inc. on behalf of Fidelity Ginnie Mae Portfolio (currently known
as Fidelity Ginnie Mae Fund) is incorporated herein by reference to
Exhibit 5(g) of Post-Effective Amendment No. 31.
(i) Sub-Advisory Agreement, dated August 1, 1994, between Fidelity
Management & Research Company and Fidelity Management & Research
(U.K.) Inc., on behalf of Spartan Limited Maturity Government Fund is
incorporated herein by reference to Exhibit 5(h) of Post-Effective
Amendment No. 31.
(j) Sub-Advisory Agreement, dated August 1, 1994, between Fidelity
Management & Research Company and Fidelity Management & Research (Far
East) Inc. on behalf of Spartan Limited Maturity Government Fund is
incorporated herein by reference to Exhibit 5(i) of Post-Effective
Amendment No. 31.
(6)(a) General Distribution Agreement, dated April 1, 1987, between
Fidelity Mortgage Securities Portfolio (currently known as Fidelity
Advisor Mortgage Securities Fund) and Fidelity Distributors
Corporation is incorporated herein by reference to Exhibit 6(a) of
Post-Effective Amendment No. 33.
(b) General Distribution Agreement, dated April 1, 1987, between
Fidelity Ginnie Mae Portfolio (currently known as Fidelity Ginnie Mae
Fund) and Fidelity Distributors Corporation is incorporated herein by
reference to Exhibit 6(c) of Post-Effective Amendment No. 33.
(c) Amendment, dated January 1, 1988, to the General Distribution
Agreement between Fidelity Mortgage Securities Portfolio (currently
known as Fidelity Advisor Mortgage Securities Fund), Fidelity Ginnie
Mae Portfolio (currently known as Fidelity Ginnie Mae Fund) and
Fidelity Distributors Corporation is incorporated herein by reference
to Exhibit 6(b) of Post-Effective Amendment No. 33.
(d) General Distribution Agreement, dated April 30, 1988, between
Fidelity Short-Term Government Portfolio (currently known as Spartan
Limited Maturity Government Fund) and Fidelity Distributors
Corporation is incorporated herein by reference to Exhibit 6(d) of
Post-Effective Amendment No. 33.
(e) General Distribution Agreement, dated December 31, 1991 between
Fidelity Government Securities Fund and Fidelity Distributors
Corporation is incorporated herein by reference to Exhibit 6(a) of
Fidelity Government Securities Fund's Post-Effective Amendment No.
42 (File No. 2-62529).
(f) Amendment, dated May 10, 1994, to the General Distribution
Agreement, dated December 31, 1991, be tween Fidelity Government
Securities Fund and Fidelity Distributors Corporation is incorporated
herein by reference to Exhibit 6(b) of Fidelity Government
Securities Fund's Post-Effective Amendment No. 42 (File No.
2-62529).
(g) Amendments to the General Distribution Agreement between
Fidelity Income Trust on behalf of Fidelity Mortgage Securities Fund
(currently known as Fidelity Advisor Mortgage Securities Fund),
Fidelity Ginnie Mae Fund, Spartan Limited Maturity Government Fund,
Fidelity Government Securities 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).
(h) Form of Bank Agency Agreement (most recently revised
January, 1997) is electronically filed herein as Exhibit 6(h).
(i) Form of Selling Dealer Agreement (most recently revised
January, 1997) is electronically filed herein as Exhibit 6(i).
(j) Form of Selling Dealer Agreement for Bank Related
Transactions (most recently revised January, 1997) is electronically
filed herein as Exhibit 6(j).
(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 and Appendix C, dated December 1, 1994,
between The Bank of New York and the Registrant is incorporated herein
by reference to Exhibit 8(a) of Fidelity Hereford Street Trust's
Post-Effective Amendment No. 4 (File No. 33-52577).
(b) Appendix A, dated August 31, 1996, to the Custodian Agreement,
dated December 1, 1994, between The Bank of New York and the
Registrant is incorporated herein by reference to Exhibit 8(b) of
Daily Money Fund's Post-Effective Amendment No. 40 (File No. 2-77909).
(c) Appendix B, dated July 31, 1996, to the Custodian Agreement,
dated December 1, 1994, between The Bank of New York and the
Registrant is incorporated herein by reference to Exhibit 8(c) of
Post-Effective Amendment No. 35.
(d) Fidelity Group Repo Custodian Agreement among The Bank of New
York, J. P. Morgan Securities, Inc., and the Registrant, dated
February 12, 1996, is incorporated herein by reference to Exhibit 8(d)
of Fidelity Institutional Cash Portfolios' (File No. 2-74808)
Post-Effective Amendment No. 31.
(e) Schedule 1 to the Fidelity Group Repo Custodian Agreement
between The Bank of New York and the Registrant, dated February 12,
1996, is incorporated herein by reference to Exhibit 8(e) of Fidelity
Institutional Cash Portfolios' (File No. 2-74808) Post-Effective
Amendment No. 31.
(f) Fidelity Group Repo Custodian Agreement among Chemical Bank,
Greenwich Capital Markets, Inc., and the Registrant, dated November
13, 1995, is incorporated herein by reference to Exhibit 8(f) of
Fidelity Institutional Cash Portfolios' (File No. 2-74808)
Post-Effective Amendment No. 31.
(g) Schedule 1 to the Fidelity Group Repo Custodian Agreement
between Chemical Bank and the Registrant, dated November 13, 1995, is
incorporated herein by reference to Exhibit 8(g) of Fidelity
Institutional Cash Portfolios' (File No. 2-74808) Post-Effective
Amendment No. 31.
(h) Joint Trading Account Custody Agreement between The Bank of New
York and the Registrant, dated May 11, 1995, is incorporated herein by
reference to Exhibit 8(h) of Fidelity Institutional Cash Portfolios'
(File No. 2-74808) Post-Effective Amendment No. 31.
(i) First Amendment to Joint Trading Account Custody Agreement
between The Bank of New York and the Registrant, dated July 14, 1995,
is incorporated herein by reference to Exhibit 8(i) of Fidelity
Institutional Cash Portfolios' (File No. 2-74808) Post-Effective
Amendment No. 31.
(9) Not applicable.
(10) Not applicable.
(11) To be filed by subsequent amendment.
(12) Not applicable.
(13) Not applicable.
(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 between Fidelity Mortgage
Securities Portfolio (currently known as Fidelity Advisor Mortgage
Securities Fund: Initial Class) and Fidelity Distributors Corporation
is incorporated herein by reference to Exhibit 15(a) of Post-Effective
Amendment No. 38.
(b) Distribution and Service Plan between Fidelity Ginnie Mae
Portfolio (currently known as Fidelity Ginnie Mae Fund) and Fidelity
Distributors Corporation is incorporated herein by reference to
Exhibit 15(b) of Post-Effective Amendment No. 33.
(c) Distribution and Service Plan between Fidelity Short-Term
Government Portfolio (currently known as Spartan Limited Maturity
Government Fund) and Fidelity Distributors Corporation is incorporated
herein by reference to Exhibit 15(c) of Post-Effective Amendment No.
33.
(d) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Mortgage Securities Fund: Class A is incorporated
herein by reference to Exhibit 15(d) of Post-Effective Amendment No.
38.
(e) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Mortgage Securities Fund: Class T is incorporated
herein by reference to Exhibit 15(e) of Post-Effective Amendment No.
38.
(f) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Mortgage Securities Fund: Class B is incorporated
herein by reference to Exhibit 15(f) of Post-Effective Amendment No.
38.
(g) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Mortgage Securities Fund: Institutional Class is
incorporated herein by reference to Exhibit 15(g) of Post-Effective
Amendment No. 38.
(h) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Government Securities Fund is filed herein as Exhibit 15(h).
(16)(a) A schedule for the computation of 30-day yields and total
returns on behalf of the Registrant is incorporated herein by
reference to Exhibit 16(a) of Post-Effective Amendment No. 33.
(b) A schedule for the computation of adjusted NAVs on behalf of
the Registrant is incorporated herein by reference to Exhibit 16(b) of
Post-Effective Amendment No. 33.
(17) Financial Data Schedules will be filed by subsequent
amendment.
(18) Rule 18f-3 Plan, dated February 1, 1997, is incorporated
herein by reference to Exhibit 18 of Post-Effective Amendment No. 38.
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 & 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 August 31, 1997
Title of Class: Shares of Beneficial Interest
Name of Series Number of Record Holders
Fidelity Advisor Mortgage Securities Fund: Initial Class 29,951
Fidelity Advisor Mortgage Securities Fund: Class A 6
Fidelity Advisor Mortgage Securities Fund: Class T 2,112
Fidelity Advisor Mortgage Securities Fund: Class B 30
Fidelity Advisor Mortgage Securities Fund: Institutional Class 551
Fidelity Ginnie Mae Fund 85,377
Spartan Limited Maturity Government Fund 17,892
Fidelity Government Securities Fund 138,507
Item 27. Indemnification
Article XI, Section 2 of the Declaration of Trust sets forth the
reasonable and fair means for determining whether indemnification
shall be provided to any past or present Trustee or officer. It states
that the Registrant shall indemnify any present or past Trustee or
officer to the fullest extent permitted by law against liability and
all expenses reasonably incurred by him in connection with any claim,
action, suit, or proceeding in which he is involved by virtue of his
service as a Trustee, an officer, or both. Additionally, amounts paid
or incurred in settlement of such matters are covered by this
indemnification. Indemnification will not be provided in certain
circumstances, however. These include instances of willful
misfeasance, bad faith, gross negligence, and reckless disregard of
the duties involved in the conduct of the particular office involved.
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
willful misfeasance, bad faith, gross negligence, and reckless
disregard of the obligations and duties under the Distribution
Agreement.
Pursuant to the agreement by which Fidelity Service Company, Inc.
("Service") is appointed transfer agent, the Registrant agrees to
indemnify and hold Service 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 the
Service and/or the Registrant as a party and is not based on and does
not result from Service's willful misfeasance, bad faith or negligence
or reckless disregard of duties, and arises out of or in connection
with Service's performance under the Transfer Agency Agreement; or
(2) any claim, demand, action or suit (except to the extent
contributed to by Service's willful misfeasance, bad faith or
negligence or reckless disregard of duties) which results from the
negligence of the Registrant, or from Service'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 Service's acting in reliance upon advice reasonably believed
by Service to have been given by counsel for the Registrant, or as a
result of Service'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.
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; Senior Vice President
and Trustee of funds advised by 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.
Bart A. Grenier Vice President of FMR and of High-Income Funds
advised by 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) FIDELITY MANAGEMENT & RESEARCH (U.K.) INC. (FMR U.K.)
25 Lovat Lane, London, EC3R 8LL, England
FMR U.K. provides investment advisory services to Fidelity Management
& Research Company and Fidelity Management Trust Company. The
directors and officers of the Sub-Adviser have held the following
positions of a substantial nature during the past two fiscal years.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman of the Board and Director of FMR U.K.,
FMR, FMR Corp., FMR Texas Inc., and FMR (Far
East) Inc.; Chairman of the Executive Committee 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 U.K.,
FMR, FMR (Far East) Inc., and FMR Texas Inc.;
Managing Director of FMR Corp.; Senior Vice
President and Trustee of funds advised by FMR.
Robert C. Pozen President and Director of FMR; Senior Vice President
and Trustee of funds advised by 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.
Mark G. Lohr Treasurer of FMR U.K., FMR, FMR (Far East) Inc., and
FMR Texas Inc.; Vice President of FMR.
Stephen G. Manning Assistant Treasurer of FMR U.K., FMR, FMR (Far
East) Inc., and FMR Texas Inc.; Treasurer of FMR
Corp.
Francis V. Knox Compliance Officer of FMR U.K.; Vice President of
FMR.
Jay Freedman Clerk of FMR U.K., FMR (Far East) Inc., and FMR
Corp.; Assistant Clerk of FMR; Secretary of FMR
Texas Inc.
(3) FIDELITY MANAGEMENT & RESEARCH COMPANY (FAR EAST) INC. (FMR FAR
EAST)
Shiroyama JT Mori Bldg., 4-3-1 Toranomon Minato-ku, Tokyo 105,
Japan
FMR Far East provides investment advisory services to Fidelity
Management & Research Company and Fidelity Management Trust 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 Far
East, FMR, FMR Corp., FMR Texas Inc., and
FMR (U.K.) Inc.; Chairman of the Executive
Committee 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
Far East, FMR Texas Inc., FMR, 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; Senior Vice
President and Trustee of funds advised by 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.
Bill Wilder Vice President of FMR Far East; President and
Representative Director of Fidelity Investments
Japan Limited.
Mark G. Lohr Treasurer of FMR Far East, FMR, FMR (U.K.)
Inc., and FMR Texas Inc.; Vice President of
FMR.
Stephen G. Manning Assistant Treasurer of FMR Far East, FMR,
FMR (U.K.) Inc., and FMR Texas Inc.; Vice
President and Treasurer of FMR Corp.
Jay Freedman Clerk of FMR Far East, FMR (U.K.) Inc., and
FMR Corp.; Assistant Clerk of FMR; Secretary
of FMR Texas Inc.
Robert Auld Vice President of FMR Far East.
</TABLE>
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' custodian The Bank of New York, 110 Washington Street, New
York, N.Y.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
The Registrant, on behalf of Fidelity Advisor Mortgage Securities
Fund, Fidelity Ginnie Mae Fund, Spartan Limited Maturity Government
Fund, and Fidelity Government Securities Fund, provided the
information required by Item 5A is contained in the annual report,
undertakes to furnish to each person to whom a prospectus has been
delivered, upon their request and without charge, a copy of the
Registrant's latest annual report to shareholders.
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. 41 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 8th day
of September 1997.
FIDELITY INCOME FUND
By /s/Edward C. Johnson 3d (dagger)
Edward C. Johnson 3d, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons
in the capacities and on the dates indicated.
(Signature) (Title) (Date)
<TABLE>
<CAPTION>
<S> <C> <C>
/s/Edward C. Johnson 3d (dagger) President and Trustee September 8, 1997
Edward C. Johnson 3d (Principal Executive Officer)
/s/Richard A. Silver Treasurer September 8, 1997
Richard A. Silver
/s/Robert C. Pozen Trustee September 8, 1997
Robert C. Pozen
/s/Ralph F. Cox * Trustee September 8, 1997
Ralph F. Cox
/s/Phyllis Burke Davis * Trustee September 8, 1997
Phyllis Burke Davis
/s/Robert M. Gates ** Trustee September 8, 1997
Robert M. Gates
/s/E. Bradley Jones * Trustee September 8, 1997
E. Bradley Jones
/s/Donald J. Kirk * Trustee September 8, 1997
Donald J. Kirk
/s/Peter S. Lynch * Trustee September 8, 1997
Peter S. Lynch
/s/Marvin L. Mann * Trustee September 8, 1997
Marvin L. Mann
/s/William O. McCoy * Trustee September 8, 1997
William O. McCoy
/s/Gerald C. McDonough * Trustee September 8, 1997
Gerald C. McDonough
/s/Thomas R. Williams * Trustee September 8, 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 6(h)
FORM OF
BANK AGENCY AGREEMENT
We at Fidelity Distributors Corporation offer to make available to
your customers shares of the mutual funds, or the separate series or
classes of the mutual funds, listed on Schedules A and B attached to
this Agreement (the "Portfolios"). We may periodically change the
list of Portfolios by giving you written notice of the change. We are
the Portfolios' principal underwriter and act as agent for the
Portfolios. You (____________________________________) are a division
or affiliate of a bank (____________________________________) and
desire to make Portfolio shares available to your customers on the
following terms:
1. Certain Defined Terms: As used in this Agreement, the term
"Prospectus" means the applicable Portfolio's prospectus and related
statement of additional information, whether in paper format or
electronic format, included in the Portfolio's then currently
effective registration statement (or post-effective amendment
thereto), and any information that we or the Portfolio may issue to
you as a supplement to such prospectus or statement of additional
information (a "sticker"), all as filed with the Securities and
Exchange Commission (the "SEC") pursuant to the Securities Act of
1933.
2. Making Portfolio Shares Available to Your Customers: (a) In all
transactions covered by this Agreement: (i) you will act as agent for
your customers; in no transaction are you authorized to act as agent
for us or for any Portfolio; (ii) you will initiate transactions only
upon your customers' orders; (iii) we will execute transactions only
upon receiving instructions from you acting as agent for your
customers; and (iv) each transaction will be for your customer's
account and not for your own account. Each transaction will be
without recourse to you, provided that you act in accordance with the
terms of this Agreement.
(b) You agree to make Portfolio shares available to your customers
only at the applicable public offering price in accordance with the
Prospectus. If your customer qualifies for a reduced sales charge
pursuant to a special purchase plan (for example, a quantity discount,
letter of intent, or right of accumulation) as described in the
Prospectus, you agree to make Portfolio shares available to your
customer at the applicable reduced sales charge. You agree to deliver
or cause to be delivered to each customer, at or prior to the time of
any purchase of shares, a copy of the then current prospectus
(including any stickers thereto), unless such prospectus has already
been delivered to the customer, and to each customer who so requests,
a copy of the then current statement of additional information
(including any stickers thereto).
(c) You agree to order Portfolio shares from us only to cover
purchase orders that you have already received from your customers, or
for your own investment. You will not withhold placing customers'
orders so as to profit yourself as a result of such withholding (for
example, by a change in a Portfolio's net asset value from that used
in determining the offering price to your customers).
(d) We will accept your purchase orders only at the public offering
price applicable to each order, as determined in accordance with the
Prospectus. We will not accept from you a conditional order for
Portfolio shares. All orders are subject to acceptance or rejection
by us in our sole discretion. We may, without notice, suspend sales
or withdraw the offering of Portfolio shares, or make a limited
offering of Portfolio shares.
(e) The placing of orders with us will be governed by instructions
that we will periodically issue to you. You must pay for Portfolio
shares in New York or Boston clearing house funds or in federal funds
in accordance with such instructions, and we must receive your payment
on or before the settlement date established in accordance with Rule
15c6-1 under the Securities Exchange Act of 1934 (the "1934 Act").
(f) You agree to comply with all applicable state and federal laws
and with the rules and regulations of authorized regulatory agencies
thereunder. You agree to make Portfolio shares available to your
customers only in states where you may legally make such Portfolio's
shares available. You will not make available shares of any Portfolio
unless such shares are registered under the applicable state and
federal laws and the rules and regulations thereunder.
(g) Certificates evidencing Portfolio shares are not available; any
transaction in Portfolio shares will be effected and evidenced by
book-entry on the records maintained by Fidelity Investments
Institutional Operations Company ("FIIOC"). A confirmation statement
evidencing transactions in Portfolio shares will be transmitted to
you.
(h) You may designate FIIOC to execute your customers' transactions
in Portfolio shares in accordance with the terms of any account,
program, plan, or service established or used by your customers, and
to confirm each transaction to your customers on your behalf on a
fully disclosed basis. At the time of the transaction, you guarantee
the legal capacity of your customers and any co-owners of such shares
so transacting in such shares.
3. Your Compensation: (a) Your fee, if any, for acting as agent
with respect to sales of Portfolio shares will be as provided in the
Prospectus or in the applicable schedule of agency fees issued by us
and in effect at the time of the sale. Upon written notice to you, we
or any Portfolio may change or discontinue any schedule of agency
fees, or issue a new schedule.
(b) If a Portfolio has adopted a plan pursuant to Rule 12b-1 under
the Investment Company Act of 1940 (a "Plan"), we may make
distribution payments or service payments to you under the Plan. If a
Portfolio does not have a currently effective Plan, we or Fidelity
Management & Research Company may make distribution payments or
service payments to you from our own funds. Any distribution payments
or service payments will be made in the amount and manner set forth in
the Prospectus or in the applicable schedule of distribution payments
or service payments issued by us and then in effect. Upon written
notice to you, we or any Portfolio may change or discontinue any
schedule of distribution payments or service payments, or issue a new
schedule. A schedule of distribution payments or service payments
will be in effect with respect to a Portfolio that has a Plan only so
long as that Portfolio's Plan remains in effect.
(c) After the effective date of any change in or discontinuance of
any schedule of agency fees, distribution payments, or service
payments, or the termination of a Plan, any agency fees, distribution
payments, or service payments will be allowable or payable to you only
in accordance with such change, discontinuance, or termination. You
agree that you will have no claim against us or any Portfolio by
virtue of any such change, discontinuance, or termination. In the
event of any overpayment by us of any agency fee, distribution
payment, or service payment, you will remit such overpayment.
(d) If, within seven (7) business days after our confirmation of
the original purchase order for shares of a Portfolio, such shares are
redeemed by the issuing Portfolio or tendered for redemption by the
customer, you agree (i) to refund promptly to us the full amount of
any agency fee, distribution payment, or service payment paid to you
on such shares, and (ii) if not yet paid to you, to forfeit the right
to receive any agency fee, distribution payment, or service payment
payable to you on such shares. We will notify you of any such
redemption within ten (10) days after the date of the redemption.
4. Certain Types of Accounts: (a) You may instruct FIIOC to
register purchased shares in your name and account as nominee for your
customers. If you hold Portfolio shares as nominee for your
customers, all Prospectuses, proxy statements, periodic reports, and
other printed material will be sent to you, and all confirmations and
other communications to shareholders will be transmitted to you. You
will be responsible for forwarding such printed material,
confirmations, and communications, or the information contained
therein, to all customers for whose account you hold any Portfolio
shares as nominee. However, we or FIIOC on behalf of itself or the
Portfolios will be responsible for the costs associated with your
forwarding such printed material, confirmations, and communications.
You will be responsible for complying with all reporting and tax
withholding requirements with respect to the customers for whose
account you hold any Portfolio shares as nominee.
(b) With respect to accounts other than those accounts referred to
in paragraph 4(a) above, you agree to provide us with all information
(including certification of taxpayer identification numbers and
back-up withholding instructions) necessary or appropriate for us to
comply with legal and regulatory reporting requirements.
(c) Accounts opened or maintained pursuant to the NETWORKING system
of the National Securities Clearing Corporation ("NSCC") will be
governed by applicable NSCC rules and procedures and any agreement or
other arrangement with us relating to NETWORKING.
(d) If you hold Portfolio shares in an omnibus account for two or
more customers, you will be responsible for determining, in accordance
with the Prospectus, whether, and the extent to which, a CDSC is
applicable to a purchase of Portfolio shares from such a customer, and
you agree to transmit immediately to us any CDSC to which such
purchase was subject. You hereby represent that if you hold Portfolio
shares subject to a CDSC, you have the capability to track and account
for such charge, and we reserve the right, at our discretion, to
verify that capability by inspecting your tracking and accounting
system or otherwise.
5. Status as Registered Broker/Dealer or "Bank": (a) Each party to
this Agreement represents to the other party that it is either (i) a
registered broker/dealer under the 1934 Act, or (ii) a "bank" as
defined in Section 3(a)(6) of the 1934 Act.
(b) If a party is a registered broker/dealer, such party represents
that it is qualified to act as a broker/dealer in the states where it
transacts business, and it is a member in good standing of the
National Association of Securities Dealers, Inc. ("NASD"). It agrees
to maintain its broker/dealer registration and qualifications and its
NASD membership in good standing throughout the term of this
Agreement. It agrees to abide by all of the NASD's rules and
regulations, including the NASD's Conduct Rules -- in particular,
Section 2830 of such Rules, which section is deemed a part of and is
incorporated by reference in this Agreement. This Agreement will
terminate automatically without notice in the event that a party's
NASD membership is terminated.
(c) If you are a "bank", you represent that you are duly authorized
to engage in the transactions to be performed under this Agreement,
and you agree to comply with all applicable federal and state laws,
including the rules and regulations of all applicable federal and
state bank regulatory agencies and authorities. This Agreement will
terminate automatically without notice in the event that you cease to
be a "bank" as defined in Section 3(a)(6) of the 1934 Act.
(d) Nothing in this Agreement shall cause you to be our partner,
employee, or agent, or give you any authority to act for us or for any
Portfolio. Neither we nor any Portfolio shall be liable for any of
your acts or obligations as a dealer under this Agreement.
6. Information Relating to the Portfolios: (a) No person is
authorized to make any representations concerning shares of a
Portfolio other than those contained in the Portfolio's Prospectus.
In ordering Portfolio shares from us under this Agreement, you will
rely only on the representations contained in the Prospectus. Upon
your request, we will furnish you with a reasonable number of copies
of the Portfolios' current prospectuses or statements of additional
information or both (including any stickers thereto).
(b) Any printed or electronic information that we furnish you
(other than the Portfolios' Prospectuses and periodic reports) is our
sole responsibility and not the responsibility of the respective
Portfolios. You agree that the Portfolios will have no liability or
responsibility to you with respect to any such printed or electronic
information. We or the respective Portfolio will bear the expense of
qualifying its shares under the state securities laws.
(c) You may not use any sales literature or advertising material
(including material disseminated through radio, television, or other
electronic media) concerning Portfolio shares, other than the printed
or electronic information referred to in paragraph 6(b) above, in
connection with making Portfolio shares available to your customers
without obtaining our prior written approval. You may not distribute
or make available to investors any information that we furnish you
marked "FOR DEALER USE ONLY" or that otherwise indicates that it is
confidential or not intended to be distributed to investors.
7. Indemnification: (a) We will indemnify and hold you harmless
from any claim, demand, loss, expense, or cause of action resulting
from the misconduct or negligence, as measured by industry standards,
of us, our agents and employees, in carrying out our obligations under
this Agreement. Such indemnification will survive the termination of
this Agreement.
(b) You will indemnify and hold us harmless from any claim, demand,
loss, expense, or cause of action resulting from the misconduct or
negligence, as measured by industry standards, of you, your agents and
employees, in carrying out your obligations under this Agreement.
Such indemnification will survive the termination of this Agreement.
8. Customer Lists: We hereby agree that we shall not use any list of
your customers which may be obtained in connection with this Agreement
for the purpose of solicitation of any product or service without your
express written consent. However, nothing in this paragraph or
otherwise shall be deemed to prohibit or restrict us or our affiliates
in any way from solicitations of any product or service directed at,
without limitation, the general public, any segment thereof, or any
specific individual, provided such solicitation is not based upon such
list.
9. Duration of Agreement: This Agreement, with respect to any Plan,
will continue in effect for one year from its effective date, and
thereafter will continue automatically for successive annual periods;
provided, however, that such continuance is subject to termination at
any time without penalty if a majority of a Portfolio's Trustees who
are not interested persons of the Portfolio (as defined in the
Investment Company Act of 1940 (the "1940 Act")), or a majority of the
outstanding shares of the Portfolio, vote to terminate or not to
continue the Plan. This Agreement, other than with respect to a Plan,
will continue in effect from year to year after its effective date,
unless terminated as provided herein.
10. Amendment and Termination of Agreement: (a) We may amend any
provision of this Agreement by giving you written notice of the
amendment. Either party to this Agreement may terminate the Agreement
without cause by giving the other party at least thirty (30) days'
written notice of its intention to terminate. This Agreement will
terminate automatically in the event of its assignment (as defined in
the 1940 Act).
(b) In the event that (i) an application for a protective decree
under the provisions of the Securities Investor Protection Act of 1970
is file against you; (ii) you file a petition in bankruptcy or a
petition seeking similar relief under any bankruptcy, insolvency, or
similar law, or a proceeding is commenced against you seeking such
relief; or (iii) you are found by the SEC, the NASD, or any other
federal or state regulatory agency or authority to have violated any
applicable federal or state law, rule or regulation arising out of
your activities as a broker/dealer or in connection with this
Agreement, this Agreement will terminate effective immediately upon
our giving notice of termination to you. You agree to notify us
promptly and to immediately suspend making Portfolio shares available
to your customers in the event of any such filing or violation, or in
the event that you cease to be a member in good standing of the NASD
or you cease to be a "bank" as defined in Section 3(a)(6) of the 1934
Act.
(c) Your or our failure to terminate this Agreement for a
particular cause will not constitute a waiver of the right to
terminate this Agreement at a later date for the same or another
cause. The termination of this Agreement with respect to any one
Portfolio will not cause its termination with respect to any other
Portfolio.
11. Arbitration: In the event of a dispute, such dispute will be
settled by arbitration before arbitrators sitting in Boston,
Massachusetts in accordance with the NASD's Code of Arbitration
Procedure in effect at the time of the dispute. The arbitrators will
act by majority decision and their award may allocate attorneys' fees
and arbitration costs between us. Their award will be final and
binding between us, and such award may be entered as a judgment in any
court of competent jurisdiction.
12. Notices: All notices required or permitted to be given under this
Agreement shall be given in writing and delivered by personal
delivery, by postage prepaid mail, or by facsimile machine or a
similar means of same day delivery (with a confirming copy by mail).
All notices to us shall be given or sent to us at our offices located
at 82 Devonshire Street, Mail Zone L12A, Boston, Massachusetts 02109,
Attn: Bank Wholesale Market. All notices to you shall be given or
sent to you at the address specified by you below. Each of us may
change the address to which notices shall be sent by giving notice to
the other party in accordance with this paragraph 12.
13. Miscellaneous: This Agreement, as it may be amended from time to
time, shall become effective as of the date when it is accepted and
dated below by us. This Agreement is to be construed in accordance
with the laws of the Commonwealth of Massachusetts. This Agreement
supersedes and cancels any prior agreement between us, whether oral or
written, relating to the sale of shares of the Portfolios or any other
subject covered by this Agreement. The captions in this Agreement are
included for convenience of reference only and in no way define or
limit any of the provisions of this Agreement or otherwise affect
their construction or effect.
Very truly yours,
FIDELITY DISTRIBUTORS
CORPORATION
Please return two signed copies of this Agreement to Fidelity
Distributors Corporation. Upon acceptance, one countersigned copy
will be returned to you for your files.
_____________________________________
Name of Firm
Address: _____________________________
_____________________________________
_____________________________________
By __________________________________
Authorized Representative
_____________________________________
Name and Title (please print or type)
ACCEPTED AND AGREED:
FIDELITY DISTRIBUTORS CORPORATION
By __________________________________
Dated: ________________
[ATTACH REVISED SCHEDULES A AND B ]
Exhibit 6(i)
FORM OF
SELLING DEALER AGREEMENT
We at Fidelity Distributors Corporation invite you
(______________________________) to distribute shares of the mutual
funds, or the separate series or classes of the mutual funds, listed
on Schedule A attached to this Agreement (the "Portfolios"). We may
periodically change the list of Portfolios by giving you written
notice of the change. We are the Portfolios' principal underwriter
and, as agent for the Portfolios, we offer to sell Portfolio shares to
you on the following terms:
1. Certain Defined Terms: As used in this Agreement, the term
"Prospectus" means the applicable Portfolio's prospectus and related
statement of additional information, whether in paper format or
electronic format, included in the Portfolio's then currently
effective registration statement (or post-effective amendment
thereto), and any information that we or the Portfolio may issue to
you as a supplement to such prospectus or statement of additional
information (a "sticker"), all as filed with the Securities and
Exchange Commission (the "SEC") pursuant to the Securities Act of
1933.
2. Purchases of Portfolio Shares for Sale to Customers: (a) In
offering and selling Portfolio shares to your customers, you agree to
act as dealer for your own account; you are not authorized to act as
agent for us or for any Portfolio.
(b) You agree to offer and sell Portfolio shares to your customers
only at the applicable public offering price in accordance with the
Prospectus. If your customer qualifies for a reduced sales charge
pursuant to a special purchase plan (for example, a quantity discount,
letter of intent, or right of accumulation) as described in the
Prospectus, you agree to offer and sell Portfolio shares to your
customer at the applicable reduced sales charge. You agree to deliver
or cause to be delivered to each customer, at or prior to the time of
any purchase of shares, a copy of the then current prospectus
(including any stickers thereto), unless such prospectus has already
been delivered to the customer, and to each customer who so requests,
a copy of the then current statement of additional information
(including any stickers thereto).
(c) You agree to purchase Portfolio shares from us only to cover
purchase orders that you have already received from your customers, or
for your own investment. You also agree not to purchase any Portfolio
shares from your customers at a price lower than the applicable
redemption price, determined in the manner described in the
Prospectus. You will not withhold placing customers' orders so as to
profit yourself as a result of such withholding (for example, by a
change in a Portfolio's net asset value from that used in determining
the offering price to your customers).
(d) We will accept your purchase orders only at the public offering
price applicable to each order, as determined in accordance with the
Prospectus. We will not accept from you a conditional order for
Portfolio shares. All orders are subject to acceptance or rejection
by us in our sole discretion. We may, without notice, suspend sales
or withdraw the offering of Portfolio shares, or make a limited
offering of Portfolio shares.
(e) The placing of orders with us will be governed by instructions
that we will periodically issue to you. You must pay for Portfolio
shares in New York or Boston clearing house funds or in federal funds
in accordance with such instructions, and we must receive your payment
on or before the settlement date established in accordance with Rule
15c6-1 under the Securities Exchange Act of 1934 (the "1934 Act"). If
we do not receive your payment on or before such settlement date, we
may, without notice, cancel the sale, or, at our option, sell the
shares that you ordered back to the issuing Portfolio, and we may hold
you responsible for any loss suffered by us or the issuing Portfolio
as a result of your failure to make payment as required.
(f) You agree to comply with all applicable state and federal laws
and with the rules and regulations of authorized regulatory agencies
thereunder. You agree to offer and sell Portfolio shares only in
states where you may legally offer and sell such Portfolio's shares.
You will not offer shares of any Portfolio for sale unless such shares
are registered for sale under the applicable state and federal laws
and the rules and regulations thereunder.
(g) Certificates evidencing Portfolio shares are not available; any
transaction in Portfolio shares will be effected and evidenced by
book-entry on the records maintained by Fidelity Investments
Institutional Operations Company ("FIIOC"). A confirmation statement
evidencing transactions in Portfolio shares will be transmitted to
you.
(h) You may designate FIIOC to execute your customers' transactions
in Portfolio shares in accordance with the terms of any account,
program, plan, or service established or used by your customers, and
to confirm each transaction to your customers on your behalf. At the
time of the transaction, you guarantee the legal capacity of your
customers and any co-owners of such shares so transacting in such
shares.
3. Your Compensation: (a) Your concession, if any, on your sales of
Portfolio shares will be as provided in the Prospectus or in the
applicable schedule of concessions issued by us and in effect at the
time of our sale to you. Upon written notice to you, we or any
Portfolio may change or discontinue any schedule of concessions, or
issue a new schedule.
(b) If a Portfolio has adopted a plan pursuant to Rule 12b-1 under
the Investment Company Act of 1940 (a "Plan"), we may make
distribution payments or service payments to you under the Plan. If a
Portfolio does not have a currently effective Plan, we or Fidelity
Management & Research Company may make distribution payments or
service payments to you from our own funds. Any distribution payments
or service payments will be made in the amount and manner set forth in
the Prospectus or in the applicable schedule of distribution payments
or service payments issued by us and then in effect. Upon written
notice to you, we or any Portfolio may change or discontinue any
schedule of distribution payments or service payments, or issue a new
schedule. A schedule of distribution payments or service payments
will be in effect with respect to a Portfolio that has a Plan only so
long as that Portfolio's Plan remains in effect.
(c) After the effective date of any change in or discontinuance of
any schedule of concessions, distribution payments, or service
payments, or the termination of a Plan, any concessions, distribution
payments, or service payments will be allowable or payable to you only
in accordance with such change, discontinuance, or termination. You
agree that you will have no claim against us or any Portfolio by
virtue of any such change, discontinuance, or termination. In the
event of any overpayment by us of any concession, distribution
payment, or service payment, you will remit such overpayment.
(d) If any Portfolio shares sold to you by us under the terms of
this Agreement are redeemed by the issuing Portfolio or tendered for
redemption by the customer within seven (7) business days after the
date of our confirmation of your original purchase order for such
shares, you agree (i) to refund promptly to us the full amount of any
concession, distribution payment, or service payment allowed or paid
to you on such shares, and (ii) if not yet allowed or paid to you, to
forfeit the right to receive any concession, distribution payment, or
service payment allowable or payable to you on such shares. We will
notify you of any such redemption within ten (10) days after the date
of the redemption.
4. Certain Types of Accounts: (a) You may instruct FIIOC to
register purchased shares in your name and account as nominee for your
customers. If you hold Portfolio shares as nominee for your
customers, all Prospectuses, proxy statements, periodic reports, and
other printed material will be sent to you, and all confirmations and
other communications to shareholders will be transmitted to you. You
will be responsible for forwarding such printed material,
confirmations, and communications, or the information contained
therein, to all customers for whose account you hold any Portfolio
shares as nominee. However, we or FIIOC on behalf of itself or the
Portfolios will be responsible for the costs associated with your
forwarding such printed material, confirmations, and communications.
You will be responsible for complying with all reporting and tax
withholding requirements with respect to the customers for whose
account you hold any Portfolio shares as nominee.
(b) With respect to accounts other than those accounts referred to
in paragraph 4(a) above, you agree to provide us with all information
(including certification of taxpayer identification numbers and
back-up withholding instructions) necessary or appropriate for us to
comply with legal and regulatory reporting requirements.
(c) Accounts opened or maintained pursuant to the NETWORKING system
of the National Securities Clearing Corporation ("NSCC") will be
governed by applicable NSCC rules and procedures and any agreement or
other arrangement with us relating to NETWORKING.
(d) If you hold Portfolio shares in an omnibus account for two or
more customers, you will be responsible for determining, in accordance
with the Prospectus, whether, and the extent to which, a CDSC is
applicable to a purchase of Portfolio shares from such a customer, and
you agree to transmit immediately to us any CDSC to which such
purchase was subject. You hereby represent that if you hold Portfolio
shares subject to a CDSC, you have the capability to track and account
for such charge, and we reserve the right, at our discretion, to
verify that capability by inspecting your tracking and accounting
system or otherwise.
5. Status as Registered Broker/Dealer: (a) Each party to this
Agreement represents to the other party that (i) it is registered as a
broker/dealer under the 1934 Act, (ii) it is qualified to act as a
broker/dealer in the states where it transacts business, and (iii) it
is a member in good standing of the National Association of Securities
Dealers, Inc. ("NASD"). Each party agrees to maintain its
broker/dealer registration and qualifications and its NASD membership
in good standing throughout the term of this Agreement. Each party
agrees to abide by all of the NASD's rules and regulations, including
the NASD's Conduct Rules -- in particular, Section 2830 of such Rules,
which section is deemed a part of and is incorporated by reference in
this Agreement. This Agreement will terminate automatically without
notice in the event that either party's NASD membership is terminated.
(b) Nothing in this Agreement shall cause you to be our partner,
employee, or agent, or give you any authority to act for us or for any
Portfolio. Neither we nor any Portfolio shall be liable for any of
your acts or obligations as a dealer under this Agreement.
6. Information Relating to the Portfolios: (a) No person is
authorized to make any representations concerning shares of a
Portfolio other than those contained in the Portfolio's Prospectus.
In buying Portfolio shares from us under this Agreement, you will rely
only on the representations contained in the Prospectus. Upon your
request, we will furnish you with a reasonable number of copies of the
Portfolios' current prospectuses or statements of additional
information or both (including any stickers thereto).
(b) Any printed or electronic information that we furnish you
(other than the Portfolios' Prospectuses and periodic reports) is our
sole responsibility and not the responsibility of the respective
Portfolios. You agree that the Portfolios will have no liability or
responsibility to you with respect to any such printed or electronic
information. We or the respective Portfolio will bear the expense of
qualifying its shares under the state securities laws.
(c) You may not use any sales literature or advertising material
(including material disseminated through radio, television, or other
electronic media) concerning Portfolio shares, other than the printed
or electronic information referred to in paragraph 6(b) above, in
connection with the offer or sale of Portfolio shares without
obtaining our prior written approval. You may not distribute or make
available to investors any information that we furnish you marked "FOR
DEALER USE ONLY" or that otherwise indicates that it is confidential
or not intended to be distributed to investors.
7. Indemnification: (a) We will indemnify and hold you harmless
from any claim, demand, loss, expense, or cause of action resulting
from the misconduct or negligence, as measured by industry standards,
of us, our agents and employees, in carrying out our obligations under
this Agreement. Such indemnification will survive the termination of
this Agreement.
(b) You will indemnify and hold us harmless from any claim, demand,
loss, expense, or cause of action resulting from the misconduct or
negligence, as measured by industry standards, of you, your agents and
employees, in carrying out your obligations under this Agreement.
Such indemnification will survive the termination of this Agreement.
8. Customer Lists: We hereby agree that we shall not use any list of
your customers which may be obtained in connection with this Agreement
for the purpose of solicitation of any product or service without your
express written consent. However, nothing in this paragraph or
otherwise shall be deemed to prohibit or restrict us or our affiliates
in any way from solicitations of any product or service directed at,
without limitation, the general public, any segment thereof, or any
specific individual, provided such solicitation is not based upon such
list.
9. Duration of Agreement: This Agreement, with respect to any Plan,
will continue in effect for one year from its effective date, and
thereafter will continue automatically for successive annual periods;
provided, however, that such continuance is subject to termination at
any time without penalty if a majority of a Portfolio's Trustees who
are not interested persons of the Portfolio (as defined in the
Investment Company Act of 1940 (the "1940 Act")), or a majority of the
outstanding shares of the Portfolio, vote to terminate or not to
continue the Plan. This Agreement, other than with respect to a Plan,
will continue in effect from year to year after its effective date,
unless terminated as provided herein.
10. Amendment and Termination of Agreement: (a) We may amend any
provision of this Agreement by giving you written notice of the
amendment. Either party to this Agreement may terminate the Agreement
without cause by giving the other party at least thirty (30) days'
written notice of its intention to terminate. This Agreement will
terminate automatically in the event of its assignment (as defined in
the 1940 Act).
(b) In the event that (i) an application for a protective decree
under the provisions of the Securities Investor Protection Act of 1970
is filed against you; (ii) you file a petition in bankruptcy or a
petition seeking similar relief under any bankruptcy, insolvency, or
similar law, or a proceeding is commenced against you seeking such
relief; or (iii) you are found by the SEC, the NASD, or any other
federal or state regulatory agency or authority to have violated any
applicable federal or state law, rule or regulation arising out of
your activities as a broker/dealer or in connection with this
Agreement, this Agreement will terminate effective immediately upon
our giving notice of termination to you. You agree to notify us
promptly and to immediately suspend sales of Portfolio shares in the
event of any such filing or violation, or in the event that you cease
to be a member in good standing of the NASD.
(c) Your or our failure to terminate this Agreement for a
particular cause will not constitute a waiver of the right to
terminate this Agreement at a later date for the same or another
cause. The termination of this Agreement with respect to any one
Portfolio will not cause its termination with respect to any other
Portfolio.
11. Arbitration: In the event of a dispute, such dispute will be
settled by arbitration before arbitrators sitting in Boston,
Massachusetts in accordance with the NASD's Code of Arbitration
Procedure in effect at the time of the dispute. The arbitrators will
act by majority decision and their award may allocate attorneys' fees
and arbitration costs between us. Their award will be final and
binding between us, and such award may be entered as a judgment in any
court of competent jurisdiction.
12. Notices: All notices required or permitted to be given under this
Agreement shall be given in writing and delivered by personal
delivery, by postage prepaid mail, or by facsimile machine or a
similar means of same day delivery (with a confirming copy by mail).
All notices to us shall be given or sent to us at our offices located
at 82 Devonshire Street, Mail Zone L10A, Boston, Massachusetts 02109,
Attn: Broker Dealer Services Group. All notices to you shall be given
or sent to you at the address specified by you below. Each of us may
change the address to which notices shall be sent by giving notice to
the other party in accordance with this paragraph 12.
13. Miscellaneous: This Agreement, as it may be amended from time to
time, shall become effective as of the date when it is accepted and
dated below by us. This Agreement is to be construed in accordance
with the laws of the Commonwealth of Massachusetts. This Agreement
supersedes and cancels any prior agreement between us, whether oral or
written, relating to the sale of shares of the Portfolios or any other
subject covered by this Agreement. The captions in this Agreement are
included for convenience of reference only and in no way define or
limit any of the provisions of this Agreement or otherwise affect
their construction or effect.
Very truly yours,
FIDELITY DISTRIBUTORS
CORPORATION
Please return two signed copies of this Agreement to Fidelity
Distributors Corporation. Upon acceptance, one countersigned copy
will be returned to you for your files.
_____________________________________
Name of Firm
Address: _____________________________
_____________________________________
_____________________________________
By __________________________________
Authorized Representative
_____________________________________
Name and Title (please print or type)
CRD # _______________________________
ACCEPTED AND AGREED:
FIDELITY DISTRIBUTORS CORPORATION
By __________________________________
Dated: _________________
[ATTACH REVISED SCHEDULE A]
Exhibit 6(j)
FORM OF
SELLING DEALER AGREEMENT
(FOR BANK-RELATED TRANSACTIONS)
We at Fidelity Distributors Corporation invite you to distribute
shares of the mutual funds, or the separate series or classes of the
mutual funds, listed on Schedules A and B attached to this Agreement
(the "Portfolios"). We may periodically change the list of Portfolios
by giving you written notice of the change. We are the Portfolios'
principal underwriter and, as agent for the Portfolios, we offer to
sell Portfolio shares to you on the following terms:
1. Certain Defined Terms: (a) You
(_____________________________________) are registered as a
broker/dealer under the Securities Exchange Act of 1934 (the "1934
Act") and have executed a written agreement with a bank or bank
affiliate to provide brokerage services to that bank, bank affiliate
and/or their customers. As used in this Agreement, the term "Bank"
means a bank as defined in Section 3(a)(6) of the 1934 Act, or an
affiliate of such a bank, with which you have entered into a written
agreement to provide brokerage services; and the term "Bank Client"
means a customer of such a Bank.
(b) As used in this Agreement, the term "Prospectus" means the
applicable Portfolio's prospectus and related statement of additional
information, whether in paper format or electronic format, included in
the Portfolio's then currently effective registration statement (or
post-effective amendment thereto), and any information that we or the
Portfolio may issue to you as a supplement to such prospectus or
statement of additional information (a "sticker"), all as filed with
the Securities and Exchange Commission (the "SEC") pursuant to the
Securities Act of 1933.
2. Purchases of Portfolio Shares for Sale to Customers: (a) In
offering and selling Portfolio shares to your customers, you agree to
act as dealer for your own account; you are not authorized to act as
agent for us or for any Portfolio.
(b) You agree to offer and sell Portfolio shares to your customers
only at the applicable public offering price in accordance with the
Prospectus. If your customer qualifies for a reduced sales charge
pursuant to a special purchase plan (for example, a quantity discount,
letter of intent, or right of accumulation) as described in the
Prospectus, you agree to offer and sell Portfolio shares to your
customer at the applicable reduced sales charge. You agree to deliver
or cause to be delivered to each customer, at or prior to the time of
any purchase of shares, a copy of the then current prospectus
(including any stickers thereto), unless such prospectus has already
been delivered to the customer, and to each customer who so requests,
a copy of the then current statement of additional information
(including any stickers thereto).
(c) You agree to purchase Portfolio shares from us only to cover
purchase orders that you have already received from your customers, or
for your own investment. You also agree not to purchase any Portfolio
shares from your customers at a price lower than the applicable
redemption price, determined in the manner described in the
Prospectus. You will not withhold placing customers' orders so as to
profit yourself as a result of such withholding (for example, by a
change in a Portfolio's net asset value from that used in determining
the offering price to your customers).
(d) We will accept your purchase orders only at the public offering
price applicable to each order, as determined in accordance with the
Prospectus. We will not accept from you a conditional order for
Portfolio shares. All orders are subject to acceptance or rejection
by us in our sole discretion. We may, without notice, suspend sales
or withdraw the offering of Portfolio shares, or make a limited
offering of Portfolio shares.
(e) The placing of orders with us will be governed by instructions
that we will periodically issue to you. You must pay for Portfolio
shares in New York or Boston clearing house funds or in federal funds
in accordance with such instructions, and we must receive your payment
on or before the settlement date established in accordance with Rule
15c6-1 under the 1934 Act. If we do not receive your payment on or
before such settlement date, we may, without notice, cancel the sale,
or, at our option, sell the shares that you ordered back to the
issuing Portfolio, and we may hold you responsible for any loss
suffered by us or the issuing Portfolio as a result of your failure to
make payment as required.
(f) You agree to comply with all applicable state and federal laws
and with the rules and regulations of authorized regulatory agencies
thereunder. You agree to offer and sell Portfolio shares only in
states where you may legally offer and sell such Portfolio's shares.
You will not offer shares of any Portfolio for sale unless such shares
are registered for sale under the applicable state and federal laws
and the rules and regulations thereunder.
(g) Certificates evidencing Portfolio shares are not available; any
transaction in Portfolio shares will be effected and evidenced by
book-entry on the records maintained by Fidelity Investments
Institutional Operations Company ("FIIOC"). A confirmation statement
evidencing transactions in Portfolio shares will be transmitted to
you.
(h) You may designate FIIOC to execute your customers' transactions
in Portfolio shares in accordance with the terms of any account,
program, plan, or service established or used by your customers, and
to confirm each transaction to your customers on your behalf on a
fully disclosed basis. At the time of the transaction, you guarantee
the legal capacity of your customers and any co-owners of such shares
so transacting in such shares.
3. Your Compensation: (a) Your concession, if any, on your sales of
Portfolio shares will be as provided in the Prospectus or in the
applicable schedule of concessions issued by us and in effect at the
time of our sale to you. Upon written notice to you, we or any
Portfolio may change or discontinue any schedule of concessions, or
issue a new schedule.
(b) If a Portfolio has adopted a plan pursuant to Rule 12b-1 under
the Investment Company Act of 1940 (a "Plan"), we may make
distribution payments or service payments to you under the Plan. If a
Portfolio does not have a currently effective Plan, we or Fidelity
Management & Research Company may make distribution payments or
service payments to you from our own funds. Any distribution payments
or service payments will be made in the amount and manner set forth in
the Prospectus or in the applicable schedule of distribution payments
or service payments issued by us and then in effect. Upon written
notice to you, we or any Portfolio may change or discontinue any
schedule of distribution payments or service payments, or issue a new
schedule. A schedule of distribution payments or service payments
will be in effect with respect to a Portfolio that has a Plan only so
long as that Portfolio's Plan remains in effect.
(c) Concessions, distribution payments, and service payments apply
only with respect to (i) shares of the "Fidelity Funds" (as designated
on Schedule A attached to this Agreement) purchased or maintained for
the account of Bank Clients, and (ii) shares of the "Fidelity Advisor
Funds" (as designated on Schedule B attached to this Agreement).
Anything to the contrary notwithstanding, neither we nor any Portfolio
will provide to you, nor may you retain, concessions on your sales of
shares of, or distribution payments or service payments with respect
to assets of, the Fidelity Funds attributable to you or any of your
clients, other than Bank Clients. When you place an order in shares
of the Fidelity Funds with us, you will identify the Bank on behalf of
whose Clients you are placing the order; and you will identify as a
non-Bank Client Order, any order in shares of the Fidelity Funds
placed for the account of a non-Bank Client.
(d) After the effective date of any change in or discontinuance of
any schedule of concessions, distribution payments, or service
payments, or the termination of a Plan, any concessions, distribution
payments, or service payments will be allowable or payable to you only
in accordance with such change, discontinuance, or termination. You
agree that you will have no claim against us or any Portfolio by
virtue of any such change, discontinuance, or termination. In the
event of any overpayment by us of any concession, distribution
payment, or service payment, you will remit such overpayment.
(e) If any Portfolio shares sold to you by us under the terms of
this Agreement are redeemed by the issuing Portfolio or tendered for
redemption by the customer within seven (7) business days after the
date of our confirmation of your original purchase order for such
shares, you agree (i) to refund promptly to us the full amount of any
concession, distribution payment, or service payment allowed or paid
to you on such shares, and (ii) if not yet allowed or paid to you, to
forfeit the right to receive any concession, distribution payment, or
service payment allowable or payable to you on such shares. We will
notify you of any such redemption within ten (10) days after the date
of the redemption.
4. Certain Types of Accounts: (a) You may instruct FIIOC to
register purchased shares in your name and account as nominee for your
customers. If you hold Portfolio shares as nominee for your
customers, all Prospectuses, proxy statements, periodic reports, and
other printed material will be sent to you, and all confirmations and
other communications to shareholders will be transmitted to you. You
will be responsible for forwarding such printed material,
confirmations, and communications, or the information contained
therein, to all customers for whose account you hold any Portfolio
shares as nominee. However, we or FIIOC on behalf of itself or the
Portfolios will be responsible for the costs associated with your
forwarding such printed material, confirmations, and communications.
You will be responsible for complying with all reporting and tax
withholding requirements with respect to the customers for whose
account you hold any Portfolio shares as nominee.
(b) With respect to accounts other than those accounts referred to
in paragraph 4(a) above, you agree to provide us with all information
(including certification of taxpayer identification numbers and
back-up withholding instructions) necessary or appropriate for us to
comply with legal and regulatory reporting requirements.
(c) Accounts opened or maintained pursuant to the NETWORKING system
of the National Securities Clearing Corporation ("NSCC") will be
governed by applicable NSCC rules and procedures and any agreement or
other arrangement with us relating to NETWORKING.
(d) If you hold Portfolio shares in an omnibus account for two or
more customers, you will be responsible for determining, in accordance
with the Prospectus, whether, and the extent to which, a CDSC is
applicable to a purchase of Portfolio shares from such a customer, and
you agree to transmit immediately to us any CDSC to which such
purchase was subject. You hereby represent that if you hold Portfolio
shares subject to a CDSC, you have the capability to track and account
for such charge, and we reserve the right, at our discretion, to
verify that capability by inspecting your tracking and accounting
system or otherwise.
5. Status as Registered Broker/Dealer: (a) Each party to this
Agreement represents to the other party that (i) it is registered as a
broker/dealer under the 1934 Act, (ii) it is qualified to act as a
broker/dealer in the states where it transacts business, and (iii) it
is a member in good standing of the National Association of Securities
Dealers, Inc. ("NASD"). Each party agrees to maintain its
broker/dealer registration and qualifications and its NASD membership
in good standing throughout the term of this Agreement. Each party
agrees to abide by all of the NASD's rules and regulations, including
the NASD's Conduct Rules -- in particular, Section 2830 of such Rules,
which section is deemed a part of and is incorporated by reference in
this Agreement. This Agreement will terminate automatically without
notice in the event that either party's NASD membership is terminated.
(b) Nothing in this Agreement shall cause you to be our partner,
employee, or agent, or give you any authority to act for us or for any
Portfolio. Neither we nor any Portfolio shall be liable for any of
your acts or obligations as a dealer under this Agreement.
6. Information Relating to the Portfolios: (a) No person is
authorized to make any representations concerning shares of a
Portfolio other than those contained in the Portfolio's Prospectus.
In buying Portfolio shares from us under this Agreement, you will rely
only on the representations contained in the Prospectus. Upon your
request, we will furnish you with a reasonable number of copies of the
Portfolios' current prospectuses or statements of additional
information or both (including any stickers thereto).
(b) Any printed or electronic information that we furnish you
(other than the Portfolios' Prospectuses and periodic reports) is our
sole responsibility and not the responsibility of the respective
Portfolios. You agree that the Portfolios will have no liability or
responsibility to you with respect to any such printed or electronic
information. We or the respective Portfolio will bear the expense of
qualifying its shares under the state securities laws.
(c) You may not use any sales literature or advertising material
(including material disseminated through radio, television, or other
electronic media) concerning Portfolio shares, other than the printed
or electronic information referred to in paragraph 6(b) above, in
connection with the offer or sale of Portfolio shares without
obtaining our prior written approval. You may not distribute or make
available to investors any information that we furnish you marked "FOR
DEALER USE ONLY" or that otherwise indicates that it is confidential
or not intended to be distributed to investors.
7. Indemnification: (a) We will indemnify and hold you harmless
from any claim, demand, loss, expense, or cause of action resulting
from the misconduct or negligence, as measured by industry standards,
of us, our agents and employees, in carrying out our obligations under
this Agreement. Such indemnification will survive the termination of
this Agreement.
(b) You will indemnify and hold us harmless from any claim, demand,
loss, expense, or cause of action resulting from the misconduct or
negligence, as measured by industry standards, of you, your agents and
employees, in carrying out your obligations under this Agreement.
Such indemnification will survive the termination of this Agreement.
8. Customer Lists: We hereby agree that we shall not use any list of
your customers which may be obtained in connection with this Agreement
for the purpose of solicitation of any product or service without your
express written consent. However, nothing in this paragraph or
otherwise shall be deemed to prohibit or restrict us or our affiliates
in any way from solicitations of any product or service directed at,
without limitation, the general public, any segment thereof, or any
specific individual, provided such solicitation is not based upon such
list.
9. Duration of Agreement: This Agreement, with respect to any Plan,
will continue in effect for one year from its effective date, and
thereafter will continue automatically for successive annual periods;
provided, however, that such continuance is subject to termination at
any time without penalty if a majority of a Portfolio's Trustees who
are not interested persons of the Portfolio (as defined in the
Investment Company Act of 1940 (the "1940 Act")), or a majority of the
outstanding shares of the Portfolio, vote to terminate or not to
continue the Plan. This Agreement, other than with respect to a Plan,
will continue in effect from year to year after its effective date,
unless terminated as provided herein.
10. Amendment and Termination of Agreement: (a) We may amend any
provision of this Agreement by giving you written notice of the
amendment. Either party to this Agreement may terminate the Agreement
without cause by giving the other party at least thirty (30) days'
written notice of its intention to terminate. This Agreement will
terminate automatically in the event of its assignment (as defined in
the 1940 Act).
(b) In the event that (i) an application for a protective decree
under the provisions of the Securities Investor Protection Act of 1970
is filed against you; (ii) you file a petition in bankruptcy or a
petition seeking similar relief under any bankruptcy, insolvency, or
similar law, or a proceeding is commenced against you seeking such
relief; or (iii) you are found by the SEC, the NASD, or any other
federal or state regulatory agency or authority to have violated any
applicable federal or state law, rule or regulation arising out of
your activities as a broker/dealer or in connection with this
Agreement, this Agreement will terminate effective immediately upon
our giving notice of termination to you. You agree to notify us
promptly and to immediately suspend sales of Portfolio shares in the
event of any such filing or violation, or in the event that you cease
to be a member in good standing of the NASD.
(c) Your or our failure to terminate this Agreement for a
particular cause will not constitute a waiver of the right to
terminate this Agreement at a later date for the same or another
cause. The termination of this Agreement with respect to any one
Portfolio will not cause its termination with respect to any other
Portfolio.
11. Arbitration: In the event of a dispute, such dispute will be
settled by arbitration before arbitrators sitting in Boston,
Massachusetts in accordance with the NASD's Code of Arbitration
Procedure in effect at the time of the dispute. The arbitrators will
act by majority decision and their award may allocate attorneys' fees
and arbitration costs between us. Their award will be final and
binding between us, and such award may be entered as a judgment in any
court of competent jurisdiction.
12. Notices: All notices required or permitted to be given under this
Agreement shall be given in writing and delivered by personal
delivery, by postage prepaid mail, or by facsimile machine or a
similar means of same day delivery (with a confirming copy by mail).
All notices to us shall be given or sent to us at our offices located
at 82 Devonshire Street, Mail Zone L12A, Boston, Massachusetts 02109,
Attn: Bank Wholesale Market. All notices to you shall be given or
sent to you at the address specified by you below. Each of us may
change the address to which notices shall be sent by giving notice to
the other party in accordance with this paragraph 11.
13. Miscellaneous: This Agreement, as it may be amended from time to
time, shall become effective as of the date when it is accepted and
dated below by us. This Agreement is to be construed in accordance
with the laws of the Commonwealth of Massachusetts. This Agreement
supersedes and cancels any prior agreement between us, whether oral or
written, relating to the sale of shares of the Portfolios or any other
subject covered by this Agreement. The captions in this Agreement are
included for convenience of reference only and in no way define or
limit any of the provisions of this Agreement or otherwise affect
their construction or effect.
Very truly yours,
FIDELITY DISTRIBUTORS
CORPORATION
Please return two signed copies of this Agreement to Fidelity
Distributors Corporation. Upon acceptance, one countersigned copy
will be returned to you for your files.
_____________________________________
Name of Firm
Address: _____________________________
_____________________________________
_____________________________________
By __________________________________
Authorized Representative
_____________________________________
Name and Title (please print or type)
CRD # _______________________________
ACCEPTED AND AGREED:
FIDELITY DISTRIBUTORS CORPORATION
By __________________________________
Dated: ________________
[ATTACH REVISED SCHEDULES A AND B]
DISTRIBUTION AND SERVICE PLAN
of Fidelity Government Securities Fund
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by
Rule 12b-1 under the Investment Company Act of 1940 (the "Act") of
Fidelity Government Securities Fund (the "Fund").
2. The Fund has entered into a General Distribution Agreement with
respect to the Fund with Fidelity Distributors Corporation (the
"Distributor"), a wholly-owned subsidiary of Fidelity Management &
Research Company (the "Adviser"), under which the Distributor uses all
reasonable efforts, consistent with its other business, to secure
purchasers for the Fund's shares of beneficial interest ("shares").
Under the agreement, the Distributor pays the expenses of printing and
distributing any prospectuses, reports and other literature used by
the Distributor, advertising, and other promotional activities in
connection with the offering of Fund shares for sale to the public. It
is recognized that the Adviser may use its management fee revenues as
well as past profits or its resources from any other source, to make
payment to the Distributor with respect to any expenses incurred in
connection with the distribution of Portfolio shares, including the
activities referred to above.
3. The Adviser directly, or through the Distributor, may, subject to
the approval of the Trustees, make payments to securities dealers and
other third parties who engage in the sale of shares or who render
shareholder support services, including but not limited to providing
office space, equipment and telephone facilities, answering routine
inquiries regarding the Fund, processing shareholder transactions and
providing such other shareholder services as the Fund may reasonably
request.
4. The Fund will not make separate payments as a result of this Plan
to the Adviser, Distributor or any other party, it being recognized
that the Fund presently pays, and will continue to pay, a management
fee to the Adviser. To the extent that any payments made by the Fund
to the Adviser, including payment of management fees, should be deemed
to be indirect financing of any activity primarily intended to result
in the sale of shares of the Fund within the context of Rule 12b-1
under the Act, then such payments shall be deemed to be authorized by
this Plan.
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 of the Fund" (as defined in the Act),
the plan having been approved by a vote of a majority of the Trustees
of the Fund, including a majority of Trustees who are not "interested
persons" of the Fund (as defined in the Act) and who have no direct or
indirect financial interest in the operation of this Plan or in any
agreements related to this 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 from the date specified above until May 31, 1992 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 Fund, 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 authorize direct payments by the
Fund to finance any activity primarily intended to result in the sale
of shares of the Fund, to increase materially the amount spent by the
Fund for distribution, 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 the Fund, and (b) any material
amendments of this Plan shall be effective only upon approval in the
manner provided in the first sentence in this paragraph.
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 Fund.
8. During the existence of this Plan, the Fund shall require the
Adviser and/or Distributor to provide the Fund, for review by the
Fund's Board of Trustees, and the Trustees shall review, at least
quarterly, a written report of the amounts expended in connection with
financing any activity primarily intended to result in the sale of
shares of the Fund (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 shares of the Fund.
10. Consistent with the limitation of shareholder liability as set
forth in the Fund's Declaration of Trust, any obligations assumed by
the Fund pursuant to this Plan and any agreements related to this Plan
shall be limited in all cases to the Fund and its assets.
11. If any provision of this Plan shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Plan
shall not be affected thereby.
