- ---------------------------------------------------------------------------
PROSPECTUS MAY 31, 1995
DREYFUS CASH MANAGEMENT
- ---------------------------------------------------------------------------
DREYFUS CASH MANAGEMENT (THE "FUND") IS AN OPEN-END, DIVERSIFIED,
MANAGEMENT INVESTMENT COMPANY, KNOWN AS A MONEY MARKET MUTUAL FUND. ITS GOAL
IS TO PROVIDE INVESTORS WITH AS HIGH A LEVEL OF CURRENT INCOME AS IS
CONSISTENT WITH THE PRESERVATION OF CAPITAL AND THE MAINTENANCE OF LIQUIDITY.
THE FUND IS DESIGNED FOR INSTITUTIONAL INVESTORS, PARTICULARLY BANKS,
ACTING FOR THEMSELVES OR IN A FIDUCIARY, ADVISORY, AGENCY, CUSTODIAL OR
SIMILAR CAPACITY. FUND SHARES MAY NOT BE PURCHASED DIRECTLY BY INDIVIDUALS,
ALTHOUGH INSTITUTIONS MAY PURCHASE SHARES FOR ACCOUNTS MAINTAINED BY
INDIVIDUALS. SUCH INSTITUTIONS HAVE AGREED TO TRANSMIT COPIES OF THIS
PROSPECTUS TO EACH INDIVIDUAL OR ENTITY FOR WHOSE ACCOUNT THE INSTITUTION
PURCHASES FUND SHARES, TO THE EXTENT REQUIRED BY LAW.
BY THIS PROSPECTUS, THE FUND IS OFFERING CLASS A SHARES AND CLASS B
SHARES. CLASS A SHARES AND CLASS B SHARES ARE IDENTICAL, EXCEPT AS TO THE
SERVICES OFFERED TO AND THE EXPENSES BORNE BY EACH CLASS. CLASS B BEARS
CERTAIN COSTS PURSUANT TO A SERVICE PLAN ADOPTED IN ACCORDANCE WITH RULE
12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940. INVESTORS CAN INVEST,
REINVEST OR REDEEM SHARES AT ANY TIME WITHOUT CHARGE OR PENALTY IMPOSED BY
THE FUND.
THE DREYFUS CORPORATION SERVES AS THE FUND'S INVESTMENT ADVISER.
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE FUND THAT
AN INVESTOR SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND RETAINED FOR
FUTURE REFERENCE.
THE STATEMENT OF ADDITIONAL INFORMATION, DATED MAY 31, 1995, WHICH
MAY BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER DISCUSSION OF CERTAIN
AREAS IN THIS PROSPECTUS AND OTHER MATTERS WHICH MAY BE OF INTEREST TO SOME
INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION AND
IS INCORPORATED HEREIN BY REFERENCE. FOR A FREE COPY, WRITE TO THE FUND AT
144 GLENN CURTISS BOULEVARD, UNIONDALE, NEW YORK 11556-0144, OR CALL
1-800-554-4611. WHEN TELEPHONING, ASK FOR OPERATOR 144.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
AGENCY. MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.
- ---------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
ANNUAL FUND OPERATING EXPENSES.......................... 2
CONDENSED FINANCIAL INFORMATION......................... 3
YIELD INFORMATION....................................... 4
DESCRIPTION OF THE FUND................................. 4
MANAGEMENT OF THE FUND.................................. 8
HOW TO BUY FUND SHARES.................................. 8
INVESTOR SERVICES....................................... 10
HOW TO REDEEM FUND SHARES............................... 11
SERVICE PLAN............................................ 11
SHAREHOLDER SERVICES PLAN............................... 12
DIVIDENDS, DISTRIBUTIONS AND TAXES...................... 12
GENERAL INFORMATION..................................... 13
- ---------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
CLASS A CLASS B
SHARES SHARES
<S> <C> <C>
Management Fees............................................................ .20% .20%
12b-1 Fees (distribution and servicing) ................................... -- .25%
Total Fund Operating Expenses.............................................. .20% .45%
EXAMPLE:
An investor would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and (2) redemption at
the end of each time period:
CLASS A CLASS B
SHARES SHARES
1 YEAR....................................... $ 2 $ 5
3 YEARS...................................... $ 6 $14
5 YEARS ..................................... $11 $25
10 YEARS..................................... $26 $57
</TABLE>
- ---------------------------------------------------------------------------
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER
OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL
RETURN, THE FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL
RETURN GREATER OR LESS THAN 5%.
- ---------------------------------------------------------------------------
The purpose of the foregoing table is to assist investors in
understanding the various costs and expenses borne by the Fund, and therefore
indirectly by investors, the payment of which will reduce investors' return
on an annual basis. Unless The Dreyfus Corporation gives the Fund's investors
at least 90 days' notice to the contrary, The Dreyfus Corporation, and not
the Fund, will be liable for Fund expenses (exclusive of taxes, brokerage,
interest on borrowing and (with the prior written consent of the necessary
state securities commissions) extraordinary expenses) other than the
following expenses, which will be borne by the Fund: (i) the management fee
payable by the Fund monthly at the annual rate of .20 of 1% of the value of
the Fund's average daily net assets and (ii) as to Class B shares only,
payments made pursuant to the Fund's Service Plan at the annual rate of .25
of 1% of the value of the average daily net assets of Class B. Institutions
and certain Service Agents (as defined below) effecting transactions in Fund
shares for the accounts of their clients may charge their clients direct fees
in connection with such transactions; such fees are not reflected in the
foregoing table. See "Management of the Fund," "How to Buy Fund Shares,"
"Service Plan" and "Shareholder Services Plan."
Page 2
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Ernst &
Young LLP, the Fund's independent auditors, whose report thereon appears in
the Statement of Additional Information. Further financial data and related
notes are included in the Statement of Additional Information, available upon
request.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share
of Beneficial Interest outstanding, total investment return, ratios to
average net assets and other supplemental data for each year indicated. This
information has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
CLASS A SHARES
---------------------------------------------------------------------------------------
YEAR ENDED JANUARY 31,
---------------------------------------------------------------------------------------
1986(1) 1987 1988 1989 1990 1991 1992 1993 1994 1995
------ ---- ----- ---- ---- ---- ---- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of year... $1.0000 $1.0000 $1.0000 $.9996 $.9994 $.9996 $.9997 $.9999 $.9999 $.9998
------- ------- ------- ------ ------ ------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Investment income-net.......... .0718 .0654 .0657 .0757 .0906 .0801 .0581 .0362 .0311 .0420
Net realized gain (loss)
on investments.... -- -- (.0004) (.0002) .0002 .0001 .0002 -- (.0001) (.0001)
-------- ------- ------- ------ ------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT
OPERATIONS.... .0718 .0654 .0653 .0755 .0908 .0802 .0583 .036 .0310 .0419
------- ------- ------- ------ ------ ------ ------ ------ ------ ------
DISTRIBUTIONS:
Dividends from investment
income-net..... (.0718) (.0654) (.0657) (.0757) (.0906) (.0801) (.0581) (.0362) (.0311) (.0420)
------- ------- ------- ------ ------ ------ ------ ------ ------ ------
Net asset value, end of year... $1.0000 $1.0000 $.9996 $.9994 $.9996 $.9997 $.9999 $.9999 $.9998 $ 9997
======= ======= ======= ====== ====== ====== ======= ====== ====== ======
TOTAL INVESTMENT RETURN...... 8.28%(2) 6.75% 6.77% 7.84% 9.44% 8.31% 5.96% 3.68% 3.15% 4.28%
RATIOS / SUPPLEMENTAL DATA:
Ratio of expenses to
average net assets..... .20%(2) .20% .20% .20% .20% .20% .20% .20% .20% .20%
Ratio of net investment income to
average net assets............. 7.90%(2) 6.44% 6.60% 7.42% 9.03% 7.99% 5.78% 3.60% 3.11% 4.08%
Decrease reflected in above expense
ratios due to undertaking
by The Dreyfus Corporation..... .07%(2) .03% .03% .03% .02% .02% .03% .04% .03% --
Net Assets, end of year
(000's Omitted). $1,192,828 $1,849,044 $3,320,959 $2,245,703 $3,373,940 $5,041,688 $6,508,999 $5,475,181 $2,894,853$1,817,166
- ------------------
(1)From March 11, 1985 (commencement of operations) to January 31, 1986.
(2)Annualized.
</TABLE>
Page 3
<TABLE>
<CAPTION>
CLASS B SHARES
------------------------
YEAR ENDED JANUARY 31,
------------------------
1994(1) 1995
------ -----
<S> <C> <C>
PER SHARE DATA:
Net asset value, beginning of year............................... $1.0000 $1.0000
-------- -------
INVESTMENT OPERATIONS:
Investment income-net............................................ .0017 .0396
Net realized gain (loss) on investments.......................... -- (.0001)
-------- -------
TOTAL FROM INVESTMENT
OPERATIONS....................................................... .0017 .0395
-------- -------
DISTRIBUTIONS:
Dividends from investment income-net............................. (.0017) (.0396)
-------- -------
Net asset value, end of year..................................... $1.0000 $.9999
======= ======
TOTAL INVESTMENT RETURN............................................ 2.83%(2) 4.03%
RATIOS / SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.......................... .45%(2) .45%
Ratio of net investment income to average net assets............. 2.83%(2) 3.94%
Decrease reflected in above expense
ratios due to undertaking by The Dreyfus Corporation............. -- --
Net Assets, end of year (000's Omitted).......................... $52,272 $85,334
- --------------------
(1)From January 10, 1994 (commencement of initial offering) to January 31, 1994.
(2)Annualized.
</TABLE>
YIELD INFORMATION
From time to time, the Fund advertises its yield and effective yield.
Both yield figures are based on historical earnings and are not intended to
indicate future performance. It can be expected that these yields will
fluctuate substantially. The yield of the Fund refers to the income generated
by an investment in the Fund over a seven-day period (which period will be
stated in the advertisement). This income is then annualized. That is, the
amount of income generated by the investment during that week is assumed to
be generated each week over a 52-week period and is shown as a percentage of
the investment. The effective yield is calculated similarly, but, when
annualized, the income earned by an investment in the Fund is assumed to be
reinvested. The effective yield will be slightly higher than the yield
because of the compounding effect of this assumed reinvestment. The Fund's
yield and effective yield may reflect absorbed expenses pursuant to any
undertaking that may be in effect. See "Management of the Fund." Both yield
figures also take into account any applicable distribution and service fees.
As a result, at any given time, the performance of Class B should be expected
to be lower than that of Class A. See "Service Plan."
Yield information is useful in reviewing the Fund's performance, but
because yields will fluctuate, under certain conditions such information may
not provide a basis for comparison with domestic bank deposits, other
investments which pay a fixed yield for a stated period of time, or other
investment companies which may use a different method of computing yield.
Comparative performance information may be used from time to time in
advertising or marketing the Fund's shares, including data from Lipper
Analytical Services, Inc., Bank Rate Monitortrademark, IBC/Donoghue's Money
Fund ReportRegistration Mark, Morningstar, Inc. and other industry
publications.
DESCRIPTION OF THE FUND
GENERAL - By this Prospectus, two classes of shares of the Fund are being
offered - Class A shares and Class B shares (each such class being referred
to as a "Class"). The Classes are identical, except that Class B shares are
subject to an annual distribution and service fee at the rate of .25% of the
value of the average daily net
Page 4
assets of Class B. The fee is payable for advertising, marketing and
distributing Class B shares and for ongoing personal services relating to
Class B shareholder accounts and services related to the maintenance of such
shareholder accounts pursuant to a Service Plan adopted in accordance with
Rule 12b-1 under the Investment Company Act of 1940. See "Service Plan." The
distribution and service fee paid by Class B will cause such Class to have
a higher expense ratio and to pay lower dividends than Class A.
WHEN USED IN THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL
INFORMATION, THE TERMS "INVESTOR" AND "SHAREHOLDER" REFER TO THE INSTITUTION
PURCHASING FUND SHARES AND DO NOT REFER TO ANY INDIVIDUAL OR ENTITY FOR WHOSE
ACCOUNT THE INSTITUTION MAY PURCHASE FUND SHARES. Such institutions have
agreed to transmit copies of this Prospectus and all relevant Fund materials,
including proxy materials, to each individual or entity for whose account the
institution purchases Fund shares, to the extent required by law.
INVESTMENT OBJECTIVE _ The Fund's goal is to provide investors with as high
a level of current income as is consistent with the preservation of capital
and the maintenance of liquidity. The Fund's investment objective cannot be
changed without approval by the holders of a majority (as defined in the
Investment Company Act of 1940) of the Fund's outstanding voting shares.
There can be no assurance that the Fund's investment objective will be
achieved. Securities in which the Fund invests may not earn as high a level
of current income as long-term or lower quality securities which generally
have less liquidity, greater market risk and more fluctuation in market
value.
MANAGEMENT POLICIES - To achieve its goal, the Fund invests in short-term
money market obligations, including securities issued or guaranteed by the
U.S. Government or its agencies or instrumentalities, certificates of
deposit, time deposits, bankers' acceptances and other short-term obligations
issued by domestic banks or London branches of domestic banks, repurchase
agreements, and high grade commercial paper and other short-term corporate
obligations. During normal market conditions, the Fund will invest at least
25% of its assets in bank obligations.
The Fund seeks to maintain a net asset value of $1.00 per share for
purchases and redemptions. To do so, the Fund uses the amortized cost method
of valuing its securities pursuant to Rule 2a-7 under the Investment Company
Act of 1940, certain requirements of which are summarized below.
In accordance with Rule 2a-7, the Fund will maintain a
dollar-weighted average portfolio maturity of 90 days or less, purchase only
instruments having remaining maturities of 13 months or less and invest only
in U.S. dollar denominated securities determined in accordance with
procedures established by the Board of Trustees to present minimal credit
risks and which are rated in one of the two highest rating categories for
debt obligations by at least two nationally recognized statistical rating
organizations (or one rating organization if the instrument was rated by only
one such organization) or, if unrated, are of comparable quality as
determined in accordance with procedures established by the Board of
Trustees. Moreover, the Fund will purchase only instruments so rated in the
highest rating category or, if unrated, of comparable quality as determined
in accordance with procedures established by the Board of Trustees. The
nationally recognized statistical rating organizations currently rating instru
ments of the type the Fund may purchase are Moody's Investors Service, Inc.,
Standard & Poor's Corporation, Duff & Phelps Credit Rating Co., Fitch
Investors Service, Inc., IBCA Limited and IBCA Inc. and Thomson BankWatch,
Inc. and their rating criteria are described in the Appendix to the Fund's
Statement of Additional Information.
In addition, the Fund will not invest more than 5% of its total
assets in the securities (including the securities collateralizing a
repurchase agreement) of, or subject to puts issued by, a single issuer,
except that (i) the Fund may invest more than 5% of its total assets in a
single issuer for a period of up to three business days in certain limited
circumstances, (ii) the Fund may invest in obligations issued or guaranteed
by the U.S. Government without any such limitation, and (iii) the limitation
with respect to puts does not apply to unconditional puts if no more than 10%
of the Fund's total assets is invested in securities issued or guaranteed by
the issuer of the unconditional put. As to each security, these percentages
are measured at the time the Fund purchases the security. For further
information regarding the amortized cost method of valuing securities, see
Page 5
"Determination of Net Asset Value" in the Fund's Statement of Additional
Information. There can be no assurance that the Fund will be able to maintain
a stable net asset value of $1.00 per share.
Securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities include U.S. Treasury securities, which differ
in their interest rates, maturities and times of issuance. Some obligations
issued or guaranteed by U.S. Government agencies and instrumentalities, for
example, Government National Mortgage Association pass-through certificates,
are supported by the full faith and credit of the U.S. Treasury; others, such
as those of the Federal Home Loan Banks, by the right of the issuer to borrow
from the Treasury; others, such as those issued by the Federal National
Mortgage Association, by discretionary authority of the U.S. Government to
purchase certain obligations of the agency or instrumentality; and others,
such as those issued by the Student Loan Marketing Association, only by the
credit of the agency or instrumentality. These securities bear fixed,
floating or variable rates of interest. Interest may fluctuate based on
generally recognized reference rates or the relationship of rates. While the
U.S. Government provides financial support to such U.S. Government-sponsored
agencies or instrumentalities, no assurance can be given that it will always
do so, since it is not so obligated by law. The Fund will invest in such secur
ities only when it is satisfied that the credit risk with respect to the
issuer is minimal.
Certificates of deposit are negotiable certificates evidencing the
obligation of a bank or thrift institution to repay funds deposited with it
for a specified period of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time (in no event longer than seven
days) at a stated interest rate. Investments in time deposits generally are
limited to London branches of domestic banks that have total assets in excess
of one billion dollars. Time deposits which may be held by the Fund will not
benefit from insurance from the Bank Insurance Fund or the Savings
Association Insurance Fund administered by the Federal Deposit Insurance
Corporation.
Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments reflect
the obligation both of the bank and of the drawer to pay the face amount of
the instrument upon maturity. The other short-term obligations may include
uninsured, direct obligations bearing fixed, floating or variable interest
rates.
Repurchase agreements involve the acquisition by the Fund of an
underlying debt instrument, subject to an obligation of the seller to
repurchase, and the Fund to resell, the instrument at a fixed price, usually
not more than one week after its purchase. Certain costs may be incurred by
the Fund in connection with the sale of the securities if the seller does not
repurchase them in accordance with the repurchase agreement. In addition, if
bankruptcy proceedings are commenced with respect to the seller of the
securities, realization on the securities by the Fund may be delayed or
limited.
Commercial paper consists of short-term, unsecured promissory notes
issued to finance short-term credit needs. The commercial paper purchased by
the Fund will consist only of direct obligations issued by domestic and
foreign entities. The other corporate obligations in which the Fund may
invest consist of high quality, U.S. dollar denominated short-term bonds and
notes (including variable amount master demand notes) issued by domestic and
foreign corporations, including banks.
The Fund may invest up to 10% of the value of its net assets in
securities as to which a liquid trading market does not exist, provided such
investments are consistent with the Fund's investment objective. Such
securities may include securities that are not readily marketable, such as
certain securities that are subject to legal or contractual restrictions on
resale, and repurchase agreements providing for settlement in more than seven
days after notice. As to these securities, the Fund is subject to a risk that
should the Fund desire to sell them when a ready buyer is not available at a
price the Fund deems representative of their value, the value of the Fund's
net assets could be adversely affected.
CERTAIN FUNDAMENTAL POLICIES - The Fund (i) may borrow money from banks, but
only for temporary or emergency (not leveraging) purposes, in an amount up to
15% of the value of the Fund's total assets (including the amount borrowed)
valued at the lesser of cost or market, less liabilities (not including the
amount borrowed) at the time the borrowing is made. While borrowings exceed
5% of the value of the Fund's total assets,
Page 6
the Fund will not make any additional investments; (ii) may invest up to 5%
of its total assets in the obligations of any issuer, except that up to 25%
of the value of the Fund's total assets may be invested, and obligations
issued or guaranteed by the U.S. Government, its agencies or instrumentalities
may be purchased, without regard to any such limitation; and (iii) will
invest, under normal market conditions, more than 25% of its total assets in
securities issued by banks and may invest up to 25% of its total assets in the
securities of issuers in any other industry, provided that there is no
limitation on investments in obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities. This paragraph describes
fundamental policies that cannot be changed without approval by the holders
of a majority (as defined in the Investment Company Act of 1940) of the Fund's
outstanding voting shares. See "Investment Objective and
Management Policies-Investment Restrictions" in the Statement of Additional
Information.
CERTAIN ADDITIONAL NON-FUNDAMENTAL POLICIES - The Fund may (i) pledge,
hypothecate, mortgage or otherwise encumber its assets, but only to secure
permitted borrowings; and (ii)invest up to 10% of the value of its net assets
in repurchase agreements providing for settlement in more than seven days
after notice and in other illiquid securities. See "Investment Objective and
Management Policies - Investment Restrictions" in the Statement of
Additional Information.
INVESTMENT CONSIDERATIONS - Since the Fund's portfolio may contain
securities issued by London branches of domestic banks, the Fund may be
subject to additional investment risks with respect to such securities that
are different in some respects from those incurred by a fund which invests
only in debt obligations of U.S. domestic issuers. Such risks include
possible future political and economic developments, the possible imposition
of United Kingdom withholding taxes on interest income payable on the
securities, the possible establishment of exchange controls or the adoption
of other foreign governmental restrictions which might adversely affect the
payment of principal and interest on these securities and the possible
seizure or nationalization of foreign deposits.
To the extent the Fund's investments are concentrated in the banking
industry, the Fund will have correspondingly greater exposure to the risk
factors which are characteristic of such investments. Sustained increases in
interest rates can adversely affect the availability or liquidity and cost of
capital funds for a bank's lending activities, and a deterioration in general
economic conditions could increase the exposure to credit losses. In
addition, the value of and the investment return on the Fund's shares could
be affected by economic or regulatory developments in or related to the
banking industry, which industry also is subject to the effects of the
concentration of loan portfolios in leveraged transactions and in particular
businesses, and competition within the banking industry as well as with other
types of financial institutions. The Fund, however, will seek to minimize its
exposure to such risks by investing only in debt securities which are
determined to be of the highest quality.
The Fund attempts to increase yields by trading to take advantage of
short-term market variations. This policy is expected to result in high
portfolio turnover but should not adversely affect the Fund since the Fund
usually does not pay brokerage commissions when it purchases short-term debt
obligations. The value of the portfolio securities held by the Fund will vary
inversely to changes in prevailing interest rates. Thus, if interest rates
have increased from the time a security was purchased, such security, if
sold, might be sold at a price less than its cost. Similarly, if interest
rates have declined from the time a security was purchased, such security, if
sold, might be sold at a price greater than its purchase cost. In either
instance, if the security was purchased at face value and held to maturity,
no gain or loss would be realized.
Investment decisions for the Fund are made independently from those
of other investment companies advised by The Dreyfus Corporation. However, if
such other investment companies are prepared to invest in, or desire to
dispose of, money market instruments at the same time as the Fund, available
investments or opportunities for sales will be allocated equitably to each
investment company. In some cases, this procedure may adversely affect the
size of the position obtained for or disposed of by the Fund or the price
paid or received by the Fund.
Page 7
MANAGEMENT OF THE FUND
The Dreyfus Corporation, located at 200 Park Avenue, New York, New
York 10166, was formed in 1947 and serves as the Fund's investment adviser.
The Dreyfus Corporation is a wholly-owned subsidiary of Mellon Bank, N.A.,
which is a wholly-owned subsidiary of Mellon Bank Corporation ("Mellon"). As
of April 30, 1995, The Dreyfus Corporation managed or administered
approximately $74 billion in assets for more than 1.8 million investor
accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of the Fund's affairs under a Management Agreement with the Fund,
subject to the overall authority of the Fund's Board of Trustees in
accordance with Massachusetts law.
Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected international
markets. Mellon is among the twenty-five largest bank holding companies in
the United States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National Association,
Mellon Bank (MD), The Boston Company, Inc., AFCO Credit Corporation and a
number of companies known as Mellon Financial Services Corporations. Through
its subsidiaries, including The Dreyfus Corporation, Mellon managed more than
$200 billion in assets as of March 31, 1995, including approximately $72
billion in mutual fund assets. As of March 31, 1995, various subsidiaries of
Mellon provided non-investment services, such as custodial or administration
services, for approximately $680 billion in assets, including approximately
$67 billion in mutual fund assets.
For the fiscal year ended January 31, 1995, the Fund paid The Dreyfus
Corporation a monthly management fee at the annual rate of .20 of 1% of the
value of the Fund's average daily net assets.
Unless The Dreyfus Corporation gives the Fund's investors at least 90
days' notice to the contrary, The Dreyfus Corporation, and not the Fund, will
be liable for Fund expenses (exclusive of taxes, brokerage, interest on
borrowings and (with the prior written consent of the necessary state
securities commissions) extraordinary expenses) other than the following
expenses, which will be borne by the Fund: (i)the management fee payable by
the Fund monthly at the annual rate of .20 of 1% of the value of the Fund's
average daily net assets and (ii) as to Class B shares only, payments made
pursuant to the Fund's Service Plan at the annual rate of .25 of 1% of the
value of the average daily net assets of Class B. See "Service Plan." The
Fund will not reimburse The Dreyfus Corporation for any amounts it may bear.
The Fund's distributor is Premier Mutual Fund Services, Inc. (the
"Distributor"), located at One Exchange Place, Boston, Massachusetts 02109.
The Distributor is a wholly-owned subsidiary of FDI Distribution Services,
Inc., a provider of mutual fund administration services, which in turn is a
wholly-owned subsidiary of FDI Holdings, Inc., the parent company of which is
the Boston Institutional Group, Inc.
The Shareholder Services Group, Inc., a subsidiary of First Data
Corporation, P.O. Box 9671, Providence, Rhode Island 02940-9671, is the
Fund's Transfer and Dividend Disbursing Agent (the "Transfer Agent"). The
Bank of New York, 90 Washington Street, New York, New York 10286, is the
Fund's Custodian. First Interstate Bank of California, 707 Wilshire
Boulevard, Los Angeles, California 90017, is the Fund's Sub-custodian (the
"Sub-custodian").
HOW TO BUY FUND SHARES
The Fund is designed for institutional investors, particularly banks,
acting for themselves or in a fiduciary, advisory, agency, custodial or
similar capacity. Fund shares may not be purchased directly by individuals,
although institutions may purchase shares for accounts maintained by
individuals. Generally, each investor will be required to open a single
master account with the Fund for all purposes. In certain cases, the Fund may
request investors to maintain separate master accounts for shares held by the
investor (i) for its own account, for the account of other institutions and
for accounts for which the institution acts as a fiduciary, and (ii) for
accounts for which the investor acts in some other capacity. An institution
may arrange with the Transfer Agent for sub-accounting services and will be
charged directly for the cost of such services.
Page 8
The minimum initial investment is $10,000,000, unless: (a) the
investor has invested at least $10,000,000 in the aggregate among the Fund,
Dreyfus Cash Management Plus, Inc., Dreyfus Institutional Short Term
Treasury Fund, Dreyfus Government Cash Management, Dreyfus Municipal Cash
Management Plus, Dreyfus New York Municipal Cash Management, Dreyfus Tax
Exempt Cash Management, Dreyfus Treasury Cash Management and Dreyfus Treasury
Prime Cash Management; or (b) the investor has, in the opinion of Dreyfus Inst
itutional Services Division, adequate intent and availability of funds to
reach a future level of investment of $10,000,000 among the funds identified
above. There is no minimum for subsequent purchases. The initial investment
must be accompanied by the Fund's Account Application. Share certificates are
issued only upon the investor's written request. No certificates are issued
for fractional shares. The Fund reserves the right to reject any purchase
order.
Fund shares may be purchased by wire, by telephone or through
compatible computer facilities. All payments should be made in U.S. dollars
and, to avoid fees and delays, should be drawn only on U.S. banks. To place
an order by telephone, investors should call one of the telephone numbers
listed under "General Information" in this Prospectus. For instructions
concerning purchases and to determine whether their computer facilities are
compatible with the Fund's, investors also should call one of the telephone
numbers listed under "General Information".
Management understands that some financial institutions, securities
dealers and other industry professionals (collectively, "Service Agents") and
other institutions may charge their clients fees in connection with purchases
for the accounts of their clients. These fees would be in addition to any
amounts which might be received under the Service Plan. Service Agents may
receive different levels of compensation for selling different Classes of
shares. Each Service Agent has agreed to transmit to its clients a schedule
of such fees.
Fund shares are sold on a continuous basis at the net asset value per
share next determined after an order in proper form and Federal Funds (monies
of member banks in the Federal Reserve System which are held on deposit at a
Federal Reserve Bank) are received by the Custodian, Sub-custodian or other
agent or entity subject to the direction of such agents. If an investor does
not remit Federal Funds, its payment must be converted into Federal Funds.
This usually occurs within one business day of receipt of a bank wire and
within two business days of receipt of a check drawn on a member bank of the
Federal Reserve System. Checks drawn on banks which are not members of the
Federal Reserve System may take considerably longer to convert into Federal
Funds. Prior to receipt of Federal Funds, the investor's money will not be
invested.
The Fund's net asset value per share is determined twice each
business day: at 12:00 Noon, New York time/9:00 a.m., California time, and as
of the close of trading on the floor of the New York Stock Exchange
(currently 4:00 p.m., New York time/1:00 p.m., California time) on each day
the New York Stock Exchange or the Transfer Agent is open for business. Net
asset value per share of each class is computed by dividing the value of the
Fund's net assets represented by such class (i.e., the value of its assets
less liabilities) by the total number of shares of such class outstanding.
See "Determination of Net Asset Value" in the Fund's Statement of Additional
Information.
Except in the case of telephone orders, investors whose payments are
received in or converted into Federal Funds by 12:00 Noon, New York time, by
the Custodian or received in Federal Funds by 12:00 Noon, California time, by
the Sub-custodian, will receive the dividend declared that day. Investors
whose payments are received in or converted into Federal Funds after 12:00
Noon, New York time, by the Custodian, or received in Federal Funds after
12:00 Noon, California time, by the Sub-custodian, will begin to accrue
dividends on the following business day.
A telephone order placed in New York will become effective at the
price determined at 12:00 Noon, New York time, and the shares purchased will
receive the dividend on Fund shares declared on that day if such order is
placed by 12:00 Noon, New York time, and Federal Funds are received by the
Custodian by 4:00 p.m., New York time, on that day. A telephone order placed
in California will become effective at the price determined at 1:00 p.m.,
California time, and the shares purchased will receive the dividend on Fund
shares declared on that day if
Page 9
such order is placed by 12:00 Noon, California time, and Federal Funds are
received by the Sub-custodian by 4:00 p.m., California time, on that day.
Federal regulations require that an investor provide a certified
Taxpayer Identification Number ("TIN") upon opening or reopening an account.
See "Dividends, Distributions and Taxes" and the Fund's Account Application
for further information concerning this requirement. Failure to furnish a
certified TIN to the Fund could subject an investor to a $50 penalty imposed
by the Internal Revenue Service (the "IRS").
INVESTOR SERVICES
FUND EXCHANGES - An investor may purchase, in exchange for Class A or Class
B shares of the Fund, Class A or Class B shares of Dreyfus Cash Management
Plus, Inc., Dreyfus Institutional Short Term Treasury Fund, Dreyfus
Government Cash Management, Dreyfus Municipal Cash Management Plus, Dreyfus
New York Municipal Cash Management, Dreyfus Tax Exempt Cash Management,
Dreyfus Treasury Cash Management and Dreyfus Treasury Prime Cash Management,
which have different investment objectives that may be of interest to
investors. Upon an exchange into a new account the following shareholder
services and privileges, as applicable and where available, will be
automatically carried over to the fund into which the exchange is made:
Telephone Exchange Privilege, Redemption by Wire or Telephone, Redemption
Through Compatible Computer Facilities and the dividend/capital gain
distribution option selected by the investor.
To request an exchange, exchange instructions must be given in
writing or by telephone. See "How to Redeem Fund Shares_Procedures." Before
any exchange, the investor must obtain and should review a copy of the
current prospectus of the fund into which the exchange is being made.
Prospectuses may be obtained by calling one of the telephone numbers listed
under "General Information" in this Prospectus. Shares will be exchanged at
the net asset value next determined after receipt of an exchange request in
proper form. The exchange of shares of one fund for shares of another fund is
treated for Federal income tax purposes as a sale of the shares given in
exchange by the investor and, therefore, an exchanging investor may realize a
taxable gain or loss. No fees currently are charged investors directly in
connection with exchanges, although the Fund reserves the right, upon not
less than 60 days' written notice, to charge investors a nominal fee in
accordance with rules promulgated by the Securities and Exchange Commission.
The Fund reserves the right to reject any exchange request in whole or in
part. The availability of Fund Exchanges may be modified or terminated at any
time upon notice to investors.
DREYFUS AUTO-EXCHANGE PRIVILEGE - Dreyfus Auto-Exchange Privilege enables an
investor to invest regularly (on a semi-monthly, monthly, quarterly or annual
basis), in exchange for Class A or Class B shares of the Fund, in Class A or
Class B shares of Dreyfus Cash Management Plus, Inc., Dreyfus Institutional
Short Term Treasury Fund, Dreyfus Government Cash Management, Dreyfus Municipal
Cash Management Plus, Dreyfus New York Municipal Cash Management, Dreyfus Tax
Exempt Cash Management, Dreyfus Treasury Cash Management or Dreyfus Treasury
Prime Cash Management, if the investor is currently an investor in one of
these funds. The amount an investor designates, which can be expressed either
in terms of a specific dollar or share amount, will be exchanged
automatically on the first and/or fifteenth of the month according to the
schedule that the investor has selected. Shares will be exchanged at the
then-current net asset value. The right to exercise this Privilege may be
modified or cancelled by the Fund or the Transfer Agent. An investor may
modify or cancel the exercise of this Privilege at any time by writing to the
Dreyfus Institutional Services Division, EAB Plaza, 144 Glenn Curtiss
Boulevard, 8th Floor, Uniondale, New York 11556-0144. The Fund may charge a
service fee for the use of this Privilege. No such fee currently is
contemplated. The exchange of shares of one fund for shares of another is
treated for Federal income tax purposes as a sale of the shares given in
exchange by the investor and, therefore, an exchanging investor may realize a
taxable gain or loss. For more information concerning this Privilege and the
funds eligible to participate in this Privilege, or to obtain a Dreyfus
Auto-Exchange Authorization Form, please call one of the telephone numbers
listed under "General Information."
Page 10
HOW TO REDEEM FUND SHARES
GENERAL - Investors may request redemption of shares at any time and the
shares will be redeemed at the next determined net asset value.
The Fund imposes no charges when shares are redeemed. Service Agents
or other institutions may charge their clients a nominal fee for effecting
redemptions of Fund shares. Any share certificates representing Fund shares
being redeemed must be submitted with the redemption request. The value of
the shares redeemed may be more or less than their original cost, depending
upon the Fund's then-current net asset value.
If a request for redemption is received in proper form in New York by
12:00 Noon, New York time, or in Los Angeles by 12:00 Noon, California time,
the proceeds of the redemption, if transfer by wire is requested, ordinarily
will be transmitted in Federal Funds on the same day and the shares will not
receive the dividend declared on that day. If the request is received later
that day in New York or Los Angeles, the shares will receive the dividend on
the Fund's shares declared on that day and the proceeds of redemption, if
wire transfer is requested, ordinarily will be transmitted in Federal Funds
on the next business day.
The Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the Securities and Exchange
Commission.
PROCEDURES - Investors may redeem Fund shares by wire or telephone, or
through compatible computer facilities as described below.
If an investor selects a telephone redemption privilege or telephone
exchange privilege (which is granted automatically unless the investor
refuses it), the investor authorizes the Transfer Agent to act on telephone
instructions from any person representing himself or herself to be an
authorized representative of the investor, and reasonably believed by the
Transfer Agent to be genuine. The Fund will require the Transfer Agent to
employ reasonable procedures, such as requiring a form of personal
identification, to confirm that instructions are genuine and, if they do not
follow such procedures, the Fund or the Transfer Agent may be liable for any
losses due to unauthorized or fraudulent instructions. Neither the Fund nor
the Transfer Agent will be liable for following telephone instructions
reasonably believed to be genuine.
During times of drastic economic or market conditions, investors may
experience difficulty in contacting the Transfer Agent or its agents by
telephone to request a redemption or exchange of Fund shares. In such cases,
investors should consider using the other redemption procedures described
herein.
REDEMPTION BY WIRE OR TELEPHONE - Investors may redeem Fund shares by wire
or telephone. The redemption proceeds will be paid by wire transfer.
Investors can redeem shares by telephone by calling one of the telephone
numbers listed under "General Information." The Fund reserves the right to
refuse any request made by wire or telephone and may limit the amount
involved or the number of telephone redemptions. This procedure may be
modified or terminated at any time by the Transfer Agent or the Fund. The
Fund's Statement of Additional Information sets forth instructions for
redeeming shares by wire. Shares for which certificates have been issued may
not be redeemed by wire or telephone.
REDEMPTION THROUGH COMPATIBLE COMPUTER FACILITIES - The Fund makes available
to institutions the ability to redeem shares through compatible computer
facilities. Investors desiring to redeem shares in this manner should call
one of the telephone numbers listed under "General Information" to determine
whether their computer facilities are compatible and to receive instructions
for redeeming shares in this manner.
SERVICE PLAN
(Class B Only)
Class B shares are subject to a Service Plan adopted pursuant to Rule
12b-1 under the Investment Company Act of 1940. Under the Service Plan, the
Fund (a) reimburses the Distributor for distributing Class B shares and (b)
pays The Dreyfus Corporation, Dreyfus Service Corporation, a wholly-owned
subsidiary of The Dreyfus Corporation, and any affiliate of either of them
(collectively, "Dreyfus") for advertising and mar-
Page 11
keting Class B shares and for providing certain services relating to Class B
shareholder accounts, such as answering shareholder inquiries regarding the
Fund and providing reports and other information, and services related to the
maintenance of shareholder accounts ("Servicing"), at an aggregate annual
rate of .25 of 1% of the value of the average daily net assets of Class B.
Each of the Distributor and Dreyfus may pay one or more Service Agents a fee
in respect of the Fund's Class B shares owned by shareholders with whom the
Service Agent has a Servicing relationship or for whom the Service Agent is
the dealer or holder of record. Each of the Distributor and Dreyfus determines
the amounts, if any, to be paid to Service Agents under the Service Plan and
the basis on which such payments are made. The fee payable for Servicing is
intended to be a "service fee" as defined in Article III, Section 26 of the
NASD Rules of Fair Practice. The fees payable under the Service Plan are
payable without regard to actual expenses incurred.
SHAREHOLDER SERVICES PLAN
(Class A Only)
Class A shares are subject to a Shareholder Services Plan pursuant to
which the Fund has agreed to reimburse Dreyfus Service Corporation an amount
not to exceed an annual rate of .25 of 1% of the value of the average daily
net assets of Class A shares for certain allocated expenses of providing
personal services to, and/or maintaining accounts of, Class A shareholders.
The services provided may include personal services relating to shareholder
accounts, such as answering shareholder inquiries regarding the Fund and
providing reports and other information, and services related to the
maintenance of shareholder accounts. Pursuant to an undertaking by The
Dreyfus Corporation described under "Management of the Fund," The Dreyfus
Corporation, and not the Fund, currently reimburses Dreyfus Service
Corporation for any such allocated expenses.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily declares dividends from net investment income on
each day the New York Stock Exchange or the Transfer Agent is open for
business. Fund shares begin earning income dividends on the day the purchase
order is effective. The Fund's earnings for Saturdays, Sundays and holidays
are declared as dividends on the prior business day. Dividends usually are
paid on the last calendar day of each month, and are automatically reinvested
in additional Fund shares at net asset value or, at the investor's option,
paid in cash. If an investor redeems all shares in its account at any time
during the month, all dividends to which the investor is entitled will be
paid along with the proceeds of the redemption. Distributions from net
realized securities gains, if any, generally are declared and paid once a
year, but the Fund may make distributions on a more frequent basis to comply
with the distribution requirements of the Internal Revenue Code of 1986, as
amended (the "Code"), in all events in a manner consistent with the
provisions of the Investment Company Act of 1940. The Fund will not make
distributions from net realized securities gains unless capital loss
carryovers, if any, have been utilized or have expired. Investors may choose
whether to receive distributions in cash or to reinvest in additional Fund
shares at net asset value. All expenses are accrued daily and deducted before
declaration of dividends to investors. Dividends paid by each Class will be
calculated at the same time and in the same manner and will be of the same
amount, except that the expenses attributable solely to Class A or Class B
will be borne exclusively by such Class. Class B shares will receive lower
per share dividends than Class A shares because of the higher expenses borne
by Class B. See "Annual Fund Operating Expenses."
Dividends derived from net investment income, together with
distributions from any net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, paid by the Fund are taxable as ordinary income,
whether received in cash or reinvested in Fund shares, if the beneficial
holder of Fund shares is a citizen or resident of the United States. No
portion of the dividends or distributions declared by the Fund qualifies for t
he dividends received deduction allowable to certain U.S. corporations.
Distributions from net realized long-term securities gains of the Fund, if
any, generally are taxable as long-term capital gains for Federal income tax
purposes if the beneficial holder of Fund shares is a citizen or resident of
the United States, regardless of how long shareholders have held their Fund
Page 12
shares and whether such distributions are received in cash or reinvested in
Fund shares. The Code provides that the net capital gain of an individual
generally will not be subject to Federal income tax at a rate in excess of
28%. Dividends and distributions may be subject to certain state and local
taxes.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, paid by the Fund with respect to Fund shares
beneficially owned by a foreign person generally are subject to U.S.
nonresident withholding taxes at the rate of 30%, unless the foreign person
claims the benefit of a lower rate specified in a tax treaty. Distributions
from net realized long-term securities gains paid by the Fund with respect to
Fund shares beneficially owned by a foreign person generally will not be
subject to U.S. nonresident withholding tax. However, such distributions may
be subject to backup withholding, as described below, unless the foreign
person certifies his non-U.S. residency status.
Notice as to the tax status of an investor's dividends and
distributions will be mailed to such investor annually. Each investor also
will receive periodic summaries of such investor's account which will include
information as to dividends and distributions from securities gains, if any,
paid during the year.
Federal regulations generally require the Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of dividends and
distributions from net realized securities gains of the Fund paid to a
shareholder if such shareholder fails to certify either that the TIN
furnished in connection with opening an account is correct, or that such
shareholder has not received notice from the IRS of being subject to backup
withholding as a result of a failure to properly report taxable dividend or
interest income on a Federal income tax return. Furthermore, the IRS may
notify the Fund to institute backup withholding if the IRS determines a
shareholder's TIN is incorrect or if a shareholder has failed to properly
report taxable dividend and interest income on a Federal income tax return.
A TIN is either the Social Security number or employer identification
number of the record owner of the account. Any tax withheld as a result of
backup withholding does not constitute an additional tax imposed on the
record owner of the account, and may be claimed as a credit on the record
owner's Federal income tax return.
Management of the Fund believes that the Fund has qualified for the
fiscal year ended January 31, 1995 as a "regulated investment company" under
the Code. The Fund intends to continue to so qualify if such qualification is
in the best interests of its shareholders. Such qualification relieves the
Fund of any liability for Federal income tax to the extent its earnings are
distributed in accordance with applicable provisions of the Code. The Fund is
subject to a nondeductible 4% excise tax, measured with respect to certain
undistributed amounts of taxable investment income and capital gains.
Each investor should consult its tax adviser regarding specific
questions as to Federal, state or local taxes.
GENERAL INFORMATION
The Fund was incorporated under Maryland law on December 6, 1984, and
commenced operations on March 11, 1985. On May 22, 1987 the Fund was
reorganized as an unincorporated business trust under the laws of the
Commonwealth of Massachusetts. The Fund is authorized to issue an unlimited
number of shares of beneficial interest, par value $.001 per share. The
Fund's shares are classified into two classes. Each share has one vote and
shareholders will vote in the aggregate and not by class except as otherwise
required by law or with respect to any matter which affects only one class.
Holders of Class B shares only, however, will be entitled to vote on matters
submitted to shareholders pertaining to the Service Plan.
Under Massachusetts law, shareholders could, under certain
circumstances, be held liable for the obligations of the Fund. However, the
Agreement and Declaration of Trust (the "Trust Agreement") disclaims
shareholder liability for acts or obligations of the Fund and requires that
notice of such disclaimer be given in each agreement, obligation or
instrument entered into or executed by the Fund or a Trustee. The Trust
Agreement provides for indemnification from the Fund's property for all
losses and expenses of any shareholder held personally liable for the
obligations of the Fund. Thus, the risk of a shareholder's incurring
financial loss on account of shareholder liability is limited to
circumstances in which the Fund itself would be unable to
Page 13
meet its obligations, a possibility which management believes is remote. Upon
payment of any liability incurred by the Fund, the shareholder paying such
liability will be entitled to reimbursement from the general assets of the
Fund. The Trustees intend to conduct the operations of the Fund in such a way
so as to avoid, as far as possible, ultimate liability of the shareholders for
liabilities of the Fund. As described under "Management of the Fund" in the
Statement of Additional Information, the Fund ordinarily will not hold
shareholder meetings; however, shareholders under certain circumstances may
have the right to call a meeting of shareholders for the purpose of voting to
remove Trustees.
The Transfer Agent maintains a record of each investor's ownership
and sends confirmations and statements of account.
Investor inquiries may be made by writing to the Fund at 144 Glenn
Curtiss Boulevard, Uniondale, New York 11556-0144, or, in the case of
institutional investors, by calling in New York State 1-718-895-1650; outside
New York State call toll free 1-800-346-3621. Individuals or entities for
whom institutions may purchase or redeem Fund shares should call toll free
1-800-554-4611.
The Glass-Steagall Act and other applicable laws prohibit Federally
chartered or supervised banks from engaging in certain aspects of the
business of issuing, underwriting, selling and/or distributing securities.
Accordingly, banks will perform only administrative and shareholder servicing
functions. While the matter is not free from doubt, the Fund's Board of
Trustees believes that such laws should not preclude a bank from acting on
behalf of clients as contemplated by this Prospectus. However, judicial or
administrative decisions or interpretations of such laws, as well as changes
in either Federal or state statutes or regulations relating to the
permissible activities of banks and their subsidiaries or affiliates, could
prevent a bank from continuing to perform all or a part of the activities
contemplated by this Prospectus. If a bank were prohibited from so acting,
its shareholder clients would be permitted to remain Fund shareholders and
alternative means for continuing the servicing of such shareholders would be
sought. In such event, changes in the operation of the Fund might occur and
shareholders serviced by such bank might no longer be able to avail
themselves of any automatic investment or other services then being provided
by the bank. The Fund does not expect that shareholders would suffer any
adverse financial consequences as a result of any of these occurrences.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE FUND'
S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S
SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM,
SUCH OFFERING MAY NOT LAWFULLY BE MADE.
Page 14
DREYFUS CASH MANAGEMENT
CLASS A AND CLASS B SHARES
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
MAY 31, 1995
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus
of Dreyfus Cash Management (the "Fund"), dated May 31, 1995, as it may be
revised from time to time. To obtain a copy of the Fund's Prospectus,
please write to the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New
York 11556-0144, or, in the case of institutional investors, call the
following numbers:
Outside New York State -- Call Toll Free 1-800-346-3621
In New York State -- Call 1-718-895-1650
Individuals or entities for whom institutions may purchase or redeem
Fund shares may write to the Fund at the above address or call toll free
1-800-554-4611 to obtain a copy of the Fund's Prospectus.
The Dreyfus Corporation (the "Manager") serves as the Fund's
investment adviser.
Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies. . . . . . . . . . . . .B-2
Management of the Fund. . . . . . . . . . . . . . . . . . . . . . . .B-4
Management Agreement. . . . . . . . . . . . . . . . . . . . . . . . .B-8
Purchase of Fund Shares . . . . . . . . . . . . . . . . . . . . . . .B-10
Service Plan (Class B Only) . . . . . . . . . . . . . . . . . . . . .B-10
Shareholder Services Plan (Class A Only). . . . . . . . . . . . . . .B-11
Redemption of Fund Shares . . . . . . . . . . . . . . . . . . . . . .B-12
Determination of Net Asset Value. . . . . . . . . . . . . . . . . . .B-13
Portfolio Transactions. . . . . . . . . . . . . . . . . . . . . . . .B-14
Investor Services . . . . . . . . . . . . . . . . . . . . . . . . . .B-15
Dividends, Distributions and Taxes. . . . . . . . . . . . . . . . . .B-15
Yield Information . . . . . . . . . . . . . . . . . . . . . . . . . .B-16
Information About the Fund. . . . . . . . . . . . . . . . . . . . . .B-16
Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors. . . . . . . . . . . . . . .B-17
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .B-18
Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . .B-20
Report of Independent Auditors. . . . . . . . . . . . . . . . . . . .B-27
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Description of the Fund."
Portfolio Securities
Bank Obligations. Investments in time deposits and certificates of
deposit ("CDs") are limited to domestic banks having total assets in
excess of one billion dollars or to London branches of such domestic
banks. The Fund also is authorized to purchase CDs issued by banks,
savings and loan associations and similar institutions with less than one
billion dollars in assets, the deposits of which are insured by the
Federal Deposit Insurance Corporation ("FDIC"), provided the Fund
purchases any such CD in a principal amount of no more than $100,000,
which amount would be fully insured by the Bank Insurance Fund or the
Savings Association Insurance Fund administered by the FDIC. Interest
payments on such a CD are not insured by the FDIC. The Fund would not own
more than one such CD per such issuer.
Both domestic banks and London branches of domestic banks are subject
to extensive but different governmental regulations which may limit both
the amount and types of loans which may be made and interest rates which
may be charged. In addition, the profitability of the banking industry is
largely dependent upon the availability and cost of funds for the purpose
of financing lending operations under prevailing money market conditions.
General economic conditions as well as exposure to credit losses arising
from possible financial difficulties of borrowers play an important part
in the operations of this industry.
Domestic commercial banks organized under Federal law are supervised
and examined by the Comptroller of the Currency and are required to be
members of the Federal Reserve System and to have their deposits insured
by the FDIC. Domestic banks organized under state law are supervised and
examined by state banking authorities but are members of the Federal
Reserve System only if they elect to join. In addition, state banks whose
CDs may be purchased by the Fund are insured by the FDIC (although such
insurance may not be of material benefit to the Fund, depending on the
principal amount of the CDs of each bank held by the Fund) and are subject
to Federal examination and to a substantial body of Federal law and
regulation. As a result of Federal and state laws and regulations,
domestic branches of domestic banks whose CDs may be purchased by the Fund
are, among other things, generally required to maintain specified levels
of reserves and are subject to other supervision and regulation designed
to promote financial soundness. However, not all of such laws and
regulations apply to the London branches of domestic banks.
CDs held by the Fund, other than those issued by banks with less than
one billion dollars in assets as described above, do not benefit
materially, and time deposits do not benefit at all, from insurance from
the Bank Insurance Fund or the Savings Association Insurance Fund
administered by the FDIC.
Repurchase Agreements. The Fund's custodian or sub-custodian will
have custody of, and will hold in a segregated account, securities
acquired by the Fund under a repurchase agreement. Repurchase agreements
are considered by the staff of the Securities and Exchange Commission to
be loans by the Fund. In an attempt to reduce the risk of incurring a
loss on a repurchase agreement, the Fund will enter into repurchase
agreements only with domestic banks with total assets in excess of one
billion dollars or primary government securities dealers reporting to the
Federal Reserve Bank of New York, with respect to securities of the type
in which the Fund may invest, and will require that additional securities
be deposited with it if the value of the securities purchased should
decrease below resale price. The Manager will monitor on an ongoing basis
the value of the collateral to assure that it always equals or exceeds the
repurchase price. The Fund will consider on an ongoing basis the
creditworthiness of the institutions with which it enters into repurchase
agreements.
Illiquid Securities. If a substantial market of qualified
institutional buyers develops pursuant to Rule 144A under the Securities
Act of 1933, as amended, for certain restricted securities held by the
Fund, the Fund intends to treat such securities as liquid securities in
accordance with procedures approved by the Fund's Board of Trustees.
Because it is not possible to predict with assurance how the market for
restricted securities pursuant to Rule 144A will develop, the Fund's Board
of Trustees has directed the Manager to monitor carefully the Fund's
investments in such securities with particular regard to trading activity,
availability of reliable price information and other relevant information.
To the extent that, for a period of time, qualified institutional buyers
cease purchasing restricted securities pursuant to Rule 144A, the Fund's
investing in such securities may have the effect of increasing the level
of illiquidity in the Fund's portfolio during such period
Investment Restrictions. The Fund has adopted investment restrictions
numbered 1 through 11 as fundamental policies. These restrictions cannot
be changed without approval by the holders of a majority (as defined in
the Investment Company Act of 1940 (the "Act")) of the Fund's outstanding
voting shares. Investment restrictions numbered 12 and 13 are not
fundamental policies and may be changed by vote of a majority of the
Fund's Trustees at any time. The Fund may not:
1. Purchase common stocks, preferred stocks, warrants or other
equity securities, or purchase corporate bonds or debentures, state bonds,
municipal bonds or industrial revenue bonds.
2. Borrow money, except from banks for temporary or emergency (not
leveraging) purposes in an amount up to 15% of the value of the Fund's
total assets (including the amount borrowed) based on the lesser of cost
or market, less liabilities (not including the amount borrowed) at the
time the borrowing is made. While borrowings exceed 5% of the value of
the Fund's total assets, the Fund will not make any additional
investments.
3. Sell securities short or purchase securities on margin.
4. Write or purchase put or call options or combinations thereof.
5. Underwrite the securities of other issuers.
6. Purchase or sell real estate, real estate investment trust
securities, commodities, or oil and gas interests.
7. Make loans to others, except through the purchase of debt
obligations referred to in the Prospectus.
8. Invest more than 15% of its assets in the obligations of any one
bank, or invest more than 5% of its assets in the obligations of any other
issuer, except that up to 25% of the value of the Fund's total assets may
be invested without regard to any such limitations. Notwithstanding the
foregoing, to the extent required by the rules of the Securities and
Exchange Commission, the Fund will not invest more than 5% of its assets
in the obligations of any one bank.
9. Invest less than 25% of its assets in securities issued by banks
or invest more than 25% of its assets in the securities of issuers in any
other industry, provided that there shall be no limitation on the purchase
of obligations issued or guaranteed by the U.S. Government, its agencies
or instrumentalities. Notwithstanding the foregoing, for temporary
defensive purposes the Fund may invest less than 25% of its assets in bank
obligations.
10. Invest in companies for the purpose of exercising control.
11. Invest in securities of other investment companies, except as
they may be acquired as part of a merger, consolidation or acquisition of
assets.
12. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except to the extent necessary to secure permitted borrowings.
13. Enter into repurchase agreements providing for settlement in
more than seven days after notice or purchase securities which are
illiquid if, in the aggregate, more than 10% of the value of the Fund's
net assets would be so invested.
If a percentage restriction is adhered to at the time of investment,
a later increase or decrease in percentage resulting from a change in
values or assets will not constitute a violation of that restriction.
The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Fund shares in certain states.
Should the Fund determine that a commitment is no longer in the best
interests of the Fund and its shareholders, the Fund reserves the right to
revoke the commitment by terminating the sale of Fund shares in the state
involved.
MANAGEMENT OF THE FUND
Trustees and officers of the Fund, together with information as to
their principal business occupations during at least the last five years,
are shown below. Each Trustee who is deemed to be an "interested person"
of the Fund, as defined in the Act, is indicated by an asterisk.
Trustees of the Fund
*DAVID W. BURKE, Trustee. Consultant to the Manager since August 1994.
From October 1990 to August 1994, Vice President and Chief
Administrative Officer of the Manager. From 1977 to 1990, Mr. Burke
was involved in the management of national television news, as Vice
President and Executive Vice President of ABC News, and subsequently
as President of CBS News. Mr. Burke also is a Board member of 50
other funds in the Dreyfus Family of Funds. He is 58 years old and
his address is 200 Park Avenue, New York, New York 10166.
ISABEL P. DUNST, Trustee. Partner in the law firm of Hogan & Hartson
since 1990. From 1986 to 1990, Deputy General Counsel of the United'
States Department of Health and Human Services. She is also a
Trustee of the Clients' Security Fund of the District of Columbia Bar
and a Trustee of Temple Sinai. Ms. Dunst also is a Board member of
seven other funds in the Dreyfus Family of Funds. She is 47 years
old and her address is c/o Hogan & Hartson, Columbia Square, 555
Thirteenth Street, N.W., Washington, D.C. 20004-1109.
LYLE E. GRAMLEY, Trustee. Consulting economist since June 1992 and Senior
Staff Vice President and Chief Economist of Mortgage Bankers
Association of America from 1985 to May 1992. Since February 1993, a
director of CWM Mortgage Holdings Inc. From 1980 to 1985, member of
the Board of Governors of the Federal Reserve System. Mr. Gramley
also is a Board member of seven other funds in the Dreyfus Family of
Funds. He is 68 years old and his address is 12901 Three Sisters
Road, Potomac, Maryland 20854.
WARREN B. RUDMAN, Trustee. Since January 1993, Partner in the law firm
Paul, Weiss, Rifkind, Wharton & Garrison. From January 1981 to
January 1993, Mr. Rudman served as a United States Senator from the
State of New Hampshire. Since January 1993, Mr. Rudman has served as
a director of Chubb Corporation and the Raytheon Company. Since
1988, Mr. Rudman has served as a trustee of Boston College, and since
1986 as a member of the Senior Advisory Board of the Institute of
Politics of the Kennedy School of Government at Harvard University.
He also served as Deputy Chairman of the President's Foreign
Intelligence Advisory Board. From January 1993 to December 1994, Mr.
Rudman had served as Vice Chairman of the Federal Reserve Bank of
Boston. Mr. Rudman also is a Board member of 17 other funds in the
Dreyfus Family of Funds. He is 64 years old and his address is 1615
L Street, N.W., Suite 1300, Washington D.C. 20036.
For so long as the Fund's plans described in the sections captioned
"Service Plan" and "Shareholder Services Plan" remain in effect, the
Trustees of the Fund who are not "interested persons" of the Fund, as
defined in the Act, will be selected and nominated by the Trustees who are
not "interested persons" of the Fund.
Each Trustee was elected at a meeting of shareholders held on August
5, 1995. No further shareholder meetings will be held for the purpose of
electing Trustees unless and until such time as less than a majority of
the Trustees holding office have been elected by shareholders, at which
time the Trustees then in office will call a shareholders' meeting for the
election of Trustees. Under the Act, shareholders of record of not less
than two-thirds of the outstanding shares of the Fund may remove a Trustee
through a declaration in writing or by vote cast in person or by proxy at
a meeting called for that purpose. The Trustees are required to call a
meeting of shareholders for the purpose of voting upon the question of
removal of any such Trustee when requested in writing to do so by the
holders of record of not less than 10% of the Fund's outstanding shares.
Trustees are entitled to receive from the Fund an annual retainer and
a per meeting attendance fee and reimbursement for their expenses. The
aggregate amount of compensation paid to each Trustee by the Fund for the
fiscal year ended January 31, 1995, and by all other funds in the Dreyfus
Family of Funds for which such person is a Board member for the year ended
December 31, 1994, were as follows:
<TABLE>
<CAPTION>
(3) (5)
(2) Pension or (4) Total Compensation
(1) Aggregate Retirement Benefits Estimated Annual from Fund and
Name of Board Compensation from Accrued as Part of Benefits Upon Fund Complex paid
Member Fund(1)(2) Fund's Expenses Retirement to Board Member
_________________ ________________ ___________________ ________________ _________________
<S> <C> <C> <C> <C>
David W. Burke $2,323 none none $36,311(3)
Isabel P. Dunst $6,000 none none $40,692(4)
Lyle E. Gramley $6,000 none none $40,692(4)
Warren B. Rudman $6,000 none none $76,544(5)
</TABLE>
__________________________________
(1) Amount does not include reimbursed expenses for attending Board
meetings, which amounted to $433 for all Trustees as a group.
(2) Pursuant to an undertaking by the Manager, the aggregate compensation
payable to each Trustee by the Fund was paid by Manager and not the
Fund.
(3) Pursuant to an undertaking by the Manager, $8,413 of this amount was
paid by the Manager.
(4) Pursuant to undertakings by the Manager, the total compensation
payable by the Fund and Fund Complex was paid by the Manager.
(5) Pursuant to an undertaking by the Manager, $46,942 of this amount was
paid by the Manager.
Officers of the Fund
- --------------------
MARIE E. CONNOLLY, President and Treasurer. President and Chief Operating
Officer and a Director of the Distributor and an officer of other
investment companies advised or administered by the Manager. From
December 1991 to July 1994, she was President and Chief Compliance
Officer of Funds Distributor, Inc., a wholly-owned subsidiary of The
Boston Company, Inc. Prior to December 1991, she served as Vice
President and Controller, and later as Senior Vice President, of The
Boston Company Advisors, Inc. She is 37 years old.
JOHN E. PELLETIER, Vice President and Secretary. Senior Vice President
and General Counsel of the Distributor and an officer of other
investment companies advised or administered by the Manager. From
February 1992 to July 1994, he served as Counsel for The Boston
Company Advisors, Inc. From August 1990 to February 1992, he was
employed as an Associate at Ropes & Gray, and prior to August 1990,
he was employed as an Associate at Sidley & Austin. He is 30 years
old.
ERIC B. FISCHMAN, Vice President and Assistant Secretary. Associate
General Counsel of the Distributor and an officer of other investment
companies advised or administered by the Manager. From September
1992 to August 1994, he was an attorney with the Board of Governors
of the Federal Reserve System. He is 30 years old.
FREDERICK C. DEY, Vice President and Assistant Treasurer. Senior Vice
President of the Distributor and an officer of other investment
companies advised or administered by the Manager. From 1988 to
August 1994, he was manager of the High Performance Fabric Division
of Springs Industries Inc. He is 33 years old.
JOSEPH F. TOWER, III, Assistant Treasurer. Treasurer and Chief Financial
Officer of the Distributor and an officer of other investment
companies advised or administered by the Manager. From July 1988 to
August 1994, he was employed by The Boston Company, Inc. where he
held various management positions in the Corporate Finance and
Treasury areas. He is 32 years old.
JOHN J. PYBURN, Assistant Treasurer. Assistant Treasurer of the
Distributor and an officer of other investment companies advised or
administered by Manager. From 1984 to July 1994, he was an Assistant
Vice President in the Mutual Fund Accounting Department of the
Manager. He is 59 years old.
RUTH D. LEIBERT, Assistant Secretary. Assistant Vice President of the
Distributor and an officer of other investment companies advised or
administered by the Manager. From March 1992 to July 1994, she was a
Compliance Officer for The Managers Funds, a registered investment
company. From March 1990 until September 1991, she was Development
Director of The Rockland Center for the Arts. She is 50 years old.
PAUL FURCINITO, Assistant Secretary. Assistant Vice President of the
Distributor and an officer of other investment companies advised or
administered by Manager. From January 1992 to July 1994, he was a
Senior Legal Product Manager, and, from January 1990 to January 1992,
he was a mutual fund accountant, for The Boston Company Advisors,
Inc. He is 28 years old.
The address of each officer of the Fund is 200 Park Avenue, New York,
New York 10166.
Trustees and officers of the Fund, as a group, owned less than 1% of
the Fund's shares of beneficial interest outstanding on March 7, 1995.
The following shareholders are known by the Fund to own of record 5%
or more of the Fund's Class A shares of beneficial interest outstanding on
March 7, 1995: (1) Adams & Company, American National Bank, 101 5th
Street East, Saint Paul, MN 55101-1808 (6.27%); and (2) Northwest Bank
Minnesota NA, 733 Marquette Avenue, 4th Floor, Minneapolis, MN 55479-0052
(5.68%). The following shareholders are known by the Fund to own of record
5% or more of the Fund's Class B shares of beneficial interests
outstanding on March 7, 1995: (1) Homefed Trust Co., 625 Broadway, Suite,
906, San Diego, CA 92101-5416 (56.26%); (2) Continental Trust Co., as
Trustee for Kaiser Aerospace Savings and Profit Sharing Plan, 231 South
LaSalle Street, Chicago, IL 60697 (10.28%); and (3) Hamill & Company FBO
Vinson & Elkins, c/o Texas Commerce Bank-Houston, P.O. Box 2558, Houston,
TX 77252 (7.12%). A shareholder who beneficially owns, directly or
indirectly, more than 25% of the Fund's voting securities may be deemed a
"control person" (as defined in the Act) of the Fund.
MANAGEMENT AGREEMENT
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Management
of the Fund."
The Manager provides management services pursuant to the Management
Agreement (the "Agreement") dated August 24, 1994 with the Fund, which is
subject to annual approval by (i) the Fund's Board of Trustees or (ii)
vote of a majority (as defined in the Act) of the outstanding voting
securities of the Fund, provided that in either event the continuance also
is approved by a majority of the Trustees who are not "interested persons"
(as defined in the Act) of the Fund or the Manager, by vote cast in person
at a meeting called for the purpose of voting on such approval.
Shareholders approved the Agreement on August 5, 1994, and the Board of
Trustees, including a majority of the Trustees who are not "interested
persons" of any party to the Agreement, last voted to renew the Agreement
at a meeting held on May 24, 1995. The Agreement is terminable without
penalty, on not more than 60 days' notice, by the Fund's Trustees or by
vote of the holders of a majority of the Fund's shares, or, on not less
than 90 days' notice, by the Manager. The Agreement will terminate
automatically in the event of its assignment (as defined in the Act).
The following persons are officers and/or directors of the Manager:
Howard Stein, Chairman of the Board and Chief Executive Officer; W. Keith
Smith, a Vice Chairman of the Board; Robert E. Riley, President, Chief
Operating Officer and a director; Lawrence S. Kash, Vice Chairman--
Distribution and a director; Philip L. Toia, Vice Chairman--Operations and
Administration; Paul H. Snyder, Vice President and Chief Financial
Officer; Daniel C. Maclean III, Vice President and General Counsel;
Barbara Casey, Vice President--Retirement Services; Henry D. Gottmann,
Vice President--Retail; Elie M. Genadry, Vice President--Wholesale; Mark
N. Jacobs, Vice President--Fund Legal and Compliance and Secretary;
Jeffrey N. Nachman, Vice President--Mutual Fund Accounting; Diane Coffey,
Vice President--Corporate Communications; Katherine C. Wickham, Vice
President--Human Resources; William F. Glavin, Jr., Vice President--
Product Management; Andrew S. Wasser, Vice President--Information
Services; Maurice Bendrihem, Controller; and Mandell L. Berman, Frank V.
Cahouet, Alvin E. Friedman, Lawrence M. Greene, Julian M. Smerling and
David B. Truman, directors.
The Manager manages the Fund's portfolio of investments in accordance
with the stated policies of the Fund, subject to the approval of the
Fund's Board of Trustees. The Manager is responsible for investment
decisions, and provides the Fund with portfolio managers who are
authorized by the Board to execute purchases and sales of securities. The
portfolio managers are Robert P. Fort, Jr., Garritt Kono, Bernard Kiernan
and Patricia A. Larkin. The Manager also maintains a research department
with a professional staff of portfolio managers and securities analysts
who provide research services for the Fund as well as for other funds
advised by the Manager. All purchases and sales are reported for the
Board's review at the meeting subsequent to such transactions.
The Manager maintains office facilities for the Fund, and furnishes
statistical and research data, clerical help, accounting, data processing,
bookkeeping and internal auditing and certain other required services to
the Fund. The Manager also may make such advertising and promotional
expenditures, using its own resources, as it from time to time deems
appropriate.
As compensation for the Manager's services under the Agreement, the
Fund has agreed to pay the Manager a monthly management fee at the annual
rate of .20 of 1% of the value of the Fund's average daily net assets.
All fees and expenses are accrued daily and deducted before declaration of
dividends to investors. The management fees payable for the fiscal years
ended January 31, 1993 and 1994 amounted to $9,101,276 and $8,015,227,
respectively, which amounts were reduced pursuant to undertakings by the
Manager, resulting in net management fees paid for such fiscal years of
$7,186,117 and $7,002,438, respectively. The management fee paid by the
Fund for the fiscal year ended January 31, 1995 was $4,607,084.
Unless the Manager gives the Fund's investors at least 90 days'
notice to the contrary, the Manager, and not the Fund, will be liable for
those expenses of the Fund (exclusive of taxes, brokerage, interest on
borrowings and (with the prior written consent of the necessary state
securities commissions) extraordinary expenses) other than the following
expenses, which will be Fund expenses: (i) the management fee payable by
the Fund monthly at the annual rate of .20 of 1% of the Fund's average
daily net assets and (ii) as to Class B shares only, payments made at the
annual rate of .25 of 1% of the value of the average daily net assets of
Class B, pursuant to the Fund's Service Plan. See "Service Plan."
In addition, the Agreement provides that if in any fiscal year the
aggregate expenses of the Fund, exclusive of taxes, brokerage, interest on
borrowings and (with the prior written consent of the necessary state
securities commissions) extraordinary expenses, but including the
management fee, exceed 1-1/2% of the value of the Fund's average net assets
for the fiscal year, the Fund may deduct from the payment to be made to
the Manager under the Agreement, or the Manager will bear, such excess
expense. Such deduction or payment, if any, will be estimated on a daily
basis, and reconciled and effected or paid, as the case may be, on a
monthly basis.
The aggregate of the fees payable to the Manager is not subject to
reduction as the value of the Fund's net assets increases.
PURCHASE OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
The Distributor. The Distributor serves as the Fund's distributor
pursuant to an agreement which is renewable annually. The Distributor
also acts as distributor for the funds in the Dreyfus Family of Funds and
for certain other investment companies.
Using Federal Funds. The Shareholder Services Group, Inc., the
Fund's transfer and dividend disbursing agent (the "Transfer Agent"), or
the Fund may attempt to notify the investor upon receipt of checks drawn
on banks that are not members of the Federal Reserve System as to the
possible delay in conversion into Federal Funds and may attempt to arrange
for a better means of transmitting the money. If the investor is a
customer of a securities dealer, bank or other financial institution and
his order to purchase Fund shares is paid for other than in Federal Funds,
the securities dealer, bank or other financial institution, acting on
behalf of its customer, will complete the conversion into, or itself
advance, Federal Funds generally on the business day following receipt of
the customer order. The order is effective only when so converted and
received by the Custodian or Sub-Custodian. An order for the purchase of
Fund shares placed by an investor with a sufficient Federal Funds or cash
balance in his brokerage account with a securities dealer, bank or other
financial institution will become effective on the day that the order,
including Federal Funds, is received by the Custodian or Sub-Custodian.
In some states, banks or other financial institutions effecting
transactions in Fund shares may be required to register as dealers
pursuant to state law.
SERVICE PLAN
(CLASS B ONLY)
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Service
Plan."
Rule 12b-1 (the "Rule") adopted by the Securities and Exchange
Commission under the Act provides, among other things, that an investment
company may bear expenses of distributing its shares only pursuant to a
plan adopted in accordance with the Rule. The Fund's Board of Trustees
has adopted such a plan (the "Service Plan") with respect to the Fund's
Class B shares, pursuant to which the Fund reimburses the Distributor for
distributing Class B shares and pays the Manager, Dreyfus Service
Corporation, a wholly-owned subsidiary of the Manager, and any affiliate
of either of them (collectively, "Dreyfus") for advertising and marketing
Class B shares and for the provision of certain services to the holders of
Class B shares. Under the Service Plan, the Distributor and Dreyfus may
make payments to certain financial institutions, securities dealers and
other financial industry professionals (collectively, "Service Agents") in
respect to these services. The Fund's Board of Trustees believes that
there is a reasonable likelihood that the Service Plan will benefit the
Fund and the holders of Class B shares.
A quarterly report of the amounts expended under the Service Plan,
and the purposes for which such expenditures were incurred, must be made
to the Trustees for their review. In addition, the Service Plan provides
that it may not be amended to increase materially the costs which holders
of Class B shares may bear pursuant to the Service Plan without the
approval of the holders of Class B shares and that other material
amendments of the Service Plan must be approved by the Board of Trustees,
and by the Trustees who are not "interested persons" (as defined in the
Act) of the Fund and have no direct or indirect financial interest in the
operation of the Service Plan or in any agreements entered into in
connection with the Service Plan, by vote cast in person at a meeting
called for the purpose of considering such amendments. The Service Plan
is subject to annual approval by such vote of the Trustees cast in person
at a meeting called for the purpose of voting on the Service Plan. The
Service Plan was so approved by the Trustees at a meeting held on May 24,
1995. The Service Plan may be terminated at any time by vote of a
majority of the Trustees who are not "interested persons" and have no
direct or indirect financial interest in the operation of the Service Plan
or in any agreements entered into in connection with the Service Plan or
by vote of the holders of a majority of Class B shares.
For the period February 1, 1994 through August 23, 1994, the Fund
paid Dreyfus Service Corporation, as the Fund's distributor during such
period, pursuant to a Rule 12b-1 plan which was terminated on August 24,
1994, $136,486, of which $134,571 was for distributing Class B shares and
$1,975 was for advertising and marketing Class B shares and for Services
provided to Class B shareholders. For the period August 24, 1994 through
January 31, 1995, the Fund paid, pursuant to the Service Plan, $96,113, of
which $78,746 was paid to the Distributor as reimbursement for
distributing Class B shares, and $17,367 was paid to Dreyfus for
advertising and marketing Class B shares and for providing services to
Class B shareholders.
SHAREHOLDER SERVICES PLAN
(CLASS A ONLY)
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Shareholder Services Plan."
The Fund has adopted a Shareholder Services Plan (the "Plan")
pursuant to which the Fund has agreed to reimburse Dreyfus Service
Corporation for certain allocated expenses of providing personal services
and/or maintaining shareholder accounts with respect to Class A shares
only. The services provided may include personal services relating to
shareholder accounts, such as answering shareholder inquiries regarding
the Fund and providing reports and other information, and services related
to the maintenance of shareholder accounts.
A quarterly report of the amounts expended under the Plan, and the
purposes for which such expenditures were incurred, must be made to the
Trustees for their review. In addition, the Plan provides that material
amendments of the Plan must be approved by the Board of Trustees, and by
the Trustees who are not "interested persons" (as defined in the Act) of
the Fund or the Manager and have no direct or indirect financial interest
in the operation of the Plan, by vote cast in person at a meeting called
for the purpose of considering such amendments. The Plan is subject to
annual approval by such vote of the Trustees cast in person at a meeting
called for the purpose of voting on the Plan. The Plan was last approved
by the Trustees at a meeting held on March 1, 1995. The Plan is
terminable at any time by vote of a majority of the Trustees who are not
"interested persons" and have no direct or indirect financial interest in
the operation of the Plan.
For the fiscal year ended January 31, 1995, no amounts were paid by
the Fund, with respect to Class A shares, under the Plan pursuant to an
undertaking by the Manager.
REDEMPTION OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to
Redeem Fund Shares."
Redemption by Wire or Telephone. By using this procedure, the
investor authorizes the Transfer Agent to act on wire or telephone
redemption instructions from any person representing himself or herself to
be an authorized representative of the investor, and reasonably believed
by the Transfer Agent to be genuine. Ordinarily, the Fund will initiate
payment for shares redeemed pursuant to this procedure on the same
business day if the Dreyfus Institutional Services Division receives the
redemption request in proper form at its New York office by 12:00 Noon,
New York time, or at its Los Angeles office by 12:00 Noon, California
time, on such day; otherwise the Fund will initiate payment on the next
business day. Redemption proceeds will be transferred by Federal Reserve
wire only to a bank that is a member of the Federal Reserve System.
Investors with access to telegraphic equipment may wire redemption
requests to the Transfer Agent by employing the following transmittal code
which may be used for domestic or overseas transmission:
Transfer Agent's
Transmittal Code Answer Back Sign
_______________ ________________
144295 144295 TSSG PREP
Investors who do not have direct access to telegraphic equipment may
have the wire transmitted by contacting a TRT Cables operator at
1-800-654-7171, toll free. Investors should advise the operator that the
above transmittal code must be used and should also inform the operator of
the Transfer Agent's answer back sign.
Redemption Commitment. The Fund has committed itself to pay in cash
all redemption requests by any shareholder of record, limited in amount
during any 90-day period to the lesser of $250,000 or 1% of the value of
the Fund's net assets at the beginning of such period. Such commitment is
irrevocable without the prior approval of the Securities and Exchange
Commission. In the case of requests for redemption in excess of such
amount, the Board of Trustees reserves the right to make payments in whole
or in part in securities or other assets of the Fund in case of an
emergency or any time a cash distribution would impair the liquidity of
the Fund to the detriment of the existing shareholders. In such event,
the securities would be valued in the same manner as the Fund's portfolio
is valued. If the recipient sold such securities, brokerage charges would
be incurred.
Suspension of Redemptions. The right of redemption may be suspended
or the date of payment postponed (a) during any period when the New York
Stock Exchange is closed (other than customary weekend and holiday
closings), (b) when trading in the markets the Fund ordinarily utilizes is
restricted, or when an emergency exists as determined by the Securities
and Exchange Commission so that disposal of the Fund's investments or
determination of its net asset value is not reasonably practicable, or (c)
for such other periods as the Securities and Exchange Commission by order
may permit to protect the Fund's investors.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
Amortized Cost Pricing. The valuation of the Fund's portfolio
securities is based upon their amortized cost which does not take into
account unrealized capital gains or losses. This involves valuing an
instrument at its cost and thereafter assuming a constant amortization to
maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the instrument. While
this method provides certainty in valuation, it may result in periods
during which value, as determined by amortized cost, is higher or lower
than the price the Fund would receive if it sold the instrument.
The Board of Trustees has established, as a particular responsibility
within the overall duty of care owed to the Fund's investors, procedures
reasonably designed to stabilize the Fund's price per share as computed
for the purpose of sales and redemptions at $1.00. Such procedures
include review of the Fund's portfolio holdings by the Board of Trustees,
at such intervals as it deems appropriate, to determine whether the Fund's
net asset value calculated by using available market quotations or market
equivalents deviates from $1.00 per share based on amortized cost. In
such review, investments for which market quotations are readily available
will be valued at the most recent bid price or yield equivalent for such
securities or for securities of comparable maturity, quality and type, as
obtained from one or more of the major market makers for the securities to
be valued. Other investments and assets will be valued at fair value as
determined in good faith by the Board of Trustees.
The extent of any deviation between the Fund's net asset value based
upon available market quotations or market equivalents and $1.00 per share
based on amortized cost will be examined by the Board of Trustees. If
such deviation exceeds 1/2 of 1%, the Board of Trustees will consider
promptly what action, if any, will be initiated. In the event the Board
of Trustees determines that a deviation exists which may result in
material dilution or other unfair results to investors or existing
shareholders, it has agreed to take such corrective action as it regards
as necessary and appropriate including: selling portfolio instruments
prior to maturity to realize capital gains or losses or to shorten average
portfolio maturity; withholding dividends or paying distributions from
capital or capital gains; redeeming shares in kind; or establishing a net
asset value per share by using available market quotations or market
equivalents.
New York Stock Exchange and Transfer Agent Closings. The holidays
(as observed) on which both the New York Stock Exchange and the Transfer
Agent are closed currently are: New Year's Day, Presidents' Day, Memorial
Day, Independence Day, Labor Day, Thanksgiving and Christmas.
PORTFOLIO TRANSACTIONS
Portfolio securities ordinarily are purchased directly from the
issuer or from an underwriter or a market maker for the securities.
Usually no brokerage commissions are paid by the Fund for such purchases.
Purchases from underwriters of portfolio securities include a concession
paid by the issuer to the underwriter and the purchase price paid to, and
sales price received from, market makers for the securities may include
the spread between the bid and asked price. No brokerage commissions have
been paid by the Fund to date.
Transactions are allocated to various dealers by the Fund's portfolio
managers in their best judgment. The primary consideration is prompt and
effective execution of orders at the most favorable price. Subject to
that primary consideration, dealers may be selected for research,
statistical or other services to enable the Manager to supplement its own
research and analysis with the views and information of other securities
firms and may be selected based upon their sales of Fund shares.
Research services furnished by brokers through which the Fund effects
securities transactions may be used by the Manager in advising other funds
it advises and, conversely, research services furnished to the Manager by
brokers in connection with other funds the Manager advises may be used by
the Manager in advising the Fund. Although it is not possible to place a
dollar value on these services, it is the opinion of the Manager that the
receipt and study of such services should not reduce the overall expenses
of its research department.
INVESTOR SERVICES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Investor
Services."
Fund Exchanges. By using the Telephone Exchange Privilege, the
investor authorizes the Transfer Agent to act on exchange instructions
from any person representing himself or herself to be an authorized
representative of the investor and reasonably believed by the Transfer
Agent to be genuine. Telephone exchanges may be subject to limitations as
to the amount involved or the number of telephone exchanges permitted.
Shares will be exchanged at the net asset value next determined after
receipt of an exchange request in proper form. Shares in certificate form
are not eligible for telephone exchange.
Dreyfus Auto-Exchange Privilege. Dreyfus Auto-Exchange Privilege
permits an investor to purchase, in exchange for shares of the Fund,
shares of Dreyfus Cash Management Plus, Inc., Dreyfus Institutional Short
Term Treasury Fund, Dreyfus Government Cash Management, Dreyfus Municipal
Cash Management Plus, Dreyfus New York Municipal Cash Management, Dreyfus
Tax Exempt Cash Management, Dreyfus Treasury Cash Management or Dreyfus
Treasury Prime Cash Management. This Privilege is available only for
existing accounts. Shares will be exchanged on the basis of relative net
asset value. Enrollment in or modification or cancellation of this
Privilege is effective three business days following notification by the
investor. An investor will be notified if its account falls below the
amount designated under this Privilege. In this case, an investor's
account will fall to zero unless additional investments are made in excess
of the designated amount prior to the next Auto-Exchange transaction.
Shares in certificate form are not eligible for this Privilege.
Fund Exchanges and the Dreyfus Auto-Exchange Privilege are available
to investors resident in any state in which shares of the fund being
acquired may legally be sold. Shares may be exchanged only between
accounts having identical names and other identifying designations.
The Fund reserves the right to reject any exchange request in whole
or in part. The availability of Fund Exchanges or the Dreyfus Auto-
Exchange Privilege may be modified or terminated at any time upon notice
to investors.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Dividends,
Distributions and Taxes".
Ordinarily, gains and losses realized from portfolio transactions
will be treated as capital gain or loss. However, all or a portion of any
gains realized from the sale or other disposition of certain market
discount bonds will be treated as ordinary income under Section 1276 of
the Internal Revenue Code of 1986, as amended.
YIELD INFORMATION
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Yield
Information."
For the seven-day period ended January 31, 1995, yield and effective
yield on Class A shares were 5.50% and 5.65%, respectively, and on Class B
shares were 5.25% and 5.39%, respectively. Yield is computed in
accordance with a standardized method which involves determining the net
change in the value of a hypothetical pre-existing Fund account having a
balance of one share at the beginning of a seven calendar day period for
which yield is to be quoted, dividing the net change by the value of the
account at the beginning of the period to obtain the base period return,
and annualizing the results (i.e., multiplying the base period return by
365/7). The net change in the value of the account reflects the value of
additional shares purchased with dividends declared on the original share
and any such additional shares and fees that may be charged to shareholder
accounts, in proportion to the length of the base period and the Fund's
average account size, but does not include realized gains and losses or
unrealized appreciation and depreciation. Effective yield is computed by
adding 1 to the base period return (calculated as described above),
raising that sum to a power equal to 365 divided by 7, and subtracting 1
from the result.
Yields will fluctuate and are not necessarily representative of
future results. The investor should remember that yield is a function of
the type and quality of the instruments in the portfolio, portfolio
maturity and operating expenses. An investor's principal in the Fund is
not guaranteed. See "Determination of Net Asset Value" for a discussion
of the manner in which the Fund's price per share is determined.
INFORMATION ABOUT THE FUND
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "General
Information."
Each Fund share has one vote and, when issued and paid for in
accordance with the terms of the offering, is fully paid and
nonassessable. Fund shares have no preemptive, subscription or conversion
rights and are freely transferable.
The Fund sends annual and semi-annual financial statements to all its
shareholders.
In early 1974, the Manager commenced offering the first money market
fund to be widely offered on a retail basis, Dreyfus Liquid Assets, Inc.
Money market mutual funds have subsequently grown into a multibillion
dollar industry.
The Fund is a member of the Family of Dreyfus Cash Management Funds
which are designed to meet the needs of an array of institutional
investors. As of March 20, 1995, the total net assets of the Dreyfus Cash
Management Funds amounted to approximately $16.5 billion.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT, COUNSEL
AND INDEPENDENT AUDITORS
The Bank of New York, 90 Washington Street, New York, New York 10286,
is the Fund's custodian. The Shareholder Services Group, Inc., a
subsidiary of First Data Corporation, P.O. Box 9671, Providence, Rhode
Island 02940-9671, is the Fund's transfer and dividend disbursing agent.
First Interstate Bank of California, 707 Wilshire Boulevard, Los Angeles,
California 90017, serves as a sub-custodian of the Fund's investments.
The Bank of New York, The Shareholder Services Group, Inc. and First
Interstate Bank of California have no part in determining the investment
policies of the Fund or which portfolio securities are to be purchased or
sold by the Fund.
Stroock & Stroock & Lavan, 7 Hanover Square, New York, New York
10004-2696, as counsel for the Fund, has rendered its opinion as to
certain legal matters regarding the due authorization and valid issuance
of the shares of beneficial interest being sold pursuant to the Fund's
Prospectus.
Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as auditors of the Fund.
APPENDIX
Descriptions of the highest commercial paper, bond and other short-
and long-term rating categories assigned by Standard & Poor's Corporation
("S&P"), Moody's Investors Service, Inc. ("Moody's"), Fitch Investors
Service, Inc. ("Fitch"), Duff & Phelps Credit Rating Co. ("Duff"), IBCA
Limited and IBCA Inc. ("IBCA") and Thomson BankWatch, Inc. ("BankWatch").
Commercial Paper Ratings and Short-Term Ratings
The designation A-1 by S&P indicates that the degree of safety
regarding timely payment is either overwhelming or very strong. Those
issues determined to possess overwhelming safety characteristics are
denoted with a plus sign (+) designation.
The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity
for repayment of short-term promissory obligations, and ordinarily will be
evidenced by leading market positions in well established industries, high
rates of return on funds employed, conservative capitalization structures
with moderate reliance on debt and ample asset protection, broad margins
in earnings coverage of fixed financial charges and high internal cash
generation, and well established access to a range of financial markets
and assured sources of alternate liquidity.
The rating Fitch-1 (Highest Grade) is the highest commercial paper
rating assigned by Fitch. Paper rated Fitch-1 is regarded as having the
strongest degree of assurance for timely payment.
The rating Duff-1 is the highest commercial paper rating assigned by
Duff. Paper rated Duff-1 is regarded as having very high certainty of
timely payment with excellent liquidity factors which are supported by
ample asset protection. Risk factors are minor.
The designation A1 by IBCA indicates that the obligation is supported
by a very strong capacity for timely repayment. Those obligations rated
A1+ are supported by the highest capacity for timely repayment.
The rating TBW-1 is the highest short-term obligation rating assigned
by BankWatch. Obligations rated TBW-1 are regarded as having the
strongest capacity for timely repayment.
In addition to ratings of short-term obligations, BankWatch assigns a
rating to each issuer it rates, in gradations of A through F. BankWatch
examines all segments of the organization including, where applicable, the
holding company, member banks or associations, and other subsidiaries. In
those instances where financial disclosure is incomplete or untimely, a
qualified rating (qr) is assigned to the institution. BankWatch also
assigns, in the case of foreign banks, a country rating which represents
an assessment of the overall political and economic stability of the
country in which that bank is domiciled.
Bond Ratings and Long-Term Ratings
Bonds rated AAA are considered by S&P to be the highest grade
obligation and possess an extremely strong capacity to pay principal and
interest.
Bonds rated Aaa are judged by Moody's to be of the best quality.
Bonds rated Aa by Moody's are judged by Moody's to be of high quality by
all standards and, together with the Aaa group, they comprise what are
generally known as high-grade bonds.
Bonds rated AAA by Fitch are judged by Fitch to be strictly high
grade, broadly marketable and suitable for investment by trustees and
fiduciary institutions and liable to but slight market fluctuation other
than through changes in the money rate. The prime feature of an AAA bond
is a showing of earnings several times or many times interest
requirements, with such stability of applicable earnings that safety is
beyond reasonable question whatever changes occur in conditions.
Bonds rated AAA by Duff are considered to be of the highest credit
quality. The risk factors are negligible, being only slightly more than
U.S. Treasury debt.
Obligations rated AAA by IBCA have the lowest expectation of
investment risk. Capacity for timely repayment of principal and interest
is substantial, such that adverse changes in business, economic or
financial conditions are unlikely to increase investment risk
significantly.
IBCA also assigns a rating to certain international and U.S. banks.
An IBCA bank rating represents IBCA's current assessment of the strength
of the bank and whether such bank would receive support should it
experience difficulties. In its assessment of a bank, IBCA uses a dual
rating system comprised of Legal Ratings and Individual Ratings. In
addition, IBCA assigns banks Long and Short-Term Ratings as used in the
corporate ratings discussed above. Legal Ratings, which range in
gradation from 1 through 5, address the question of whether the bank would
receive support provided by central banks or the bank's shareholders if it
experienced difficulties, and such ratings are considered by IBCA to be a
prime factor in its assessment of credit risk. Individual Ratings, which
range in gradations from A through E, represent IBCA's assessment of a
bank's economic merits and address the question of how the bank would be
viewed if it were entirely independent and could not rely on support from
state authorities or its owners.
<TABLE>
<CAPTION>
DREYFUS CASH MANAGEMENT
STATEMENT OF INVESTMENTS JANUARY 31, 1995
PRINCIPAL
NEGOTIABLE BANK CERTIFICATES OF DEPOSIT--1.9% AMOUNT VALUE
---------- -----------
<S> <C> <C>
Harris Trust & Savings Bank (London)
6.72%, 6/5/95........................................................... $ 25,000,000 $ 24,982,482
NationsBank of North Carolina (London)
5.04%, 3/14/95.......................................................... 12,000,000 12,000,000
------------
TOTAL NEGOTIABLE BANK CERTIFICATES OF DEPOSIT
(cost $36,982,482)...................................................... $ 36,982,482
=============
COMMERCIAL PAPER--30.5%
Den Danske Corp. Inc.
6.44%, 5/11/95.......................................................... $ 25,000,000 $ 24,566,875
Ford Motor Credit Co.
6.15%-6.24%, 4/27/95-4/28/95............................................ 50,000,000 49,276,785
General Electric Capital Corp.
5.11%-5.19%, 2/27/95-3/10/95............................................ 90,000,000 89,650,067
General Electric Capital Services Inc.
5.11%-6.50%, 2/27/95-4/19/95............................................ 85,000,000 84,340,601
General Motors Acceptance Corp.
6.05%-6.42%, 2/27/95-5/8/95............................................. 85,000,000 84,206,356
Goldman Sachs Group L.P.
6.64%, 5/4/95........................................................... 50,000,000 49,169,444
Internationale Nederlanden (U.S.) Funding
6.66%, 7/12/95.......................................................... 10,000,000 9,711,542
NYNEX Corp.
6.55%, 6/16/95.......................................................... 10,000,000 9,760,750
Prudential Funding Corp.
5.85%, 2/1/95........................................................... 50,000,000 50,000,000
Sears Roebuck Acceptance Corp.
6.53%-6.70%, 6/12/95-6/23/95............................................ 30,000,000 29,254,205
Seventy Five State St.
6.11%, 3/10/95 (a)...................................................... 20,000,000 19,875,639
UBS Finance (Delaware) Inc.
5.85%, 2/1/95........................................................... 80,000,000 80,000,000
-------------
TOTAL COMMERCIAL PAPER (cost $579,812,264).................................. $ 579,812,264
===============
CORPORATE NOTES--10.2%
Bear Stearns Companies Inc.
6.09%-6.12%, 8/25/95-1/26/96 (b)........................................ $ 74,000,000 $ 74,000,000
Lehman Brothers Holdings Inc.
5.97%, 9/21/95 (b)...................................................... 50,000,000 50,000,000
Merrill Lynch & Co. Inc.
5.94%, 2/23/95 (b)...................................................... 70,000,000 70,000,000
--------------
TOTAL CORPORATE NOTES (cost $194,000,000)................................... $ 194,000,000
===============
</TABLE>
<TABLE>
<CAPTION>
DREYFUS CASH MANAGEMENT
STATEMENT OF INVESTMENTS (CONTINUED) JANUARY 31, 1995
PRINCIPAL
SHORT-TERM BANK NOTES--4.2% AMOUNT VALUE
---------------- ------------
<S> <C> <C>
First National Bank of Boston
6.25%-6.25%, 4/27/95-5/1/95
(cost $80,000,000). .................................................... $ 80,000,000 $ 80,000,000
===============
U.S. TREASURY BILLS--5.3%
3.64%, 2/9/95
(cost $99,922,000)...................................................... $ 100,000,000 $ 99,922,000
===============
U.S. GOVERNMENT AGENCIES--7.9%
Federal Home Loan Banks, Consolidated Systemwide,
Floating Rate Bonds
6.05%, 2/3/97 (b)....................................................... $ 50,000,000 $ 49,981,040
Federal National Mortgage Association, Consolidated
Systemwide, Floating Rate Bonds
5.97%, 2/14/97 (b)...................................................... 100,000,000 100,000,000
-------------
TOTAL U.S. GOVERNMENT AGENCIES (cost $149,981,040).......................... $149,981,040
============
TIME DEPOSITS--13.4%
Chase Manhattan Bank NA (London)
5.63%, 2/1/95........................................................... $ 45,000,000 $ 45,000,000
Chemical Bank (London)
5.88%, 2/1/95........................................................... 80,000,000 80,000,000
Morgan Guaranty Trust Co. (London)
5.69%, 2/1/95........................................................... 80,000,000 80,000,000
Republic National Bank of New York (London)
5.63%, 2/1/95........................................................... 50,041,000 50,041,000
------------
TOTAL TIME DEPOSITS (cost $255,041,000)..................................... $255,041,000
=============
REPURCHASE AGREEMENTS--21.0%
Daiwa Securities America Inc.
5.78%, dated 1/31/95, due 2/1/95 in the amount
of $80,000,000 (fully collateralized by
$81,465,000 U.S. Treasury Notes, 4.25%-4.625%
due 7/31/95 to 12/31/95, value $80,927,342)............................. $ 80,000,000 $ 80,000,000
Goldman, Sachs & Co.
5.70%, dated 1/31/95, due 2/1/95 in the amount
of $80,000,000 (fully collateralized by
$82,820,000 U.S. Treasury Notes, 4.25%
due 11/30/95, value $81,737,254)........................................ 80,000,000 80,000,000
Lehman Government Securities, Inc.
5.80%, dated 1/31/95, due 2/1/95 in the amount
of $80,000,000 (fully collateralized by
$28,100,000 U.S. Treasury Bills due 4/20/95 and
$52,475,000 U.S. Treasury Notes, 5.875%-11.25%
due 5/15/95, value $81,591,393)......................................... 80,000,000 80,000,000
</TABLE>
<TABLE>
<CAPTION>
DREYFUS CASH MANAGEMENT
STATEMENT OF INVESTMENTS (CONTINUED) JANUARY 31, 1995
PRINCIPAL
REPURCHASE AGREEMENTS (CONTINUED) AMOUNT VALUE
---------------- --------------
<S> <C> <C>
Sanwa Securities USA Co. L.P.
5.80%,dated 1/31/95,due 2/1/95 in the amount
of $80,000,000 (fully collaterized by
$83,298,000 U.S. Treasury Bills due 7/20/95
value $80,898,555)...................................................... $ 80,000,000 $ 80,000,000
Yamaichi International America, Inc.
5.80%,dated 1/31/95,due 2/1/95 in the amount
of $80,000,000 (fully collateralized by
$78,285,000 U.S. Treasury Notes,8.50-10.50%
due 2/15/95 to 11/15/95,value $80,521,856).............................. 80,000,000 80,000,000
------------
TOTAL REPURCHASE AGREEMENTS (cost $400,000,000)............................. $ 400,000,000
==============
TOTAL INVESTMENTS (cost $1,795,738,786)............................ 94.4% $ 1,795,738,786
====== ==============
CASH AND RECEIVABLES (NET)......................................... 5.6% $ 106,761,555
====== ==============
NET ASSETS .................................................. 100.0% $ 1,902,500,341
====== ===============
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Backed by irrevocable bank letter of credit.
(b) Variable interest rate-subject to periodic change.
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS CASH MANAGEMENT
STATEMENT OF ASSETS AND LIABILITIES JANUARY 31, 1995
ASSETS:
<S> <C> <C>
Investments in securities, at value
(including repurchase agreements of $400,000,000)-Note 1(a,b)......... $ 1,795,738,786
Receivable for investment securities sold............................... 108,729,607
Interest receivable..................................................... 4,539,601
----------------
1,909,007,994
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 291,381
Due to Distributor...................................................... 18,969
Due to Custodian........................................................ 6,197,303 6,507,653
------------ -------------
NET ASSETS ................................................................ $ 1,902,500,341
==============
REPRESENTED BY:
Paid-in capital......................................................... $ 1,903,126,690
Accumulated net realized (loss) on investments.......................... (626,349)
----------------
NET ASSETS at value......................................................... $ 1,902,500,341
==============
Shares of Beneficial Interest outstanding:
Class A shares
(unlimited number of $.001 par value shares authorized)............... 1,817,785,395
==============
Class B shares
(unlimited number of $.001 par value shares authorized)............... 85,341,295
============
NET ASSET VALUE per share:
Class A shares
($1,817,166,206 / 1,817,785,395 shares)............................... $1.00
=====
Class B shares
($85,334,135 / 85,341,295 shares)..................................... $1.00
=====
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS CASH MANAGEMENT
STATEMENT OF OPERATIONS YEAR ENDED JANUARY 31, 1995
INVESTMENT INCOME:
<S> <C> <C>
INTEREST INCOME......................................................... $ 98,597,301
EXPENSES:
Management fee-Note 2(a).............................................. $4,607,084
Distribution fees (Class B shares)-Note 2(b).......................... 232,599
------------
TOTAL EXPENSES.................................................... 4,839,683
-------------
INVESTMENT INCOME--NET...................................................... 93,757,618
NET REALIZED (LOSS) ON INVESTMENTS--Note 1(b)............................... (185,931)
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $93,571,687
==============
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS CASH MANAGEMENT
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED JANUARY 31,
---------------------------------
1994 1995
------------ ----------
<S> <C> <C>
OPERATIONS:
Investment income--net.............................................. $ 124,597,162 $ 93,757,618
Net realized gain (loss) on investments............................. 330,758 (185,931)
-------------- -------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.......... 124,927,920 93,571,687
-------------- -------------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income--net:
Class A shares.................................................... (124,557,691) (90,088,510)
Class B shares.................................................... (39,471) (3,669,108)
-------------- -------------
TOTAL DIVIDENDS............................................... (124,597,162) (93,757,618)
-------------- -------------
BENEFICIAL INTEREST TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold:
Class A shares.................................................... 44,940,158,583 17,326,303,484
Class B shares.................................................... 95,036,034 670,809,160
Dividends reinvested:
Class A shares.................................................... 21,715,882 21,969,146
Class B shares.................................................... 78,861 1,713,385
Cost of shares redeemed:
Class A shares.................................................... (47,542,533,683) (18,425,780,190)
Class B shares.................................................... (42,843,195) (639,452,949)
-------------- -------------
(DECREASE) IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS (2,528,387,518) (1,044,437,964)
-------------- -------------
TOTAL (DECREASE) IN NET ASSETS.............................. (2,528,056,760) (1,044,623,895)
NET ASSETS:
Beginning of year................................................... 5,475,180,996 2,947,124,236
-------------- -------------
End of year......................................................... $ 2,947,124,236 $ 1,902,500,341
================ ================
</TABLE>
See notes to financial statements.
DREYFUS CASH MANAGEMENT
FINANCIAL HIGHLIGHTS
Reference is made to page 3 of the Fund's Prospectus, dated May 31, 1995.
DREYFUS CASH MANAGEMENT
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a diversified open-end management investment company. Dreyfus Service
Corporation, until August 24, 1994, acted as the distributor of the Fund's
shares, which are sold to the public without a sales load. Dreyfus Service
Corporation is a wholly-owned subsidiary of The Dreyfus Corporation
("Manager"). Effective August 24, 1994, the Manager became a direct
subsidiary of Mellon Bank, N.A.
On August 24, 1994, Premier Mutual Fund Services, Inc. (the
"Distributor") was engaged as the Fund's distributor. The Distributor,
located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned
subsidiary of Institutional Administration Services, Inc., a provider of
mutual fund administration services, the parent company of which is Boston
Institutional Group, Inc.
It is the Fund's policy to maintain a continuous net asset value per
share of $1.00; the Fund has adopted certain investment, portfolio valuation
and dividend and distribution policies to enable it to do so. There is no
assurance, however, that the Fund will be able to maintain a stable net asset
value of $1.00.
The Fund offers both Class A and Class B shares. Class B shares are
subject to a Service Plan adopted pursuant to Rule 12b-1 under the Act. Other
differences between the two Classes include the services offered to and the
expenses borne by each Class and certain voting rights.
(A) PORTFOLIO VALUATION: Investments are valued at amortized cost, which
has been determined by the Fund's Board of Trustees to represent the fair
value of the Fund's investments.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Interest
income is recognized on the accrual basis. Cost of investments represents
amortized cost.
The Fund may enter into repurchase agreements with financial
institutions, deemed to be creditworthy by the Manager, subject to the
seller's agreement to repurchase and the Fund's agreement to resell such
securities at a mutually agreed upon price. Securities purchased subject to
repurchase agreements are deposited with the Fund's custodians and, pursuant
to the terms of the repurchase agreement, must have an aggregate market value
greater than or equal to the repurchase price plus accrued interest at all
times. If the value of the underlying securities falls below the value of the
repurchase price plus accrued interest, the Fund will require the seller to
deposit additional collateral by the next business day. If the request for
additional collateral is not met, or the seller defaults on its repurchase
obligation, the Fund maintains the right to sell the underlying securities at
market value and may claim any resulting loss against the seller.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends from investment income-net on each business day. Such dividends are
paid monthly. Dividends from net realized capital gain are normally declared
and paid annually, but the Fund may make distributions on a more frequent
basis to comply with the distribution requirements of the Internal Revenue
Code. To the extent that net realized capital gain can be offset by capital
loss carryovers, it is the policy of the Fund not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income and
excise taxes.
The Fund has an unused capital loss carryover of approximately $569,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to
DREYFUS CASH MANAGEMENT
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
January 31, 1995. The carryover does not include net realized securities
losses from November 1, 1994 through January 31, 1995 which are treated for
Federal income tax purposes as arising in fiscal 1996. If not applied,
$427,000 of the carryover expires in fiscal 1996, $11,000 expires in fiscal
1999, and $131,000 expires in 2003.
At January 31, 1995, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
NOTE 2--MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .20 of 1% of the average
daily value of the Fund's net assets and is payable monthly.
The Agreement provides for an expense reimbursement from the Manager
should the Fund's aggregate expenses, exclusive of taxes, brokerage, interest
on borrowings and extraordinary expenses, exceed 1 1/2% of the average value
of the Fund's net assets for any full fiscal year.
Currently, due to an undertaking, the Manager, and not the Fund, is
liable for all expenses of the Fund (excluding certain expenses as described
above) other than management fee, and with respect to the Fund's Class B
shares, Rule 12b-1 Service Plan expenses.
The Manager may modify the existing undertaking provided that the Fund's
shareholders are given 90 days prior notice.
(B) On August 5, 1994, Fund shareholders approved a revised Class B
Service Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Pursuant to
the Plan, effective August 24, 1994, the Fund reimburses the Distributor for
distributing the Fund's Class B shares. The Fund also pays The Dreyfus
Corporation and Dreyfus Service Corporation, and their affiliates
(collectively "Dreyfus") for advertising and marketing relating to the Fund's
Class B shares and for providing certain services relating to Class B sharehol
der accounts, such as answering shareholder inquiries regarding the Fund and
providing reports and other information, and services related to the
maintenance of shareholder accounts, at an aggregate annual rate of .25 of 1%
of the value of the Fund's Class B shares average daily net assets. Both the
Distributor and Dreyfus may pay one or more Service Agents a fee in respect
of the Funds' Class B shares owned by the shareholders with whom the Service
Agent has a servicing relationship or for whom the Service Agent is the
dealer or holder of record. Both the Distributor and Dreyfus determine the
amounts, if any, to be paid to the Service Agents under the Plan and the
basis on which such payments are made. The fees payable under the Plan are
payable without regard to actual expenses incurred.
During the period form February 1, 1994, through August 23, 1994, the
Fund's Service Plan ("prior Class B Service Plan") provided that the Fund pay
Dreyfus Service Corporation at an annual rate of .25 of 1% of the value of
the Fund's Class B shares average daily net assets, for costs and expenses in
connection with advertising, marketing and distributing Class B shares and
for providing certain services to holders of Class B shares. Dreyfus Service
Corporation made payments to one or more Service Agents based on the value of
the Fund's Class B shares owned by clients of the Service Agent.
During the year ended January 31, 1995, $96,113 was charged to the Fund
pursuant to the Plan and $136,486 was charged to the Fund pursuant to the
Prior Class B Service Plan.
(C) Prior to August 24, 1994, certain officers and trustees of the Fund
were "affiliated persons," as defined in the Act, of the Manager and/or
Dreyfus Service Corporation. Each trustee who is not an "affiliated person"
receives an annual fee of $3,000 and an attendance fee of $500 per meeting.
DREYFUS CASH MANAGEMENT
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
DREYFUS CASH MANAGEMENT
We have audited the accompanying statement of assets and liabilities of
Dreyfus Cash Management, including the statement of investments, as of
January 31, 1995, and the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in
the period then ended, and financial highlights for each of the years
indicated therein. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of January 31, 1995 by correspondence with the custodians
and brokers. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Dreyfus Cash Management at January 31, 1995, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each
of the indicated years, in conformity with generally accepted accounting
principles.
(Logo Signature)
New York, New York
March 7, 1994
