LANDMARK MULTI-STATE TAX FREE FUNDS, 485BPOS, 1996-12-17

LANDMARK MULTI-STATE TAX FREE FUNDS
485BPOS, 1996-12-17

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As filed with the Securities and Exchange Commission on December 17, 1996

File Nos. 2-99977
811-4596

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER

THE SECURITIES ACT OF 1933

POST-EFFECTIVE AMENDMENT NO. 19

AND

REGISTRATION STATEMENT UNDER

THE INVESTMENT COMPANY ACT OF 1940

AMENDMENT NO. 25

LANDMARK MULTI-STATE TAX FREE FUNDS*
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

6 ST. JAMES AVENUE, BOSTON, MASSACHUSETTS 02116
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 617-423-1679

PHILIP W. COOLIDGE, 6 ST. JAMES AVENUE, BOSTON, MASSACHUSETTS 02116
(NAME AND ADDRESS OF AGENT FOR SERVICE)

COPY TO:
ROGER P. JOSEPH, BINGHAM, DANA & GOULD LLP, 150 FEDERAL STREET,
BOSTON, MASSACHUSETTS 02110

It is proposed that this filing will become effective on January 2,
1997, pursuant to paragraph (b) of Rule 485.

Pursuant to Rule 24f-2, Registrant has registered an indefinite number
of its Shares of Beneficial Interest (without par value) under the Securities
Act of 1933 and has filed a Rule 24f-2 Notice on October 17, 1996 for
Registrant's fiscal year ended August 31, 1996.

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* Relating to shares of beneficial interest of Landmark New York Tax Free
Reserves and Landmark Connecticut Tax Free Reserves.

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LANDMARK MULTI-STATE TAX FREE FUNDS
(LANDMARK NEW YORK TAX FREE RESERVES AND
LANDMARK CONNECTICUT TAX FREE RESERVES)
REGISTRATION STATEMENT ON FORM N-1A

CROSS REFERENCE SHEET

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N-1A
ITEM NO. N-1A ITEM LOCATION
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PART A PROSPECTUS
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<S> <C> <C>
Item 1. Cover Page............................................. Cover Page
Item 2. Synopsis............................................... Expense Summary
Item 3. Condensed Financial Information........................ Condensed Financial Information
Item 4. General Description of Registrant...................... Investment Information; General
Information; Appendix
Item 5. Management of the Fund................................. Management; Expenses
Item 5A. Management's Discussion of Fund Performance............ Not Applicable
Item 6. Capital Stock and Other Securities..................... General Information; Voting and Other
Rights; Purchases; Exchanges;
Redemptions; Net Income and
Distributions; Tax Matters
Item 7. Purchase of Securities Being Offered................... Purchases; Exchanges; Redemptions
Item 8. Redemption or Repurchase............................... Purchases; Exchanges; Redemptions
Item 9. Pending Legal Proceedings.............................. Not Applicable

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STATEMENT OF
ADDITIONAL
PART B INFORMATION
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<S> <C> <C>
Item 10. Cover Page............................................. Cover Page
Item 11. Table of Contents...................................... Cover Page
Item 12. General Information and History........................ The Fund
Item 13. Investment Objectives and Policies..................... Investment Objectives, Policies and
Restrictions
Item 14. Management of the Fund................................. Management
Item 15. Control Persons and Principal Holders of Securities.... Management
Item 16. Investment Advisory and Other Services................. Management
Item 17. Brokerage Allocation and Other Practices............... Portfolio Transactions
Item 18. Capital Stock and Other Securities..................... Description of Shares, Voting Rights and
Liabilities
Item 19. Purchase, Redemption and Pricing of Securities
Being Offered.......................................... Description of Shares, Voting Rights and
Liabilities; Determination of Net Asset
Value
Item 20. Tax Status............................................. Certain Additional Tax Matters
Item 21. Underwriters........................................... Management
Item 22. Calculation of Performance Data........................ Performance Information
Item 23. Financial Statements................................... Independent Accountants and Financial
Statements
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PART C Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration Statement.

<PAGE>

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PROSPECTUS
JANUARY 2, 1997
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LANDMARK NEW YORK TAX FREE RESERVES
(A member of the Landmark(SM) Family of Funds)

This Prospectus describes Landmark New York Tax Free Reserves, a mutual fund in
the Landmark Family of Funds. The Fund is a type of mutual fund commonly
referred to as a "triple tax-exempt money market fund." Citibank, N.A. is the
investment adviser of the Fund.

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REMEMBER THAT SHARES OF THE FUND:

[] ARE NOT INSURED BY THE FDIC OR ANY OTHER AGENCY

[] ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, CITIBANK
OR ANY OF ITS AFFILIATES

[] ARE SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL
AMOUNT INVESTED

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INVESTMENTS IN THE FUND ARE NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT. THE FUND ATTEMPTS TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER
SHARE; HOWEVER, THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO DO SO.

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This Prospectus concisely sets forth information about the Fund that a
prospective investor should know before investing. A Statement of Additional
Information dated January 2, 1997 (and incorporated by reference in this
Prospectus) has been filed with the Securities and Exchange Commission. Copies
of the Statement of Additional Information may be obtained without charge, and
further inquiries about the Fund may be made, by contacting the investor's
shareholder servicing agent (see inside back cover for address and phone
number).

THE FUND INVESTS PRIMARILY IN NEW YORK MUNICIPAL OBLIGATIONS; AS A RESULT,
AN INVESTMENT IN THE FUND MAY BE RISKIER THAN AN INVESTMENT IN A MORE
DIVERSIFIED MONEY MARKET FUND.

TABLE OF CONTENTS
Prospectus Summary ....................................................... 2
Expense Summary .......................................................... 3
Condensed Financial Information .......................................... 4
Investment Information ................................................... 5
Risk Considerations ...................................................... 6
Valuation of Shares ...................................................... 7
Purchases ................................................................ 8
Exchanges ................................................................ 8
Redemptions .............................................................. 9
Net Income and Distributions ............................................. 9
Management ...............................................................10
Tax Matters ..............................................................12
Performance Information ..................................................13
General Information ......................................................13
Appendix A -- Permitted Investments and
Investment Practices ...................................................14
Appendix B -- Ratings of Municipal Obligations ...........................16
Appendix C -- Taxable Equivalent Yield Tables ............................19

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.

INVESTORS SHOULD READ THIS PROSPECTUS AND RETAIN IT FOR FUTURE REFERENCE.
<PAGE>
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PROSPECTUS SUMMARY
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See the body of the Prospectus for more information on the topics discussed
in this summary.

THE FUND: This Prospectus describes Landmark New York Tax Free Reserves, a
triple tax-exempt money market mutual fund.

INVESTMENT OBJECTIVES AND POLICIES: To provide its shareholders with high levels
of current income exempt from federal, New York State and New York City personal
income taxes, preservation of capital and liquidity. The Fund invests primarily
in short-term, high quality obligations issued by state and municipal
governments and by other qualifying issuers, the interest on which is exempt
from federal income taxes ("Municipal Obligations"), including obligations of
the State of New York and its political subdivisions. There can be no assurance
that the Fund will achieve its objectives.

INVESTMENT ADVISER AND DISTRIBUTOR: Citibank, N.A. ("Citibank" or the
"Adviser"), a wholly-owned subsidiary of Citicorp, is the investment adviser.
Citibank and its affiliates manage more than $83 billion in assets worldwide.
The Landmark Funds Broker-Dealer Services, Inc. ("LFBDS" or the "Distributor")
is the distributor of shares of the Fund. See "Management."

PURCHASES AND REDEMPTIONS: Customers of Shareholder Servicing Agents may
purchase and redeem shares of the Fund on any Business Day. See "Purchases"
and "Redemptions."

PRICING: Shares of the Fund are purchased and redeemed at net asset value
(normally $1.00 per share) without a sales load or redemption fees. While
there are no sales loads, shares of the Fund are subject to a distribution
fee. See "Purchases," "Redemptions" and "Management -- Distribution
Arrangements."

EXCHANGES: Shares may be exchanged for shares of most other Landmark Funds.
See "Exchanges."

DIVIDENDS: Declared daily and distributed monthly. Shares begin accruing
dividends on the day they are purchased. See "Net Income and Distributions."

REINVESTMENT: Dividends may be received either in cash or in Fund shares at
net asset value, subject to the policies of a shareholder's Shareholder
Servicing Agent. See "Net Income and Distributions."

WHO SHOULD INVEST: The Fund is designed for investors seeking liquidity,
preservation of capital and current income exempt from federal income taxes, and
for whom long-term capital growth is not a consideration. The Fund is also
designed for investors seeking income exempt from New York State and New York
City personal income taxes and who are willing to bear the increased risk of an
investment portfolio which is concentrated in obligations of the State of New
York and its political subdivisions. See "Investment Information."

RISK FACTORS: There can be no assurance that the Fund will achieve its
investment objectives. In addition, while the Fund intends to maintain a stable
net asset value of $1.00 per share, there can be no assurance that the Fund will
be able to do so. Investments in high quality, short-term instruments may, in
many circumstances, result in a lower yield than would be available from
investments with a lower quality or a longer term.

The Fund is a non-diversified mutual fund, which means that it is not
subject to any statutory restrictions under the Investment Company Act of 1940
limiting the investment of its assets in one or relatively few issuers. The Fund
may therefore invest a relatively high percentage of its assets in the
obligations of a limited number of issuers. Also, the Fund may invest 25% or
more of its assets in securities of issuers in similar or related industries or
issuers located in the same state. Under normal circumstances, the Fund invests
primarily in obligations of the State of New York and its political
subdivisions. As a result, the Fund is more susceptible to any single economic,
political or regulatory occurrence.

Certain investment practices also may entail special risks. Prospective
investors should read "Risk Considerations" for more information about risk
factors.
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EXPENSE SUMMARY
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The following table summarizes estimated shareholder transaction and annual
operating expenses for shares of the Fund.* For more information on costs and
expenses, see "Management" and "General Information -- Expenses."

---------
SHAREHOLDER TRANSACTION EXPENSES ................................ None
ANNUAL FUND OPERATING EXPENSES, AFTER FEE WAIVERS AND
REIMBURSEMENTS (AS A PERCENTAGE OF AVERAGE NET ASSETS):
Investment Management Fee(1)..................................... .16%
12b-1 Fees(1)(2) ................................................ .03%
Other Expenses
Administrative Services Fees(1) ............................... .15%
Shareholder Servicing Agent Fees .............................. .25%
Other Operating Expenses ...................................... .06%
---
Total Fund Operating Expenses(1) ................................ .65%
===

* This table is intended to assist investors in understanding the various
costs and expenses that a shareholder of the Fund will bear, either directly
or indirectly. The table shows the fees paid by the Fund to various service
providers after giving effect to expected voluntary partial fee waivers.
There can be no assurance that the fee waivers and reimbursements reflected
in the table will continue at their present levels.
(1) Absent fee waivers and reimbursements, investment management fees, 12b-1
fees, administrative services fees and total fund operating expenses would
be .20%, .20%, .25% and .96%, respectively.
(2) Fees under the 12b-1 distribution plan are asset-based sales charges.
Long-term shareholders in the Fund could pay more in sales charges than the
economic equivalent of the maximum front-end sales charges permitted by the
National Association of Securities Dealers, Inc.

EXAMPLE: A shareholder of the Fund would pay the following expenses on a
$1,000 investment, assuming redemption at the end of each period indicated
below:

ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
------------------------------------------------------------
$7 $21 $36 $81

The Example assumes a 5% annual return and that all dividends are reinvested,
and expenses are based on the Fund's fiscal year ended August 31, 1996, after
waivers and reimbursements. If waivers and reimbursements were not in place, the
amounts in the Example would be $10, $31, $53 and $118, respectively. The
assumption of a 5% annual return is required by the Securities and Exchange
Commission for all mutual funds, and is not a prediction of the Fund's future
performance. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES OF THE FUND. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE
SHOWN.

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CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------

The following table provides condensed financial information about the Fund for
the periods indicated. This information should be read in conjunction with the
financial statements appearing in the Fund's Annual Report to Shareholders,
which are incorporated by reference in the Statement of Additional Information.
The financial statements and notes, as well as the table below, covering periods
through August 31, 1996 have been audited by Deloitte & Touche LLP, independent
certified public accountants, whose report is included in the Fund's Annual
Report. Copies of the Annual Report may be obtained without charge from an
investor's Shareholder Servicing Agent (see inside of back cover for address and
phone number).

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FINANCIAL HIGHLIGHTS

YEAR ENDED AUGUST 31,
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
beginning of period $1.00000 $1.00000 $1.00000 $1.00000 $1.00000 $1.00000 $1.00000 $1.00000 $1.00000 $1.00000
Net investment income 0.02936 0.03136 0.01954 0.01858 0.02914 0.04211 0.05187 0.05012 0.03969 0.03477
Dividends from net
investment income . (0.02936) (0.03136) (0.01954) (0.01858) (0.02914) (0.04211) (0.05187) (0.05012) (0.03969) (0.03477)
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Net Asset Value,
end of period ..... $1.00000 $1.00000 $1.00000 $1.00000 $1.00000 $1.00000 $1.00000 $1.00000 $1.00000 $1.00000
======== ======== ======== ======== ======== ======== ======== ======== ======== ========

RATIOS/SUPPLEMENTAL DATA:
Net assets, end of
period (000's
omitted) .......... $941,691 $767,129 $684,687 $607,992 $675,238 $586,720 $622,820 $380,539 $349,677 $293,008
Ratio of expenses to
average net assets . 0.65% 0.65% 0.65% 0.65% 0.65% 0.64% 0.66% 0.80% 0.80% 0.80%
Ratio of net
investment income
to average net
assets ............ 2.92% 3.15% 1.96% 1.86% 2.88% 4.21% 5.18% 5.09% 3.97% 3.49%
Total return ........ 2.98% 3.18% 1.97% 1.87% 2.94% 4.29% 5.29% 5.17% 4.03% 3.54%

Note: If agents of the Fund had not voluntarily waived all or a portion of their fees for the periods indicated, the ratios and net
investment income per share would have been as follows:

Net investment
income per share .. $0.02725 $0.02917 $0.01715 $0.01628 $0.02691 $0.04001 $0.04947 $0.04914 $0.03889 $0.03387
RATIOS:
Expenses to average
net assets ........ 0.86% 0.87% 0.88% 0.88% 0.87% 0.85% 0.89% 0.90% 0.88% 0.89%
Net investment
income to average
net assets ........ 2.71% 2.93% 1.72% 1.63% 2.66% 4.00% 4.94% 4.99% 3.89% 3.40%
</TABLE>

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INVESTMENT INFORMATION
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INVESTMENT OBJECTIVES: The investment objectives of the Fund are to provide its
shareholders with high levels of current income exempt from federal, New York
State and New York City personal income taxes, preservation of capital and
liquidity.

The investment objectives of the Fund may not be changed without approval by
the Fund's shareholders. Of course, there can be no assurance that the Fund will
achieve its investment objectives.

INVESTMENT POLICIES: The Fund seeks its objectives by investing primarily in
short-term, high quality fixed rate and variable rate obligations issued by or
on behalf of states and municipal governments and their authorities, agencies,
instrumentalities and political subdivisions and by other qualifying issuers,
the interest on which is exempt from federal income taxes (these securities are
referred to as "Municipal Obligations"). As a fundamental policy, the Fund
invests at least 80% of its assets, under normal circumstances, in the following
types of Municipal Obligations and in participation interests in these
obligations issued by banks, insurance companies or other financial institutions
("Participation Interests"):

(1) Municipal bonds that at the date of purchase are rated Aa or better by
Moody's Investors Service, Inc. ("Moody's") or AA or better by Standard &
Poor's Rating Group ("S&P") or Fitch Investors Service, Inc. ("Fitch"), or
are unrated but are of comparable quality as determined by the Adviser on
the basis of a credit evaluation of the obligor, or of the bank issuing the
Participation Interest or guarantee of the bonds, or of any insurance issued
in support of the bonds or the Participation Interest;

(2) Municipal notes that at the date of purchase are rated MIG2/VMIG2 or better
by Moody's, SP-2 or better by S&P or F-2 or better by Fitch, or are unrated
but are of comparable quality as determined by the Adviser; and

(3) Municipal commercial paper that at the date of purchase is rated Prime-2 or
better by Moody's, A-2 or better by S&P or F-2 or better by Fitch, or is
unrated but is of comparable quality as determined by the Adviser.

See Appendix A for an explanation of Municipal Obligations and Appendix B
for an explanation of ratings of Municipal Obligations.

Under normal circumstances, the Fund invests at least 65% of its assets in
Municipal Obligations the interest on which is exempt from federal, New York
State and New York City personal income taxes (these securities are referred to
as "New York Municipal Obligations"). The Fund is a "triple tax-exempt money
market fund." New York Municipal Obligations include Municipal Obligations of
the State of New York and its political subdivisions, Puerto Rico and other U.S.
territories and their political subdivisions and other qualifying issuers. To
the extent that acceptable New York Municipal Obligations are not available to
the Fund, the Fund may purchase Municipal Obligations issued by issuers in other
states. The interest on these securities will be subject to New York State and
New York City personal income taxes. BECAUSE THE FUND INVESTS PRIMARILY IN NEW
YORK MUNICIPAL OBLIGATIONS, AN INVESTMENT IN THE FUND MAY BE RISKIER THAN AN
INVESTMENT IN A MORE DIVERSIFIED MONEY MARKET FUND.

Although the Fund attempts to invest all of its assets in Municipal
Obligations, the Fund may invest up to 20% of its assets in taxable securities
(such as U.S. Government obligations or certificates of deposit of domestic
banks). Any taxable securities in which the Fund invests are of comparable
quality to the Municipal Obligations in which the Fund invests.

In determining the tax status of interest on Municipal Obligations, the
Adviser relies on opinions of bond counsel who may be counsel to the issuer.

CERTAIN ADDITIONAL INVESTMENT POLICIES:
$1.00 NET ASSET VALUE. The Fund employs specific investment policies and
procedures designed to maintain a constant net asset value of $1.00 per share.
There can be no assurance, however, that a constant net asset value will be
maintained on a continuing basis. See "Net Income and Distributions."

90-DAY AVERAGE MATURITY. All of the Fund's investments mature in 397 days or
less from the date of purchase, have a variable rate of interest adjusted no
less frequently than every 397 days, or are purchased pursuant to a repurchase
agreement which provides for repurchase by the seller within 397 days from the
date of purchase. The average maturity of the Fund's investments (on a
dollar-weighted basis) is 90 days or less. All of the Fund's investments are
"eligible securities" within the meaning of Rule 2a-7 under the 1940 Act and are
determined by the Adviser to present minimal credit risks. Investment in high
quality, short-term instruments may, in many circumstances, result in a lower
yield than would be available from investment in instruments with a lower
quality or a longer term.

PERMITTED INVESTMENTS. Uninvested cash may be held temporarily for the Fund
pending investment. The Fund may borrow from banks up to 15% of its total assets
for temporary or emergency purposes. For more information regarding permitted
investments and investment practices, see Appendix A. The Fund will not
necessarily invest or engage in each of the investments and investment practices
in Appendix A but reserves the right to do so.

INVESTMENT IN ANOTHER INVESTMENT COMPANY. The Fund may, in the future, seek
its investment objectives by investing all of its investable assets in an
open-end management investment company having the same investment objectives and
policies and substantially the same investment restrictions as those of the
Fund. This investment would be made only with the prior approval of the Fund's
shareholders and only if the Fund's Trustees believe that the aggregate per
share expenses of the Fund and such other investment company would be less than
or approximately equal to the expenses which the Fund would incur if the assets
of the Fund were to continue to be invested directly in portfolio securities.

INVESTMENT RESTRICTIONS. The Statement of Additional Information contains a
list of specific investment restrictions which govern the Fund's investment
policies. Except as otherwise indicated, the Fund's investment restrictions and
policies may be changed without shareholder approval. If a percentage or rating
restriction (other than a restriction as to borrowing) is adhered to at the time
an investment is made, a later change in percentage or rating resulting from
changes in the Fund's securities will not be a violation of policy.

BROKERAGE TRANSACTIONS. The primary consideration in placing the Fund's
security transactions with broker-dealers for execution is to obtain and
maintain the availability of execution at the most favorable prices and in the
most effective manner possible.

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RISK CONSIDERATIONS
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The risks of investing in the Fund vary depending upon the nature of the
securities held, and the investment practices employed, on its behalf. Certain
of these risks are described below.

NON-DIVERSIFIED STATUS. The Fund is a non-diversified mutual fund. This
means that it is not subject to any statutory restrictions under the 1940 Act
limiting the investment of its assets in one or relatively few issuers (although
certain diversification requirements are imposed by the Internal Revenue Code).
Since the Fund may invest a relatively high percentage of its assets in the
obligations of a limited number of issuers, the value of shares of the Fund may
be more susceptible to any single economic, political or regulatory occurrence
than the value of shares of a diversified mutual fund would be. The Fund also
may invest 25% or more of its assets in securities the issuers of which are
located in the same state or the interest on which is paid from revenues of
similar type projects or that are otherwise related in such a way that a single
economic, business or political development or change affecting one of the
securities would also affect other securities. Investors should consider the
greater risk inherent in these policies when compared with a more diversified
mutual fund.

"CONCENTRATION" IN PARTICIPATION INTERESTS. The Fund may invest more than
25% of its assets in Participation Interests in Municipal Obligations which are
secured by bank letters of credit or guarantees. Banks are subject to extensive
governmental regulation which may limit both the amounts and types of loans and
other financial commitments which may be made and interest rates and fees which
may be charged. The profitability of this industry is largely dependent upon the
availability and cost of capital funds for the purpose of financing lending
operations under prevailing money market conditions. Also, general economic
conditions play an important part in the operation of this industry and exposure
to credit losses arising from possible financial difficulties of borrowers might
affect a bank's ability to meet its obligations under a letter of credit or
guarantee. For additional information concerning variable rate instruments and
Participation Interests, see Appendix A.

INVESTMENT PRACTICES. Certain of the investment practices employed for the
Fund may entail certain risks. See Appendix A.

RISKS AFFECTING INVESTMENTS IN NEW YORK MUNICIPAL OBLIGATIONS. The Fund
intends to invest a high proportion of its assets in New York Municipal
Obligations. Payment of interest and principal of these Municipal Obligations is
dependent on the continuing ability of issuers in New York and obligors of
state, municipal and public authority debt obligations to meet their
obligations. Investors in the Fund should consider the greater risks inherent in
the Fund's concentration in these obligations when compared with the safety that
comes with a less geographically concentrated investment portfolio. The Adviser
believes that by maintaining the Fund's investment portfolio in liquid,
short-term high quality New York Municipal Obligations, including Participation
Interests and other variable rate instruments that have high quality credit
support from banks, insurance companies or other financial institutions, the
Fund is somewhat insulated from the credit risks that may exist for long-term
New York Municipal Obligations.

Investors should be aware of special economic factors affecting New York
before investing in the Fund. While these factors are summarized below, a more
detailed description is set forth in the Statement of Additional Information and
the Appendix thereto (see "Investment Objectives, Policies and Restrictions --
Risk Factors Affecting Investment in New York Municipal Obligations" in the
Statement of Additional Information). The information below and in the Statement
of Additional Information is a summary of certain information contained in
official statements of issuers of New York Municipal Obligations and does not
purport to be complete. The Fund is not responsible for the accuracy or
timeliness of this information.

New York State and other issuers of New York Municipal Obligations over the
past several years have experienced financial difficulties, which caused the
credit ratings of certain of their obligations to be downgraded by certain
rating agencies. There can be no assurance that credit ratings on obligations of
New York State, New York City and other New York Municipal Obligations will not
be downgraded again.

Investors also should compare the yield available on a portfolio of single
state issues with the yield of a more diversified portfolio including other
state issues before making an investment decision. For a comparison of yields on
Municipal Obligations and taxable securities, see Appendix C.

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VALUATION OF SHARES
- --------------------------------------------------------------------------------

Net asset value per share of the Fund is determined each day the New York
Stock Exchange is open for trading (a "Business Day"). This determination is
made once each day as of 12:00 noon, Eastern time, by adding the market value of
all of the Fund's securities and other assets, then subtracting the liabilities
charged to the Fund, and then dividing the result by the number of the Fund's
outstanding shares. The Fund attempts to stabilize the net asset value of its
shares at $1.00 by valuing portfolio securities using the amortized cost method;
however, there can be no assurance that the Fund's net asset value will always
remain at $1.00 per share. The net asset value per share is effective for orders
received and accepted by the Distributor prior to its calculation.

The amortized cost method involves valuing a security at its cost and
thereafter assuming a constant amortization to maturity of any discount or
premium. Although the amortized cost method provides certainty in valuation, it
may result in periods during which the stated value of a security is higher or
lower than the price the Fund would receive if the security were sold.

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PURCHASES
- --------------------------------------------------------------------------------

Shares of the Fund are offered continuously and may be purchased on any
Business Day without a sales load at the shares' net asset value next determined
after an order is transmitted to and accepted by the Distributor. Shares may be
purchased either through a securities broker which has a sales agreement with
the Distributor or through a bank or other financial institution which has an
agency agreement with the Distributor. Shares of the Fund are being offered
exclusively to customers of a Shareholder Servicing Agent (i.e., a financial
institution, such as a federal or state-chartered bank, trust company, savings
and loan association or savings bank, or a securities broker, that has entered
into a shareholder servicing agreement concerning the Fund). The Fund and the
Distributor reserve the right to reject any purchase order and to suspend the
offering of Fund shares for a period of time.

While there is no sales load imposed on shares of the Fund, the Distributor
receives fees from the Fund pursuant to a Distribution Plan. See "Management --
Distribution Arrangements."

Each shareholder's account is established and maintained by his or her
Shareholder Servicing Agent, which will be the shareholder of record of the
Fund. Each Shareholder Servicing Agent may offer services to its customers such
as pre-authorized or automatic purchase and redemption programs and "sweep"
checking programs, and may establish its own terms, conditions and charges with
respect to services it offers to its customers. Charges for these services may
include fixed annual fees and account maintenance fees. The effect of any of
these fees will be to reduce the net return on the investment of customers of
that Shareholder Servicing Agent.

Shareholder Servicing Agents will not transmit purchase orders to the
Distributor until they have received the purchase price in federal or other
immediately available funds. If Fund shares are purchased by check, there will
be a delay (usually not longer than two business days) in transmitting the
purchase order until the check is converted into federal funds.

From time to time the Distributor may make payments for distribution and/ or
shareholder servicing activities out of its past profits and other sources
available to it. The Distributor may also make payments for marketing,
promotional or related expenses to dealers who engage in marketing efforts on
behalf of the Fund. The amounts of these payments will be determined by LFBDS in
its sole discretion and may vary among different dealers.

- --------------------------------------------------------------------------------
EXCHANGES
- --------------------------------------------------------------------------------

Shares of the Fund may be exchanged for shares of the other Landmark Funds
that are made available by a shareholder's Shareholder Servicing Agent, or may
be acquired through an exchange of shares of those funds. No initial sales
charge is imposed on shares being acquired through an exchange unless the shares
being acquired are subject to a sales charge that is greater than the current
sales charge of the Fund (in which case an initial sales charge will be imposed
at a rate equal to the difference). Contingent deferred sales charges may apply
to redemptions of some shares of other Landmark Funds disposed of or acquired
through an exchange.

Shareholders must place exchange orders through their Shareholder Servicing
Agents, and may do so by telephone if their account applications so permit. For
more information on telephone transactions see "Redemptions." All exchanges will
be effected based on the relative net asset values per share next determined
after the exchange order is received by the Distributor. See "Valuation of
Shares." Shares of the Fund may be exchanged only after payment in federal funds
for the shares has been made.

This exchange privilege may be modified or terminated at any time, upon at
least 60 days' notice when such notice is required by SEC rules, and is
available only in those jurisdictions where such exchanges legally may be made.
See the Statement of Additional Information for further details. Before making
any exchange, shareholders should contact their Shareholder Servicing Agents to
obtain more information and prospectuses of the Landmark Funds to be acquired
through the exchange.

- --------------------------------------------------------------------------------
REDEMPTIONS
- --------------------------------------------------------------------------------

Fund shares may be redeemed at their net asset value (normally $1.00 per
share) next determined after a redemption request in proper form is received by
a shareholder's Shareholder Servicing Agent. Shareholders may redeem shares of
the Fund only by authorizing their Shareholder Servicing Agents to redeem such
shares on their behalf through the Distributor.

REDEMPTIONS BY MAIL. Shareholders may redeem Fund shares by sending written
instructions in proper form (as determined by a shareholder's Shareholder
Servicing Agent) to their Shareholder Servicing Agents. Shareholders are
responsible for ensuring that a request for redemption is in proper form.

REDEMPTIONS BY TELEPHONE. Shareholders may redeem or exchange Fund shares by
telephone, if their account applications so permit, by calling their Shareholder
Servicing Agents. During periods of drastic economic or market changes or severe
weather or other emergencies, shareholders may experience difficulties
implementing a telephone exchange or redemption. In such an event, another
method of instruction, such as a written request sent via an overnight delivery
service, should be considered. The Fund and each Shareholder Servicing Agent
will employ reasonable procedures to confirm that instructions communicated by
telephone are genuine. These procedures may include recording of the telephone
instructions and verification of a caller's identity by asking for his or her
name, address, telephone number, Social Security number, and account number. If
these or other reasonable procedures are not followed, the Fund or the
Shareholder Servicing Agent may be liable for any losses to a shareholder due to
unauthorized or fraudulent instructions. Otherwise, the shareholder will bear
all risk of loss relating to a redemption or exchange by telephone.

PAYMENT OF REDEMPTIONS. The proceeds of a redemption are paid in federal
funds normally on the Business Day the redemption is effected, but in any event
within seven days. If a shareholder requests redemption of shares which were
purchased recently, the Fund may delay payment until it is assured that good
payment has been received. In the case of purchases by check, this can take up
to ten days. See "Determination of Net Asset Value" in the Statement of
Additional Information regarding the Fund's right to pay the redemption price in
kind with securities (instead of cash).

Questions about redemption requirements should be referred to the
shareholder's Shareholder Servicing Agent. The right of any shareholder to
receive payment with respect to any redemption may be suspended or the payment
of the redemption price postponed during any period in which the New York Stock
Exchange is closed (other than weekends or holidays) or trading on the Exchange
is restricted or if an emergency exists.

- --------------------------------------------------------------------------------
NET INCOME AND DISTRIBUTIONS
- --------------------------------------------------------------------------------

The Fund's net income is determined each Business Day (and on such other
days as is necessary in order to comply with the 1940 Act). This determination
is made once during each such day as of 12:00 noon, Eastern time. Substantially
all the Fund's net income is declared as a dividend to shareholders of record at
the time of such determination. Shares begin accruing dividends on the day they
are purchased, and accrue dividends up to and including the day prior to
redemption. Dividends are distributed monthly on or prior to the last business
day of each month. Unless a shareholder elects to receive dividends in cash
(subject to the policies of the shareholder's Shareholder Servicing Agent),
dividends are distributed in the form of full and fractional additional Fund
shares at the rate of one share of the Fund for each one dollar of dividend
income.

Since the Fund's net income is declared as a dividend each time the Fund's
net income is determined, the net asset value per share of the Fund is expected
to remain at $1.00 per share immediately after each such determination and
dividend declaration. Any increase in the value of a shareholder's investment in
the Fund, representing the reinvestment of dividend income, is reflected by an
increase in the number of shares of the Fund in the shareholder's account.

Because of the short-term maturities of the portfolio investments of the
Fund, the Fund does not expect to realize long-term capital gains or losses. Any
net realized short-term capital gains will be declared and distributed to the
Fund's shareholders annually after the close of the Fund's fiscal year.
Distributions of short-term capital gains are taxable to shareholders as
described in "Tax Matters." Any realized short-term capital losses will be
offset against short-term capital gains or, to the extent possible, utilized as
capital loss carryover. The Fund may distribute short-term capital gains more
frequently than annually, reduce shares to reflect capital losses or make
distributions of capital if necessary in order to maintain the Fund's net asset
value of $1.00 per share.

It is expected that the Fund will have a positive net income at the time of
each determination thereof. If for any reason the Fund's net income is a
negative amount, which could occur, for instance, upon default by an issuer of a
portfolio security, the Fund would first offset the negative amount with respect
to each shareholder account from the dividends declared during the month with
respect to those accounts. If and to the extent that negative net income exceeds
declared dividends at the end of the month, the Fund would reduce the number of
outstanding Fund shares by treating each shareholder as having contributed to
the capital of the Fund that number of full and fractional shares in his or her
account which represents his or her share of the amount of such excess. Each
shareholder would be deemed to have agreed to such contribution in these
circumstances by his or her investment in the Fund.

- --------------------------------------------------------------------------------
MANAGEMENT
- --------------------------------------------------------------------------------

TRUSTEES AND OFFICERS: The Fund is supervised by its Board of Trustees. A
majority of the Trustees are not affiliated with the Adviser. More information
on the Trustees and officers of the Fund appears under "Management" in the
Statement of Additional Information.

INVESTMENT ADVISER: CITIBANK. The Fund draws on the strength and experience of
Citibank. Citibank offers a wide range of banking and investment services to
customers across the United States and throughout the world, and has been
managing money since 1822. Its portfolio managers are responsible for investing
in money market, equity and fixed income securities. Citibank and its affiliates
manage more than $83 billion in assets worldwide. Citibank is a wholly-owned
subsidiary of Citicorp.

Citibank manages the assets of the Fund pursuant to an Investment Advisory
Agreement. Subject to policies set by the Fund's Trustees, Citibank makes
investment decisions for the Fund.

ADVISORY FEES. For its services under the Investment Advisory Agreement, the
Adviser receives investment advisory fees, which are accrued daily and paid
monthly, of 0.20% of the Fund's average daily net assets on an annualized basis
for the Fund's then-current fiscal year. The Adviser has voluntarily agreed to
waive a portion of its investment advisory fee.

For the fiscal year ended August 31, 1996, the investment advisory fees paid
to Citibank, after waiver, were 0.12% of the Fund's average daily net assets for
that fiscal year.

BANKING RELATIONSHIPS. Citibank and its affiliates may have deposit, loan
and other relationships with the issuers of securities purchased on behalf of
the Fund, including outstanding loans to such issuers which may be repaid in
whole or in part with the proceeds of securities so purchased. Citibank has
informed the Fund that, in making its investment decisions, it does not obtain
or use material inside information in the possession of any division or
department of Citibank or in the possession of any affiliate of Citibank.

BANK REGULATORY MATTERS. The Glass-Steagall Act prohibits certain financial
institutions, such as Citibank, from underwriting securities of open-end
investment companies, such as the Fund. Citibank believes that its services
under the Investment Advisory Agreement and the activities performed by it or
its affiliates as Shareholder Servicing Agents and sub-administrator are not
underwriting and are consistent with the Glass-Steagall Act and other relevant
federal and state laws. However, there is no controlling precedent regarding the
performance of the combination of investment advisory, shareholder servicing and
sub-administrative activities by banks. State laws on this issue may differ from
applicable federal law and banks and financial institutions may be required to
register as dealers pursuant to state securities laws. Changes in either federal
or state statutes or regulations, or in their interpretations, could prevent
Citibank or its affiliates from continuing to perform these services for the
Fund. If Citibank or its affiliates were to be prevented from acting as the
Adviser, sub-administrator or a Shareholder Servicing Agent, the Fund would seek
alternative means for obtaining these services. The Fund does not expect that
shareholders would suffer any adverse financial consequences as a result of any
such occurrence.

ADMINISTRATIVE SERVICES PLAN: The Fund has an Administrative Services Plan which
provides that the Fund may obtain the services of an administrator, a transfer
agent, a custodian, a fund accountant and one or more Shareholder Servicing
Agents, and may enter into agreements providing for the payment of fees for such
services. Under the Administrative Services Plan, the total of the fees paid to
the Fund's Administrator and Shareholder Servicing Agents and the distribution
fee paid to the Distributor (other than any fee concerning electronic or other
media advertising) may not exceed 0.60% of the Fund's average daily net assets
on an annualized basis for the Fund's then-current fiscal year. Within this
overall limitation, individual fees may vary. See "Administrator," "Shareholder
Servicing Agents" and "Transfer Agent, Custodian and Fund Accountant."

ADMINISTRATOR: LFBDS provides certain administrative services to the Fund under
an administrative services agreement. These administrative services include
providing general office facilities, supervising the overall administration of
the Fund, and providing persons satisfactory to the Board of Trustees to serve
as Trustees and officers of the Fund. These Trustees and officers may be
directors, officers or employees of LFBDS or its affiliates.

For these services, the Administrator receives fees accrued daily and paid
monthly of 0.25% of the average daily net assets of the Fund on an annualized
basis for the Fund's then-current fiscal year. However, the Administrator has
voluntarily agreed to waive a portion of the fees payable to it.

LFBDS is a wholly-owned subsidiary of Signature Financial Group, Inc.
"Landmark" is a service mark of LFBDS.

SUB-ADMINISTRATOR: Pursuant to a sub-administrative services agreement, Citibank
performs such sub-administrative duties for the Fund as from time to time are
agreed upon by Citibank and LFBDS. Citibank's compensation as sub-administrator
is paid by LFBDS.

SHAREHOLDER SERVICING AGENTS: The Fund has entered into separate shareholder
servicing agreements with each Shareholder Servicing Agent pursuant to which
that Shareholder Servicing Agent provides shareholder services, including
answering customer inquiries, assisting in processing purchase, exchange and
redemption transactions and furnishing Fund communications to shareholders. For
these services, each Shareholder Servicing Agent receives a fee from the Fund at
an annual rate of 0.25% of the average daily net assets of the Fund represented
by shares owned by investors for whom such Shareholder Servicing Agent maintains
a servicing relationship.

Some Shareholder Servicing Agents may impose certain conditions on their
customers in addition to or different from those imposed by the Fund, such as
requiring a minimum initial investment or charging their customers a direct fee
for their services. Each Shareholder Servicing Agent has agreed to transmit to
its customers who are shareholders of the Fund appropriate prior written
disclosure of any fees that it may charge them directly and to provide written
notice at least 30 days prior to imposition of any transaction fees.

TRANSFER AGENT, CUSTODIAN AND FUND ACCOUNTANT: State Street Bank and Trust
Company acts as transfer agent, dividend disbursing agent and custodian for the
Fund. State Street also provides fund accounting services to the Fund and
calculates the daily net asset value of the Fund.

DISTRIBUTION ARRANGEMENTS: LFBDS is the Distributor of the Fund's shares and
also serves as distributor for each of the other Landmark Funds and as a
Shareholder Servicing Agent for certain investors. As Distributor, LFBDS bears
the cost of compensating personnel involved in the sale of shares of the Fund
and bears all costs of travel, office expenses (including rent and overhead) and
equipment. In those states where LFBDS is not a registered broker-dealer, shares
of the Fund are sold through Signature Broker-Dealer Services, Inc., as dealer.

Under a plan of distribution for the Fund adopted in accordance with Rule
12b-1 under the 1940 Act (the "Plan"), the Fund pays the Distributor a fee at an
annual rate not to exceed 0.10% of the average daily net assets of the Fund. The
Plan also permits the Fund to pay the Distributor an additional fee (not to
exceed 0.10% of the average daily net assets of the Fund) in anticipation of or
as reimbursement for print or electronic media advertising expenses incurred in
connection with the sale of Fund shares. However, the Distributor has agreed to
waive a portion of these fees.

The Fund and the Distributor provide to the Trustees quarterly a written
report of amounts expended pursuant to the Plan and the purposes for which the
expenditures were made.

- --------------------------------------------------------------------------------
TAX MATTERS
- --------------------------------------------------------------------------------

This discussion of taxes is for general information only. Investors should
consult their own tax advisers about their particular situations.

FEDERAL INCOME TAXES: The Fund intends to meet requirements of the Internal
Revenue Code applicable to regulated investment companies so that it will not be
liable for any federal income or excise taxes.

The Fund expects that most of its net income will be attributable to
interest on Municipal Obligations and as a result most of the Fund's dividends
to shareholders will be excludable from shareholders' gross income. However, the
Fund may invest from time to time in taxable securities, and certain Fund
dividends may be subject to the federal alternative minimum tax. It is also
possible, but not intended, that the Fund may realize short-term or long-term
capital gains or losses. Generally, distributions from the Fund's short-term
capital gains will be taxed as ordinary income, and distributions from long-term
net capital gains will be taxed as such regardless of how long the shares of the
Fund have been held. Dividends and distributions are treated in the same manner
for federal tax purposes whether they are paid in cash or as additional shares.

Fund dividends of tax-exempt income are taken into account in determining
the amount of a shareholder's social security and railroad retirement benefits
that may be subject to federal income tax. No deduction may be claimed for
interest on indebtedness incurred or continued for the purpose of purchasing or
carrying Fund shares. Investors who are, or who are related to, "substantial
users" of facilities financed by private activity bonds should consult their tax
advisers before buying Fund shares.

Early each year, the Fund will notify its shareholders of the amount and
federal tax status of distributions paid to shareholders for the preceding year.

The account application asks each new shareholder to certify that the
shareholder's Social Security or taxpayer identification number is correct and
that the shareholder is not subject to 31% backup withholding for failing to
report income to the IRS. The Fund may be required to withhold (and pay over to
the IRS for the shareholder's credit) 31% of certain distributions paid to
shareholders who fail to provide this information or otherwise violate IRS
regulations.

STATE AND LOCAL TAXES: Except as noted below, Fund dividends which are
excludable from shareholders' gross income for federal income tax purposes may
not necessarily be exempt from the income or other tax laws of any state or
local taxing authority. Investors should consult their own tax advisers in this
regard.

To the extent that dividends received from the Fund are derived from
interest on New York Municipal Obligations, the dividends will also be excluded
from the gross income of individual shareholders who are New York residents for
New York State and New York City personal income tax purposes. DIVIDENDS FROM
THE FUND ARE NOT EXCLUDED IN DETERMINING NEW YORK STATE OR NEW YORK CITY
FRANCHISE TAXES ON CORPORATIONS AND FINANCIAL INSTITUTIONS.

FOREIGN SHAREHOLDERS. The Fund will withhold U.S. federal income tax payments at
a rate of 30% (or any lower applicable treaty rate) on taxable dividends and
other payments subject to withholding taxes that are made to persons who are not
citizens or residents of the United States. Distributions received from the Fund
by non-U.S. persons also may be subject to tax under the laws of their own
jurisdiction.

- --------------------------------------------------------------------------------
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------

Fund performance may be quoted in advertising, shareholder reports and other
communications in terms of yield, effective yield, tax equivalent yield, total
rate of return or tax equivalent total rate of return. All performance
information is historical and is not intended to indicate future performance.
Yields and total rates of return fluctuate in response to market conditions and
other factors.

The Fund may provide its period and average annualized "total rates of
return" and "tax equivalent total rates of return." The "total rate of return"
refers to the change in the value of an investment in the Fund over a stated
period and is compounded to include the value of any shares purchased with any
dividends or capital gains declared during such period. Period total rates of
return may be "annualized." An "annualized" total rate of return assumes that
the period total rate of return is generated over a one-year period. The "tax
equivalent total rate of return" refers to the total rate of return that a fully
taxable money market fund would have to generate in order to produce an
after-tax total rate of return equivalent to that of the Fund. The use of a tax
equivalent total rate of return allows investors to compare the total rates of
return of the Fund, the dividends from which are exempt from federal personal
income taxes, with the total rates of return of funds the dividends from which
are not so tax exempt.

The Fund may provide annualized "yield," "effective yield" and "tax
equivalent yield" quotations. The "yield" of the Fund refers to the income
generated by an investment in the Fund over a seven-day period (which period is
stated in any such advertisement or communication). This income is then
annualized; that is, the amount of income generated by the investment over that
period is assumed to be generated each week over a 365-day period and is shown
as a percentage of the investment. The "effective yield" is calculated
similarly, but when annualized the income earned by the investment during that
seven-day period is assumed to be reinvested. The effective yield is slightly
higher than the yield because of the compounding effect of this assumed
reinvestment. The "tax equivalent yield" refers to the yield that a fully
taxable money market fund would have to generate in order to produce an
after-tax yield equivalent to that of the Fund. The use of a tax equivalent
yield allows investors to compare the yield of the Fund, the dividends from
which are exempt from federal personal income tax, with yields of funds the
dividends from which are not so tax exempt. The Fund may also provide yield,
effective yield and tax equivalent yield quotations for longer periods.

Of course, any fees charged by a shareholder's Shareholder Servicing Agent
will reduce that shareholder's net return on his or her investment. See the
Statement of Additional Information for more information concerning the
calculation of yield and total rate of return quotations for the Fund.

- --------------------------------------------------------------------------------
GENERAL INFORMATION
- --------------------------------------------------------------------------------

ORGANIZATION: Landmark New York Tax Free Reserves is a non-diversified
series of Landmark Multi-State Tax Free Funds (the "Trust"). The Trust is a
Massachusetts business trust which was organized on August 30, 1985; it was
known as Landmark New York Tax Free Reserves until its name was changed
effective December 18, 1991. The Trust is a non-diversified, open-end management
investment company registered under the 1940 Act. There are presently two active
series of the Trust in addition to the Fund.

Under Massachusetts law, shareholders of a business trust may, under certain
circumstances, be held personally liable as partners for the trust's
obligations. However, the risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which both
inadequate insurance existed and the trust itself was unable to meet its
obligations.

VOTING AND OTHER RIGHTS: The Trust may issue an unlimited number of shares, may
create new series of shares and may divide shares in each series into classes.
Each share of the Trust gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of each series of
the Trust have equal voting rights except that, in matters affecting only a
particular series, only shares of that particular series are entitled to vote.

At any meeting of shareholders of the Fund, a Shareholder Servicing Agent
may vote any shares of which it is the holder of record and for which it does
not receive voting instructions proportionately in accordance with the
instructions it received for all other shares of which that Shareholder
Servicing Agent is the holder of record.

As a Massachusetts business trust, the Trust is not required to hold annual
shareholder meetings. Shareholder approval will usually be sought only for
changes in the Fund's fundamental investment restrictions and for the election
of Trustees under certain circumstances. Trustees may be removed by shareholders
under certain circumstances. Each share of the Fund is entitled to participate
equally in dividends and other distributions and the proceeds of any liquidation
of the Fund.

CERTIFICATES: The Fund's Transfer Agent maintains a share register for
shareholders of record, i.e., Shareholder Servicing Agents. Share certificates
are not issued.

EXPENSES: For the fiscal year ended August 31, 1996, total operating expenses of
the Fund, after giving effect to fee waivers and reimbursements, were 0.65% of
the Fund's average daily net assets for that fiscal year. All fee waivers and
reimbursements are voluntary and may be reduced or terminated at any time.

------------------------------

The Statement of Additional Information dated the date hereof contains more
detailed information about the Fund, including information related to (i)
investment policies and restrictions, (ii) the Trustees, officers, Adviser and
Administrator, (iii) securities transactions, (iv) the Fund's shares, including
rights and liabilities of shareholders, (v) the methods used to calculate
performance information, (vi) programs for the purchase of shares, and (vii) the
determination of net asset value.

No person has been authorized to give any information or make any
representations not contained in this Prospectus in connection with the offering
made by this Prospectus and, if given or made, such information or
representations must not be relied upon as having been authorized by the Fund or
its distributor. This Prospectus does not constitute an offering by the Fund or
its distributor in any jurisdiction in which such offering may not lawfully be
made.
<PAGE>
- --------------------------------------------------------------------------------
APPENDIX A
- --------------------------------------------------------------------------------

PERMITTED INVESTMENTS AND
INVESTMENT PRACTICES

MUNICIPAL BONDS. Municipal bonds are debt obligations of states, cities,
municipalities and municipal agencies and authorities which generally have a
maturity at the time of issue of one year or more and which are issued to raise
funds for various public purposes, such as construction of a wide range of
public facilities, refunding outstanding obligations or obtaining funds for
institutions and facilities. The two principal classifications of municipal
bonds are "general obligation" and "revenue" bonds. General obligation bonds are
secured by the issuer's pledge of its full faith, credit and taxing power for
the payment of principal and interest. The principal of and interest on revenue
bonds are payable from the income of specific projects or authorities and
generally are not supported by the issuer's general power to levy taxes. In some
cases, revenues derived from specific taxes are pledged to support payments on a
revenue bond.

In addition, certain kinds of private activity bonds ("IDBs") are issued by
or on behalf of public authorities to provide funding for various privately
operated industrial facilities, such as warehouse, office, plant and store
facilities and environmental and pollution control facilities. IDBs are, in most
cases, revenue bonds. The payment of the principal and interest on IDBs usually
depends solely on the ability of the user of the facilities financed by the
bonds or other guarantor to meet its financial obligations and, in certain
instances, the pledge of real and personal property as security for payment.
Many IDBs may not be readily marketable; however, the IDBs or the participation
certificates in IDBs purchased by the Fund will have liquidity because they
generally will be supported by demand features to "high quality" banks,
insurance companies or other financial institutions.

MUNICIPAL NOTES. There are four major varieties of state and municipal
notes: Tax and Revenue Anticipation Notes ("TRANs"); Tax Anticipation Notes
("TANs"); Revenue Anticipation Notes ("RANs"); and Bond Anticipation Notes
("BANs"). TRANs, TANs and RANs are issued by states, municipalities and other
tax-exempt issuers to finance short-term cash needs or, occasionally, to finance
construction. Many TRANs, TANs and RANs are general obligations of the issuing
entity payable from taxes or designated revenues, respectively, expected to be
received within the related fiscal period. BANs are issued with the expectation
that their principal and interest will be paid out of proceeds from renewal
notes or bonds to be issued prior to the maturity of the BANs. BANs are issued
by both general obligation and revenue bond issuers usually to finance such
items as land acquisition, facility acquisition and/or construction and capital
improvement projects.

VARIABLE RATE INSTRUMENTS AND PARTICIPATION INTERESTS. Variable rate
instruments provide for a periodic adjustment in the interest rate paid on the
instrument and usually permit the holder to receive payment of principal and
accrued interest upon a specified number of day's notice. Variable rate
instruments in which the Fund may invest include participation interests in
Municipal Obligations owned by a bank, insurance company or other financial
institution or affiliated organization ("Participation Interests"). A variable
rate instrument or a Participation Interest may be backed by an irrevocable
letter of credit or guarantee of, or a right to put to, a bank, or an insurance
policy of an insurance company. See "Stand-by Commitments." Purchase of a
Participation Interest may involve the risk that the Fund will not be deemed to
be the owner of the underlying Municipal Obligation for purposes of the ability
to claim tax exemption of interest paid on that Municipal Obligation. If
interest rates rise or fall, the rates payable on variable rate instruments will
generally be readjusted. As a result variable rate instruments do not offer the
same opportunity for capital appreciation or loss as fixed rate instruments.

STAND-BY COMMITMENTS. When the Fund purchases Municipal Obligations it may
also acquire stand-by commitments from banks with respect to such Municipal
Obligations. The Fund also may acquire stand-by commitments from broker-dealers.
Under a stand-by commitment, a bank or broker-dealer agrees to purchase at the
Fund's option a specified Municipal Obligation at a specified price. A stand-by
commitment is the equivalent of a "put" option with respect to a particular
Municipal Obligation. The Fund intends to acquire stand-by commitments solely to
facilitate liquidity. Stand-by commitments are subject to certain risks, which
include the ability of the issuer of the commitment to pay for the Municipal
Obligations at the time the commitment is exercised, the fact that the
commitment is not marketable, and that the maturity of the underlying security
will generally be different from that of the commitment.

"WHEN-ISSUED" SECURITIES. In order to ensure the availability of suitable
securities, the Fund may purchase securities on a "when-issued" or on a "forward
delivery" basis, which means that the securities would be delivered to the Fund
at a future date beyond customary settlement time. Under normal circumstances,
the Fund takes delivery of the securities. In general, the purchaser does not
pay for the securities until received and does not start earning interest until
the contractual settlement date. While awaiting delivery of the securities, the
Fund establishes a segregated account consisting of cash, cash equivalents or
high quality debt securities equal to the amount of the Fund's commitments to
purchase "when-issued" securities. An increase in the percentage of the Fund's
assets committed to the purchase of securities on a "when-issued" basis may
increase the volatility of its net asset value.

REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements.
Repurchase agreements are transactions in which an institution sells the Fund a
security at one price, subject to the Fund's obligation to resell and the
selling institution's obligation to repurchase that security at a higher price
normally within a seven day period. There may be delays and risks of loss if the
seller is unable to meet its obligation to repurchase. Repurchase agreements may
involve Municipal Obligations or other securities.

PRIVATE PLACEMENTS AND ILLIQUID INVESTMENTS. The Fund may invest up to 10%
of its net assets in securities for which there is no readily available market.
These illiquid securities may include privately placed restricted securities for
which no institutional market exists. The absence of a trading market can make
it difficult to ascertain a market value for illiquid investments. Disposing of
illiquid investments may involve time-consuming negotiation and legal expenses,
and it may be difficult or impossible for the Fund to sell them promptly at an
acceptable price.

<PAGE>
- --------------------------------------------------------------------------------
APPENDIX B
- --------------------------------------------------------------------------------

RATINGS OF MUNICIPAL OBLIGATIONS*

The ratings of Moody's Investors Service, Inc., Standard & Poor's Ratings
Group and Fitch Investors Service, Inc. represent their opinions as to the
quality of various debt obligations. It should be emphasized, however, that
ratings are not absolute standards of quality. Consequently, Municipal
Obligations with the same maturity, coupon and rating may have different yields
while Municipal Obligations of the same maturity and coupon with different
ratings may have the same yield.

DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S
TWO HIGHEST LONG-TERM DEBT RATINGS:

Aaa -- Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and generally are referred to as
"gilt edge". Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.

Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities, or fluctuation of
protective elements may be of greater amplitude, or there may be other elements
present which make the long-term risks appear somewhat larger than in Aaa
securities.

Note: Those bonds in the Aa group which Moody's believes possess the
strongest investment attributes are designated by the symbol Aa1.

DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S
TWO HIGHEST RATINGS OF STATE AND MUNICIPAL NOTES:

Moody's ratings for state and municipal short-term obligations are
designated Moody's Investment Grade ("MIG"). Such ratings recognize the
differences between short-term credit risk and long-term risk. A short-term
rating ("VMIG") may also be assigned to variable rate demand obligations.
Factors affecting the liquidity of the borrower and short-term cyclical elements
are critical in short-term ratings, while other factors of major importance in
bond risk, long-term secular trends, for example, may be less important over the
short run. Symbols used are as follows:

MIG 1/VMIG 1 -- This designation denotes best quality. There is presently
strong protection by established cash flows, superior liquidity support or
demonstrated broad-based access to the market for refinancing.

MIG 2/VMIG 2 -- This designation denotes high quality. Margins of protection
are ample although not so large as in the preceding group.

- ----------
*As described by the rating agencies. Ratings are generally given to securities
at the time of issuance. While the rating agencies may from time to time revise
such ratings, they undertake no obligation to do so.

DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S
TWO HIGHEST COMMERCIAL PAPER RATINGS:

Moody's commercial paper ratings are opinions of the ability of issuers to
repay punctually senior debt obligations. These obligations have an original
maturity not exceeding one year.

Issuers rated PRIME-1 (or supporting institutions) have a superior ability
for repayment of senior short-term debt obligations. Prime-1 repayment ability
will often be evidenced by many of the following characteristics: (1) leading
market positions in well established industries; (2) high rates of return on
funds employed; (3) conservative capitalization structure with moderate reliance
on debt and ample asset protection; (4) broad margins in earnings coverage of
fixed financial charges and high internal cash generation; and (5) well
established access to a range of financial markets and assured sources of
alternate liquidity.

Issuers rated PRIME-2 (or supporting institutions) have a strong ability for
repayment of senior short-term debt obligations. This will normally be evidenced
by many of the characteristics cited above but to a lesser degree. Earnings
trends and coverage ratios, while sound, may be more subject to variation.
Capitalization characteristics, while still appropriate, may be more affected by
external conditions. Ample alternate liquidity is maintained.

DESCRIPTION OF STANDARD & POOR'S RATINGS GROUP'S
TWO HIGHEST LONG-TERM DEBT RATINGS:

AAA -- An obligation rated AAA has the highest rating assigned by Standard &
Poor's. The obligor's capacity to meet its financial commitments on the
obligation is extremely strong.

AA -- An obligation rated "AA" differs from the highest rated obligations
only in small degree. The obligor's capacity to meet its financial obligations
is very strong.

Plus (+) or Minus (-): The "AA" rating may be modified by the addition of a
plus or minus sign to show relative standing within the AA rating category.

DESCRIPTION OF STANDARD & POOR'S RATINGS GROUP'S
TWO HIGHEST RATINGS OF STATE AND MUNICIPAL NOTES:

A Standard & Poor's note rating reflects the liquidity factors and market
access risks unique to notes. Notes maturing in three years or less will likely
receive a note rating. Notes maturing beyond three years will most likely
receive a long-term debt rating. The following criteria will be used in making
that assessment:

-- Amortization schedule (the larger the final maturity relative to other
maturities, the more likely the issue is to be treated as a note).

-- Source of payment (the more dependent the issue is on the market for its
refinancing, the more likely it will be treated as a note).

Note rating symbols and definitions are as follows:

SP-1 -- Strong capacity to pay principal and interest. Issues determined to
possess very strong characteristics are given a plus (+) designation.

SP-2 -- Satisfactory capacity to pay principal and interest, with some
vulnerability to adverse financial and economic changes over the term of the
notes.

DESCRIPTION OF STANDARD & POOR'S RATINGS GROUP'S
TWO HIGHEST COMMERCIAL PAPER RATINGS:

A Standard & Poor's issue credit rating is a current opinion of the
creditworthiness of an obligor with respect to a specific financial obligation
(including commercial paper programs). It takes into consideration the
creditworthiness of guarantors, insurers or other forms of credit enhancement on
the obligation and takes into account the currency in which the obligation is
denominated.

A-1 -- A short-term obligation rated "A-1" is rated in the highest category
by Standard & Poor's. The obligor's capacity to meet its financial commitment on
the obligation is strong. Within this category, certain obligations are
designated with a plus sign(+). This indicates that the obligor's capacity to
meet its financial commitment on these obligations is extremely strong.

A-2 -- A short-term obligation rated "A-2" is somewhat more susceptible to
the adverse effects of changes in circumstances and economic conditions than
obligations in higher rating categories. However, the obligor's capacity to meet
its financial commitment on the obligation is satisfactory.

DESCRIPTION OF STANDARD & POOR'S
RATINGS GROUP'S DUAL RATINGS:

Standard & Poor's assigns "dual" ratings to all debt issues that have a put
option or demand feature as part of their structure.

The first rating addresses the likelihood of repayment of principal and
interest as due, and the second rating addresses only the demand feature. The
long-term debt rating symbols are used for bonds to denote the long-term
maturity and the commercial paper rating symbols for the put option (for
example, "AAA/A-1+"). With short-term demand debt, Standard & Poor's rating
symbols are used with the commercial paper rating symbols (for example,
"SP-1+/A-1+").

DESCRIPTION OF FITCH INVESTORS SERVICE, INC.'S
TWO HIGHEST BOND RATINGS:

The rating takes into consideration special features of the issue, its
relationship to other obligations of the issuer, the current and prospective
financial condition and operating performance of the issuer and any guarantor,
as well as the economic and political environment that might affect the issuer's
future financial strength and credit quality.

AAA -- Bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay interest and
repay principal, which is unlikely to be affected by reasonably foreseeable
events.

AA -- Bonds considered to be investment grade and of very high credit
quality. The obligor's ability to pay interest and repay principal is very
strong, although not quite as strong as bonds rated "AAA". Because bonds rated
in the "AAA" and "AA" categories are not significantly vulnerable to foreseeable
future developments, short-term debt of these issuers is generally rated "F-1+".

Plus (+) or Minus (-): The "AA" rating may be modified by the addition of a
plus or minus sign to show relative standing within the AA rating category.

DESCRIPTION OF FITCH INVESTORS SERVICE, INC.'S
THREE HIGHEST RATINGS OF STATE AND MUNICIPAL NOTES:

The short-term rating places greater emphasis than a long-term rating on the
existence of liquidity necessary to meet the issuer's obligations in a timely
manner.

F-1+ -- Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.

F-1 -- Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated
"F-1+".

DESCRIPTION OF FITCH INVESTORS SERVICE, INC.'S
THREE HIGHEST COMMERCIAL PAPER RATINGS:

The short-term rating places greater emphasis than a long-term rating on the
existence of liquidity necessary to meet the issuer's obligations in a timely
manner.

F-1+ -- Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.

F-1 -- Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated
"F-1+".

F-2 -- Good Credit Quality. Issues assigned this rating have a satisfactory
degree of assurance for timely payment, but the margin of safety is not as great
as for issues assigned "F-1+" and "F-1" ratings.
<PAGE>
- --------------------------------------------------------------------------------
APPENDIX C
- --------------------------------------------------------------------------------

TAXABLE EQUIVALENT YIELD TABLES

(RATES FOR 1996 UNDER FEDERAL AND
NEW YORK PERSONAL INCOME TAX LAWS)

The tables below show the approximate taxable bond yields which are
equivalent to tax-exempt bond yields under 1996 federal and New York personal
income tax laws. SUCH YIELDS MAY DIFFER UNDER THE LAWS APPLICABLE TO
SUBSEQUENT YEARS IF THE EFFECT OF ANY SUCH LAW IS TO CHANGE ANY TAX BRACKET OR
THE AMOUNT OF TAXABLE INCOME WHICH IS APPLICABLE TO A TAX BRACKET. Separate
calculations, showing the applicable taxable income brackets, are provided for
investors who file joint returns and for investors who file individual
returns. While it is expected that a substantial portion of the dividends paid
to shareholders of the Fund will be exempt from federal, New York State and
New York City personal income taxes, portions of such dividends from time to
time may be subject to federal income taxes and/or New York State and New York
City personal income taxes.

<TABLE>
<CAPTION>
FEDERAL TABLE
----------------------------------------------------------------------------------------------------------------------------------
TAXABLE INCOME* TAX-EXEMPT YIELD
----------------------------------------------------------------------------------------------------------------------------------
SINGLE RETURN JOINT RETURN INCOME
TAX 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% 5.50% 6.00% 6.50%
BRACKET**
BUT BUT
OVER NOT OVER OVER NOT OVER EQUIVALENT TAXABLE YIELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0 $ 24,000 $ 0 $ 40,100 15.00% 2.35% 2.94% 3.53% 4.12% 4.71% 5.29% 5.88% 6.47% 7.06% 7.65%
$ 24,000 $ 58,150 $ 40,100 $ 96,900 28.00% 2.78% 3.47% 4.17% 4.86% 5.56% 6.25% 6.94% 7.64% 8.33% 9.03%
$ 58,150 $121,300 $ 96,900 $147,700 31.00% 2.90% 3.62% 4.35% 5.07% 5.80% 6.52% 7.25% 7.97% 8.70% 9.42%
$121,300 $263,750 $147,700 $263,750 36.00% 3.13% 3.91% 4.69% 5.47% 6.25% 7.03% 7.81% 8.59% 9.38% 10.16%
$263,750 $263,750 39.60% 3.31% 4.14% 4.97% 5.79% 6.62% 7.45% 8.28% 9.11% 9.93% 10.76%

<FN>
*Net amount subject to Federal Personal Income Tax after deductions and exemptions.
**Effective Federal Tax Bracket for 1996. 1997 information is not available as of the date of this Prospectus.
</FN>

<CAPTION>
FEDERAL AND NEW YORK STATE TABLE
----------------------------------------------------------------------------------------------------------------------------------
TAXABLE INCOME* TAX-EXEMPT YIELD
----------------------------------------------------------------------------------------------------------------------------------
SINGLE RETURN JOINT RETURN INCOME
TAX 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% 5.50% 6.00% 6.50%
BRACKET**
BUT BUT
OVER NOT OVER OVER NOT OVER EQUIVALENT TAXABLE YIELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0 $ 24,000 19.42% 2.48% 3.10% 3.72% 4.34% 4.96% 5.58% 6.21% 6.83% 7.45% 8.07%
$ 0 $ 40,100 19.14% 2.47% 3.09% 3.71% 4.33% 4.95% 5.57% 6.18% 6.80% 7.42% 8.04%
$ 24,000 $ 58,150 32.93% 2.98% 3.73% 4.47% 5.22% 5.96% 6.71% 7.45% 8.20% 8.95% 9.69%
$ 40,100 $ 96,900 32.93% 2.98% 3.73% 4.47% 5.22% 5.96% 6.71% 7.45% 8.20% 8.95% 9.69%
$ 58,150 $121,300 35.73% 3.11% 3.89% 4.67% 5.45% 6.22% 7.00% 7.78% 8.56% 9.34% 10.11%
$ 96,900 $147,700 35.73% 3.11% 3.89% 4.67% 5.45% 6.22% 7.00% 7.78% 8.56% 9.34% 10.11%
$121,300 $263,750 $147,700 $263,750 40.38% 3.35% 4.21% 5.03% 5.87% 6.71% 7.55% 8.39% 9.23% 10.06% 10.90%
$263,750 $263,750 43.74% 3.55% 4.44% 5.33% 6.22% 7.11% 8.00% 8.89% 9.78% 10.66% 11.55%

<FN>
*Net amount subject to federal and New York State personal income tax after deductions and exemptions.
**Effective combined federal and state tax bracket. State tax rate based on the average state rate for the federal income
tax bracket and 1996 State Tax rates. 1997 information is not available as of the date of this Prospectus.
</FN>

<PAGE>
<CAPTION>
FEDERAL, NEW YORK STATE AND NEW YORK CITY TABLE
----------------------------------------------------------------------------------------------------------------------------------
TAXABLE INCOME* TAX-EXEMPT YIELD
----------------------------------------------------------------------------------------------------------------------------------
SINGLE RETURN JOINT RETURN INCOME
TAX 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% 5.50% 6.00% 6.50%
BRACKET**
BUT BUT
OVER NOT OVER OVER NOT OVER EQUIVALENT TAXABLE YIELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0 $ 24,000 22.66% 2.59% 3.23% 3.88% 4.53% 5.17% 5.82% 6.46% 7.11% 7.76% 8.40%
$ 0 $ 40,100 22.35% 2.58% 3.22% 3.86% 4.51% 5.15% 5.80% 6.44% 7.08% 7.73% 8.37%
$ 24,000 $ 58,150 36.11% 3.13% 3.91% 4.70% 5.48% 6.26% 7.04% 7.83% 8.61% 9.39% 10.17%
$ 40,100 $ 96,900 36.10% 3.13% 3.08% 4.69% 5.48% 6.26% 7.04% 7.82% 8.61% 9.39% 10.17%
$ 58,150 $121,300 38.80% 3.27% 4.08% 4.90% 5.72% 6.54% 7.35% 8.17% 8.99% 9.80% 10.62%
$ 96,900 $147,700 38.80% 3.27% 4.08% 4.90% 5.72% 6.54% 7.33% 8.17% 8.99% 9.80% 10.62%
$121,300 $263,750 $147,700 $263,750 43.24% 3.52% 4.00% 5.29% 6.17% 7.05% 7.93% 8.81% 9.69% 10.57% 11.45%
$263,750 $263,750 46.43% 3.73% 4.67% 5.60% 6.53% 7.47% 8.40% 9.33% 10.27% 11.20% 12.13%

<FN>
*Net amount subject to federal and New York State personal income tax after deductions and exemptions.
**Effective combined federal, state tax bracket. State tax rate based on the average rate for the federal income tax bracket and
1996 State Tax rates including surcharges. 1997 information is not available as of the date of this Prospectus.
</FN>
</TABLE>

<PAGE>
- -----------------------------------
SHAREHOLDER
SERVICING AGENTS
- -----------------------------------
- -----------------------------------

FOR CITIBANK PRIVATE BANKING CLIENTS:
Citibank, N.A.
The Citibank Private Bank
153 East 53rd Street, New York, NY 10043
Call Your Citibank Private Banking Account Officer,
Registered Representative or (212) 559-5959

FOR CITIBANK GLOBAL ASSET MANAGEMENT CLIENTS:
Citibank, N.A.
Citibank Global Asset Management
153 East 53rd Street, New York, NY 10043
(212) 559-7117

FOR CITIBANK NORTH AMERICAN INVESTOR SERVICES CLIENTS:
Citibank, N.A.
111 Wall Street, New York, NY 10043
Call Your Account Manager or (212) 657-9100

[logo] LANDMARK
FUNDS

MONEY MARKET FUNDS:
Cash Reserves
Premium Liquid Reserves
Institutional Liquid Reserves

U.S. Treasury Reserves
Premium U.S. Treasury Reserves
Institutional U.S. Treasury Reserves

Tax Free Reserves
Institutional Tax Free Reserves

California Tax Free Reserves
Connecticut Tax Free Reserves
New York Tax Free Reserves

STOCK & BOND FUNDS:
U.S. Government Income Fund
Intermediate Income Fund
National Tax Free Income Fund
New York Tax Free Income Fund

Balanced Fund
Equity Fund
Small Cap Equity Fund
International Equity Fund
Emerging Asian Markets Equity Fund

<PAGE>
TRUSTEES AND OFFICERS
C. Oscar Morong, Jr., Chairman
Philip W. Coolidge*, President
H. B. Alvord
Elliott J. Berv
Mark T. Finn
Riley C. Gilley
Diana R. Harrington
Susan B. Kerley
Walter E. Robb, III
E. Kirby Warren
William S. Woods, Jr.

SECRETARY
Linda T. Gibson*

TREASURER
John R. Elder*

*Affiliated Person of Administrator and Distributor

- ------------------------------|-|---------------------------------

INVESTMENT ADVISER
Citibank, N.A.
153 East 53rd Street, New York, NY 10043

ADMINISTRATOR AND DISTRIBUTOR
The Landmark Funds Broker-Dealer Services, Inc.
6 St. James Avenue, Boston, MA 02116
(617) 423-1679

TRANSFER AGENT AND CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street, Boston, MA 02110

AUDITORS
Deloitte & Touche LLP
125 Summer Street, Boston, MA 02110

LEGAL COUNSEL
Bingham, Dana & Gould LLP
150 Federal Street, Boston, MA 02110

- ------------------------------|-|---------------------------------

SHAREHOLDER SERVICING AGENTS
(See Inside of Cover)

NYTFR/P/97/RB Printed on Recycled Paper [recycle symbol]

[LOGO] LANDMARK(SM) FUNDS
Advised by Citibank, N.A.
- -------------------------------------------------------------------
LANDMARK
NEW YORK
TAX FREE RESERVES
- -------------------------------------------------------------------

- -------------------------------------------------------------------
PROSPECTUS
January 2, 1997
- -------------------------------------------------------------------

<PAGE>

PROSPECTUS
- -------------------------------------------------------------------------------
JANUARY 2, 1997

LANDMARK CONNECTICUT TAX FREE RESERVES
(A member of the Landmark(SM) Family of Funds)

This Prospectus describes Landmark Connecticut Tax Free Reserves, a mutual
fund in the Landmark Family of Funds. The Fund is a type of mutual fund
commonly referred to as a "double tax-exempt money market fund." Citibank,
N.A. is the investment adviser of the Fund.
- ------------------------------------------------------------------------------
REMEMBER THAT SHARES OF THE FUND:
[ ] ARE NOT INSURED BY THE FDIC OR ANY OTHER AGENCY
[ ] ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, CITIBANK
OR ANY OF ITS AFFILIATES
[ ] ARE SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL
AMOUNT INVESTED
- ------------------------------------------------------------------------------
INVESTMENTS IN THE FUND ARE NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT. THE FUND ATTEMPTS TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00
PER SHARE; HOWEVER, THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO DO
SO.
- ------------------------------------------------------------------------------
This Prospectus concisely sets forth information about the Fund that a
prospective investor should know before investing. A Statement of Additional
Information dated January 2, 1997 (and incorporated by reference in this
Prospectus) has been filed with the Securities and Exchange Commission. Copies
of the Statement of Additional Information may be obtained without charge, and
further inquiries about the Fund may be made, by contacting the investor's
shareholder servicing agent (see inside back cover for address and phone
number).

THE FUND INVESTS PRIMARILY IN CONNECTICUT MUNICIPAL OBLIGATIONS; AS A
RESULT, AN INVESTMENT IN THE FUND MAY BE RISKIER THAN AN INVESTMENT IN A MORE
DIVERSIFIED MONEY MARKET FUND.

TABLE OF CONTENTS
Prospectus Summary ....................................................... 2
Expense Summary .......................................................... 3
Condensed Financial Information .......................................... 4
Investment Information ................................................... 5
Risk Considerations ...................................................... 6
Valuation of Shares ...................................................... 7
Purchases ............................................................... 7
Exchanges ................................................................ 8
Redemptions .............................................................. 9
Net Income and Distributions ............................................. 9
Management ...............................................................10
Tax Matters ..............................................................12
Performance Information ..................................................12
General Information ......................................................13
Appendix A -- Permitted Investments and
Investment Practices ...................................................14
Appendix B -- Ratings of Municipal Obligations ...........................16
Appendix C -- Taxable Equivalent Yield Tables ............................19
- -------------------------------------------------------------------------------

INVESTORS SHOULD READ THIS PROSPECTUS AND RETAIN IT FOR FUTURE REFERENCE.

<PAGE>
- ------------------------------------------------------------------------------
PROSPECTUS SUMMARY
- ------------------------------------------------------------------------------

See the body of the Prospectus for more information on the topics
discussed in this summary.

THE FUND: This Prospectus describes Landmark Connecticut Tax Free Reserves, a
double tax-exempt money market mutual fund.

INVESTMENT OBJECTIVES AND POLICIES: To provide its shareholders with high
levels of current income exempt from both federal and Connecticut personal
income taxes, preservation of capital and liquidity. The Fund invests
primarily in short-term, high quality obligations issued by state and
municipal governments and by other qualifying issuers, the interest on which
is exempt from federal income taxes ("Municipal Obligations"), including
obligations of the State of Connecticut and its political subdivisions. There
can be no assurance that the Fund will achieve its objectives.

PURCHASES AND REDEMPTIONS: Customers of Shareholder Servicing Agents may
purchase and redeem shares of the Fund on any Business Day. See "Purchases"
and "Redemptions."

EXCHANGES: Shares may be exchanged for shares of most other Landmark Funds.
See "Exchanges."

DIVIDENDS: Declared daily and distributed monthly. Shares begin accruing
dividends on the day they are purchased. See "Net Income and Distributions."

WHO SHOULD INVEST: The Fund is designed for investors seeking liquidity,
preservation of capital and current income exempt from federal income taxes,
and for whom long-term capital growth is not a consideration. The Fund is also
designed for investors seeking income exempt from Connecticut personal income
taxes and who are willing to bear the increased risk of an investment
portfolio which is concentrated in obligations of the State of Connecticut and
its political subdivisions. See "Investment Information."

RISK FACTORS: There can be no assurance that the Fund will achieve its
investment objectives. In addition, while the Fund intends to maintain a
stable net asset value of $1.00 per share, there can be no assurance that the
Fund will be able to do so. Investments in high quality, short-term
instruments may, in many circumstances, result in a lower yield than would be
available from investments with a lower quality or a longer term.

The Fund is a non-diversified mutual fund, which means that it is not
subject to any statutory restrictions under the Investment Company Act of 1940
limiting the investment of its assets in one or relatively few issuers. The
Fund may therefore invest a relatively high percentage of its assets in the
obligations of a limited number of issuers. Also, the Fund may invest 25% or
more of its assets in securities of issuers in similar or related industries
or issuers located in the same state. Under normal circumstances, the Fund
invests primarily in obligations of the State of Connecticut and its political
subdivisions. As a result, the Fund is more susceptible to any single
economic, political or regulatory occurrence.

Certain investment practices also may entail special risks. Prospective
investors should read "Risk Considerations" for more information about risk
factors.
<PAGE>

- -------------------------------------------------------------------------------
EXPENSE SUMMARY
- -------------------------------------------------------------------------------
The following table summarizes estimated shareholder transaction and annual
operating expenses for shares of the Fund.* For more information on costs and
expenses, see "Management" and "General Information -- Expenses."

---------------
SHAREHOLDER TRANSACTION EXPENSES: ......................... None
ANNUAL FUND OPERATING EXPENSES, AFTER FEE WAIVERS AND
REIMBURSEMENTS (AS A PERCENTAGE OF AVERAGE NET ASSETS):
Investment Management Fee(1)............................... .16%
12b-1 Fees(1)(2) .......................................... .00%
Other Expenses
Administrative Services Fees(1) ......................... .00%
Shareholder Servicing Agent Fees ........................ .25%
Other Operating Expenses ................................ .24%
----
Total Fund Operating Expenses(1) .......................... .65%
====
* This table is intended to assist investors in understanding the various
costs and expenses that a shareholder of the Fund will bear, either
directly or indirectly. The table shows the fees paid by the Fund to
various service providers after giving effect to expected voluntary
partial fee waivers. There can be no assurance that the fee waivers and
reimbursements reflected in the table will continue at their present
levels.
(1) Absent fee waivers and reimbursements, investment management fees, 12b-1
fees, administrative services fees and total fund operating expenses would
be .20%, .20%, .25% and 1.14%, respectively.
(2) Fees under the 12b-1 distribution plan are asset-based sales charges.
Long-term shareholders in a Fund could pay more in sales charges than the
economic equivalent of the maximum front-end sales charges permitted by
the National Association of Securities Dealers, Inc.

EXAMPLE: A shareholder of the Fund would pay the following expenses on a
$1,000 investment, assuming redemption at the end of each period indicated
below:

ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
-------------------------------------------------
$ 7 $21 $36 $81

The Example assumes a 5% annual return and that all dividends are reinvested,
and expenses are based on the Fund's fiscal year ended August 31, 1996, after
waivers and reimbursements. If waivers and reimbursements were not in place,
the amounts in the Example would be $12, $36, $63 and $139, respectively. The
assumption of a 5% annual return is required by the Securities and Exchange
Commission for all mutual funds, and is not a prediction of the Fund's future
performance. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES OF THE FUND. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE
SHOWN.
<PAGE>
- -------------------------------------------------------------------------------
CONDENSED FINANCIAL INFORMATION
- -------------------------------------------------------------------------------

The following table provides condensed financial information about the Fund
for the periods indicated. This information should be read in conjunction with
the financial statements appearing in the Fund's Annual Report to
Shareholders, which are incorporated by reference in the Statement of
Additional Information. The financial statements and notes, as well as the
table below, covering the periods through August 31, 1996 have been audited by
Deloitte & Touche LLP, independent certified public accountants, whose report
is included in the Fund's Annual Report. Copies of the Annual Report may be
obtained without charge from an investor's Shareholder Servicing Agent (see
inside of back cover for address and phone number).

-----------------------------------
FINANCIAL HIGHLIGHTS
YEAR ENDED AUGUST 31,
1996 1995 1994+
---- ---- -----
Net Asset Value, beginning of period ..... $ 1.00000 $ 1.00000 $ 1.00000
Net investment income .................... 0.03135 0.03564 0.01754
Less dividends from net investment
income .................................. (0.03135) (0.03564) (0.01754)
--------- --------- ---------
Net Asset Value, end of period ........... $ 1.00000 $ 1.00000 $ 1.00000
========= ========= =========

RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000's omitted) ......................... $116,025 $46,556 $15,949
Ratio of expenses to average net assets .. 0.42% 0.22% 0.00%*
Ratio of net investment income to average
net assets .............................. 3.08% 3.60% 2.16%*
Total return ............................. 3.18% 3.62% 1.75%**

Note: If certain agents of the Fund had not voluntarily waived all or a
portion of their fees from the Fund and the Administrator had not voluntarily
assumed expenses for the period indicated, the ratios and net investment
income per share would have been as follows:

Net investment income per share .......... $ 0.02504 $ 0.02732 $ 0.00128
RATIOS:
Expenses to average net assets ........... 1.04% 1.06% 2.42%*
Net investment income to average net
assets .................................. 2.46% 2.76% 0.19%*

* Annualized.
** Not annualized.
+ For the period from the start of business, December 1, 1993, to
August 31, 1994.

<PAGE>
- ------------------------------------------------------------------------------
INVESTMENT INFORMATION
- ------------------------------------------------------------------------------

INVESTMENT OBJECTIVES: The investment objectives of the Fund are to provide its
shareholders with high levels of current income exempt from both federal and
Connecticut personal income taxes, preservation of capital and liquidity.

The investment objectives of the Fund may not be changed without approval
by the Fund's shareholders. Of course, there can be no assurance that the Fund
will achieve its investment objectives.

INVESTMENT POLICIES: The Fund seeks its objectives by investing primarily in
short-term, high quality fixed rate and variable rate obligations issued by or
on behalf of states and municipal governments and their authorities, agencies,
instrumentalities and political subdivisions and by other qualifying issuers,
the interest on which is exempt from federal income taxes (these securities
are referred to as "Municipal Obligations"). As a fundamental policy, the Fund
invests at least 80% of its assets, under normal circumstances, in the
following types of Municipal Obligations and in participation interests in
these obligations issued by banks, insurance companies or other financial
institutions ("Participation Interests"):

(1) Municipal bonds that at the date of purchase are rated Aa or better by
Moody's Investors Service, Inc. ("Moody's") or AA or better by Standard &
Poor's Rating Group ("S&P") or Fitch Investors Service, Inc. ("Fitch"), or
are unrated but are of comparable quality as determined by the Adviser on
the basis of a credit evaluation of the obligor, or of the bank issuing
the Participation Interest or guarantee of the bonds, or of any insurance
issued in support of the bonds or the Participation Interest;

(2) Municipal notes that at the date of purchase are rated MIG 2/VMIG 2 or
better by Moody's, SP-2 or better by S&P or F-2 or better by Fitch, or are
unrated but are of comparable quality as determined by the Adviser; and

(3) Municipal commercial paper that at the date of purchase is rated Prime-2
or better by Moody's, A-2 or better by S&P or F-2 or better by Fitch, or
is unrated but is of comparable quality as determined by the Adviser.

See Appendix A for an explanation of Municipal Obligations and Appendix B for
an explanation of ratings of Municipal Obligations.

Under normal circumstances, the Fund invests at least 65% of its assets in
Municipal Obligations the interest on which is exempt from both federal and
Connecticut personal income taxes (these securities are referred to as
"Connecticut Municipal Obligations"). The Fund is a "double tax-exempt money
market fund." Connecticut Municipal Obligations include Municipal Obligations
issued by or on behalf of the State of Connecticut, its political subdivisions
and public entities created under Connecticut law, and obligations of Puerto
Rico and other U.S. territories and their political subdivisions and other
qualifying issuers. To the extent that acceptable Connecticut Municipal
Obligations are not available to the Fund, the Fund may purchase Municipal
Obligations issued by issuers in other states. The interest on these
securities will be subject to Connecticut personal income taxes. BECAUSE THE
FUND INVESTS PRIMARILY IN CONNECTICUT MUNICIPAL OBLIGATIONS AN INVESTMENT IN
THE FUND MAY BE RISKIER THAN AN INVESTMENT IN A MORE DIVERSIFIED MONEY MARKET
FUND.

In determining the tax status of interest on Municipal Obligations, the
Adviser relies on opinions of bond counsel who may be counsel to the issuer.

90-DAY AVERAGE MATURITY. All of the Fund's investments mature in 397 days
or less from the date of purchase, have a variable rate of interest adjusted
no less frequently than every 397 days, or are purchased pursuant to a
repurchase agreement which provides for repurchase by the seller within 397
days from the date of purchase. The average maturity of the Fund's investments
(on a dollar-weighted basis) is 90 days or less. All of the Fund's investments
are "eligible securities" within the meaning of Rule 2a-7 under the 1940 Act,
and are determined by the Adviser to present minimal credit risks. Investment
in high quality, short-term instruments may, in many circumstances, result in
a lower yield than would be available from investment in instruments with a
lower quality or a longer term.

PERMITTED INVESTMENTS. Uninvested cash reserves may be held temporarily
for the Fund pending investment. The Fund may borrow from banks up to 15% of
its total assets for temporary or emergency purposes. For more information
regarding permitted investments and investment practices, see Appendix A. The
Fund will not necessarily invest or engage in each of the investments and
investment practices in Appendix A but reserves the right to do so.

INVESTMENT IN ANOTHER INVESTMENT COMPANY. The Fund may, in the future,
seek its investment objectives by investing all of its investable assets in an
open-end management investment company having the same investment objectives
and policies and substantially the same investment restrictions as those of
the Fund. This investment would be made only if the Fund's Trustees believe
that the aggregate per share expenses of the Fund and such other investment
company would be less than or approximately equal to the expenses which the
Fund would incur if the assets of the Fund were to continue to be invested
directly in portfolio securities.

INVESTMENT RESTRICTIONS. The Statement of Additional Information contains
a list of specific investment restrictions which govern the Fund's investment
policies. Except as otherwise indicated, the Fund's investment restrictions
and policies may be changed without shareholder approval. If a percentage or
rating restriction (other than a restriction as to borrowing) is adhered to at
the time an investment is made, a later change in percentage or rating
resulting from changes in the Fund's securities will not be a violation of
policy.

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RISK CONSIDERATIONS
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The risks of investing in the Fund vary depending upon the nature of the
securities held, and the investment practices employed, on its behalf. Certain
of these risks are described below.

NON-DIVERSIFIED STATUS. The Fund is a non-diversified mutual fund. This
means that it is not subject to any statutory restrictions under the 1940 Act
limiting the investment of its assets in one or relatively few issuers
(although certain diversification requirements are imposed by the Internal
Revenue Code). Since the Fund may invest a relatively high percentage of its
assets in the obligations of a limited number of issuers, the value of shares
of the Fund may be more susceptible to any single economic, political or
regulatory occurrence than the value of shares of a diversified mutual fund
would be. The Fund also may invest 25% or more of its assets in securities the
issuers of which are located in the same state or the interest on which is
paid from revenues of similar type projects or that are otherwise related in
such a way that a single economic, business or political development or change
affecting one of the securities would also affect other securities. Investors
should consider the greater risk inherent in these policies when compared with
a more diversified mutual fund.

"CONCENTRATION" IN PARTICIPATION INTERESTS. The Fund may invest more than
25% of its assets in Participation Interests in Municipal Obligations which
are secured by bank letters of credit or guarantees. Banks are subject to
extensive governmental regulation which may limit both the amounts and types
of loans and other financial commitments which may be made and interest rates
and fees which may be charged. The profitability of this industry is largely
dependent upon the availability and cost of capital funds for the purpose of
financing lending operations under prevailing money market conditions. Also,
general economic conditions play an important part in the operation of this
industry and exposure to credit losses arising from possible financial
difficulties of borrowers might affect a bank's ability to meet its
obligations under a letter of credit or guarantee. For additional information
concerning variable rate instruments and Participation Interests, see Appendix
A.

INVESTMENT PRACTICES. Certain of the investment practices employed for the
Fund may entail certain risks. See Appendix A.

RISKS AFFECTING INVESTMENTS IN CONNECTICUT MUNICIPAL OBLIGATIONS. The Fund
intends to invest a high proportion of its assets in Connecticut Municipal
Obligations. Payment of interest and principal of these Municipal Obligations
is dependent on the continuing ability of issuers in Connecticut and obligors
of state, municipal and public authority debt obligations to meet their
obligations. Investors in the Fund should consider the greater risks inherent
in the Fund's concentration in these obligations when compared with the safety
that comes with a less geographically concentrated investment portfolio. The
Adviser believes that by maintaining the Fund's investment portfolio in
liquid, short-term high quality Connecticut Municipal Obligations, including
Participation Interests and other variable rate instruments that have high
quality credit support from banks, insurance companies or other financial
institutions, the Fund is somewhat insulated from the credit risks that may
exist for long-term Connecticut Municipal Obligations.

Investors should be aware of special economic factors affecting
Connecticut before investing in the Fund. While these factors are summarized
below, a more detailed description is set forth in the Statement of Additional
Information and the Appendix thereto (see "Investment Objectives, Policies and
Restrictions -- Risk Factors Affecting Investment in Connecticut Municipal
Obligations" in the Statement of Additional Information). The information
below and in the Statement of Additional Information is a summary of certain
information contained in official statements of issuers of Connecticut
Municipal Obligations and does not purport to be complete. The Fund is not
responsible for the accuracy or timeliness of this information.

As a result of recurring budgetary problems, certain rating agencies
downgraded Connecticut's general obligation bonds in 1990 and 1991. There can
be no assurance that credit ratings on Connecticut Municipal Obligations will
not be downgraded again. Many of the Fund's Municipal Obligations are likely
to be obligations of Connecticut governmental issuers which rely in whole or
in part, directly or indirectly, on real property taxes as a source of
revenue.

Investors also should compare the yield available on a portfolio of single
state issues with the yield of a more diversified portfolio including other
state issues before making an investment decision. For a comparison of yields
on Municipal Obligations and taxable securities, see Appendix C.

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VALUATION OF SHARES
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Net asset value per share of the Fund is determined each day the New York
Stock Exchange is open for trading (a "Business Day"). This determination is
made once each day as of 12:00 noon, Eastern time, by adding the market value
of all of the Fund's securities and other assets, then subtracting the
liabilities charged to the Fund, and then dividing the result by the number of
the Fund's outstanding shares. The Fund attempts to stabilize the net asset
value of its shares at $1.00 by valuing portfolio securities using the
amortized cost method; however, there can be no assurance that the Fund's net
asset value will always remain at $1.00 per share. The net asset value per
share is effective for orders received and accepted by the Fund's Distributor.

The amortized cost method involves valuing a security at its cost and
thereafter assuming a constant amortization to maturity of any discount or
premium. Although the amortized cost method provides certainty in valuation,
it may result in periods during which the stated value of a security is higher
or lower than the price the Fund would receive if the security were sold.

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PURCHASES
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Shares of the Fund are offered continuously and may be purchased on any
Business Day without a sales load at the shares' net asset value next
determined after an order is transmitted to and accepted by the Distributor.
Shares may be purchased either through a securities broker which has a sales
agreement with the Distributor or through a bank or other financial
institution which has an agency agreement with the Distributor. Shares of the
Fund are being offered exclusively to customers of a Shareholder Servicing
Agent (i.e., a financial institution, such as a federal or state-chartered
bank, trust company, savings and loan association or savings bank, or a
securities broker, that has entered into a shareholder servicing agreement
concerning the Fund). The Fund and the Distributor reserve the right to reject
any purchase order and to suspend the offering of Fund shares for a period of
time.

While there is no sales load imposed on shares of the Fund, the
Distributor receives fees from the Fund pursuant to a Distribution Plan. See
"Management -- Distribution Arrangements."

Each shareholder's account is established and maintained by his or her
Shareholder Servicing Agent, which will be the shareholder of record of the
Fund. Each Shareholder Servicing Agent may offer services to its customers
such as pre-authorized or automatic purchase and redemption programs and
"sweep" checking programs, and may establish its own terms, conditions and
charges with respect to services it offers to its customers. Charges for these
services may include fixed annual fees and account maintenance fees. The
effect of any of these fees will be to reduce the net return on the investment
of customers of that Shareholder Servicing Agent.

From time to time the Distributor may make payments for distribution and/
or shareholder servicing activities out of its past profits and other sources
available to it. The Distributor may also make payments for marketing,
promotional or related expenses to dealers who engage in marketing efforts on
behalf of the Fund. The amounts of these payments will be determined by LFBDS
in its sole discretion and may vary among different dealers.

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EXCHANGES
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Shares of the Fund may be exchanged for shares of the other Landmark Funds
that are made available by a shareholder's Shareholder Servicing Agent, or may
be acquired through an exchange of shares of those funds. No initial sales
charge is imposed on shares being acquired through an exchange unless the
shares being acquired are subject to a sales charge that is greater than the
current sales charge of the Fund (in which case an initial sales charge will
be imposed at a rate equal to the difference). Contingent deferred sales
charges may apply to redemptions of some shares of other Landmark Funds
disposed of or acquired through an exchange.

Shareholders must place exchange orders through their Shareholder
Servicing Agents, and may do so by telephone if their account applications so
permit. For more information on telephone transactions see "Redemptions." All
exchanges will be effected based on the relative net asset values per share
next determined after the exchange order is received by the Distributor. See
"Valuation of Shares." Shares of the Fund may be exchanged only after payment
in federal funds for the shares has been made.

This exchange privilege may be modified or terminated at any time, upon at
least 60 days' notice when such notice is required by SEC rules, and is
available only in those jurisdictions where such exchanges legally may be
made. See the Statement of Additional Information for further details. Before
making any exchange, shareholders should contact their Shareholder Servicing
Agents to obtain more information and prospectuses of the Landmark Funds to be
acquired through the exchange.

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REDEMPTIONS
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Fund shares may be redeemed at their net asset value (normally $1.00 per
share) next determined after a redemption request in proper form is received
by a shareholder's Shareholder Servicing Agent. Shareholders may redeem shares
of the Fund only by authorizing their Shareholder Servicing Agents to redeem
such shares on their behalf through the Distributor.

REDEMPTIONS BY MAIL. Shareholders may redeem Fund shares by sending
written instructions in proper form (as determined by a shareholder's
Shareholder Servicing Agent) to their Shareholder Servicing Agents.
Shareholders are responsible for ensuring that a request for redemption is in
proper form.

REDEMPTIONS BY TELEPHONE. Shareholders may redeem or exchange Fund shares
by telephone, if their account applications so permit, by calling their
Shareholder Servicing Agents. During periods of drastic economic or market
changes or severe weather or other emergencies, shareholders may experience
difficulties implementing a telephone exchange or redemption. In such an
event, another method of instruction, such as a written request sent via an
overnight delivery service, should be considered. The Fund and each
Shareholder Servicing Agent will employ reasonable procedures to confirm that
instructions communicated by telephone are genuine. These procedures may
include recording of the telephone instructions and verification of a caller's
identity by asking for his or her name, address, telephone number, Social
Security number, and account number. If these or other reasonable procedures
are not followed, the Fund or the Shareholder Servicing Agent may be liable
for any losses to a shareholder due to unauthorized or fraudulent
instructions. Otherwise, the shareholder will bear all risk of loss relating
to a redemption or exchange by telephone.

PAYMENT OF REDEMPTIONS. The proceeds of a redemption are paid in federal
funds normally on the Business Day the redemption is effected, but in any
event within seven days. If a shareholder requests redemption of shares which
were purchased recently, the Fund may delay payment until it is assured that
good payment has been received. In the case of purchases by check, this can
take up to ten days. See "Determination of Net Asset Value" in the Statement
of Additional Information regarding the Fund's right to pay the redemption
price in kind with securities (instead of cash).

Questions about redemption requirements should be referred to the
shareholder's Shareholder Servicing Agent. The right of any shareholder to
receive payment with respect to any redemption may be suspended or the payment
of the redemption price postponed during any period in which the New York
Stock Exchange is closed (other than weekends or holidays) or trading on the
Exchange is restricted or if an emergency exists.

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NET INCOME AND DISTRIBUTIONS
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The Fund's net income is determined each Business Day (and on such other
days as is necessary in order to comply with the 1940 Act). This determination
is made once during each such day as of 12:00 noon, Eastern time. All the
Fund's net income is declared as a dividend to shareholders of record at the
time of such determination. Shares begin accruing dividends on the day they
are purchased, and accrue dividends up to and including the day prior to
redemption. Dividends are distributed monthly on or prior to the last business
day of each month. Unless a shareholder elects to receive dividends in cash
(subject to the policies of the shareholder's Shareholder Servicing Agent),
dividends are distributed in the form of full and fractional additional Fund
shares at the rate of one share of the Fund for each one dollar of dividend
income.

Since the Fund's net income is declared as a dividend each time the Fund's
net income is determined, the net asset value per share of the Fund is
expected to remain at $1.00 per share immediately after each such
determination and dividend declaration. Any increase in the value of a
shareholder's investment in the Fund, representing the reinvestment of
dividend income, is reflected by an increase in the number of shares of the
Fund in the shareholder's account.

Because of the short-term maturities of the portfolio investments of the
Fund, the Fund does not expect to realize long-term capital gains or losses.
Any net realized short-term capital gains will be declared and distributed to
the Fund's shareholders annually after the close of the Fund's fiscal year.
Distributions of short-term capital gains are taxable to shareholders as
described in "Tax Matters." Any realized short-term capital losses will be
offset against short-term capital gains or, to the extent possible, utilized
as capital loss carryover. The Fund may distribute short-term capital gains
more frequently than annually, reduce shares to reflect capital losses or make
distributions of capital if necessary in order to maintain the Fund's net
asset value of $1.00 per share.

It is expected that the Fund will have a positive net income at the time
of each determination thereof. If for any reason the Fund's net income is a
negative amount, which could occur, for instance, upon default by an issuer of
a portfolio security, the Fund would first offset the negative amount with
respect to each shareholder account from the dividends declared during the
month with respect to those accounts. If and to the extent that negative net
income exceeds declared dividends at the end of the month, the Fund would
reduce the number of outstanding Fund shares by treating each shareholder as
having contributed to the capital of the Fund that number of full and
fractional shares in his or her account which represents his or her share of
the amount of such excess. Each shareholder would be deemed to have agreed to
such contribution in these circumstances by his or her investment in the Fund.

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MANAGEMENT
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INVESTMENT ADVISER: CITIBANK. The Fund draws on the strength and experience of
Citibank. Citibank offers a wide range of banking and investment services to
customers across the United States and throughout the world, and has been
managing money since 1822. Its portfolio managers are responsible for
investing in money market, equity and fixed income securities. Citibank and
its affiliates manage more than $83 billion in assets worldwide. Citibank is a
wholly-owned subsidiary of Citicorp.

Citibank manages the assets of the Fund pursuant to an Investment Advisory
Agreement. Subject to policies set by the Fund's Trustees, Citibank makes
investment decisions for the Fund.

ADVISORY FEES. For its services under the Investment Advisory Agreement,
the Adviser receives investment advisory fees, which are accrued daily and
paid monthly, of 0.20% of the Fund's average daily net assets on an annualized
basis for the Fund's then-current fiscal year. The Adviser has voluntarily
agreed to waive all or a portion of its investment advisory fee.

For the fiscal year ended August 31, 1996, the investment advisory fees
paid to Citibank, after waiver, were 0.01% of the Fund's average daily net
assets for that fiscal year.

BANK REGULATORY MATTERS. The Glass-Steagall Act prohibits certain
financial institutions, such as Citibank, from underwriting securities of
open-end investment companies, such as the Fund. Citibank believes that its
services under the Investment Advisory Agreement and the activities performed
by it or its affiliates as Shareholder Servicing Agents and sub-administrator
are not underwriting and are consistent with the Glass-Steagall Act and other
relevant federal and state laws. However, there is no controlling precedent
regarding the performance of the combination of investment advisory,
shareholder servicing and sub-administrative activities by banks. State laws
on this issue may differ from applicable federal law and banks and financial
institutions may be required to register as dealers pursuant to state
securities laws. Changes in either federal or state statutes or regulations,
or in their interpretations, could prevent Citibank or its affiliates from
continuing to perform these services for the Fund. If Citibank or its
affiliates were to be prevented from acting as the Adviser, sub-administrator
or a Shareholder Servicing Agent, the Fund would seek alternative means for
obtaining these services. The Fund does not expect that shareholders would
suffer any adverse financial consequences as a result of any such occurrence.

ADMINISTRATIVE SERVICES PLAN: The Fund has an Administrative Services Plan
which provides that the Fund may obtain the services of an administrator, a
transfer agent, a custodian, a fund accountant and one or more Shareholder
Servicing Agents, and may enter into agreements providing for the payment of
fees for such services. Under the Administrative Services Plan, the total of
the fees paid to the Fund's Administrator and Shareholder Servicing Agents and
the distribution fee paid to the Distributor (other than any fee concerning
electronic or other media advertising) may not exceed 0.60% of the Fund's
average daily net assets on an annualized basis for the Fund's then-current
fiscal year. Within this overall limitation, individual fees may vary. See
"Administrator," "Shareholder Servicing Agents" and "Transfer Agent, Custodian
and Fund Accountant."

ADMINISTRATOR: LFBDS provides certain administrative services to the Fund
under an administrative services agreement. These administrative services
include providing general office facilities, supervising the overall
administration of the Fund, and providing persons satisfactory to the Board of
Trustees to serve as Trustees and officers of the Fund. These Trustees and
officers may be directors, officers or employees of LFBDS or its affiliates.

LFBDS is a wholly-owned subsidiary of Signature Financial Group, Inc.
"Landmark" is a service mark of LFBDS.

SUB-ADMINISTRATOR: Pursuant to a sub-administrative services agreement,
Citibank performs such sub-administrative duties for the Fund as from time to
time are agreed upon by Citibank and LFBDS. Citibank's compensation as sub-
administrator is paid by LFBDS.

SHAREHOLDER SERVICING AGENTS: The Fund has entered into separate shareholder
servicing agreements with each Shareholder Servicing Agent pursuant to which
that Shareholder Servicing Agent provides shareholder services, including
answering customer inquiries, assisting in processing purchase, exchange and
redemption transactions and furnishing Fund communications to shareholders.
For these services, each Shareholder Servicing Agent receives a fee from the
Fund at an annual rate of 0.25% of the average daily net assets of the Fund
represented by shares owned by investors for whom such Shareholder Servicing
Agent maintains a servicing relationship.

Some Shareholder Servicing Agents may impose certain conditions on their
customers in addition to or different from those imposed by the Fund, such as
requiring a minimum initial investment or charging their customers a direct
fee for their services. Each Shareholder Servicing Agent has agreed to
transmit to its customers who are shareholders of the Fund appropriate prior
written disclosure of any fees that it may charge them directly and to provide
written notice at least 30 days prior to imposition of any transaction fees.

TRANSFER AGENT, CUSTODIAN AND FUND ACCOUNTANT: State Street Bank and Trust
Company acts as transfer agent, dividend disbursing agent and custodian for
the Fund. State Street also provides fund accounting services to the Fund and
calculates the daily net asset value of the Fund.

DISTRIBUTION ARRANGEMENTS: LFBDS is the Distributor of the Fund's shares and
also serves as distributor for each of the other Landmark Funds and as a
Shareholder Servicing Agent for certain investors. As Distributor, LFBDS bears
the cost of compensating personnel involved in the sale of shares of the Fund
and bears all costs of travel, office expenses (including rent and overhead)
and equipment. In those states where LFBDS is not a registered broker-dealer,
shares of the Fund are sold through Signature Broker-Dealer Services, Inc., as
dealer.

Under a plan of distribution for the Fund adopted in accordance with Rule
12b-1 under the 1940 Act (the "Plan"), the Fund pays the Distributor a fee at
an annual rate not to exceed 0.10% of the average daily net assets of the
Fund. The Plan also permits the Fund to pay the Distributor an additional fee
(not to exceed 0.10% of the average daily net assets of the Fund) in
anticipation of or as reimbursement for print or electronic media advertising
expenses incurred in connection with the sale of Fund shares. However, the
Distributor has agreed to waive a portion of these fees.

The Fund and the Distributor provide to the Trustees quarterly a written
report of amounts expended pursuant to the Plan and the purposes for which the
expenditures were made.
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TAX MATTERS
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This discussion of taxes is for general information only. Investors should
consult their own tax advisers about their particular situations.

The Fund expects that most of its net income will be attributable to
interest on Municipal Obligations and as a result, most of the Fund's
dividends to shareholders will be excludable from shareholders' gross income.
However, the Fund may invest from time to time in taxable securities, and
certain Fund dividends may be subject to the federal alternative minimum tax.
It is also possible, but not intended, that the Fund may realize short-term or
long-term capital gains or losses. Generally, distributions from the Fund's
short-term capital gains will be taxed as ordinary income, and distributions
of long-term net capital gains will be taxed as such regardless of how long
the shares of the Fund have been held. Dividends and distributions are treated
in the same manner for federal tax purposes whether they are paid in cash or
as additional shares.

Fund dividends of tax-exempt income are taken into account in determining
the amount of a shareholder's social security and railroad retirement benefits
that may be subject to federal income tax. No deduction may be claimed for
interest on indebtedness incurred or continued for the purpose of purchasing
or carrying Fund shares. Investors who are, or who are related to,
"substantial users" of facilities financed by private activity bonds should
consult their tax advisers before buying Fund shares.

Early each year, the Fund will notify its shareholders of the amount and
federal tax status of distributions paid to shareholders for the preceding
year.

The account application asks each new shareholder to certify that the
shareholder's Social Security or taxpayer identification number is correct and
that the shareholder is not subject to 31% backup withholding for failing to
report income to the IRS. The Fund may be required to withhold (and pay over
to the IRS for the shareholder's credit) 31% of certain distributions paid to
shareholders who fail to provide this information or otherwise violate IRS
regulations.

Under existing law, the Fund expects that shareholders will not be subject
to the Connecticut personal income tax on exempt-interest dividends received
from the Fund to the extent that such distributions are derived from interest
on Connecticut Municipal Obligations. Capital-gain dividends derived from
Connecticut Municipal Obligations other than obligations of U.S. territories
or possessions and their political subdivisions are also free from this tax.
Other distributions from the Fund, including exempt-interest dividends
attributable to obligations of issuers in other states, other long-term
capital gains and all short-term capital gains, will not be exempt from the
Connecticut personal income tax. Moreover, distributions by the Fund derived
from interest income, other than interest on Connecticut Municipal
Obligations, that is treated as a preference item for federal income tax
purposes may be subject to the net Connecticut minimum tax in the case of any
shareholder subject to the Connecticut personal income tax and required to pay
the federal alternative minimum tax.

FOREIGN SHAREHOLDERS: The Fund will withhold U.S. federal income tax payments
at a rate of 30% (or any lower applicable treaty rate) on taxable dividends
and other payments subject to withholding taxes that are made to persons who
are not citizens or residents of the United States. Distributions received
from the Fund by non-U.S. persons also may be subject to tax under the laws of
their own jurisdiction.

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PERFORMANCE INFORMATION
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Fund performance may be quoted in advertising, shareholder reports and
other communications in terms of yield, effective yield, tax equivalent yield,
total rate of return or tax equivalent total rate of return. All performance
information is historical and is not intended to indicate future performance.
Yields and total rates of return fluctuate in response to market conditions
and other factors.

The Fund may provide its period and average annualized "total rates of
return" and "tax equivalent total rates of return." The "total rate of return"
refers to the change in the value of an investment in the Fund over a stated
period and is compounded to include the value of any shares purchased with any
dividends or capital gains declared during such period. Period total rates of
return may be "annualized." An "annualized" total rate of return assumes that
the period total rate of return is generated over a one-year period. The "tax
equivalent total rate of return" refers to the total rate of return that a
fully taxable money market fund would have to generate in order to produce an
after-tax total rate of return equivalent to that of the Fund. The use of a
tax equivalent total rate of return allows investors to compare the total
rates of return of the Fund, the dividends from which are exempt from federal
personal income taxes, with the total rates of return of funds the dividends
from which are not so tax exempt.

The Fund may provide annualized "yield," "effective yield" and "tax
equivalent yield" quotations. The "yield" of the Fund refers to the income
generated by an investment in the Fund over a seven-day period (which period
is stated in any such advertisement or communication). This income is then
annualized; that is, the amount of income generated by the investment over
that period is assumed to be generated each week over a 365-day period and is
shown as a percentage of the investment. The "effective yield" is calculated
similarly, but when annualized the income earned by the investment during that
seven-day period is assumed to be reinvested. The effective yield is slightly
higher than the yield because of the compounding effect of this assumed
reinvestment. The "tax equivalent yield" refers to the yield that a fully
taxable money market fund would have to generate in order to produce an after-
tax yield equivalent to that of the Fund. The use of a tax equivalent yield
allows investors to compare the yield of the Fund, the dividends from which
are exempt from federal personal income tax, with yields of funds the
dividends from which are not so tax exempt. The Fund may also provide yield,
effective yield and tax equivalent yield quotations for longer periods.

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GENERAL INFORMATION
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ORGANIZATION: Landmark Connecticut Tax Free Reserves is a non-diversified
series of Landmark Multi-State Tax Free Funds (the "Trust"). The Trust is a
Massachusetts business trust which was organized on August 30, 1985; it was
known as Landmark New York Tax Free Reserves until its name was changed
effective December 18, 1991. The Fund was established as a separate series of
the Trust on September 13, 1993. The Trust is a non-diversified, open-end
management investment company registered under the 1940 Act. There are
presently two active series of the Trust in addition to the Fund.

Under Massachusetts law, shareholders of a business trust may, under
certain circumstances, be held personally liable as partners for the trust's
obligations. However, the risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which both
inadequate insurance existed and the trust itself was unable to meet its
obligations.

VOTING AND OTHER RIGHTS: The Trust may issue an unlimited number of shares,
may create new series of shares and may divide shares in each series into
classes. Each share of the Trust gives the shareholder one vote in Trustee
elections and other matters submitted to shareholders for vote. All shares of
each series of the Trust have equal voting rights except that, in matters
affecting only a particular series, only shares of that particular series are
entitled to vote.

At any meeting of shareholders of the Fund, a Shareholder Servicing Agent
may vote any shares of which it is the holder of record and for which it does
not receive voting instructions proportionately in accordance with the
instructions it receives for all other shares of which that Shareholder
Servicing Agent is the holder of record.

As a Massachusetts business trust, the Trust is not required to hold
annual shareholder meetings. Shareholder approval will usually be sought only
for changes in the Fund's fundamental investment restrictions and for the
election of Trustees under certain circumstances. Trustees may be removed by
shareholders under certain circumstances. Each share of the Fund is entitled
to participate equally in dividends and other distributions and the proceeds
of any liquidation of the Fund.

CERTIFICATES: The Fund's Transfer Agent maintains a share register for
shareholders of record, i.e., Shareholder Servicing Agents. Share certificates
are not issued.

EXPENSES: For the fiscal year ended August 31, 1996, total operating expenses
of the Fund, after giving effect to fee waivers and reimbursements, were 0.65%
of the Fund's average daily net assets for that fiscal year. All fee waivers
and reimbursements are voluntary and may be reduced or terminated at any time.

------------------------------

The Statement of Additional Information dated the date hereof contains
more detailed information about the Fund, including information related to (i)
investment policies and restrictions, (ii) the Trustees, officers, Adviser and
Administrator, (iii) securities transactions, (iv) the Fund's shares,
including rights and liabilities of shareholders, (v) the methods used to
calculate performance information, (vi) programs for the purchase of shares,
and (vii) the determination of net asset value.

No person has been authorized to give any information or make any
representations not contained in this Prospectus in connection with the
offering made by this Prospectus and, if given or made, such information or
representations must not be relied upon as having been authorized by the Fund
or its distributor. This Prospectus does not constitute an offering by the
Fund or its distributor in any jurisdiction in which such offering may not
lawfully be made.
- ------------------------------------------------------------------------------
APPENDIX A
- ------------------------------------------------------------------------------

PERMITTED INVESTMENTS
AND INVESTMENT PRACTICES

MUNICIPAL BONDS. Municipal bonds are debt obligations of states, cities,
municipalities and municipal agencies and authorities which generally have a
maturity at the time of issue of one year or more and which are issued to
raise funds for various public purposes, such as construction of a wide range
of public facilities, refunding outstanding obligations or obtaining funds for
institutions and facilities. The two principal classifications of municipal
bonds are "general obligation" and "revenue" bonds. General obligation bonds
are secured by the issuer's pledge of its full faith, credit and taxing power
for the payment of principal and interest. The principal of and interest on
revenue bonds are payable from the income of specific projects or authorities
and generally are not supported by the issuer's general power to levy taxes.
In some cases, revenues derived from specific taxes are pledged to support
payments on a revenue bond.

In addition, certain kinds of private activity bonds ("IDBs") are issued
by or on behalf of public authorities to provide funding for various privately
operated industrial facilities, such as warehouse, office, plant and store
facilities and environmental and pollution control facilities. IDBs are, in
most cases, revenue bonds. The payment of the principal and interest on IDBs
usually depends solely on the ability of the user of the facilities financed
by the bonds or other guarantor to meet its financial obligations and, in
certain instances, the pledge of real and personal property as security for
payment. Many IDBs may not be readily marketable; however, the IDBs or the
participation certificates in IDBs purchased by the Fund will have liquidity
because they generally will be supported by demand features to "high quality"
banks, insurance companies or other financial institutions.

MUNICIPAL NOTES. There are four major varieties of state and municipal
notes: Tax and Revenue Anticipation Notes ("TRANs"); Tax Anticipation Notes
("TANs"); Revenue Anticipation Notes ("RANs"); and Bond Anticipation Notes
("BANs"). TRANs, TANs and RANs are issued by states, municipalities and other
tax-exempt issuers to finance short-term cash needs or, occasionally, to
finance construction. Many TRANs, TANs and RANs are general obligations of the
issuing entity payable from taxes or designated revenues, respectively,
expected to be received within the related fiscal period. BANs are issued with
the expectation that their principal and interest will be paid out of proceeds
from renewal notes or bonds to be issued prior to the maturity of the BANs,
BANs are issued by both general obligation and revenue bond issuers usually to
finance such items as land acquisition, facility acquisition and/or
construction and capital improvement projects.

VARIABLE RATE INSTRUMENTS AND PARTICIPATION INTERESTS. Variable rate
instruments provide for a periodic adjustment in the interest rate paid on the
instrument and usually permit the holder to receive payment of principal and
accrued interest upon a specified number of day's notice. Variable rate
instruments in which the Fund may invest include participation interests in
Municipal Obligations owned by a bank, insurance company or other financial
institution or affiliated organization ("Participation Interests"). A variable
rate instrument or a Participation Interest may be backed by an irrevocable
letter of credit or guarantee of, or a right to put to, a bank, or an
insurance policy of an insurance company. See "Stand-by Commitments." Purchase
of a Participation Interest may involve the risk that the Fund will not be
deemed to be the owner of the underlying Municipal Obligation for purposes of
the ability to claim tax exemption of interest paid on that Municipal
Obligation. If interest rates rise or fall, the rates payable on variable rate
instruments will generally be readjusted. As a result variable rate
instruments do not offer the same opportunity for capital appreciation or loss
as fixed rate instruments.

STAND-BY COMMITMENTS. When the Fund purchases Municipal Obligations it may
also acquire stand-by commitments from banks with respect to such Municipal
Obligations. The Fund also reserves the right to acquire, and may acquire in
the future, subject to receipt of an exemptive order pursuant to the 1940 Act,
stand-by commitments from broker-dealers. There can be no assurance that such
an order will be granted. Under a stand-by commitment, a bank or broker-dealer
agrees to purchase at the Fund's option a specified Municipal Obligation at a
specified price. A stand-by commitment is the equivalent of a "put" option
with respect to a particular Municipal Obligation. The Fund intends to acquire
stand-by commitments solely to facilitate liquidity. Stand-by commitments are
subject to certain risks, which include the ability of the issuer of the
commitment to pay for the Municipal Obligations at the time the commitment is
exercised, the fact that the commitment is not marketable, and that the
maturity of the underlying security will generally be different from that of
the commitment.

"WHEN-ISSUED" SECURITIES. In order to ensure the availability of suitable
securities, the Fund may purchase securities on a "when-issued" or on a
"forward delivery" basis, which means that the securities would be delivered
to the Fund at a future date beyond customary settlement time. Under normal
circumstances, the Fund takes delivery of the securities. In general, the
purchaser does not pay for the securities until received and does not start
earning interest until the contractual settlement date. While awaiting
delivery of the securities, the Fund establishes a segregated account
consisting of cash, cash equivalents or high quality debt securities equal to
the amount of the Fund's commitments to purchase "when-issued" securities. An
increase in the percentage of the Fund's assets committed to the purchase of
securities on a "when-issued" basis may increase the volatility of its net
asset value.

REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements.
Repurchase agreements are transactions in which an institution sells the Fund
a security at one price, subject to the Fund's obligation to resell and the
selling institution's obligation to repurchase that security at a higher price
normally within a seven day period. There may be delays and risks of loss if
the seller is unable to meet its obligation to repurchase. Repurchase
agreements may involve Municipal Obligations or other securities.

RESTRICTED SECURITIES. The Fund may purchase restricted securities that
are not registered for sale to the general public. Provided that a dealer or
institutional trading market in such securities exists, these restricted
securities are not treated as illiquid securities for purposes of the Fund's
investment limitations. Institutional trading in restricted securities is
relatively new, and the liquidity of the Fund's investments could be impaired
if trading does not develop or declines.

PRIVATE PLACEMENTS AND ILLIQUID INVESTMENTS. The Fund may invest up to 10%
of its net assets in securities for which there is no readily available
market. These illiquid securities may include privately placed restricted
securities for which no institutional market exists. The absence of a trading
market can make it difficult to ascertain a market value for illiquid
investments. Disposing of illiquid investments may involve time-consuming
negotiation and legal expenses, and it may be difficult or impossible for the
Fund to sell them promptly at an acceptable price.

- ------------------------------------------------------------------------------
APPENDIX B
- ------------------------------------------------------------------------------

RATINGS OF MUNICIPAL OBLIGATIONS*

The ratings of Moody's Investors Service, Inc., Standard & Poor's Ratings
Group and Fitch Investors Service, Inc. represent their opinions as to the
quality of various debt obligations. It should be emphasized, however, that
ratings are not absolute standards of quality. Consequently, Municipal
Obligations with the same maturity, coupon and rating may have different
yields while Municipal Obligations of the same maturity and coupon with
different ratings may have the same yield.

DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S TWO
HIGHEST LONG-TERM DEBT RATINGS:

Aaa -- Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and generally are referred
to as "gilt edge". Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such issues.

- ----------
*As described by the rating agencies. Ratings are generally given to
securities at the time of issuance. While the rating agencies may from time
to time revise such ratings, they undertake no obligation to do so.

Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known
as high grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities, or fluctuation of
protective elements may be of greater amplitude, or there may be other
elements present which make the long-term risks appear somewhat larger than in
Aaa securities.

Note: Those bonds in the Aa group which Moody's believes possess the
strongest investment attributes are designated by the symbol Aa1.

DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S TWO
HIGHEST RATINGS OF STATE AND MUNICIPAL NOTES:

Moody's ratings for state and municipal short-term obligations are
designated Moody's Investment Grade ("MIG"). Such ratings recognize the
differences between short-term credit risk and long-term risk. A short-term
rating ("VMIG") may also be assigned to variable rate demand obligations.
Factors affecting the liquidity of the borrower and short-term cyclical
elements are critical in short-term ratings, while other factors of major
importance in bond risk, long-term secular trends, for example, may be less
important over the short run. Symbols used are as follows:

MIG 1/VMIG 1 -- This designation denotes best quality. There is present
strong protection by established cash flows, superior liquidity support or
demonstrated broad-based access to the market for refinancing.

MIG 2/VMIG 2 -- This designation denotes high quality. Margins of
protection are ample although not so large as in the preceding group.

DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S TWO
HIGHEST COMMERCIAL PAPER RATINGS:

Moody's commercial paper ratings are opinions of the ability of issuers to
repay punctually senior debt obligations. These obligations have an original
maturity not exceeding one year.

Issuers rated PRIME-1 (or supporting institutions) have a superior ability
for repayment of senior short-term debt obligations. Prime-1 repayment ability
will often be evidenced by many of the following characteristics: (1) leading
market positions in well established industries; (2) high rates of return on
funds employed; (3) conservative capitalization structure with moderate
reliance on debt and ample asset protection; (4) broad margins in earnings
coverage of fixed financial charges and high internal cash generation; and (5)
well established access to a range of financial markets and assured sources of
alternate liquidity.

Issuers rated PRIME-2 (or supporting institutions) have a strong ability
for repayment of senior short-term debt obligations. This will normally be
evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, may be more subject to
variation. Capitalization characteristics, while still appropriate, may be
more affected by external conditions. Ample alternate liquidity is maintained.

DESCRIPTION OF STANDARD & POOR'S RATINGS GROUP'S TWO
HIGHEST LONG-TERM DEBT RATINGS:

AAA -- An obligation rated "AAA" has the highest rating assigned by
Standard & Poor's. The obligor's capacity to meet its financial commitment on
the obligation is extremely strong.

AA -- An obligation rated "AA" differs from the highest rated obligations
only in a small degree. The obligor's capacity to meet its financial
commitment on the obligation is very strong.

Plus (+) or Minus (-): The "AA" rating may be modified by the addition of
a plus or minus sign to show relative standing within the AA rating category.

DESCRIPTION OF STANDARD & POOR'S RATINGS GROUP'S TWO
HIGHEST RATINGS OF STATE AND MUNICIPAL NOTES:

A Standard & Poor's note rating reflects the liquidity factors and market
access risks unique to notes. Notes maturing in three years or less will
likely receive a note rating. Notes maturing beyond three years will most
likely receive a long-term debt rating. The following criteria will be used in
making that assessment:

-- Amortization schedule (the larger the final maturity relative to other
maturities, the more likely the issue is to be treated as a note).

-- Source of payment (the more the issue depends on the market for its
refinancing, the more likely it is to be treated as a note).

Note rating symbols and definitions are as follows:

SP-1 -- Strong capacity to pay principal and interest. Issues determined
to possess very strong characteristics are given a plus (+) designation.

SP-2 -- Satisfactory capacity to pay principal and interest, with some
vulnerability to adverse financial and economic changes over the term of the
notes.

DESCRIPTION OF STANDARD & POOR'S RATINGS GROUP'S TWO
HIGHEST COMMERCIAL PAPER RATINGS:

A Standard & Poor's issue credit rating is a current opinion of the
creditworthiness of an obligor with respect to a specific financial obligation
(including commercial paper programs). It takes into consideration the
creditworthiness of guarantors, insurers or other forms of credit enhancement
on the obligation and takes into account the currency in which the obligation
is denominated.

A-1 -- A short-term obligation rated "A-1" is rated in the highest
category by Standard & Poor's. The obligor's capacity to meet its financial
commitment on the obligation is strong. Within this category, certain
obligations are designated with a plus sign (+). This indicates that the
obligor's capacity to meet its financial commitment on these obligations is
extremely strong.

A-2 -- A short-term obligation rated "A-2" is somewhat more susceptible to
the adverse effects of changes in circumstances and ecomomic conditions than
obligations in higher rating categories. However, the obligor's capacity to
meet its financial commitment on the obligation is satisfactory.

DESCRIPTION OF STANDARD & POOR'S RATINGS
GROUP'S DUAL RATINGS:

Standard & Poor's assigns "dual" ratings to all debt issues that have a
put option or demand feature as part of their structure.

The first rating addresses the likelihood of repayment of principal and
interest as due, and the second rating addresses only the demand feature. The
long-term debt rating symbols are used for bonds to denote the long-term
maturity and the commercial paper rating symbols for the put option (for
example, "AAA/A-1+"). With short-term demand debt Standard & Poor's note
rating symbols are used with the commercial paper rating symbols (for example,
"SP-1+/A-1+").

DESCRIPTION OF FITCH INVESTORS SERVICE, INC.'S TWO
HIGHEST BOND RATINGS:

The rating takes into consideration special features of the issue, its
relationship to other obligations of the issuer, the current and prospective
financial condition and operating performance of the issuer and any guarantor,
as well as the economic and political environment that might affect the
issuer's future financial strength and credit quality.

AA -- Bonds considered to be investment grade and of very high credit
quality. The obligor's ability to pay interest and repay principal is very
strong, although not quite as strong as bonds rated "AAA". Because bonds rated
in the "AAA" and "AA" categories are not significantly vulnerable to
foreseeable future developments, short-term debt of these issuers is generally
rated "F-1+".

Plus (+) or Minus (-): The "AA" rating may be modified by the addition of
a plus or minus sign to show relative standing within the "AA" rating
category.

DESCRIPTION OF FITCH INVESTORS SERVICE, INC.'S THREE
HIGHEST RATINGS OF STATE AND MUNICIPAL NOTES:

The short-term rating places greater emphasis than a long-term rating on
the existence of liquidity necessary to meet the issuer's obligations in a
timely manner.

F-1+ -- Exceptionally Strong Credit Quality. Issues assigned this rating
are regarded as having the strongest degree of assurance for timely payment.

F-1 -- Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated "F-
1+".

DESCRIPTION OF FITCH INVESTORS SERVICE, INC.'S THREE
HIGHEST COMMERCIAL PAPER RATINGS:

The short-term rating places greater emphasis than a long-term rating on
the existence of liquidity necessary to meet the issuer's obligations in a
timely manner.

F-1+ -- Exceptionally Strong Credit Quality. Issues assigned this rating
are regarded as having the strongest degree of assurance for timely payment.

F-1 -- Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated "F-
1+".

<PAGE>
- --------------------------------------------------------------------------------
APPENDIX C
- --------------------------------------------------------------------------------

TAXABLE EQUIVALENT YIELD TABLES
(RATES FOR 1996 UNDER FEDERAL AND
CONNECTICUT PERSONAL INCOME TAX LAWS)

The tables below show the approximate taxable bond yields which are
equivalent to tax-exempt bond yields under 1996 federal and Connecticut
personal income tax laws. SUCH YIELDS MAY DIFFER UNDER THE LAWS APPLICABLE TO
SUBSEQUENT YEARS IF THE EFFECT OF ANY SUCH LAW IS TO CHANGE ANY TAX BRACKET OR
THE AMOUNT OF TAXABLE INCOME WHICH IS APPLICABLE TO A TAX BRACKET. Separate
calculations, showing the applicable taxable income brackets, are provided for
investors who file joint returns and for investors who file individual
returns. While it is expected that a substantial portion of the dividends paid
to shareholders of the Fund will be exempt from federal and Connecticut
personal income taxes, portions of such dividends from time to time may be
subject to federal income taxes and/or Connecticut personal income taxes.

<TABLE>
<CAPTION>
FEDERAL TABLE
----------------------------------------------------------------------------------------------------------------------------------
TAXABLE INCOME* TAX-EXEMPT YIELD
----------------------------------------------------------------------------------------------------------------------------------
SINGLE RETURN JOINT RETURN INCOME
TAX 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% 5.50% 6.00% 6.50%
BRACKET**
BUT BUT
OVER NOT OVER OVER NOT OVER EQUIVALENT TAXABLE YIELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0 $ 24,000 $ 0 $ 40,100 15.00% 2.35% 2.94% 3.53% 4.12% 4.71% 5.29% 5.88% 6.47% 7.06% 7.65%
$ 24,000 $ 58,150 $ 40,100 $ 96,900 28.00% 2.78% 3.47% 4.17% 4.86% 5.56% 6.25% 6.94% 7.64% 8.33% 9.03%
$ 58,150 $121,300 $ 96,900 $147,700 31.00% 2.90% 3.62% 4.35% 5.07% 5.80% 6.52% 7.25% 7.97% 8.70% 9.42%
$121,300 $263,750 $147,700 $263,750 36.00% 3.13% 3.91% 4.69% 5.47% 6.25% 7.03% 7.81% 8.59% 9.38% 10.16%
$263,750 & over $263,750 & over 39.60% 3.31% 4.14% 4.97% 5.79% 6.62% 7.45% 8.28% 9.11% 9.93% 10.76%

<FN>
*Net amount subject to Federal Personal income tax after deductions and exemptions.
**Effective Federal Tax Bracket for 1996. 1997 information is not available as of the date of this Prospectus.
</FN>

<CAPTION>
FEDERAL AND CONNECTICUT TABLE
------------------------------------------------------------------------------------------------------------------------------
TAXABLE INCOME* TAX-EXEMPT YIELD
----------------------------------------------------------------------------------------------------------------------------------
SINGLE RETURN JOINT RETURN INCOME
TAX 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% 5.50% 6.00% 6.50%
BRACKET**
BUT BUT
OVER NOT OVER OVER NOT OVER EQUIVALENT TAXABLE YIELD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0 $ 24,000 18.59% 2.46% 3.07% 3.69% 4.30% 4.91% 5.53% 6.14% 6.76% 7.37% 7.98%
$ 0 $ 40,100 18.54% 2.46% 3.07% 3.68% 4.30% 4.91% 5.52% 6.14% 6.75% 7.37% 7.98%
$ 24,000 $ 58,150 $ 40,100 $ 96,900 31.24% 2.91% 3.64% 4.36% 5.09% 5.82% 6.54% 7.27% 8.00% 8.73% 9.45%
$ 58,150 $121,300 $ 96,900 $147,700 34.11% 3.04% 3.79% 4.55% 5.31% 6.07% 6.83% 7.59% 8.35% 9.11% 9.86%
$121,300 $263,750 $147,700 $263,750 38.88% 3.27% 4.09% 4.91% 5.73% 6.54% 7.36% 8.18% 9.00% 9.82% 10.63%
$263,750 $263,750 42.32% 3.47% 4.33% 5.20% 6.07% 6.93% 7.80% 8.67% 9.54% 10.40% 11.27%

<FN>
*Net amount subject to Federal and Connecticut personal income tax after deductions and exemptions.
**Effective combined federal and state tax bracket.
State rate based on the 1996 average state rate for the 1996 federal tax bracket. Combined Federal and State rate
assumes itemization of state tax deduction. 1997 information is not available as of the date of this Prospectus.
</FN>
</TABLE>

<PAGE>
- -----------------------------------
SHAREHOLDER
SERVICING AGENTS
- -----------------------------------

FOR CITIBANK NEW YORK RETAIL BANKING AND BUSINESS AND
PROFESSIONAL CUSTOMERS:
Citibank, N.A.
450 West 33rd Street, New York, NY 10001
(212) 564-3456 or (800) 846-5300

FOR CITIGOLD CLIENTS:
Citigold
P.O. Box 5130, New York, NY 10126-5130
Call Your Citigold Executive, or in NY or CT (800) 285-1701,
or for all other states (800) 285-1707

FOR CITIBANK GLOBAL ASSET MANAGEMENT CLIENTS:
Citibank, N.A.
Citibank Global Asset Management
153 East 53rd Street, New York, NY 10043
(212) 559-7117

FOR CITIBANK NORTH AMERICAN INVESTOR
SERVICES CLIENTS:
Citibank, N.A.
111 Wall Street, New York, NY 10043
Call Your Account Manager or (212) 657-9100

FOR CITICORP INVESTMENT SERVICES CUSTOMERS:
Citicorp Investment Services
One Court Square, Long Island City, NY 11120
Call Your Investment Consultant or (800) 846-5200
(212) 736-8170 in New York City

[logo] LANDMARK
FUNDS

MONEY MARKET FUNDS:
Cash Reserves
Premium Liquid Reserves
Institutional Liquid Reserves

U.S. Treasury Reserves
Premium U.S. Treasury Reserves
Institutional U.S. Treasury Reserves

Tax Free Reserves
Institutional Tax Free Reserves

California Tax Free Reserves
Connecticut Tax Free Reserves
New York Tax Free Reserves

STOCK & BOND FUNDS:
U.S. Government Income Fund
Intermediate Income Fund
National Tax Free Income Fund
New York Tax Free Income Fund

Balanced Fund
Equity Fund
Small Cap Equity Fund
International Equity Fund
Emerging Asian Markets Equity Fund
<PAGE>
TRUSTEES AND OFFICERS

C. Oscar Morong, Jr., Chairman
Philip W. Coolidge*, President
H. B. Alvord
Elliott J. Berv
Mark T. Finn
Riley C. Gilley
Diana R. Harrington
Susan B. Kerley
Walter E. Robb, III
E. Kirby Warren
William S. Woods, Jr.

SECRETARY
Linda T. Gibson*

TREASURER
John R. Elder*
*Affiliated Person of Administrator and Distributor

- -------------------------------------------------------------------------------

INVESTMENT ADVISER
Citibank, N.A.
153 East 53rd Street, New York, NY 10043

ADMINISTRATOR AND DISTRIBUTOR
The Landmark Funds Broker-Dealer Services, Inc.
6 St. James Avenue, Boston, MA 02116
(617) 423-1679

TRANSFER AGENT AND CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street, Boston, MA 02110

AUDITORS
Deloitte & Touche LLP
125 Summer Street, Boston, MA 02110

LEGAL COUNSEL
Bingham, Dana & Gould LLP
150 Federal Street, Boston, MA 02110

- --------------------------------------------------------------------------------

SHAREHOLDER SERVICING AGENTS
(See Inside of Cover)

CTTR/P/97/RB Printed on Recycled Paper [Recycle symbol]

[logo] LANDMARK(SM) FUNDS
Advised by Citibank, N.A.

LANDMARK
CONNECTICUT
TAX FREE RESERVES

PROSPECTUS
January 2, 1997

<PAGE>

STATEMENT OF
ADDITIONAL INFORMATION
January 2, 1997

LANDMARK NEW YORK TAX FREE RESERVES
(A member of the Landmark(SM) Family of Funds)

Landmark New York Tax Free Reserves (the "Fund") is a separate series
of Landmark Multi-State Tax Free Funds (the "Trust"). The address and telephone
number of the Trust are 6 St. James Avenue, Boston, Massachusetts 02116,
(617) 423-1679.

FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, CITIBANK, N.A. OR ANY OF ITS AFFILIATES, ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER AGENCY, AND INVOLVE
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.

Table of Contents Page
- ----------------- ----

The Fund 2
Investment Objectives, Policies and Restrictions 2
Performance Information 14
Determination of Net Asset Value 15
Management 16
Portfolio Transactions 24
Description of Shares, Voting Rights and Liabilities 25
Certain Additional Tax Matters 26
Independent Accountants and Financial Statements 27
Appendix 28

This Statement of Additional Information sets forth information which
may be of interest to investors but which is not necessarily included in the
Fund's Prospectus, dated January 2, 1997, by which shares of the Fund are
offered. This Statement of Additional Information should be read in conjunction
with the Prospectus, a copy of which may be obtained by an investor without
charge by contacting the Fund's Distributor (see back cover for address and
phone number).

THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS AUTHORIZED
FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE PROSPECTUS.
<PAGE>
1. THE FUND

The Trust is a no-load, non-diversified, open-end management investment
company which was organized as a business trust under the laws of the
Commonwealth of Massachusetts on August 30, 1985. The Trust was known as
"Landmark New York Tax Free Reserves" until its name was changes on December 18,
1991. Shares of the Trust are divided into three separate series, one of which,
the Fund, is described in this Statement of Additional Information. References
in this Statement of Additional Information to the Prospectus are to the
Prospectus, dated January 2, 1997, of the Fund by which shares of the Fund are
offered.

The Fund is a type of mutual fund commonly referred to as a "triple
tax-exempt money market fund." The net asset value of each of the Fund's shares
is expected to remain constant at $1.00, although there can be no assurance that
this will be so on a continuing basis. (See "Determination of Net Asset Value.")

Citibank, N.A. ("Citibank" or the "Adviser") is the investment adviser
to the Fund. The Adviser manages the investments of the Fund from day to day in
accordance with the Fund's investment objectives and policies. The selection of
investments for the Fund, and the way they are managed, depend on the conditions
and trends in the economy and the financial marketplaces.

The Landmark Funds Broker-Dealer Services, Inc. ("LFBDS" or the
"Administrator"), the administrator of the Trust, supervises the overall
administration of the Trust. The Board of Trustees of the Trust provides broad
supervision over the affairs of the Trust. Shares of the Fund are continuously
sold by LFBDS, the Fund's distributor (the "Distributor"), only to investors who
are customers of a financial institution, such as a federal or state-chartered
bank, trust company, savings and loan association or savings bank, or a
securities broker, that has entered into a shareholder servicing agreement with
the Trust (collectively, "Shareholder Servicing Agents"). Although shares of the
Fund are sold without a sales load, LFBDS may receive a fee from the Fund
pursuant to a Distribution Plan adopted in accordance with Rule 12b-1 under the
Investment Company Act of 1940, as amended (the "1940 Act").

2. INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS

INVESTMENT OBJECTIVES

The investment objectives of the Fund are to provide its shareholders
with high levels of current income exempt from federal, New York State and New
York City personal income taxes, preservation of capital and liquidity.

The investment objectives of the Fund may not be changed without
approval by the Fund's shareholders. Of course, there can be no assurance that
the Fund will achieve its investment objectives.

INVESTMENT POLICIES

The Fund seeks its investment objectives by investing primarily in
short-term, high quality fixed rate and variable rate obligations issued by or
on behalf of the State of New York, other states, territories and possessions of
the United States and their authorities, agencies, instrumentalities and
political subdivisions and by other qualifying issuers, the interest on which is
exempt from federal income taxes, including participation interests in such
obligations issued by banks, insurance companies or other financial
institutions. (These securities, whether or not the interest thereon is subject
to the federal alternative minimum tax, are referred to herein as "Municipal
Obligations").

Dividends paid by the Fund which are attributable to interest income on
tax-exempt obligations of the State of New York and its political subdivisions,
of Puerto Rico, other U.S. territories and their political subdivisions and of
other qualifying issuers ("New York Municipal Obligations"), will be exempt from
federal, New York State and New York City personal income taxes. The Fund may
purchase Municipal Obligations issued by other states, their agencies and
instrumentalities, the interest income on which will be exempt from federal
income tax but will be subject to New York State and New York City personal
income taxes. In determining the tax status of interest on Municipal Obligations
and New York Municipal Obligations, the Adviser relies on opinions of bond
counsel who may be counsel to the issuer.

Under normal circumstances, the Fund invests at least 65% of its assets
in New York Municipal Obligations, although the exact amount of the Fund's
assets invested in such securities varies from time to time. Although the Fund
attempts to invest 100% of its assets in Municipal Obligations, the Fund may
invest up to 20% of its total assets in securities the interest income on which
is subject to federal, state and local income tax or the federal alternative
minimum tax. The Fund may invest more than 25% of its assets in participation
interests issued by banks in industrial development bonds and other Municipal
Obligations. In view of this possible "concentration" in bank participation
interests, an investment in the Fund should be made with an understanding of the
characteristics of the banking industry and the risks which such an investment
may entail. (See "Variable Rate Instruments and Participation Interests"
hereafter.) Uninvested cash reserves may be held temporarily for the Fund
pending investment. The Fund's investments may include "when-issued" and
"forward delivery" Municipal Obligations, stand-by commitments and taxable
repurchase agreements.

The Trust's Board of Trustees has determined that the term "high
quality" means Municipal Obligations which at the time of purchase are rated
within the AAA or AA categories by Standard & Poor's Rating Group ("Standard &
Poor's") or Fitch Investors Service, Inc. ("Fitch") or within the Aaa or Aa
categories by Moody's Investors Service, Inc. ("Moody's") in the case of bonds;
MIG 1/VMIG 1 or MIG 2/VMIG 2 by Moody's, SP-1+, SP-1 or SP-2 by Standard &
Poor's or F-1+, F-1 or F-2 by Fitch in the case of notes; A-1+, A-1 or A-2 by
Standard & Poor's or Prime-1, Prime-2 by Moody's or F-1+, F-1 or F-2 by Fitch,
in the case of tax-exempt commercial paper; or which are unrated but are
determined to be of comparable quality by or on behalf of the Trust's Board of
Trustees on the basis of a credit evaluation of the obligor or of the bank
issuing a participation interest, letter of credit or guarantee, or insurance
policy issued in support of the Municipal Obligations or participation
interests. (See "Variable Rate Instruments and Participation Interests" below.)
Such instruments may produce a lower yield than would be available from less
highly rated instruments. The Trust's Board of Trustees has determined that
Municipal Obligations which are backed by the full faith and credit of the U.S.
Government will be considered to have a rating equivalent to Moody's Aaa. (See
"Ratings of Municipal Obligations" in Appendix B to the Prospectus.)

All of the Fund's investments mature or are deemed to mature within 397
days from the date of acquisition and the average maturity of the investments in
the Fund's portfolio (on a dollar-weighted basis) is 90 days or less. The
maturities of variable rate instruments held in the Fund's portfolio are deemed
to be the longer of the period remaining until the next interest rate adjustment
or the period until the Fund would be entitled to payment pursuant to demand
rights, a letter of credit, guarantee or insurance policy or a right to tender
or put the instrument, although the stated maturities may be in excess of 397
days. (See "Variable Rate Instruments and Participation Interests" below.)

As a non-diversified investment company, the Fund is not subject to any
statutory restrictions under the 1940 Act with respect to limiting the
investment of its assets in one or relatively few issuers. This concentration
may present greater risks than in the case of a diversified company. However,
the Fund intends to qualify as a "regulated investment company" under Subchapter
M of the Internal Revenue Code of 1986, as amended (the "Code"). In order so to
qualify under current law, at the close of each quarter of the Fund's taxable
year, at least 50% of the value of the Fund's total assets must be represented
by cash, U.S. Government securities, investment company securities and other
securities limited in respect of any one issuer (or related) to not more than 5%
in value of the total assets of the Fund and not more than 10% of the
outstanding voting securities of such issuer. In addition, and again under
current law, at the close of each quarter of its taxable year, not more than 25%
in value of the Fund's total assets may be invested in securities, other than
U.S. Government securities, of one issuer (or related issuers).

For a general discussion of Municipal Obligations and an explanation of
the ratings of Municipal Obligations by Moody's, Standard & Poor's and Fitch,
see Appendix A and B to the Fund's Prospectus. For a comparison of yields on
such Municipal Obligations and taxable securities, see the "Taxable Equivalent
Yield Tables" in Appendix C to the Prospectus.

Except as stated below, the Fund's investment policies are not
fundamental and may be changed by the Board of Trustees of the Trust without
approval by the Fund's shareholders. As a fundamental policy, the Fund invests
at least 80% of its assets, under normal circumstances, in:

(1) Municipal bonds with remaining maturities of one year or less that
are rated at the date of purchase within the Aaa or Aa categories by Moody's or
within the AAA or AA categories by Standard & Poor's or F-1+, F-1 or F-2 Fitch
or, if not rated by any of these rating agencies, are of comparable quality as
determined by the Adviser on the basis of the credit evaluation of the obligor
on the bonds or of the bank issuing a participation interest or guarantee or of
any insurance policy issued in support of the bonds or the participation
interests.

(2) Municipal notes with remaining maturities of one year or less that
are rated at the date of purchase MIG 1/VMIG 1 or MIG 2/VMIG 2 by Moody's,
SP-1+, SP-1 or SP-2 by Standard & Poor's or F-1+,F-1 or F-2 by Fitch or, if not
rated by any of these rating agencies, are of comparable quality as determined
by the Adviser. The principal kinds of municipal notes are tax and revenue
anticipation notes, tax anticipation notes, bond anticipation notes and revenue
anticipation notes. Notes sold in anticipation of collection of taxes, a bond
sale or receipt of other revenues are usually general obligations of the issuing
municipality or agency. The Fund's investments may be concentrated in municipal
obligations of New York issuers.

(3) Municipal commercial paper that is rated Prime-1 or Prime-2 by
Moody's, A-1+, A-1 or A-2 by Standard & Poor's or F-1+, F-1 or F-2 by Fitch or,
if not rated by any of these rating agencies, is of comparable quality as
determined by the Adviser. Issues of municipal commercial paper typically
represent very short-term, unsecured, negotiable promissory notes. These
obligations are often issued to meet seasonal working capital needs of
municipalities or to provide interim construction financing and are paid from
general revenues of municipalities or are refinanced with long-term debt. In
most cases municipal commercial paper is backed by letters of credit, lending
agreements, note repurchase agreements or other credit facility agreements
offered by banks or other institutions which may be called upon in the event of
default by the issuer of the commercial paper.

Subsequent to its purchase by the Fund, a rated Municipal Obligation
may cease to be rated or its rating may be reduced below the minimum required
for purchase for the Fund. Neither event will require sale of such Municipal
Obligation by the Fund (other than variable rate instruments which must be sold
if they are not "high quality"), but the Adviser will consider such event in
determining whether the Fund should continue to hold the Municipal Obligation.
To the extent that the ratings given to the Municipal Obligations or other
securities held by the Fund are altered due to changes in either the Moody's or
Standard & Poor's ratings systems (see Appendix B to the Prospectus for an
explanation of these rating systems), the Adviser will adopt such changed
ratings as standards for its future investments in accordance with the
investment policies contained in the Prospectus. Certain Municipal Obligations
issued by instrumentalities of the U.S. Government are not backed by the full
faith and credit of the U.S. Treasury but only by the creditworthiness of the
instrumentality. The Trust's Board of Trustees has determined that any Municipal
Obligation that depends directly, or indirectly through a government insurance
program or other guarantee, on the full faith and credit of the U.S. Government
will be considered to have a rating in the highest category. Where necessary to
ensure that the Municipal Obligations are of "high quality" (i.e., within the
two highest ratings assigned by any major rating service), or where the
obligations are not freely transferable, the Fund will require that the
obligation to pay the principal and accrued interest be backed by an
unconditional irrevocable bank letter of credit, a guarantee, insurance policy
or other comparable undertaking of an approved financial institution.

The Fund may invest 25% or more of its assets in securities that are
related in such a way that an economic, business or political development or
change affecting one of the securities would also affect the other securities
including, for example, securities the interest upon which is paid from revenues
of similar type projects, or securities the issuers of which are located in the
same state.

VARIABLE RATE INSTRUMENTS AND PARTICIPATION INTERESTS

Variable rate instruments that the Fund may purchase are tax-exempt
Municipal Obligations (including municipal notes and municipal commercial paper)
that provide for a periodic adjustment in the interest rate paid on the
instrument and permit the holder to receive payment upon a specified number of
days' notice of the unpaid principal balance plus accrued interest either from
the issuer or by drawing on a bank letter of credit, a guarantee or an insurance
policy issued with respect to such instrument or by tendering or "putting" such
instrument to a third party.

The variable rate instruments in which the Fund's assets may be
invested are payable upon a specified period of notice which may range from one
day up to one year. The terms of the instruments provide that interest rates are
adjustable at intervals ranging from daily to up to one year and the adjustments
are based upon the prime rate of a bank or other appropriate interest rate
adjustment index as provided in the respective instruments. The Fund will decide
which variable rate instruments it will purchase in accordance with procedures
prescribed by the Board of Trustees to minimize credit risks. An unrated
variable rate instrument may be determined to meet the Fund's high quality
criteria if it is backed by a letter of credit or guarantee or a right to tender
or put the instrument to a third party or is insured by an insurer that meets
the high quality criteria for the Fund discussed above or on the basis of a
credit evaluation of the underlying obligor. If the credit of the obligor is of
"high quality," no credit support from a bank or other financial institution
will be necessary. Each unrated variable rate instrument will be evaluated on a
quarterly basis to determine that it continues to meet the Fund's high quality
criteria. If an instrument is ever deemed to be of less than high quality, the
Fund either will sell it in the market or exercise the liquidity feature
described below.

Variable rate instruments in which the Fund may invest include
participation interests in variable rate, tax-exempt Municipal Obligations owned
by a bank, insurance company or other financial institution or affiliated
organizations. Although the rate of the underlying Municipal Obligations may be
fixed, the terms of the participation interest may result in the Fund receiving
a variable rate on its investment. A participation interest gives the Fund an
undivided interest in the Municipal Obligation in the proportion that the Fund's
participation bears to the total principal amount of the Municipal Obligation
and provides the liquidity feature. Each participation may be backed by an
irrevocable letter of credit or guarantee of, or a right to put to, a bank
(which may be the bank issuing the participation interest, a bank issuing a
confirming letter of credit to that of the issuing bank, or a bank serving as
agent of the issuing bank with respect to the possible repurchase of the
participation interest) or insurance policy of an insurance company that has
been determined by or on behalf of the Board of Trustees of the Trust to meet
the prescribed quality standards of the Fund. The Fund has the right to sell the
participation interest back to the institution or draw on the letter of credit
or insurance after a specified period of notice, for all or any part of the full
principal amount of the Fund's participation in the security, plus accrued
interest. The Fund intends to exercise the liquidity feature only (1) upon a
default under the terms of the bond documents, (2) as needed to provide
liquidity to the Fund in order to make redemptions of Fund shares, or (3) to
maintain a high quality investment portfolio. In some cases, this liquidity
feature may not be exercisable in the event of a default on the underlying
Municipal Obligations; in these cases, the underlying Municipal Obligations must
meet the Fund's high credit standards at the time of purchase of the
participation interest. Issuers of participation interests will retain a service
and letter of credit fee and a fee for providing the liquidity feature, in an
amount equal to the excess of the interest paid on the instruments over the
negotiated yield at which the participations were purchased by the Fund. The
total fees generally range from 5% to 15% of the applicable prime rate or other
interest rate index. With respect to insurance, the Fund will attempt to have
the issuer of the participation interest bear the cost of the insurance,
although the Fund retains the option to purchase insurance if necessary, in
which case the cost of insurance will be an expense of the Fund subject to the
expense limitation of 2 1/2% of the first $30 million of the Fund's average net
assets, 2% of the next $70 million and 1 1/2% of the Fund's average net assets
in excess of $100 million. The Adviser has been instructed by the Trust's Board
of Trustees to monitor continually the pricing, quality and liquidity of the
variable rate instruments held by the Fund, including the participation
interests, on the basis of published financial information and reports of the
rating agencies and other bank analytical services to which the Fund may
subscribe. Although participation interests may be sold, the Fund intends to
hold them until maturity, except under the circumstances stated above.

In view of the "concentration" of the Fund in bank participation
interests in Municipal Obligations secured by bank letters of credit or
guarantees, an investment in the Fund should be made with an understanding of
the characteristics of the banking industry and the risks which such an
investment may entail. Banks are subject to extensive governmental regulation
which may limit both the amounts and types of loans and other financial
commitments which may be made and interest rates and fees which may be charged.
The profitability of this industry is largely dependent upon the availability
and cost of capital funds for the purpose of financing lending operations under
prevailing money market conditions. Also, general economic conditions play an
important part in the operation of this industry and exposure to credit losses
arising from possible financial difficulties of borrowers might affect a bank's
ability to meet its obligations under a letter of credit.

Periods of high inflation and periods of economic slowdown, together
with the fiscal measures adopted to attempt to deal with them, have brought wide
fluctuations in interest rates. When interest rates rise, the value of fixed
income securities generally falls, and vice versa. While this is true for
variable rate instruments generally, the variable rate nature of the underlying
instruments should minimize these changes in value. Accordingly, as interest
rates decrease or increase, the potential for capital appreciation and the risk
of potential capital depreciation is less than would be the case with a
portfolio of fixed income securities. Because the adjustment of interest rates
on the variable rate instruments is made in relation to movements of various
interest rate adjustment indices, the variable rate instruments are not
comparable to long-term fixed rate securities. Accordingly, interest rates on
the variable rate instruments may be higher or lower than current market rates
for fixed rate obligations of comparable quality with similar maturities.

Because of the variable rate nature of the instruments, when prevailing
interest rates decline the Fund's yield will decline and its shareholders will
forego the opportunity for capital appreciation. On the other hand, during
periods when prevailing interest rates increase, the Fund's yield will increase
and its shareholders will have reduced risk of capital depreciation.

For purposes of determining whether a variable rate instrument held by
the Fund matures within 397 days from the date of its acquisition, the maturity
of the instrument will be deemed to be the longer of (1) the period required
before the Fund is entitled to receive payment of the principal amount of the
instrument after notice or (2) the period remaining until the instrument's next
interest rate adjustment. The maturity of a variable rate instrument will be
determined in the same manner for purposes of computing the Fund's
dollar-weighted average portfolio maturity.

"WHEN-ISSUED" SECURITIES

New issues of certain Municipal Obligations frequently are offered on a
"when-issued" or "forward delivery" basis. The payment obligation and the
interest rate that will be received on the Municipal Obligations are each fixed
at the time the buyer enters into the commitment although settlement, i.e.,
delivery of and payment for the Municipal Obligations, takes place beyond
customary settlement time (but normally within 45 days after the date of the
Fund's commitment to purchase). Although the Fund will only make commitments to
purchase "when-issued" or "forward delivery" Municipal Obligations with the
intention of actually acquiring them, the Fund may sell these securities before
the settlement date if deemed advisable by the Adviser.

Municipal Obligations purchased on a "when-issued" or "forward
delivery" basis and the securities held in the Fund's portfolio are subject to
changes in value based upon the public's perception of the credit-worthiness of
the issuer and changes, real or anticipated, in the level of interest rates. The
value of these Municipal Obligations and securities generally change in the same
way, that is, both experience appreciation when interest rates decline and
depreciation when interest rates rise. Purchasing Municipal Obligations on a
"when-issued" or "forward delivery" basis can involve a risk that the yields
available in the market on the settlement date may actually be higher or lower
than those obtained in the transaction itself. A separate account of the Fund
consisting of cash or liquid debt securities equal to the amount of the
"when-issued" or "forward delivery" commitments will be established at the
Fund's custodian bank. For the purpose of determining the adequacy of the
securities in the account, the deposited securities will be valued at market
value. If the market value of such securities declines, additional cash or
highly liquid securities will be placed in the account daily so that the value
of the account will equal the amount of the Fund's commitments. On the
settlement date of the "when-issued" or "forward delivery" securities, the
Fund's obligations will be met from then-available cash flow, sale of securities
held in the separate account, sale of other securities or, although not normally
expected, from sale of the "when-issued" or "forward delivery" securities
themselves (which may have a value greater or lesser than the Fund's payment
obligations). Sale of securities to meet such obligations may result in the
realization of capital gains or losses, which are not exempt from federal income
tax.

STAND-BY COMMITMENTS

When the Fund purchases Municipal Obligations it may also acquire
stand-by commitments from banks with respect to such Municipal Obligations. The
Fund also may acquire stand-by commitments from broker-dealers. Under the
stand-by commitment, a bank or broker-dealer agrees to purchase at the Fund's
option a specified Municipal Obligation at a specified price. A stand-by
commitment is the equivalent of a "put" option acquired by the Fund with respect
to a particular Municipal Obligation held in the Fund's portfolio.

The amount payable to the Fund upon the exercise of a stand-by
commitment normally would be (1) the acquisition cost of the Municipal
Obligation (excluding any accrued interest paid on the acquisition), less any
amortized market premium or plus any amortized market or original issue discount
during the period the Fund owned the security, plus (2) all interest accrued on
the security since the last interest payment date during the period the security
was owned by the Fund. Absent unusual circumstances relating to a change in
market value, the Fund would value the underlying Municipal Obligation at
amortized cost. Accordingly, the amount payable by a bank or dealer during the
time a stand-by commitment is exercisable would be substantially the same as the
market value of the underlying Municipal Obligation. The Fund values stand-by
commitments at zero for purposes of computing the value of its net assets.

The stand-by commitments that the Fund may enter into are subject to
certain risks, which include the ability of the issuer of the commitment to pay
for the securities at the time the commitment is exercised and the fact that the
commitment is not marketable by the Fund and the maturity of the underlying
security will generally be different from that of the commitment.

TAXABLE SECURITIES

Although the Fund attempts to invest 100% of its net assets in
tax-exempt Municipal Obligations, the Fund may invest up to 20% of the value of
its net assets in securities of the kind described below, the interest income on
which is subject to federal income tax. Circumstances in which the Fund may
invest in taxable securities include the following: (a) pending investment of
proceeds of sales of Fund shares or of portfolio securities; (b) pending
settlement of purchases of portfolio securities; (c) to maintain liquidity for
the purpose of meeting anticipated redemptions; and (d) when, in the opinion of
the Fund's investment adviser, it is advisable to do so because of adverse
market conditions affecting the market for Municipal Obligations. The kinds of
taxable securities in which the Fund's assets may be invested are limited to the
following short-term, fixed-income securities (maturing in 397 days or less from
the time of purchase): (1) obligations of the U.S. Government or its agencies,
instrumentalities or authorities; (2) commercial paper rated Prime-1 or Prime-2
by Moody's, A-1+, A-1 or A-2 by Standard & Poor's or F-1+, F-1 or F-2 by Fitch;
(3) certificates of deposit of U.S. banks with assets of $1 billion or more; and
(4) repurchase agreements with respect to any Municipal Obligations or other
securities which the Fund is permitted to own. The Fund's assets may also be
invested in Municipal Obligations which are subject to an alternative minimum
tax.

REPURCHASE AGREEMENTS

The Fund may invest assets in instruments subject to repurchase
agreements only with member banks of the Federal Reserve System or "primary
dealers" (as designated by the Federal Reserve Bank of New York) in U.S.
Government securities. Under the terms of a typical repurchase agreement, the
Fund would acquire an underlying debt instrument for a relatively short period
(usually not more than one week) subject to an obligation of the seller to
repurchase and the Fund to resell the instrument at a fixed price and time,
thereby determining the yield during the Fund's holding period. This results in
a fixed rate of return insulated from market fluctuations during such period. A
repurchase agreement is subject to the risk that the seller may fail to
repurchase the security. Repurchase agreements may be deemed to be loans under
the 1940 Act. All repurchase agreements entered into by the Fund shall be fully
collateralized at all times during the period of the agreement in that the value
of the underlying security shall be at least equal to the amount of the loan,
including the accrued interest thereon, and the Fund or its custodian or
sub-custodian shall have possession of the collateral, which the Trust's Board
of Trustees believes will give it a valid, perfected security interest in the
collateral. Whether a repurchase agreement is the purchase and sale of a
security or a collateralized loan has not been definitively established. This
might become an issue in the event of the bankruptcy of the other party to the
transaction. In the event of default by the seller under a repurchase agreement
construed to be a collateralized loan, the underlying securities are not owned
by the Fund but only constitute collateral for the seller's obligation to pay
the repurchase price. Therefore, the Fund may suffer time delays and incur costs
in connection with the disposition of the collateral. The Trust's Board of
Trustees believes that the collateral underlying repurchase agreements may be
more susceptible to claims of the seller's creditors than would be the case with
securities owned by the Fund. Repurchase agreements will give rise to income
which will not qualify as tax-exempt income when distributed by the Fund. The
Fund will not invest in a repurchase agreement maturing in more than seven days
if any such investment together with illiquid securities held by the Fund exceed
10% of the Fund's total net assets. Repurchase agreements are also subject to
the same risks described herein with respect to stand-by commitments.

RISK FACTORS AFFECTING INVESTMENT
IN NEW YORK MUNICIPAL OBLIGATIONS

The Fund intends to invest a high proportion of the its assets in
Municipal Obligations of the State of New York and its political subdivisions,
municipalities, agencies, instrumentalities and public authorities. Payment of
interest and preservation of principal is dependent upon the continuing ability
of New York issuers and/or obligors of state, municipal and public authority
debt obligations to meet their obligations thereunder.

The fiscal stability of New York State is related, at least in part, to
the fiscal stability of its localities and authorities. Various State agencies,
authorities and localities have issued large amounts of bonds and notes either
guaranteed or supported by the State through lease-purchase arrangements, other
contractual arrangements or moral obligation provisions. While debt service is
normally paid out of revenues generated by projects of such State agencies,
authorities and localities, the State has had to provide special assistance in
recent years, in some cases of a recurring nature, to enable such agencies,
authorities and localities to meet their financial obligations and, in some
cases, to prevent or cure defaults. To the extent State agencies and local
governments require State assistance to meet their financial obligations, the
ability of the State to meet its own obligations as they become due or to obtain
additional financing could be adversely affected.

The Adviser believes that by maintaining the Fund's investment
portfolio in liquid, short-term, high quality investments, including
participation interests and other variable rate instruments that have high
quality credit support from banks, insurance companies or other financial
institutions, the Fund is somewhat insulated from the credit risks that may
exist for long-term New York Municipal Obligations.

For further information concerning New York Municipal Obligations, see
the Appendix to this Statement of Additional Information. The summary set forth
above and in the Appendix is included for the purpose of providing a general
description of New York State and New York City credit and financial conditions.
This summary is based on information from statements of issuers of New York
Municipal Obligations and does not purport to be complete. The Trust is not
responsible for the accuracy or timeliness of this information.

INVESTMENT RESTRICTIONS

The Trust has adopted the following policies with respect to the Fund
which may not be changed without approval by a "majority of the outstanding
shares" of the Fund, which as used in this Statement of Additional Information,
means the vote of the lesser of (i) 67% or more of the shares of the Fund
present at a meeting, if the holders of more than 50% of the outstanding "voting
securities" of the Fund are present or represented by proxy, or (ii) more than
50% of the outstanding "voting securities" of the Fund. The term "voting
securities" as used in this paragraph has the same meaning as in the 1940 Act.
The Fund will vote the shares held by its shareholders who do not give voting
instructions in the same proportion as the shares of the Fund's shareholders who
do give voting instructions. Shareholders of the Fund who do not vote will have
no effect on the outcome of these matters.

The Trust may not with respect to the Fund:

(2) Borrow money. This restriction shall not apply to borrowings from
banks for temporary or emergency (not leveraging) purposes, including the
meeting of redemption requests that might otherwise require the untimely
disposition of securities, in an amount up to 15% of the value of the Fund's
total assets (including the amount borrowed) valued at market less liabilities
(not including the amount borrowed) at the time the borrowing was made. While
borrowings exceed 5% of the value of the Fund's total assets, the Trust will not
make any investments on behalf of the Fund. Interest paid on borrowings will
reduce net income.

(3) Pledge, hypothecate, mortgage or otherwise encumber the Fund's
assets, except in an amount up to 15% of the value of the Fund's total assets
and only to secure borrowings for temporary or emergency purposes.

(4) Sell securities short or purchase securities on margin, or engage
in the purchase and sale of put, call, straddle or spread options or in writing
such options, except to the extent that securities subject to a demand
obligation and stand-by commitments may be purchased as set forth under
"Investment Policies" above.

(5) Underwrite the securities of other issuers, except insofar as the
Trust may be deemed an underwriter under the Securities Act of 1933 in disposing
of a portfolio security of the Fund.

(6) Purchase securities subject to restrictions on disposition under
the Securities Act of 1933 ("restricted securities"). The Trust will not invest
on behalf of the Fund in a repurchase agreement maturing in more than seven days
if any such investment together with securities that are not readily marketable
held by the Fund exceed 10% of the Fund's total net assets.

(7) Purchase or sell real estate, real estate investment trust
securities, commodities or commodity contracts, or oil and gas interests, but
this shall not prevent the Trust from investing in Municipal Obligations secured
by real estate or interests in real estate.

(8) Make loans to others, except through the purchase of portfolio
investments, including repurchase agreements, as described under "Investment
Policies" above.

(9) Purchase more than 10% of all outstanding voting securities of any
one issuer or invest in companies for the purpose of exercising control.

(10) Invest more than 25% of the Fund's assets in the securities of
"issuers" in any single industry, provided that the Trust may invest more than
25% of the Fund's assets in bank participation interests and there shall be no
limitation on the purchase of those Municipal Obligations and other obligations
issued or guaranteed by the U.S. Government, its agencies or instrumentalities.
When the assets and revenues of an agency, authority, instrumentality or other
political subdivision are separate from those of the government creating the
issuing entity and a security is backed only by the assets and revenues of the
entity, the entity would be deemed to be the sole issuer of the security.
Similarly, in the case of a private activity bond, if that bond is backed only
by the assets and revenues of the non-governmental user, then such
non-governmental user would be deemed to be the sole issuer. If, however, in
either case, the creating government or some other entity, such as an insurance
company or other corporate obligor, guarantees a security or a bank issues a
letter of credit, such a guarantee or letter of credit would be considered a
separate security and would be treated as an issue of such government, other
entity or bank.

(11) Invest in securities of other investment companies, except the
Trust may purchase on behalf of the Fund unit investment trust securities (i.e.,
securities issued by an investment company which (i) is organized under a trust
indenture or contract of custodianship or similar instrument, (ii) does not have
a board of directors, and (iii) issues only redeemable securities, each of which
represents an undivided interest in a unit of specified securities) where such
unit trusts meet the investment objectives and policies of the Fund and then
only up to 5% of the Fund's net assets, except as they may be acquired as part
of a merger, consolidation or acquisition of assets. As of the date of this
Statement of Additional Information, the Trust has no intention of investing in
unit investment trust securities on behalf of the Fund.

For purposes of the investment restrictions described above, the issuer
of a tax-exempt security is deemed to be the entity (public or private)
ultimately responsible for the payment of principal of and interest on the
security. If, however, the acting government or some other entity, such as an
insurance company or other corporate obligor, guarantees a security or a bank
issues a Letter of Credit, such a guarantee or Letter of Credit may, in
accordance with applicable Securities and Exchange Commission ("SEC") rules, be
considered a separate security and treated as an issue of such government, other
entity or bank.

If a percentage restriction or a rating restriction (other than a
restriction as to borrowing) on investment or utilization of assets set forth
above is adhered to at the time an investment is made or assets are so utilized,
a later change in percentage resulting from the changes in the value of the
portfolio securities or a later change in the rating of a portfolio security
will not be considered a violation of such policy.

3. PERFORMANCE INFORMATION

Any current yield quotation of the Fund which is used in such a manner
as to be subject to the provisions of Rule 482(d) under the Securities Act of
1933, as amended, consists of an annualized historical yield, carried at least
to the nearest hundredth of one percent, based on a specific seven calendar day
period and is calculated by dividing the net change in the value of an account
having a balance of one share at the beginning of the period by the value of the
account at the beginning of the period and multiplying the quotient by 365/7.
For this purpose the net change in account value would reflect the value of
additional shares purchased with dividends declared on the original share and
dividends declared on both the original share and any such additional shares,
but would not reflect any realized gains or losses from the sale of securities
or any unrealized appreciation or depreciation on portfolio securities. In
addition, any effective yield quotation of the Fund so used shall be calculated
by compounding the current yield quotation for such period by multiplying such
quotation by 7/365, adding 1 to the product, raising the sum to a power equal to
365/7, and subtracting 1 from the result.

Any tax equivalent yield quotation of the Fund is calculated as
follows: If the entire current yield quotation for such period is tax-exempt,
the tax equivalent yield will be the current yield quotation divided by 1 minus
a stated income tax rate or rates. If a portion of the current yield quotation
is not tax-exempt, the tax equivalent yield will be the sum of (a) that portion
of the yield which is tax-exempt divided by 1 minus a stated income tax rate or
rates and (b) the portion of the yield which is not tax-exempt.

A total rate of return quotation for the Fund is calculated for any
period by (a) dividing (i) the sum of the net asset value per share on the last
day of the period and the net asset value per share on the last day of the
period of shares purchasable with dividends and capital gains distributions
declared during such period with respect to a share held at the beginning of
such period and with respect to shares purchased with such dividends and capital
gains distributions, by (ii) the public offering price on the first day of such
period, and (b) subtracting 1 from the result. Any annualized total rate of
return quotation is calculated by (x) adding 1 to the period total rate of
return quotation calculated above, (y) raising such sum to a power which is
equal to 365 divided by the number of days in such period, and (z) subtracting 1
from the result.

Any tax equivalent total rate of return quotation of the Fund is
calculated as follows: If the entire current total rate of return quotation for
such period is tax-exempt, the tax equivalent total rate of return will be the
current total rate of return quotation divided by 1 minus a stated income tax
rate or rates. If a portion of the current total rate of return quotation is not
tax-exempt, the tax equivalent total rate of return will be the sum of (a) that
portion of the total rate of return which is tax-exempt divided by 1 minus a
stated income tax rate or rates and (b) the portion of the total rate of return
which is not tax-exempt.

Set forth below is total rate of return information, assuming that
dividends and capital gains distributions, if any, were reinvested, for the Fund
for the periods indicated, at the beginning of which periods no sales charges
were applicable to purchases of shares of the Fund (unless otherwise indicated).

REDEEMABLE VALUE OF A
HYPOTHETICAL $1,000
ANNUALIZED TOTAL INVESTMENT AT THE END
PERIOD RATE OF RETURN OF THE PERIOD

Ten years ended August 31, 1996 3.53% $1,414.14
Five years ended August 31, 1996 2.59% $1,136.37
One year ended August 31, 1996 2.98% $1,029.76

The annualized yield of the Fund for the seven-day period ended August
31, 1996 was 2.84%, the effective compound annualized yield of the Fund for such
period was 2.88% and the annualized tax equivalent yield of the Fund for such
period was 5.05% (assuming (i) a combined New York State, New York City and
federal tax bracket of 46.60% and (ii) that 95.00% of the Fund's assets were
invested in New York Municipal Obligations).

4. DETERMINATION OF NET ASSET VALUE

The net asset value of each of the shares of the Fund is determined on
each day on which the New York Stock Exchange is open for trading. This
determination is made once during each such day as of 12:00 noon, Eastern time,
by dividing the value of the Fund's net assets (i.e., the value of its assets
less its liabilities, including expenses payable or accrued) by the number of
shares of the Fund outstanding at the time the determination is made. As of the
date of this Statement of Additional Information, the NYSE is open for trading
every weekday except for the following holidays (or the days on which they are
observed): New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. It is
anticipated that the net asset value of each share of the Fund will remain
constant at $1.00 and, although no assurance can be given that it will be able
to do so on a continuing basis, as described below, the Fund employs specific
investment policies and procedures to accomplish this result.

The securities held by the Fund are valued at their amortized cost.
Amortized cost valuation involves valuing an instrument at its cost and
thereafter assuming a constant amortization to maturity of any discount or
premium. If fluctuating interest rates cause the market value of the securities
held by the Fund to deviate more than 1/2 of 1% from their value determined on
the basis of amortized cost, the Board of Trustees of the Trust will consider
whether any action should be initiated, as described in the following paragraph.
Although the amortized cost method provides certainty in valuation, it may
result in periods during which the stated value of an instrument is higher or
lower than the price the Fund would receive if the instrument were sold.

Pursuant to the rules of the SEC, the Trust's Board of Trustees has
established procedures to stabilize the value of the Fund's net assets within
1/2 of 1% of the value determined on the basis of amortized cost. These
procedures include a review of the extent of any such deviation of net asset
value, based on available market rates. Should that deviation exceed 1/2 of 1%,
the Trust's Board of Trustees will consider whether any action should be
initiated to eliminate or reduce material dilution or other unfair results to
investors in the Fund. Such action may include withdrawal in kind, selling
securities prior to maturity and utilizing a net asset value as determined by
using available market quotations. The Fund maintains a dollar-weighted average
maturity of 90 days or less, does not purchase any instrument with a remaining
maturity greater than 397 days or subject to a repurchase agreement having a
duration of greater than 397 days, and limits its investments, including
repurchase agreements, to those U.S. dollar-denominated instruments that are
determined by the Adviser to present minimal credit risks and comply with
certain reporting and recordkeeping procedures. The Trust also has established
procedures to ensure that securities purchased by it meet the high quality
criteria described above in "Investment Policies."

Subject to compliance with applicable regulations, the Trust has
reserved the right to pay the redemption price of shares of the Fund, either
totally or partially, by a distribution in kind of readily marketable securities
(instead of cash). The securities so distributed would be valued at the same
amount as that assigned to them in calculating the net asset value for the
shares or beneficial interests being sold. If a holder of shares or beneficial
interests received a distribution in kind, such holder could incur brokerage or
other charges in converting the securities to cash.

The Trust may suspend the right of redemption or postpone the date of
payment for shares of the Fund for more than seven days during any period when
(a) trading in the markets the Fund normally utilizes is restricted, or an
emergency, as defined by the rules and regulations of the SEC, exists making
disposal of the Fund's investments or determination of its net asset value not
reasonably practicable; (b) the NYSE is closed (other than customary weekend and
holiday closings); or (c) the SEC has by order permitted such suspension.

5. MANAGEMENT

The Trustees and officers of the Trust, their ages and their principal
occupations during the past five years are set forth below. Their titles may
have varied during that period. Asterisks indicate that those Trustees and
officers are "interested persons" (as defined in the 1940 Act) of the Trust.
Unless otherwise indicated below, the address of each Trustee and officer is 6
St. James Avenue, Boston, Massachusetts.

TRUSTEES

H. B. ALVORD; 74 -- Treasurer - Tax Collector, County of Los Angeles (retired,
March, 1984); Trustee, The 59 Wall Street Trust and The 59 Wall Street Fund,
Inc. (Registered Investment Companies). His address is P.O. Box 1812, Pebble
Beach, California.

ELLIOTT J. BERV; 53 -- Chairman and Director, Catalyst, Inc. (Management
Consultants) (since August, 1992); President, Chief Operating Officer and
Director, Deven International, Inc. (International Consultants) (June, 1991 to
July, 1992); President and Director, Elliott J. Berv & Associates (Management
Consultants) (since May, 1984). His address is 15 Stornoway Drive, Cumberland
Foreside, Maine.

PHILIP W. COOLIDGE; 45* -- President of the Trust; Chairman, Chief Executive
Officer and President, Signature Financial Group, Inc. and The Landmark Funds
Broker-Dealer Services, Inc. (since December, 1988).

MARK T. FINN; 53 -- President and Director, Delta Financial, Inc. (since June,
1983); Chairman of the Board and Chief Executive Officer, FX 500 Ltd. (Commodity
Trading Advisory Firm) (since April, 1990); Director, Vantage Consulting Group,
Inc. (since October, 1988). His address is 3500 Pacific Avenue, P.O. Box 539,
Virginia Beach, Virginia.

RILEY C. GILLEY; 70 -- Vice President and General Counsel, Corporate Property
Investors (December, 1988 to September, 1991); Retired Partner, Breed, Abbott &
Morgan (Attorneys) (Retired, December, 1987). His address is 4041 Gulf Shore
Boulevard North, Naples, Florida.

DIANA R. HARRINGTON; 56 -- Professor, Babson College (since September, 1993);
Visiting Professor, Kellogg Graduate School of Management, Northwestern
University (September, 1992 to September, 1993); Professor, Darden Graduate
School of Business, University of Virginia (September, 1978 to September, 1993);
Consultant to Kidder, Peabody & Co. Incorporated (since January, 1990). Her
address is 120 Goulding Street, Holliston, Massachusetts.

SUSAN B. KERLEY; 45 -- President, Global Research Associates, Inc. (Investment
Research) (since August, 1990); Manager of Special Investments, Rockefeller &
Co. (April, 1988 to August, 1990); Director of Research, Rogers, Casey &
Barksdale (Investment Research and Consulting) (November, 1983 to March, 1988);
Director, New York Life Insurance Company (Institutional Mutual Funds) (since
December, 1990). Her address is P.O. Box 9572, New Haven, Connecticut.

C. OSCAR MORONG, JR.; 61 -- Chairman of the Board of Trustees of the Trust;
Managing Director, Morong Capital Management (since February, 1993); Senior Vice
President and Investment Manager, CREF Investments, Teachers Insurance & Annuity
Association (retired January, 1993). His address is 1385 Outlook Drive West,
Mountainside, New Jersey.

WALTER E. ROBB, III; 70 -- President, Benchmark Advisors, Inc. (Corporate
Financial Advisors) (since 1989); Trustee of certain registered investment
companies in the MFS Family of Funds. His address is 35 Farm Road, Sherborn,
Massachusetts.

E. KIRBY WARREN; 62 -- Professor of Management, Graduate School of Business,
Columbia University (since 1987). His address is Columbia University, Graduate
School of Business, 725 Uris Hall, New York, New York.

WILLIAM S. WOODS, JR.; 76 -- Vice President - Investments, Sun Company (retired,
April, 1984). His address is 35 Colwick Road, Cherry Hill, New Jersey.

OFFICERS

PHILIP W. COOLIDGE; 45* -- President of the Trust; Chairman, Chief Executive
Officer and President, Signature Financial Group, Inc., and The Landmark Funds
Broker-Dealer Services, Inc. (since December, 1988).

SAMANTHA M. BURGESS; 27* -- Assistant Secretary and Assistant Treasurer;
Assistant Vice President, Signature Financial Group, Inc. (since November 1995);
Graduate Student, Loyola University (prior to August 1995).

CHRISTINE A. DRAPEAU; 26* -- Assistant Secretary and Assistant Treasurer;
Assistant Vice President, Signature Financial Group, Inc. (since January 1996);
Paralegal and Compliance Officer, various financial companies (July 1992 to
January 1996); Graduate Student, Bentley College (prior to December 1994).

JOHN R. ELDER; 48* -- Treasurer of the Trust; Vice President, Signature
Financial Group, Inc. (since April 1995); Treasurer, Phoenix Family of Mutual
Funds (Phoenix Home Life Mutual Insurance Company) (from 1983 to March 1995).

LINDA T. GIBSON; 31* -- Secretary of the Trust; Vice President, Signature
Financial Group, Inc. (since June 1991); law student, Boston University School
of Law (from September 1989 to May 1992).

JOAN A. GULINELLO; 41* -- Assistant Secretary and Assistant Treasurer; Vice
President, Signature Financial Group, Inc. (since October 1993); Secretary, The
Landmark Funds Broker-Dealer Services, Inc. (since October 1995); Vice President
and Assistant General Counsel, Massachusetts Financial Services Company (prior
to October 1993).

JAMES E. HOOLAHAN; 49* -- Vice President, Assistant Secretary and Assistant
Treasurer; Senior Vice President, Signature Financial Group, Inc.

MOLLY S. MUGLER; 45* -- Assistant Secretary of the Trust; Vice President,
Signature Financial Group, Inc.; Assistant Secretary, The Landmark Funds
Broker-Dealer Services, Inc. (since December, 1988).

KARYN A. NOKE; 26 -- Vice President, Assistant Secretary and Assistant
Treasurer; Vice President, Signature Financial Group (Cayman) Limited (since
September 1966); Assistant Vice President, Signature Financial Group, Inc. (May
1993 to August 1996); Student, University of Massachusetts (prior to May 1993).

SHARON M. WHITSON; 48* -- Assistant Secretary and Assistant Treasurer; Assitant
Vice President, Signaure Financial Group, Inc. (since November 1992); Associate
Trader, Massachusetts Financial Services Company (prior to November 1992).

JULIE J. WYETZNER; 37* -- Vice President, Assistant Secretary and Assistant
Treasurer; Vice President, Signature Financial Group, Inc.

The Trustees and officers of the Trust also hold comparable positions
with certain other funds for which LFBDS or an affiliate serves as the
distributor or administrator.

TRUSTEES COMPENSATION TABLE

AGGREGATE COMPENSATION TOTAL COMPENSATION FROM
TRUSTEE FROM THE TRUST(1) TRUST AND COMPLEX(2)

H. B. Alvord $6,155.51 $42.000.00
Elliott J. Berv $2,068.28 $42.000.00
Philip W. Coolidge 0 0
Mark T. Finn $1,916.13 $42,000.00
Riley C. Gilley $8,750.48 $46,000.00
Diana R. Harrington $8,232.46 $44,000.00
Susan B. Kerley $7,670.22 $42,000.00
C. Oscar Morong, Jr. $8,782.14 $53,000.00
Walter E. Robb, III $2,603.11 $46,500.00
E. Kirby Warren $7,242.88 $46,500.00
William S. Woods, Jr. $11,014.39 $46,000.00

- ---------------------
(1) For the fiscal year ended August 31, 1996.
(2) Information relates to the fiscal year ended August 31, 1996. Messrs.
Alvord, Berv, Coolidge, Finn, Gilley, Morong, Robb, Warren and Woods and Mses.
Harrington and Kerley are trustees of 12, 12, 28, 14, 11, 12, 12, 12, 11, 11 and
11 Funds, respectively, of the Landmark Family of Funds.

As of December 16, 1996, all Trustees and officers as a group owned
less than 1% of the Fund's outstanding shares. As of the same date, more than
95% of the outstanding shares of the Fund were held of record by Citibank, N.A.
or an affiliate, as a Shareholder Servicing Agent of the Fund, for the accounts
of their respective clients.

The Declaration of Trust of the Trust provides that the Trust will
indemnify its Trustees and officers against liabilities and expenses incurred in
connection with litigation in which they may be involved because of their
offices with the Trust unless, as to liability to the Trust or its investors, it
is finally adjudicated that they engaged in willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in their offices,
or unless with respect to any other matter it is finally adjudicated that they
did not act in good faith in the reasonable belief that their actions were in
the best interests of the Trust. In the case of settlement, such indemnification
will not be provided unless it has been determined by a court or other body
approving the settlement or other disposition, or by a reasonable determination,
based upon a review of readily available facts, by vote of a majority of
disinterested Trustees of the Trust, or in a written opinion of independent
counsel, that such officers or Trustees have not engaged in willful misfeasance,
bad faith, gross negligence or reckless disregard of their duties.

ADVISER

Citibank manages the assets of the Trust pursuant to an investment
advisory agreement (the "Advisory Agreement"). Subject to such policies as the
Board of Trustees of the Trust may determine, the Adviser manages the securities
of the Fund and makes investment decisions for the Fund. The Adviser furnishes
at its own expense all services, facilities and personnel necessary in
connection with managing the Fund's investments and effecting securities
transactions for the Fund. The Advisory Agreement will continue in effect as
long as its continuance is specifically approved at least annually by the Board
of Trustees of the Trust or by a vote of a majority of the outstanding voting
securities of the Fund, and, in either case, by a majority of the Trustees of
the Trust who are not parties to the Advisory Agreement or interested persons of
any such party, at a meeting called for the purpose of voting on the Advisory
Agreement.

The Advisory Agreement provides that the Adviser may render services
to others. The Advisory Agreement is terminable without penalty on not more than
60 days' nor less than 30 days' written notice by the Trust when authorized
either by a vote of a majority of the outstanding voting securities of the Fund
or by a vote of a majority of the Board of Trustees of the Trust, or by the
Adviser on not more than 60 days' nor less than 30 days' written notice, and
will automatically terminate in the event of its assignment. The Advisory
Agreement provides that neither the Adviser nor its personnel shall be liable
for any error of judgment or mistake of law or for any loss arising out of any
investment or for any act or omission in the execution of security transactions
for the Fund, except for willful misfeasance, bad faith or gross negligence or
reckless disregard of its or their obligations and duties under the Advisory
Agreement.

The Prospectus contains a description of the fees payable to the
Adviser for services under the Advisory Agreement. The Adviser has voluntarily
agreed to waive a portion of the fees payable to it under the Advisory Agreement
on a month-to-month basis. For the fiscal years ended August 31, 1994, August
31, 1995 and August 31, 1996, the fees payable to Citibank under the Advisory
Agreement were $1,265,739, $1,405,747 and $1,745,127 (of which Citibank
voluntarily waived $255,742, $242,164 and $703,481).

ADMINISTRATOR

Pursuant to an Administrative Services Agreement (the "Administrative
Services Agreement"), LFBDS provides the Trust with general office facilities
and supervises the overall administration of the Trust, including, among other
responsibilities, the negotiation of contracts and fees with, and the monitoring
of performance and billings of, the independent contractors and agents of the
Trust; the preparation and filing of all documents required for compliance by
the Trust with applicable laws and regulations; and arranging for the
maintenance of books and records of the Trust. The Administrator provides
persons satisfactory to the Board of Trustees of the Trust to serve as Trustees
and officers of the Trust. Such Trustees and officers may be directors, officers
or employees of LFBDS or its affiliates.

The Prospectus contains a description of the fees payable to the
Administrator under the Administrative Services Agreement.

For the fiscal years ended August 31, 1994, August 31, 1995 and August
31, 1996, the fees payable to LFBDS from the Fund under the Administrative
Services Agreement were $949,304, $1,054,310 and $2,181,408 (of which LFBDS
voluntarily waived $21,230, $61,120 and $641,872).

The Administrative Services Agreement with the Trust acknowledges that
the names "Landmark" and "Landmark Funds" are the property of the Administrator
and provides that if LFBDS ceases to serve as the Administrator of the Trust,
the Trust and the Fund will change their respective names so as to delete the
word "Landmark" or the words "Landmark Funds." The Administrative Services
Agreement with the Trust also provides that LFBDS may render administrative
services to others and may permit other investment companies in addition to the
Trust to use the word "Landmark" or the words "Landmark Funds" in their names.

The Administrative Services Agreement with the Trust continues in
effect if such continuance is specifically approved at least annually by the
Trust's Board of Trustees or by a vote of a majority of the outstanding voting
securities of the Trust and, in either case, by a majority of the Trustees of
the Trust who are not interested parties of the Trust or the Administrator. The
Administrative Services Agreement with the Trust terminates automatically if it
is assigned and may be terminated as to the Fund by the Trust without penalty by
vote of a majority of the outstanding voting securities of the Fund or by either
party on not more than 60 days' nor less than 30 days' written notice. The
Administrative Services Agreement with the Trust also provides that neither the
Administrator nor its personnel shall be liable for any error of judgment or
mistake of law or for any act or omission in the administration or management of
the Trust, except for willful misfeasance, bad faith or gross negligence in the
performance of its or their duties or by reason of reckless disregard of its or
their obligations and duties under the Administrative Services Agreement.

The Administrator has agreed to reimburse the Fund for its operating
expenses (exclusive of interest, taxes, brokerage, and extraordinary expenses)
which in any year exceed the limits prescribed by any state in which the Fund's
shares are qualified for sale. The expenses incurred by the Fund for
distribution purposes pursuant to the Trust's Distribution Plan are included
within such operating expenses only to the extent required by any state in which
the Fund's shares are qualified for sale. The Trust may elect not to qualify the
Fund's shares for sale in every state. The Trust believes that currently the
most restrictive expense ratio limitation imposed by any state is 2 1/2% of the
first $30 million of the Fund's average net assets for its then-current fiscal
year, 2% of the next $70 million of such assets, and 1 1/2% of such assets in
excess of $100 million. For the purpose of this obligation to reimburse
expenses, the Fund's annual expenses are estimated and accrued daily, and any
appropriate estimated payments will be made by the Administrator. Subject to the
obligation of the Administrator to reimburse the Fund for its excess expenses as
described above, the Trust has, under its Administrative Services Agreement,
confirmed its obligation for payment of all other expenses of the Fund.

LFBDS is a wholly-owned subsidiary of Signature Financial Group, Inc.

Pursuant to a Sub-Administrative Services Agreement (the
"Sub-Administrative Agreement"), Citibank performs such sub-administrative
duties for the Trust as are from time to time agreed upon by Citibank and LFBDS.
Citibank's sub-administrative duties may include providing equipment and
clerical personnel necessary for maintaining the organization of the Trust,
participation in preparation of documents required for compliance by the Trust
with applicable laws and regulations, preparation of certain documents in
connection with meetings of Trustees and shareholders of the Trust, and other
functions which would otherwise be performed by the Administrator as set forth
above. For performing such sub-administrative services, Citibank receives such
compensation as is from time to time agreed upon by LFBDS and Citibank, not in
excess of the amount paid to the Administrator for its services under the
Administrative Services Agreement. All such compensation is paid by LFBDS.

DISTRIBUTOR

The Trust, on behalf of the Fund, has adopted a Distribution Plan (the
"Distribution Plan") in accordance with Rule 12b-1 under the 1940 Act after
having concluded that there is a reasonable likelihood that the Distribution
Plan will benefit the Fund and its shareholders. The Distribution Plan provides
that the Trust shall pay a distribution fee to the Distributor at an annual rate
not to exceed 0.10% of the Fund's average daily net assets for distribution of
the Fund's shares (exclusive of any advertising expenses incurred by the
Distributor in connection with the sale of shares of the Fund). The Distributor
may use all or any portion of such fee to pay for Fund expenses of printing
prospectuses and reports used for sales purposes, expenses of the preparation
and printing of sales literature and other distribution-related expenses.

The Trust is also permitted to pay the Distributor an additional fee
not to exceed 0.10% per annum of the Fund's average daily net assets in
anticipation of, or as reimbursement for, print or electronic media advertising
expenses incurred in connection with the sale of shares of the Fund. No payments
under the Distribution Plan are made to Shareholder Servicing Agents although
Shareholder Servicing Agents receive payments under the Administrative Services
Plan referred to below.

The Distribution Plan continues in effect if such continuance is
specifically approved at least annually by a vote of both a majority of the
Trust's Trustees and a majority of the Trust's Trustees who are not "interested
persons" of the Trust and who have no direct or indirect financial interest in
the operation of the Distribution Plan or in any agreement related to the Plan
("Qualified Trustees"). The Distribution Plan requires that the Trust and the
Distributor shall provide to the Board of Trustees, and the Board of Trustees
shall review, at least quarterly, a written report of the amounts expended (and
the purposes therefor) under the Distribution Plan. The Distribution Plan
further provides that the selection and nomination of the Qualified Trustees is
committed to the discretion of the disinterested Trustees (as defined in the
1940 Act) then in office. The Distribution Plan may be terminated with respect
to the Fund at any time by a vote of a majority of the Trust's Qualified
Trustees or by a vote of a majority of the outstanding voting securities of the
Fund. The Distribution Plan may not be amended to increase materially the amount
of the Fund's permitted expenses thereunder without the approval of a majority
of the outstanding voting securities of the Fund and may not be materially
amended in any case without a vote of the majority of both the Trustees and the
Qualified Trustees. The Distributor will preserve copies of any plan, agreement
or report made pursuant to the Distribution Plan for a period of not less than
six years from the date of the Plan, and for the first two years the Distributor
will preserve such copies in an easily accessible place.

As contemplated by the Distribution Plan, LFBDS acts as the agent of
the Fund in connection with the offering of shares of the Fund pursuant to a
Distribution Agreement (the "Distribution Agreement"). After the prospectus and
periodic reports have been prepared, set in type and mailed to existing
shareholders, the Distributor pays for the printing and distribution of copies
of the prospectuses and periodic reports which are used in connection with the
offering of shares of the Fund to prospective investors. The Prospectus contains
a description of fees payable to the Distributor under the Distribution
Agreement. The Distributor has voluntarily agreed to waive a portion of the fees
payable to it on a month-to-month basis. For the fiscal years ended August 31,
1994, August 31, 1995 and August 31, 1996, the fees payable to the Distributor
from the Fund under the Distribution Agreement were $316,435, $351,437 and
$872,563 (of which the Distributor voluntarily waived $251,008, $181,044 and
$490,330). From the commencement of operations through August 31, 1996, no
portion of such fees was applicable to print or electronic media advertising.

SHAREHOLDER SERVICING AGENTS, TRANSFER AGENT AND CUSTODIAN

The Trust has adopted an Administrative Services Plan (the
"Administrative Plan") which provides that the Trust may obtain the services of
an administrator, a transfer agent, a custodian and one or more Shareholder
Servicing Agents, and may enter into agreements providing for the payment of
fees for such services. Under the Administrative Plan, the aggregate of the fee
paid to the Administrator from the Fund, the fees paid to the Shareholder
Servicing Agents from the Fund and the distribution fee paid from the Fund to
the Distributor under the Distribution Plan may not exceed 0.60% of the Fund's
average daily net assets on an annualized basis for the Fund's then-current
fiscal year. The Administrative Plan continues in effect if such continuance is
specifically approved at least annually by a vote of both a majority of the
Trust's Trustees and a majority of the Trust's Trustees who are not "interested
persons" of the Trust and who have no direct or indirect financial interest in
the operation of the Administrative Plan or in any agreement related to such
Plan ("Qualified Trustees"). The Administrative Plan requires that the Trust
provide to the Trust's Board of Trustees and the Trust's Board of Trustees
review, at least quarterly, a written report of the amounts expended (and the
purposes therefor) under the Administrative Plan. The Administrative Plan may be
terminated at any time with respect to the Fund by a vote of a majority of the
Trust's Qualified Trustees or by a vote of a majority of the outstanding voting
securities of the Fund. The Administrative Plan may not be amended to increase
materially the amount of permitted expenses thereunder without the approval of a
majority of the outstanding voting securities of the Fund and may not be
materially amended in any case without a vote of the majority of both the
Trust's Trustees and the Qualified Trustees.

The Trust has entered into a shareholder servicing agreement (a
"Servicing Agreement") with each Shareholder Servicing Agent and a Transfer
Agency and Service Agreement and a Custodian Agreement with State Street Bank
and Trust Company ("State Street") pursuant to which State Street acts as
transfer agent and custodian and performs fund accounting services for the
Trust. For additional information, including a description of fees paid to the
Shareholder Servicing Agents under the Servicing Agreements, see "Shareholder
Servicing Agents" and "Transfer Agent, Custodian and Fund Accountant" in the
Prospectus. For the fiscal years ended August 31, 1995 and 1996, the aggregate
fees payable or paid by the Fund to Shareholder Servicing Agents under the
Administrative Services Plan were $2,811,494 (of which $1,054,310 was
voluntarily waived) and $2,181,408.

6. PORTFOLIO TRANSACTIONS

The Fund's purchases and sales of its portfolio securities usually are
principal transactions. Portfolio securities are normally purchased directly
from the issuer or from an underwriter or market maker for the securities. There
usually are no brokerage commissions paid for such purchases. The Fund does not
anticipate paying brokerage commissions. Any transaction for which the Fund pays
a brokerage commission will be effected at the best price and execution
available. Purchases from underwriters of portfolio securities include a
commission or concession paid by the issuer to the underwriter, and purchases
from dealers serving as market makers include the spread between the bid and
asked price.

Allocation of transactions, including their frequency, to various
dealers is determined by the Adviser in its best judgment and in a manner deemed
to be in the best interest of investors in the Fund rather than by any formula.
The primary consideration is prompt execution of orders in an effective manner
at the most favorable price.

Investment decisions for the Fund will be made independently from those
for any other account, series or investment company that is or may in the future
become managed by the Adviser or its affiliates. If, however, the Fund and other
investment companies, series or accounts managed by the Adviser are
contemporaneously engaged in the purchase or sale of the same security, the
transactions may be averaged as to price and allocated equitably to each
account. In some cases, this policy might adversely affect the price paid or
received by the Fund or the size of the position obtainable for the Fund. In
addition, when purchases or sales of the same security for the Fund and for
other investment companies or series managed by the Adviser occur
contemporaneously, the purchase or sale orders may be aggregated in order to
obtain any price advantages available to large denomination purchases or sales.

No portfolio transactions are executed with the Adviser, or with any
affiliate of the Adviser, acting either as principal or as broker.

7. DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES

The Trust's Declaration of Trust permits the Trust's Board of Trustees
to issue an unlimited number of full and fractional Shares of Beneficial
Interest (without par value) and to divide or combine the shares into a greater
or lesser number of shares without thereby changing the proportionate beneficial
interests in that series. Each share of the series represents an equal
proportionate interest in the series with each other share. Upon liquidation or
dissolution of the Fund, the Fund's shareholders are entitled to share pro rata
in the Fund's net assets available for distribution to its shareholders. The
Trust reserves the right to create and issue additional series of shares, in
which case the shares of each series would participate pro rata in the earnings,
dividends and distribution of net assets of the particular series upon the
liquidation or dissolution of the series. Shares of each series would be
entitled to vote separately to approve advisory agreements or changes in
investment policy, but shares of all series could vote together in the election
or selection of Trustees and accountants for the Fund.

Shareholders are entitled to one vote for each share held on matters on
which they are entitled to vote. Shareholders in the Trust do not have
cumulative voting rights, and shareholders owning more than 50% of the
outstanding shares of the Trust may elect all of the Trustees of the Trust if
they choose to do so and in such event the other shareholders in the Trust would
not be able to elect any Trustee. The Trust is not required to and has no
current intention to hold annual meetings of shareholders but the Trust will
hold special meetings of shareholders when in the judgment of the Trust's
Trustees it is necessary or desirable to submit matters for a shareholder vote.
Shareholders have under certain circumstances (e.g., upon application and
submission of certain specified documents to the Trustees by a specified number
of shareholders) the right to communicate with other shareholders in connection
with requesting a meeting of shareholders for the purpose of removing one or
more Trustees. Shareholders also have the right to remove one or more Trustees
without a meeting by a declaration in writing by a specified number of
shareholders. No material amendment may be made to the Trust's Declaration of
Trust without the affirmative vote of the holders of a majority of its
outstanding shares.

The Trust's Declaration of Trust provides that, at any meeting of
shareholders of the Trust or of any series of the Trust, a Shareholder Servicing
Agent may vote any shares of which it is the holder of record and for which it
does not receive voting instructions proportionately in accordance with the
instructions it receives for all other shares of which it is the holder of
record. Shares have no preference, pre-emptive or conversion or similar rights.
Shares, when issued, are fully paid and non-assessable, except as set forth
below.

The Trust may enter into a merger or consolidation, or sell all or
substantially all of its assets, if approved by the vote of the holders of
two-thirds of its outstanding shares voting as a single class, except that if
the Trustees of the Trust recommend such sale of assets, merger or
consolidation, the approval by a vote of the holders of a majority of the
Trust's outstanding voting securities would be sufficient. The Trust may be
terminated (i) by a vote of a majority of the outstanding voting securities of
the Trust or (ii) by the Trustees by written notice to the shareholders of the
Trust. If not so terminated, the Trust will continue indefinitely.

Share certificates will not be issued.

The Trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders of such a business trust
may, under certain circumstances, be held personally liable as partners for its
obligations. However, the Declaration of Trust contains an express disclaimer of
shareholder liability for acts or obligations of the Trust and provides for
indemnification and reimbursement of expenses out of the Trust property for any
shareholder held personally liable for the obligations of the Trust. The
Declaration of Trust also provides that the Trust shall maintain appropriate
insurance (e.g., fidelity bonding and errors and omissions insurance) for the
protection of the Trust, its shareholders, Trustees, officers, employees and
agents covering possible tort and other liabilities. Thus, the risk of a
shareholder incurring financial loss on account of shareholder liability is
limited to circumstances in which both inadequate insurance existed and the
Trust itself was unable to meet its obligations.

The Trust's Declaration of Trust further provides that obligations of
the Trust are not binding upon the Trust's Trustees individually but only upon
the property of the Trust and that the Trust's Trustees will not be liable for
any action or failure to act, but nothing in the Declaration of Trust protects a
Trustee against any liability to which he would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of his office.

8. CERTAIN ADDITIONAL TAX MATTERS

The Fund has elected to be treated and intends to qualify each year as
a "regulated investment company" under Subchapter M of the Internal Revenue Code
of 1986, as amended (the "Code"), by meeting all applicable requirements of
Subchapter M, including requirements as to the nature of the Fund's gross
income, the amount of Fund distributions (as a percentage of both the Fund's
overall income and its tax-exempt income), and the composition and holding
period of the Fund's portfolio assets. Provided all such requirements are met
and all of the Fund's net investment income and realized capital gains are
distributed to shareholders in accordance with the timing requirements imposed
by the Code, no federal income or excise taxes will generally be required to be
paid by the Fund. If the Fund should fail to qualify as a regulated investment
company for any year, the Fund would incur a regular corporate federal income
tax upon its taxable income and Fund distributions would generally be taxable as
ordinary dividend income to shareholders.

The portion of the Fund's distributions of net investment income that
is attributable to interest from tax-exempt securities will be designated by the
Fund as an "exempt-interest dividend" under the Code and will generally be
exempt from federal income tax in the hands of shareholders so long as at least
50% of the total value of the Fund's assets consists of tax-exempt securities at
the close of each quarter of the Fund's taxable year. Distributions of
tax-exempt interest earned from certain securities may, however, be treated as
an item of tax preference for shareholders under the federal alternative minimum
tax, and all exempt-interest dividends may increase a corporate shareholder's
alternative minimum tax. Unless the Fund provides shareholders with actual
monthly percentage breakdowns, the percentage of income designated as tax exempt
will be applied uniformly to all distributions by the Fund of net investment
income made during each fiscal year of the Fund and may differ from the
percentage of distributions consisting of tax-exempt interest in any particular
month. Shareholders are required to report exempt-interest dividends received
from the Fund on their federal income tax returns.

Because the Fund expects to earn primarily interest income, it is
expected that no Fund distributions will qualify for the dividends-received
deduction for corporations.

9. INDEPENDENT ACCOUNTANTS AND FINANCIAL STATEMENTS

Deloitte & Touche LLP are the independent certified public accountants
for the Fund, providing audit services and assistance and consultation with
respect to the preparation of filings with the SEC.

The audited financial statements of the Fund (Portfolio of Investments
at August 31, 1996, Statement of Assets and Liabilities at August 31, 1996,
Statement of Operations for the year ended August 31, 1996, Statement of Changes
in Net Assets for each of the years ended August 31, 1996 and 1995, Financial
Highlights for each of the years in the five-year period ended August 31, 1996,
Notes to Financial Statements and Independent Auditor's Report), which are
included in the Annual Report to Shareholders of the Fund, are incorporated by
reference into this Statement of Additional Information and have been so
incorporated in reliance upon the report of Deloitte & Touche LLP.

A copy of the Annual Report accompanies this Statement of Additional
Information.
<PAGE>
APPENDIX

ADDITIONAL INFORMATION CONCERNING

NEW YORK MUNICIPAL OBLIGATIONS

The following information is a summary of special factors affecting
investments in New York Municipal Obligations. The sources of payment for such
obligations and the marketability thereof may be affected by financial or other
difficulties experienced by New York State (the "State") and certain of its
municipalities and public authorities. This information does not purport to be a
complete description and is based on information from official statements
relating to securities offerings of New York issuers. Landmark New York Tax Free
Reserves is not responsible for the accuracy or timeliness of this information.

NEW YORK STATE

The factors affecting New York State's financial condition are complex
and the following description constitutes only a summary.

CURRENT ECONOMIC OUTLOOK

The national economy has resumed a more robust rate of growth after a
"soft landing" in 1995, with over 11 million jobs added nationally since early
1992. The State economy has continued to expand, but growth remains somewhat
slower than in the nation. Although the State has added approximately 240,000
jobs since late 1992, employment growth in the State has been hindered during
recent years by significant cutbacks in the computer and instrument
manufacturing, utility, defense, and banking industries. Government downsizing
has also moderated these job gains.

The State Financial Plan is based upon a June 1996 projection by the
State Division of the Budget ("DOB") of national and State economic activity.
DOB forecasts that national economic growth will be quite strong in the first
half of calendar 1996, but will moderate considerably as the year progresses.
The overall growth rate of the national economy during calendar year 1996 is
expected to be just slightly below the "consensus" of a widely followed survey
of national economic forecasters. Growth in real Gross Domestic Product during
1996 is projected to be moderate at 2.1 percent, with anticipated declines in
federal spending and net exports more than offset by increases in consumption
and investment. Inflation, as measured by the Consumer Price Index, is projected
to be contained at about 3 percent due to moderate wage growth and foreign
competition. Personal income and wages are projected to increase by about 5
percent.

The forecast of the State's economy shows modest expansion during the
first half of calendar 1996, but some slowdown is projected during the second
half of the year. Although industries that export goods and services are
expected to continue to do well, growth is expected to be slowed by government
cutbacks at all levels and by tight fiscal constraints on health and social
services. On an average annual basis, employment growth in the State is expected
to be up slightly from the 1995 rate. Personal income is expected to record
moderate gains in 1996. Bonus payments in the securities industry are expected
to increase further from last year's record level.

The forecast for continued slow growth, and any resultant impact on the
State's 1996-97 Financial Plan, contains some uncertainties.
Stronger-than-expected gains in employment could lead to a significant
improvement in consumption spending. Investments could also remain robust.
Conversely, the prospect of a continuing deadlock on federal budget deficit
reduction or fears of excessively rapid economic growth could create upward
pressures on interest rates. In addition, the State economic forecast could
over- or underestimate the level of future bonus payments or inflation growth,
resulting in forecasted average wage growth that could differ significantly from
actual growth. Similarly, the State forecast could fail to correctly account for
expected declines in government and banking employment and the direction of
employment change that is likely to accompany telecommunications deregulation.

New York State's financial operations have improved during recent
fiscal years. During the period 1989-90 through 1991-92, the State incurred
General Fund operating deficits that were closed with receipts from the issuance
of tax and revenue anticipation notes ("TRANs"). A national recession, followed
by the lingering economic slowdown in the New York and regional economy,
resulted in repeated shortfalls in receipts and three budget deficits during
those years. During its last four fiscal years, however, the State has recorded
balanced budgets on a cash basis, with positive fund balances as described
below.

1996-97 State Financial Plan

The State's current fiscal year commenced on April 1, 1996, ends on
March 31, 1997, and is referred to herein as the State's 1996-97 fiscal year.
The State's budget for the 1996-97 fiscal year was enacted by the Legislature on
July 13, 1996, more than three months after the start of the fiscal year. Prior
to adoption of the budget, the Legislature enacted appropriations for
disbursements considered to be necessary for State operations and other
purposes, including necessary appropriations for all State-supported debt
service. The State Financial Plan for the 1996-97 fiscal year was formulated on
July 25, 1996 and is based on the State's budget as enacted by the Legislature
and signed into law by the Governor, as well as actual results for the first
quarter of the current fiscal year. The 1996-97 State Financial Plan will be
updated in October and January.

After adjustments for comparability between fiscal years, the adopted
1996-97 budget projects a year-over-year increase in General Fund disbursements
of 0.2 percent. Adjusted State Funds (excluding federal grants) disbursements
are projected to increase by 1.6 percent from the prior fiscal year. All
Government Funds projected disbursements increase by 4.1 percent over the prior
fiscal year, after adjustments for comparability.

The 1996-97 State Financial Plan is projected to be balanced on a cash
basis. As compared to the Governor's proposed budget as revised on March 20,
1996, the State's adopted budget for 1996-97 increases General Fund spending by
$842 million, primarily from increases for education, special education and
higher education ($563 million). The balance represents funding increases to a
variety of other programs, including community projects and increased assistance
to fiscally distressed cities. Resources used to fund these additional
expenditures include $540 million in increased revenues projected for 1996-97
based on higher-than-projected tax collections during the first half of calendar
1996, $110 million in projected receipts from a new State tax amnesty program,
and other resources including certain non-recurring resources. The total amount
of non-recurring resources included in the 1996-97 State budget is projected by
DOB to be $1.3 billion, or 3.9 percent of total General Fund receipts.

1995-96 Fiscal Year

The State ended its 1995-96 fiscal year on March 31, 1996 with a
General Fund cash surplus. The Division of the Budget reported that revenues
exceeded projections by $270 million, while spending for social service programs
was lower than forecast by $120 million and all other spending was lower by $55
million. From the resulting benefit of $445 million, a $65 million voluntary
deposit was made into the Tax Stabilization Reserve Fund ("TSRF"), and $380
million was used to reduce 1996-97 Financial Plan liabilities by accelerating
1996-97 payments, deferring 1995-96 revenues, and making a deposit to the tax
refund reserve account.

The General Fund closing fund balance was $287 million, an increase of
$129 million from 1994-95 levels. The $129 million change in fund balance is
attributable to the $65 million voluntary deposit to the TSRF, a $15 million
required deposit to the TSRF, a $40 million deposit to the Contingency Reserve
Fund ("CRF"), and a $9 million deposit to the Revenue Accumulation Fund. The
closing fund balance includes $237 million on deposit in the TSRF, to be used in
the event of any future General Fund deficit as provided under the State
Constitution and State Finance Law. In addition, $41 million is on deposit in
the CRF. The CRF was established in State fiscal year 1993-94 to assist the
State in financing the costs of extraordinary litigation. The remaining $9
million reflects amounts on deposit in the Revenue Accumulation Fund. This fund
was created to hold certain tax receipts temporarily before their deposit to
other accounts. In addition, $678 million was on deposit in the tax refund
reserve account, of which $521 million was necessary to complete the
restructuring of the State's cash flow under the Local Government Assistance
Corporation ("LGAC") program.

General Fund receipts totaled $32.81 billion, a decrease of 1.1 percent
from 1994-95 levels. This decrease reflects the impact of tax reductions enacted
and effective in both 1994 and 1995. General Fund disbursements totaled $32.68
billion for the 1995-96 fiscal year, a decrease of 2.2 percent from 1994-95
levels. Mid-year spending reductions, taken as part of a management review
undertaken in October at the direction of the Governor, yielded savings from
Medicaid utilization controls, office space consolidation, overtime and
contractual expense reductions, and statewide productivity improvements achieved
by State agencies. Together with decreased social services spending, this
management review accounts for the bulk of the decline in spending.

1994-95 Fiscal Year

The State ended its 1994-95 fiscal year with the General Fund in
balance. The $241 million decline in the fund balance reflects the planned use
of $264 million from the CRF, partially offset by the required deposit of $23
million to the TSRF. In addition, $278 million was on deposit in the tax refund
reserve account, $250 million of which was deposited to continue the process of
restructuring the State's cash flow as part of the LGAC program. The closing
fund balance of $158 million reflects $157 million in the TSRF and $1 million in
the CRF.

General Fund receipts totaled $33.16 billion, an increase of 2.9%
percent from 1993-94 levels. General Fund disbursements totaled $33.40 billion
for the 1994-95 fiscal year, an increase of 4.7 percent from the previous fiscal
year. The increase in disbursements was primarily the result of one-time
litigation costs for the State, funded by the use of the CRF, offset by $188
million in spending reductions initiated in January 1995 to avert a potential
gap in the 1994-95 State Financial Plan. These actions included savings from a
hiring freeze, halting the development of certain services, and the suspension
of non-essential capital projects.

1993-94 Fiscal Year

The State ended its 1993-94 fiscal year with a General Fund cash
surplus, primarily the result of an improving national economy, State employment
growth, tax collections that exceeded earlier projections and disbursements that
were below expectations. A deposit of $268 million was made to the CRF, with a
withdrawal during the year of $3 million, and a deposit of $67 million was made
to the TSRF. These three transactions resulted in the change in fund balance of
$332 million. In addition, a deposit of $1.14 billion was made to the tax refund
reserve account, of which $1.03 billion was available for budgetary purposes in
the 1994-95 fiscal year. The remaining $114 million was redeposited in the tax
refund reserve account at the end of the State's 1994-95 fiscal year to continue
the process of restructuring the State's cash flow as part of the LGAC program.
The General Fund closing balance was $399 million, of which $265 million was on
deposit in the CRF and $134 million in the TSRF. The CRF was initially funded
with a transfer of $100 million attributable to a positive margin recorded in
the 1992-93 fiscal year.

General Fund receipts totaled $32.23 billion, an increase of 2.6
percent from 1992-93 levels. General Fund disbursements totaled $31.90 billion
for the 1993-94 fiscal year, 3.5 percent higher than the previous fiscal year.
Receipts were higher in part due to improved tax collections from renewed State
economic growth, although the State continued to lag behind the national
economic recovery. Disbursements were higher in part due to increased local
assistance costs for school aid and social services, accelerated payment of
certain Medicaid expenses, and the cost of an additional payroll for State
employees.

During the prior ten years, State-supported long-term debt service
increased by 8.6 percent annually to $2.72 billion by 1995-96 as available
revenues increased by 4.4 percent annually. The relative comparable growth in
revenues and debt service resulted in modest increases in the ratio of debt
service to revenues from 1986-87 to 1995-96. The ratio is estimated to increase
to over 6.7 percent as a result of the enacted budget.

Principal and interest payments on general obligation bonds and
interest payments on bond anticipation notes ("BANs"), which were $735 million
for the 1995-96 fiscal year, are estimated to be $719 million for 1996-97.
Principal and interest payments on fixed rate and variable rate bonds issued by
LGAC were $340 million for the 1995-96 fiscal year, and are estimated to be $323
million for 1996-97. State lease-purchase rental and contractual-obligation
payments including State installment payments relating to certificates of
participation ("COPs"), classified as "Other Financial Obligations," were $1.647
billion in 1995-96 and are estimated to be $1.883 billion for the 1996-97 fiscal
year.

Total outstanding State-related debt increased from $24.62 billion at
the end of the 1986-87 fiscal year to $38.25 billion at the end of the 1995-96
fiscal year, an average annual increase of 5%. State-supported debt increased
from $10.91 billion at the end of the 1986-87 fiscal year to $30.67 billion at
the end of the 1995-96 fiscal year, an average annual increase of 12.2%.
However, debt issuances resulting from the 1996-97 enacted budget are only
expected to increase outstanding state-supported debt by 4.5 percent over the
prior fiscal year. During the prior ten year period, annual personal income in
the State rose from $310.6 billion to $498.7 billion, an average annual increase
of 5.4%. Thus, State-supported debt grew at a faster rate than personal income
while State-related obligations grew at a slower rate. Expressed in other terms,
the total amount of State-supported debt outstanding grew from 3.5% of personal
income in the 1986-87 fiscal year to 6.2% for the 1995-96 fiscal year while
State-related debt outstanding declined from 7.9% to 7.7% for the same period.

Rating Agencies Actions: On February 5, 1993, Fitch assigned its municipal bond
rating of A+ to the State's general obligation bonds. Moody's assigned its
municipal bond rating of A on August 14, 1996, and as of October 29, 1996, S&P
assigned its rating of A- to the State's general obligation bonds. Each such
rating reflects only the views of the respective rating agency, and an
explanation of the significance of such rating may be obtained from such rating
agency. There is no assurance that such ratings will continue for any given
period of time or that they will not be revised or withdrawn entirely by such
rating agency if, in the judgment of such rating agency, circumstances so
warrant. A downward revision or withdrawal of any such rating may have an
adverse effect on the market price of the State's general obligation bonds.

PUBLIC AUTHORITIES

The fiscal stability of the State is related, in part, to the fiscal
stability of its public authorities, meaning public benefit corporations created
pursuant to State law, other than local authorities. Public authorities are not
subject to the constitutional restrictions on the incurrence of debt which apply
to the State itself and may issue bonds and notes within the amounts and subject
to the restrictions set forth in legislative authorization. The State's access
to the public credit markets could be impaired, and the market price of its
outstanding debt may be materially adversely affected, if any of its public
authorities were to default on their respective obligations, particularly those
using the financing techniques referred to as State-supported or State-related
debt. As of September 30, 1995, there were 17 public authorities that had
outstanding debt of $100 million or more, and the aggregate outstanding debt,
including refunding bonds, of all State public authorities was $73.45 billion.
As of March 31, 1995, aggregate public authority debt outstanding as
State-supported debt was $27.9 billion and as State-related debt was $36.1
billion.

There are numerous public authorities, with various responsibilities,
including those which finance, construct and/or operate revenue producing public
facilities. Public authority operating expenses and debt service costs are
generally paid by revenues generated by the projects financed or operated, such
as tolls charged for the use of highways, bridges or tunnels, rentals charged
for housing units, and charges for occupancy at medical care facilities.

In addition, State legislation authorizes several financing techniques
for public authorities. Also, there are statutory arrangements providing for
State local assistance payments, otherwise payable to localities, to be made
under certain circumstances to public authorities. Although the State has no
obligation to provide additional assistance to localities whose local assistance
payments have been paid to public authorities under these arrangements if local
assistance payments are so diverted, the affected localities could seek
additional State assistance.

Some authorities also receive money from State appropriations to pay
for the operating costs of certain of their programs. As described below, the
Metropolitan Transportation Authority ("MTA") receives the bulk of this money in
order to carry out mass transit and commuter services.

METROPOLITAN TRANSPORTATION AUTHORITY

The MTA oversees the operation of subway and bus lines in New York City
by its affiliates, the New York City Transit Authority and the Manhattan and
Bronx Surface Transit Operating Authority (collectively, the "TA"). The MTA
operates certain commuter rail and bus services in the New York Metropolitan
area through MTA's subsidiaries, the Long Island Rail Road Company, the
Metro-North Commuter Railroad Company, and the Metropolitan Suburban Bus
Authority. In addition, the Staten Island Rapid Transit Operating Authority, an
MTA subsidiary, operates a rapid transit line on Staten Island. Through its
affiliated agency, the Triborough Bridge and Tunnel Authority (the "TBTA"), the
MTA operates certain intrastate toll bridges and tunnels. Because fare revenues
are not sufficient to finance the mass transit portion of these operations, the
MTA has depended, and will continue to depend, for operating support upon a
system of State, local government and TBTA support, and, to the extent
available, federal operating assistance, including loans, grants and subsidies.
If current revenue projections are not realized and/or operating expenses exceed
current projections, the TA or commuter railroads may be required to seek
additional State assistance, raise fares or take other actions.

Since 1980, the State has enacted several taxes -- including a
surcharge on the profits of banks, insurance corporations and general business
corporations doing business in the 12-county Metropolitan Transportation Region
served by the MTA and a special one-quarter of 1 percent regional sales and use
tax -- that provide revenues for mass transit purposes, including assistance to
the MTA. Since 1987, State law has required that the proceeds of a one-quarter
of 1 percent mortgage recording tax paid on certain mortgages in the
Metropolitan Transportation Region be deposited in a special MTA fund for
operating or capital expenses. In 1993, the State dedicated a portion of certain
additional State petroleum business tax receipts to fund operating or capital
assistance to the MTA. For the 1996-97 State fiscal year, total State assistance
to the MTA is estimated at approximately $1.09 billion.

State legislation accompanying the 1996-97 adopted State budget
authorized the MTA, TBTA and TA to issue an aggregate of $6.5 billion in bonds
to finance a portion of a new $11.98 billion MTA capital plan for the 1995
through 1999 calendar years (the "1995-99 Capital Program"), and authorized the
MTA to submit the 1995-99 Capital Program to the Capital Program Review Board
for approval. This plan will supersede the overlapping portion of the MTA's
1992-96 Capital Program. This is the fourth capital plan since the Legislature
authorized procedures for the adoption, approval and amendment of MTA capital
programs and is designed to upgrade the performance of the MTA's transportation
systems by investing in new rolling stock, maintaining replacement schedules for
existing assets and bringing the MTA system into a state of good repair. The
1995-99 Capital Program assumes the issuance of an estimated $5.1 billion in
bonds under this $6.5 billion aggregate bonding authority. The remainder of the
plan is projected to be generated from actions taken by the MTA.

There can be no assurance that all the necessary governmental actions
for the 1995-99 Capital Program or future capital programs will be taken, that
funding sources currently identified will not be decreased or eliminated, or
that the 1995-99 Capital Program, or parts thereof, will not be delayed or
reduced. Should funding levels fall below current projections, the MTA would
have to revise its 1995-99 Capital Program accordingly. If the 1995-99 Capital
Program is delayed or reduced, ridership and fare revenues may decline, which
could, among other things, impair the MTA's ability to meet its operating
expenses without additional assistance.

LOCALITIES

THE CITY OF NEW YORK

The fiscal health of the State may also be affected by the fiscal
health of New York City ("the City"), which continues to require significant
financial assistance from the State. The City depends on State aid both to
enable the City to balance its budget and to meet its cash requirements. The
City has achieved balanced operating results for each of its fiscal years since
1981 as reported in accordance with the then-applicable GAAP standards.

Fiscal Oversight

In response to the City's fiscal crisis in 1975, the State took action
to assist the City in returning to fiscal stability. Among those actions, the
State established the Municipal Assistance Corporation For The City of New York
("NYC MAC") to provide financing assistance to the City; the New York State
Financial Control Board (the "Control Board") to oversee the City's financial
affairs; and the Office of the State Deputy Comptroller for the City of New York
("OSDC") to assist the Control Board in exercising its powers and
responsibilities. A "Control Period" existed from 1975 to 1986 during which the
City was subject to certain statutorily-prescribed fiscal controls. Although the
Control Board terminated the Control Period in 1986 when certain statutory
conditions were met and suspended certain Control Board powers, upon the
occurrence or "substantial likelihood and imminence" of the occurrence of
certain events, including (but not limited to) a City operating budget deficit
of more than $100 million or impaired access to public credit markets, the
Control Board is required by law to reimpose a Control Period.

Currently, the City and its Covered Organizations (i.e., those which
----
receive or may receive moneys from the City directly, indirectly or
contingently) operate under a four-year financial plan (the "Financial Plan")
which the City prepares annually and periodically updates. The City's Financial
Plan includes its capital, revenue and expense projections and outlines proposed
gap-closing programs for years with projected budget gaps. The City's
projections set forth in the Financial Plan are based on various assumptions and
contingencies, some of which are uncertain and may not materialize. Unforeseen
developments and changes in major assumptions could significantly affect the
City's ability to balance its budget as required by State law and to meet its
annual cash flow and financing requirements.

Implementation of the Financial Plan is also dependent upon the ability
of the City and certain Covered Organizations to market their securities
successfully. The City issues securities to finance, refinance and rehabilitate
infrastructure and other capital needs, as well as for seasonal financing needs.
The City currently projects that if no action is taken, it will exceed its State
Constitutional general debt limit beginning in City fiscal year 1998. The
current Financial Plan includes certain alternative methods of financing a
portion of the City's capital program which require State or other outside
approval. Future developments concerning the City or its Covered Organizations,
and public discussion of such developments, as well as prevailing market
conditions and securities credit ratings, may affect the ability or cost to sell
securities issued by the City or such Covered Organizations and may also affect
the market for their outstanding securities.

Monitoring Agencies

The staffs of the Control Board, OSDC and the City Comptroller issue
periodic reports on the City's Financial Plans which analyze the City's
forecasts of revenues and expenditures, cash flow, and debt service requirements
for, and Financial Plan compliance by, the City and its Covered Organizations.
According to recent staff reports, the City's economy has experienced weak
employment and moderate wage and income growth throughout the mid-1990's.
Although this trend is expected to continue for the rest of the decade, there is
the risk of a slowdown in the City's economy in the next few years, which would
depress revenue growth and put further strains on the City's budget. These
reports have also indicated that recent City budgets have been balanced in part
through the use of non-recurring resources; that the City's Financial Plan tends
to rely on actions outside its direct control; that the City has not yet brought
its long-term expenditure growth in line with recurring revenue growth; and that
the City is therefore likely to continue to face substantial future budget gaps
that must be closed with reduced expenditures and/or increased revenues. Copies
of the most recent Control Board, OSDC and City Comptroller staff reports are
available by contacting the Control Board at 270 Broadway, 21st Floor, New York,
NY 10007, Attention: Executive Director; OSDC at 270 Broadway, 22nd Floor, New
York, NY, 10007, Attention: Deputy Comptroller, and the City Comptroller at
Municipal Building, Room 517, One Centre Street, New York, NY 10007, Attention:
Deputy Comptroller, Finance.

OTHER LOCALITIES

Certain localities outside New York City have experienced financial
problems and have requested and received additional State assistance during the
last several State fiscal years. The potential impact on the State of any future
requests by localities for additional assistance is not included in the
projections of the State's receipts and disbursements for the State's 1996-97
fiscal year.

Fiscal difficulties experienced by the City of Yonkers resulted in the
re-establishment of the Financial Control Board for the City of Yonkers by the
State in 1984. That Board is charged with oversight of the fiscal affairs of
Yonkers. Future actions taken by the State to assist Yonkers could result in
increased State expenditures for extraordinary local assistance.

Beginning in 1990, the City of Troy experienced a series of budgetary
deficits that resulted in the establishment of a Supervisory Board for the City
of Troy in 1994. The Supervisory Board's powers were increased in 1995, when
Troy MAC was created to help Troy avoid default on certain obligations. The
legislation creating Troy MAC prohibits the City of Troy from seeking federal
bankruptcy protection while Troy MAC bonds are outstanding.

Seventeen municipalities received extraordinary assistance during the
1996 legislative session through $50 million in special appropriations targeted
for distressed cities.

Municipalities and school districts have engaged in substantial
short-term and long-term borrowings. In 1994, the total indebtedness of all
localities in the State other than New York City was approximately $17.7
billion. A small portion (approximately $82.9 million) of that indebtedness
represented borrowing to finance budgetary deficits and was issued pursuant to
State enabling legislation. State law requires the Comptroller to review and
make recommendations concerning the budgets of those local government units
other than New York City authorized by State law to issue debt to finance
deficits during the period that such deficit financing is outstanding. Seventeen
localities had outstanding indebtedness for deficit financing at the close of
their fiscal year ending in 1994.

From time to time, federal expenditure reductions could reduce, or in
some cases eliminate, federal funding of some local programs and accordingly
might impose substantial increased expenditure requirements on affected
localities. If the State, the City or any of the public authorities were to
suffer serious financial difficulties jeopardizing their respective access to
the public credit markets, the marketability of notes and bonds issued by
localities within the State could be adversely affected. Localities also face
anticipated and potential problems resulting from certain pending litigation,
judicial decisions and long-range economic trends. Long-range potential problems
of declining urban population, increasing expenditures and other economic trends
could adversely affect localities and require increasing State assistance in the
future.

LITIGATION

GENERAL

The legal proceedings noted below involve State finances, State
programs and miscellaneous tort, real property and contract claims in which the
State is a defendant and the monetary damages sought are substantial. These
proceedings could affect adversely the financial condition of the State in the
1996-97 fiscal year or thereafter.

Adverse developments in these proceedings or the initiation of new
proceedings could affect the ability of the State to maintain a balanced 1996-97
State Financial Plan. The State believes that the 1996-97 State Financial Plan
includes sufficient reserves for the payment of judgments that may be required
during the 1996-97 fiscal year. There can be no assurance, however, that an
adverse decision in any of these proceedings would not exceed the amount of the
1996-97 State Financial Plan reserves for the payment of judgments and,
therefore, could affect the ability of the State to maintain a balanced 1996-97
State Financial Plan. In its General Purpose Financial Statements, the State
reports its estimated liability in subsequent fiscal years for awarded and
anticipated unfavorable judgments.

Although other litigation is pending against the State, except as
described below, no current litigation involves the State's authority, as a
matter of law, to contract indebtedness, issue its obligations, or pay such
indebtedness when it matures, or affects the State's power or ability, as a
matter of law, to impose or collect significant amounts of taxes and revenues.

In addition to the proceedings noted below, the State is a party to
other claims and litigation which its legal counsel has advised are not probable
of adverse court decisions. Although the amounts of potential losses, if any,
are not presently determinable, it is the State's opinion that its ultimate
liability in these cases is not expected to have a material adverse effect on
the State's financial position in the 1996-97 fiscal year or thereafter.

STATE FINANCE POLICIES

Insurance Law

In Trustees of and The Pension, Hospitalization Benefit Plan of the
Electrical Industry, et al. v. Cuomo, et al., commenced November 25, 1992 in the
United States District Court for the Eastern District of New York, plaintiff
employee welfare benefit plans seek a declaratory judgment nullifying on the
ground of federal preemption provisions of Section 2807-c of the Public Health
Law and implementing regulations which impose a bad debt and charity care
allowance on all hospital bills and a 13 percent surcharge on inpatient bills
paid by employee welfare benefit plans.

Tax Law

Aspects of petroleum business taxes are the subject of administrative
claims and litigation (e.g., Tug Buster Bouchard, et al. v. Wetzler, Supreme
----
Court, Albany County, commenced November 13, 1992). In Tug Buster Bouchard,
petitioner corporations, which purchase fuel out of State and consume such fuel
within the State, contend that the assessment of the petroleum business tax
pursuant to Tax Law ss.301 to such fuel violates the Commerce Clause of the
United States Constitution. Petitioners contend that the application of Section
301 to the interstate transaction but not to purchasers who purchase and consume
fuel within the State discriminates against interstate commerce.

STATE PROGRAMS

Several cases challenge provisions of Chapter 81 of the Laws of 1995
which alter the nursing home Medicaid reimbursement methodology on and after
April 1, 1995. Included are New York State Health Facilities Association, et al.
v. DeBuono, et al., St. Luke's Nursing Center, et al. v. DeBuono, et al., New
York Association of Homes and Services for the Aging v. DeBuono et al. (three
cases), Healthcare Association of New York State v. DeBuono and Bayberry Nursing
Home et al. v. Pataki, et al. Plaintiffs allege that the changes in methodology
have been adopted in violation of procedural and substantive requirements of
State and federal law.

In a consolidated action commenced in 1992, Medicaid recipients and
home health care providers and organizations challenge promulgation by the State
Department of Social Services ("DSS") in June 1992 of a home assessment resource
review instrument ("HARRI"), which is to be used by DSS to determine eligibility
for and the nature of home care services for Medicaid recipients, and challenge
the policy of DSS of limiting reimbursable hours of service until a patient is
assessed using the HARRI (Dowd, et al. v. Bane, Supreme Court, New York County).

Office of Mental Health Patient-Care Costs

Two actions, Balzi, et al. v. Surles, et al., commenced in November
1985 in the United States District Court for the Southern District of New York,
and Brogan, et al. v. Sullivan, et al., commenced in May 1990 in the United
States District Court for the Western District of New York, now consolidated,
challenge the practice of using patients' Social Security benefits for the costs
of care of patients of State Office of Mental Health facilities.

Shelter Allowance

In an action commenced in March 1987 against State and New York City
officials (Jiggetts, et al. v. Bane, et al.), plaintiffs allege that the shelter
allowance granted to recipients of public assistance is not adequate for proper
housing.

Education Law

In New York State Association of Counties v. Pataki, et al., commenced
May 29, 1996 (Supreme Court, Albany County), plaintiff seeks reimbursement from
the State for certain costs arising out of the provision of preschool services
and programs for children with handicapping conditions, pursuant to Sections
4410 (10) and (11) of the Education Law.

RACIAL SEGREGATION

In an action commenced in 1985 (United States et al. v. Yonkers Board
of Education et al.), the United States District Court for the Southern District
of New York found that Yonkers and its public schools were intentionally
segregated. Yonkers enacted an "education improvement plan" which was adopted in
1986. Plaintiffs allege that defendants have not fulfilled their responsibility
to alleviate the segregation. On January 19, 1989 the State, the State Education
Department and the New York State Urban Development Corporation were added as
defendants.

REAL PROPERTY CLAIMS

On March 4, 1985 in Oneida Indian Nation of New York, et al. v. County
of Oneida, the United States Supreme Court affirmed a judgment of the United
States Court of Appeals for the Second Circuit holding that the Oneida Indians
have a common-law right of action against Madison and Oneida Counties for
wrongful possession of 872 acres of land illegally sold to the State in 1795. At
the same time, however, the Court reversed the Second Circuit by holding that a
third-party claim by the counties against the State for indemnification was not
properly before the federal courts. The case was remanded to the District Court
for an assessment of damages, which action is still pending. The counties may
still seek indemnification in the State courts.

Several other actions involving Indian claims to land in upstate New
York are also pending. Included are Cayuga Indian Nation of New York v. Cuomo,
et al., and Canadian St. Regis Band of Mohawk Indians, et al. v. State of New
York, et al., both in the United States District Court for the Northern District
of New York. The Supreme Court's holding in Oneida Indian Nation of New York may
impair or eliminate certain of the State's defenses to these actions but may
enhance others.

CONTRACT AND TORT CLAIMS

In Inter-Power of New York, Inc. v. State of New York, commenced
November 16, 1994 in the Court of Claims, plaintiff alleges that by reason of
the failure of the State's Department of Environmental Conservation to provide
in a timely manner accurate and complete data, plaintiff was unable to complete
by the projected completion date a cogeneration facility, and thereby suffered
damages.

<PAGE>
SHAREHOLDER SERVICING AGENTS

FOR CITIBANK NEW YORK RETAIL BANKING AND
BUSINESS AND PROFESSIONAL CUSTOMERS:
Citibank, N.A.
450 West 33rd Street, New York, NY 10001
(212) 564-3456 or (800) 846-5300

FOR CITIGOLD CLIENTS:
Citigold
P.O. Box 5130, New York, NY 10126-5130
Call Your Citigold Executive or, in NY or CT (800) 285-1701,
or for all other states, (800) 285-1707

FOR CITIBANK GLOBAL ASSET MANAGEMENT CLIENTS:
Citibank, N.A.
Citibank Global Asset Management
153 East 53rd Street, New York, NY 10043
(212) 559-7117

FOR CITIBANK NORTH AMERICAN INVESTOR SERVICES CLIENTS:
Citibank, N.A.
111 Wall Street, New York, NY 10043
Call Your Account Manager or (212) 657-9100

FOR CITICORP INVESTMENT SERVICES CUSTOMERS:
Citicorp Investment Services
One Court Square, Long Island City, NY 11120
Call Your Investment Consultant or (800) 846-5200
(212) 736-8170 in New York City
<PAGE>
LANDMARK NEW YORK TAX FREE RESERVES

TRUSTEES AND OFFICERS
C. Oscar Morong, Jr., Chairman
Philip W. Coolidge, President*
H.B. Alvord
Elliott J. Berv
Mark T. Finn
Riley C. Gilley
Diana R. Harrington
Susan B. Kerley
Walter E. Robb, III
E. Kirby Warren
William S. Woods, Jr.

SECRETARY
Linda T. Gibson*

TREASURER
John R. Elder*

*Affiliated Person of Administrator and Distributor

- ----------------------------------------------------------------------------

INVESTMENT ADVISER
Citibank, N.A.
153 East 53rd Street, New York, NY 10043

ADMINISTRATOR AND DISTRIBUTOR
The Landmark Funds Broker-Dealer Services, Inc.
6 St. James Avenue, Boston, MA 02116
(617) 423-1679

TRANSFER AGENT AND CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street, Boston, MA 02110

AUDITORS
Deloitte & Touche LLP
125 Summer Street, Boston, MA 02110

LEGAL COUNSEL
Bingham, Dana & Gould LLP
150 Federal Street, Boston, MA 02110

- ----------------------------------------------------------------------------

SHAREHOLDER SERVICING AGENTS
(See Inside of Cover)
<PAGE>

STATEMENT OF
ADDITIONAL INFORMATION
January 2, 1997

LANDMARK CONNECTICUT TAX FREE RESERVES
(A member of the Landmark(SM) Family of Funds)

Landmark Connecticut Tax Free Reserves (the "Fund") is a separate
series of Landmark Multi-State Tax Free Funds (the "Trust"). The address and
telephone number of the Trust are 6 St. James Avenue, Boston, Massachusetts
02116, (617) 423-1679.

Table of Contents Page
- ----------------- ----

The Fund 2
Investment Objectives, Policies and Restrictions 2
Performance Information 14
Determination of Net Asset Value 15
Management 17
Portfolio Transactions 24
Description of Shares, Voting Rights and Liabilities 25
Certain Additional Tax Matters 27
Independent Accountants and Financial Statements 27
Appendix 29

THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS AUTHORIZED
FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE PROSPECTUS.
<PAGE>
1. THE FUND

The Trust is a no-load, non-diversified, open-end management investment
company which was organized as a business trust under the laws of the
Commonwealth of Massachusetts on August 30, 1985. The Trust was known as
"Landmark New York Tax Free Reserves" until its name was changed on December 18,
1991. Shares of the Trust are divided into three separate series, one of which,
the Fund, is described in this Statement of Additional Information. References
in this Statement of Additional Information to the Prospectus are to the
Prospectus, dated January 2, 1997, of the Fund by which shares of the Fund are
offered.

The Fund is a type of mutual fund commonly referred to as a "double
tax-exempt money market fund." The net asset value of each of the Fund's shares
is expected to remain constant at $1.00, although there can be no assurance that
this will be so on a continuing basis. (See "Determination of Net Asset Value.")

2. INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS

INVESTMENT OBJECTIVES

The investment objectives of the Fund are to provide its shareholders
with high levels of current income exempt from federal and Connecticut personal
income taxes, preservation of capital and liquidity.

The investment objectives of the Fund may not be changed without
approval by the Fund's shareholders. Of course, there can be no assurance that
the Fund will achieve its investment objectives.

INVESTMENT POLICIES

The Fund seeks its investment objectives by investing primarily in
short-term, high quality fixed rate and variable rate obligations issued by or
on behalf of the State of Connecticut, other states, territories and possessions
of the United States and their authorities, agencies, instrumentalities and
political subdivisions and other qualifying issuers, the interest on which is
exempt from federal income taxes, including participation interests in such
obligations issued by banks, insurance companies or other financial
institutions. (These securities, whether or not the interest thereon is subject
to the federal alternative minimum tax, are referred to herein as "Municipal
Obligations").

Dividends paid by the Fund which are treated as exempt-interest
dividends for federal income tax purposes, to the extent derived from interest
income on tax-exempt obligations issued by or on behalf of the State of
Connecticut, its political subdivisions, or public instrumentalities, state or
local authorities, districts or similar public entities created under
Connecticut law, obligations of Puerto Rico, other U.S. territories and their
political subdivisions and obligations of other qualifying issuers ("Connecticut
Municipal Obligations"), will be exempt from federal and Connecticut personal
income taxes. To the extent acceptable Connecticut Municipal Obligations are not
available for investment, the Fund may purchase Municipal Obligations issued by
other states, their agencies and instrumentalities, the interest income on which
will be exempt from federal income tax but will be subject to Connecticut
personal income taxes.

In determining the tax status of interest on Municipal Obligations and
Connecticut Municipal Obligations, the Adviser relies on opinions of bond
counsel who may be counsel to the issuer.

Under normal circumstances, the Fund invests at least 65% of its assets
in Connecticut Municipal Obligations, although the exact amount of the Fund's
assets invested in such securities varies from time to time. Although the Fund
attempts to invest 100% of its assets in Municipal Obligations, the Fund may
invest up to 20% of its total assets in securities the interest income on which
is subject to federal, state and local income tax or the federal alternative
minimum tax. The Fund may invest more than 25% of its assets in participation
interests issued by banks in industrial development bonds and other Municipal
Obligations. In view of this possible "concentration" in bank participation
interests, an investment in the Fund should be made with an understanding of the
characteristics of the banking industry and the risks which such an investment
may entail. (See "Variable Rate Instruments and Participation Interests"
hereafter.) Uninvested cash reserves may be held temporarily for the Fund
pending investment. The Fund's investments may include "when-issued" or "forward
delivery" Municipal Obligations, stand-by commitments and taxable repurchase
agreements.

As a non-diversified investment company, the Fund is not subject to any
statutory restrictions under the 1940 Act with respect to limiting the
investment of its assets in one or relatively few issuers. This concentration
may present greater risks than in the case of a diversified company. However,
the Fund intends to qualify as a "regulated investment company" under Subchapter
M of the Internal Revenue Code. In order so to qualify under current law, at the
close of each quarter of the Fund's taxable year, at least 50% of the value of
the Fund's total assets must be represented by cash, U.S. Government securities,
investment company securities and other securities limited in respect of any one
issuer (or two or more issuers which the Fund controls and which are determined
to be engaged in the same or similar trades or businesses or related businesses)
to not more than 5% in value of the total assets of the Fund and not more than
10% of the outstanding voting securities of such issuer. In addition, and again
under current law, at the close of each quarter of its taxable year, not more
than 25% in value of the Fund's total assets may be invested in securities of
one issuer other than U.S. Government securities.

(1) Municipal bonds with remaining maturities of 397 days or less that
are rated at the date of purchase within the Aaa or Aa categories by Moody's or
within the AAA or AA categories by Standard & Poor's or Fitch and present a
minimal credit risk as determined by the Board of Trustees or the Adviser on its
behalf or, if not rated by any of these rating agencies, are of comparable
quality as determined by the Adviser on the basis of the credit evaluation of
the obligor on the bonds or of the bank issuing a participation interest or
guarantee or of any insurance policy issued in support of the bonds or the
participation interests.

(2) Municipal notes with remaining maturities of 397 days or less that
are rated at the date of purchase MIG 1/VMIG 1 or MIG 2/VMIG 2 by Moody's,
SP-1+, SP-1 or SP-2 by Standard & Poor's or F-1+,F-1 or F-2 by Fitch and present
a minimal credit risk as determined by the Board of Trustees or the Adviser on
its behalf or, if not rated by any of these rating agencies, are of comparable
quality as determined by the Adviser. The principal kinds of municipal notes are
tax and revenue anticipation notes, tax anticipation notes, bond anticipation
notes and revenue anticipation notes. Notes sold in anticipation of collection
of taxes, a bond sale or receipt of other revenues are usually general
obligations of the issuing municipality or agency. The Fund's investments may be
concentrated in municipal obligations of Connecticut issuers.

(3) Municipal commercial paper that is rated Prime-1 or Prime-2 by
Moody's, A-1+, A-1 or A-2 by Standard & Poor's or F-1+, F-1 or F-2 by Fitch and
presents a minimal credit risk as determined by the Board of Trustees or the
Adviser on its behalf or, if not rated by any of these rating agencies, is of
comparable quality as determined by the Adviser. Issues of municipal commercial
paper typically represent very short-term, unsecured, negotiable promissory
notes. These obligations are often issued to meet seasonal working capital needs
of municipalities or to provide interim construction financing and are paid from
general revenues of municipalities or are refinanced with long-term debt. In
most cases municipal commercial paper is backed by letters of credit, lending
agreements, note repurchase agreements or other credit facility agreements
offered by banks or other institutions which may be called upon in the event of
default by the issuer of the commercial paper.

Subsequent to its purchase by the Fund, a rated Municipal Obligation
may cease to be rated or its rating may be reduced below the minimum required
for purchase for the Fund. Neither event will require sale of such Municipal
Obligation by the Fund (other than variable rate instruments which must be sold
if they are not "high quality"), but the Adviser will consider such event in
determining whether the Fund should continue to hold the Municipal Obligation.
To the extent that the ratings given to the Municipal Obligations or other
securities held by the Fund are altered due to changes in either the Moody's or
Standard & Poor's rating systems (see Appendix B to the Prospectus for an
explanation of these ratings systems), the Adviser will adopt such changed
ratings as standards for its future investments in accordance with the
investment policies contained in the Prospectus. Certain Municipal Obligations
issued by instrumentalities of the U.S. Government are not backed by the full
faith and credit of the U.S. Treasury but only by the creditworthiness of the
instrumentality. The Trust's Board of Trustees has determined that any Municipal
Obligation that depends directly, or indirectly through a government insurance
program or other guarantee, on the full faith and credit of the U.S. Government
will be considered to have a rating in the highest category. Where necessary to
ensure that the Municipal Obligations are of "high quality" (i.e., within the
two highest ratings assigned by any major rating service), or where the
obligations are not freely transferable, the Fund will require that the
obligation to pay the principal and accrued interest be backed by an
unconditional irrevocable bank letter of credit, a guarantee, insurance policy
or other comparable undertaking of an approved financial institution.

VARIABLE RATE INSTRUMENTS AND PARTICIPATION INTERESTS

Variable rate instruments in which the Fund may invest its assets may
include participation interests in variable rate, Municipal Obligations owned by
a bank, insurance company or other financial institution or affiliated
organizations. Although the rate of the underlying Municipal Obligations may be
fixed, the terms of the participation interest may result in the Fund receiving
a variable rate on its investment. A participation interest gives the Fund an
undivided interest in the Municipal Obligation in the proportion that the Fund's
participation bears to the total principal amount of the Municipal Obligation
and provides the liquidity feature. Each participation may be backed by an
irrevocable letter of credit or guarantee of, or a right to put to, a bank
(which may be the bank issuing the participation interest, a bank issuing a
confirming letter of credit to that of the issuing bank, or a bank serving as
agent of the issuing bank with respect to the possible repurchase of the
participation interest) or insurance policy of an insurance company that has
been determined by or on behalf of the Board of Trustees of the Trust to meet
the prescribed quality standards of the Fund. The Fund has the right to sell the
participation interest back to the institution or draw on the letter of credit
or insurance after a specified period of notice, for all or any part of the full
principal amount of the Fund's participation in the security, plus accrued
interest. The Fund intends to exercise the liquidity feature only (1) upon a
default under the terms of the bond documents, (2) as needed to provide
liquidity to the Fund in order to make redemptions of Fund shares, or (3) to
maintain a high quality investment portfolio. In some cases, this liquidity
feature may not be exercisable in the event of a default on the underlying
Municipal Obligations; in these cases, the underlying Municipal Obligations must
meet the Fund's high credit standards at the time of purchase of the
participation interest. Issuers of participation interests will retain a service
and letter of credit fee and a fee for providing the liquidity feature, in an
amount equal to the excess of the interest paid on the instruments over the
negotiated yield at which the participations were purchased by the Fund. The
total fees generally range from 5% to 15% of the applicable prime rate or other
interest rate index. With respect to insurance, the Fund will attempt to have
the issuer of the participation interest bear the cost of the insurance,
although the Fund retains the option to purchase insurance if necessary, in
which case the cost of insurance will be an expense of the Fund subject to the
expense limitation of 2 1/2% of the first $30 million of the Fund's average net
assets, 2% of the next $70 million and 1 1/2% of the Fund's average net assets
in excess of $100 million. The Adviser has been instructed by the Trust's Board
of Trustees to monitor continually the pricing, quality and liquidity of the
variable rate instruments held by the Fund, including the participation
interests, on the basis of published financial information and reports of the
rating agencies and other bank analytical services to which the Fund may
subscribe. Although participation interests may be sold, the Fund intends to
hold them until maturity, except under the circumstances stated above.

For purposes of determining whether a variable rate instrument held by
the Fund matures within 397 days from the date of its acquisition, the maturity
of the instrument will be deemed to be the longer of (1) the period required
before the Fund is entitled to receive payment of the principal amount of the
instrument after notice or (2) the period remaining until the instrument's next
interest rate adjustment, except that an instrument issued or guaranteed by the
U.S. Government or any agency thereof shall be deemed to have a maturity equal
to the period remaining until the next adjustment of the interest rate. The
maturity of a variable rate instrument will be determined in the same manner for
purposes of computing the Fund's dollar-weighted average portfolio maturity.

"WHEN-ISSUED" SECURITIES

STAND-BY COMMITMENTS

TAXABLE SECURITIES

REPURCHASE AGREEMENTS

RISK FACTORS AFFECTING INVESTMENT
IN CONNECTICUT MUNICIPAL OBLIGATIONS

The Fund intends to invest a high proportion of its assets in
Connecticut Municipal Obligations. Payment of interest and preservation of
principal is dependent upon the continuing ability of Connecticut issuers and/or
obligors of state, municipal and public authority debt obligations to meet their
obligations thereunder. For information concerning Connecticut Municipal
Obligations, see the Appendix to this Statement of Additional Information.

The summary set forth above and in the Appendix is included for the
purpose of providing a general description of the State of Connecticut credit
and financial conditions. This summary is based on information from statements
of issuers of Connecticut Municipal Obligations and does not purport to be
complete. The Trust is not responsible for the accuracy or timeliness of this
information.

INVESTMENT RESTRICTIONS

The Trust may not with respect to the Fund:

(1) Make investments other than as described under "Investment
Policies" above or any other form of federal tax-exempt investment which meets
the Fund's high quality criteria, as determined by the Board of Trustees and
which is consistent with the Fund's investment objectives and policies
(provided, however, that the Trust may invest all or substantially all of the
Fund's assets in another registered investment company having the same
investment objective and policies and substantially the same investment
restrictions as the Fund).

(5) Underwrite the securities of other issuers, except insofar as the
Trust may be deemed an underwriter under the Securities Act of 1933 in disposing
of a portfolio security of the Fund (provided, however, that the Trust may
invest all or substantially all of the Fund's assets in another registered
investment company having the same investment objective and policies and
substantially the same investment restrictions as the Fund).

(6) Purchase or sell real estate, real estate investment trust
securities, commodities or commodity contracts, or oil and gas interests, but
this shall not prevent the Trust from investing in Municipal Obligations secured
by real estate or interests in real estate.

(7) Make loans to others, except through the purchase of portfolio
investments, including repurchase agreements, as described under "Investment
Policies" above.

(8) Purchase more than 10% of all outstanding voting securities of any
one issuer or invest in companies for the purpose of exercising control, except
that the Trust may invest all or substantially all of the Fund's assets in
another registered investment company having the same investment objective and
policies and substantially the same investment restrictions as the Fund.

(9) Invest more than 25% of the Fund's assets in the securities of
"issuers" in any single industry, provided that the Trust reserves the right to
invest more than 25% of the Fund's assets in bank participation interests and
there shall be no limitation on the purchase of those Municipal Obligations and
other obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities, except that the Trust may invest all or substantially all of
the Fund's assets in another registered investment company having the same
investment objective and policies and substantially the same investment
restrictions as the Fund. When the assets and revenues of an agency, authority,
instrumentality or other political subdivision are separate from those of the
government creating the issuing entity and a security is backed only by the
assets and revenues of the entity, the entity would be deemed to be the sole
issuer of the security. Similarly, in the case of a private activity bond, if
that bond is backed only by the assets and revenues of the non-governmental
user, then such non-governmental user would be deemed to be the sole issuer. If,
however, in either case, the creating government or some other entity, such as
an insurance company or other corporate obligor, guarantees a security or a bank
issues a letter of credit, such a guarantee or letter of credit may, in
accordance with applicable Securities and Exchange Commission ("SEC") rules, be
considered a separate security and could be treated as an issue of such
government, other entity or bank.

(10) Invest in securities of other investment companies, except the
Trust may purchase on behalf of the Fund unit investment trust securities (i.e.,
securities issued by an investment company which (i) is organized under a trust
indenture or contract of custodianship or similar instrument, (ii) does not have
a board of directors, and (iii) issues only redeemable securities, each of which
represents an undivided interest in a unit of specified securities) where such
unit trusts meet the investment objectives and policies of the Fund and then
only up to 5% of the Fund's net assets, except as they may be acquired as part
of a merger, consolidation or acquisition of assets, except that the Trust may
invest all or substantially all of the Fund's assets in another registered
investment company having the same investment objectives and policies and
substantially the same investment restrictions as the Fund. As of the date of
this Statement of Additional Information, the Trust has no intention of
investing in unit investment trust securities on behalf of the Fund.

(11) Issue any senior security (as that term is defined in the 1940
Act) if such issuance is specifically prohibited by the 1940 Act or the rules
and regulations promulgated thereunder, except as appropriate to evidence a debt
incurred without violating Investment Restriction (2) above.

For purposes of the investment restrictions described in (8) and (9)
above, the issuer of a tax-exempt security is deemed to be the entity (public or
private) ultimately responsible for the payment of principal of and interest on
the security. If, however, the acting government or some other entity, such as
an insurance company or other corporate obligor, guarantees a security or a bank
issues a Letter of Credit, such a guarantee or Letter of Credit may, in
accordance with applicable SEC rules, be considered a separate security and
treated as an issue of such government, other entity or bank.

In addition, as a matter of non-fundamental policy, the Trust will not
invest on behalf of the Fund in securities that are not readily marketable, such
as fixed time deposits and repurchase agreements maturing in more than seven
days, if such investments together with other illiquid securities held by the
Fund exceed 10% of the Fund's total net assets.

3. PERFORMANCE INFORMATION

REDEEMABLE VALUE OF A
HYPOTHETICAL $1,000
ANNUALIZED TOTAL INVESTMENT AT THE END
PERIOD RATE OF RETURN OF THE PERIOD

December 1, 1993 (commencement of
operations) to August 31, 1996 3.12% $1,088.08

One year ended August 31, 1996 3.18% $1,031.81

The annualized yield of the Fund for the seven-day period ended August
31, 1996 was 2.83%, the effective compound annualized yield of the Fund for such
period was 2.87% and the annualized tax equivalent yield of the Fund for such
period was 3.93% (assuming (i) a combined Connecticut and federal tax bracket of
42.32% and (ii) that 80% of the Fund's assets were invested in Connecticut
Municipal Obligations).

4. DETERMINATION OF NET ASSET VALUE

The net asset value of each of the shares of the Fund is determined on
each day on which the New York Stock Exchange is open for trading. This
determination is made once during each such day as of 12:00 noon, Eastern time,
by dividing the value of the Fund's net assets (i.e., the value of its assets
less its liabilities, including expenses payable or accrued) by the number of
shares of the Fund outstanding at the time the determination is made. As of the
date of this Statement of Additional Information, the New York Stock Exchange is
open for trading every weekday except for the following holidays (or the days on
which they are observed): New Year's Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. It is
anticipated that the net asset value of each share of the Fund will remain
constant at $1.00 and, although no assurance can be given that it will be able
to do so on a continuing basis, as described below, the Fund employs specific
investment policies and procedures to accomplish this result.

5. MANAGEMENT

TRUSTEES

WILLIAM S. WOODS, JR.; 76 -- Vice President - Investments, Sun Company (retired,
April, 1984). His address is 35 Colwick Road, Cherry Hill, New Jersey.

OFFICERS

LINDA T. GIBSON; 31* -- Secretary of the Trust; Vice President, Signature
Financial Group, Inc. (since June 1991); law student, Boston University School
of Law (from September 1989 to May 1992).

JAMES E. HOOLAHAN; 49* -- Vice President, Assistant Secretary and Assistant
Treasurer; Senior Vice President, Signature Financial Group, Inc.

MOLLY S. MUGLER; 45* -- Assistant Secretary of the Trust; Vice President,
Signature Financial Group, Inc.; Assistant Secretary, The Landmark Funds
Broker-Dealer Services, Inc. (since December, 1988).

KARYN A. NOKE; 26 -- Vice President, Assistant Secretary and Assistant
Treasurer; Vice President, Signature Financial Group (Cayman) Limited (since
September 1996); Assistant Vice President, Signature Financial Group, Inc. (May
1993 to August 1996); Student, University of Massachusetts (prior to May 1993).

SHARON M. WHITSON; 48* -- Assistant Secretary and Assistant Treasurer; Assistant
Vice President, Signature Financial Group, Inc. (since November 1992); Associate
Trader, Massachusetts Financial Services Company (prior to November 1992).

JULIE J. WYETZNER; 37* -- Vice President, Assistant Secretary and Assistant
Treasurer; Vice President, Signature Financial Group, Inc.

The Trustees and officers of the Trust also hold comparable positions
with certain other funds for which LFBDS or an affiliate serves as the
distributor or administrator.

TRUSTEES COMPENSATION TABLE

AGGREGATE COMPENSATION TOTAL COMPENSATION FROM
TRUSTEE FROM THE TRUST(1) TRUST AND COMPLEX(2)
- ------- ---------------------- -----------------------

H.B. Alvord $2,020.16 $42,000.00
Elliott J. Berv $1,651.22 $42,000.00
Philip W. Coolidge 0 0
Mark T. Finn $1,636.77 $42,000.00
Riley C. Gilley $2,268.59 $46,000.00
Diana R. Harrington $2,234.22 $44,000.00
Susan B. Kerley $2,170.62 $42,000.00
C. Oscar Morong, Jr. $2,276.76 $53,000.00
Walter E. Robb, III $1,699.88 $46,500.00
E. Kirby Warren $2,116.48 $46,500.00
William S. Woods, Jr. $2,473.76 $46,000.00

- --------------------------------------------------------------------------------
(1) For the fiscal year ended August 31, 1996.
(2) Information relates to the fiscal year ended August 31, 1996. Messrs.
Alvord, Berv, Coolidge, Finn, Gilley, Morong, Robb, Warren and Woods and Mses.
Harrington and Kerley are trustees of 12, 12, 28, 14, 11, 12, 12, 12, 11, 11 and
11 Funds, respectively, of the Landmark Family of Funds.

ADVISER

The Prospectus contains a description of the fees payable to the
Adviser for services under the Advisory Agreement. For the period December 1,
1993 (commencement of operations of the Fund) to August 31, 1994 and for the
fiscal years ended August 31, 1995 and 1996, the fees payable to Citibank under
the Advisory Agreement were $10,533 and $74,063 (all of which were voluntarily
waived) and $187,676 (of which $183,278 was voluntarily waived).

ADMINISTRATOR

Pursuant to an Administrative Services Agreement (the "Administrative
Services Agreement"), LFBDS provides the Trust with general office facilities
and LFBDS supervises the overall administration of the Trust, including, among
other responsibilities, the negotiation of contracts and fees with, and the
monitoring of performance and billings of, the independent contractors and
agents of the Trust; the preparation and filing of all documents required for
compliance by the Trust with applicable laws and regulations; and arranging for
the maintenance of books and records of the Trust. The Administrator provides
persons satisfactory to the Board of Trustees of the Trust to serve as Trustees
and officers of the Trust. Such Trustees and officers may be directors, officers
or employees of LFBDS or its affiliates.

The Prospectus contains a description of the fees payable to the
Administrator under the Administrative Services Agreement.

For the period from December 1, 1993 (commencement of operations) to
August 31, 1994 and for the fiscal years ended August 31, 1995 and 1996, the
fees payable to LFBDS from the Fund under the Administrative Services Agreement
were $7,900 and $55,547 (all of which were voluntarily waived) and $234,594 (of
which $117,110 was voluntarily waived).

LFBDS is a wholly-owned subsidiary of Signature Financial Group, Inc.

DISTRIBUTOR

The Trust is also permitted to pay the Distributor an additional fee
not to exceed 0.10% per annum of the Fund's average daily net assets in
anticipation of, or as reimbursement for, print or electronic media advertising
expenses incurred in connection with the sale of shares of the Fund. No payments
under the Distribution Plan will be made to Shareholder Servicing Agents
although Shareholder Servicing Agents receive payments under the Administrative
Services Plan referred to below.

As contemplated by the Distribution Plan, LFBDS acts as the agent of
the Fund in connection with the offering of shares of the Fund pursuant to a
Distribution Agreement (the "Distribution Agreement"). After the prospectus and
periodic reports have been prepared, set in type and mailed to existing
shareholders, the Distributor pays for the printing and distribution of copies
of the prospectuses and periodic reports which are used in connection with the
offering of shares of the Fund to prospective investors. The Prospectus contains
a description of fees payable to the Distributor under the Distribution
Agreement. The Distributor has voluntarily agreed to waive a portion of the fees
payable to it on a month-to-month basis. For the period from December 1, 1993
(commencement of operations) to August 31, 1994 and for the fiscal years ended
August 31, 1995 and 1996, the fees payable to the Distributor from the Fund
under the Distribution Agreement were $2,633, $18,516 and $93,838 (all of which
were voluntarily waived).

SHAREHOLDER SERVICING AGENTS, TRANSFER AGENT AND CUSTODIAN

The Trust has entered into a shareholder servicing agreement (a
"Servicing Agreement") with each Shareholder Servicing Agent and a Transfer
Agency and Service Agreement and a Custodian Agreement with State Street Bank
and Trust Company ("State Street") pursuant to which State Street acts as
transfer agent and custodian and performs fund accounting services for the
Trust. For additional information, including a description of fees paid to the
Shareholder Servicing Agents under the Servicing Agreements, see "Shareholder
Servicing Agents" and "Transfer Agent, Custodian and Fund Accountant" in the
Prospectus. For the period from December 1, 1993 (commencement of operations) to
August 31, 1994 and for the fiscal years ended August 31, 1995 and 1996, the
aggregate fees payable by the Fund to Shareholder Servicing Agents under the
Administrative Services Plan were $21,066 and $148,126 (all of which were
voluntarily waived) and $234,594 (of which $183,603 was voluntarily waived).

6. PORTFOLIO TRANSACTIONS

No portfolio transactions are executed with the Adviser, or with any
affiliate of the Adviser, acting either as principal or as broker.

7. DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES

Share certificates will not be issued.

8. CERTAIN ADDITIONAL TAX MATTERS

Because the Fund expects to earn primarily interest income, it is
expected that no Fund distributions will qualify for the dividends-received
deduction for corporations.

9. INDEPENDENT ACCOUNTANTS AND FINANCIAL STATEMENTS

Deloitte & Touche LLP are the independent certified public accountants
for the Fund, providing audit services and assistance and consultation with
respect to the preparation of filings with the SEC.

The audited financial statements of the Fund (Portfolio of Investments
at August 31, 1996, Statement of Assets and Liabilities at August 31, 1996,
Statement of Operations for the fiscal year ended August 31, 1996, Statement of
Changes in Net Assets for each of the years ended August 31, 1996 and 1995 and
Financial Highlights for the fiscal years ended August 31, 1996 and 1995 and for
the period from December 1, 1993 (commencement of operations) to August 31,
1994, Notes to Financial Statements and the Independent Auditor's Report), which
are included in the Annual Report to Shareholders of the Fund, are incorporated
by reference into this Statement of Additional Information and have been so
incorporated in reliance upon the report of Deloitte & Touche LLP.

A copy of the Annual Report accompanies this Statement of Additional
Information.
<PAGE>
APPENDIX

ADDITIONAL INFORMATION CONCERNING
CONNECTICUT MUNICIPAL OBLIGATIONS

The following information is a summary of special factors affecting
investments in Connecticut Municipal Obligations. The sources of payment for
such obligations and the marketability thereof may be affected by financial or
other difficulties experienced by Connecticut (the "State") and certain of its
municipalities and public authorities. This summary does not purport to be a
complete description and is based on information from statements relating to
offerings of Connecticut bond issues. Landmark Connecticut Tax Free Reserves is
not responsible for the accuracy or timeliness of this information.

CERTAIN ECONOMIC CONSIDERATIONS

Connecticut's economy is diverse. Manufacturing employment in the State
has been on a downward trend since the mid-1980s, while non-manufacturing
employment has risen significantly. Manufacturing is diversified, with
transportation equipment the dominant industry. Connecticut is a leading
producer of aircraft engines and parts, submarines and helicopters. The largest
employers in these industries are United Technologies Corporation, including its
Pratt and Whitney Aircraft Division, with headquarters in East Hartford, and
Sikorsky Aircraft Division in Stratford as well as General Dynamics
Corporation's Electric Boat Division in Groton.

Over the past ten years, Connecticut's manufacturing employment peaked
in 1985 at over 408,000 workers. Since that year, employment in manufacturing
has been on a downward trend, declining 30.1%, or a loss of 127,330 jobs by 1995
from 1985 levels. A number of factors, such as the overvalued dollar of the
mid-1980s, heightened foreign competition, a sharp decrease in defense spending,
and improved productivity played a significant role in affecting the overall
level of manufacturing employment. In Connecticut, the rate of job loss in the
manufacturing sector produced a decline of 1.5% or 4,410 jobs from 1994 to 1995.

Over the past several decades the non-manufacturing sector of the
State's economy has risen in economic importance, from just over 50% of total
State employment in 1950 to approximately 82% by 1995. This trend has decreased
the State's dependence on manufacturing jobs. The State's non-manufacturing
sector expanded by 2.0% in 1995 as compared to 1994, and 1.7% in 1994 as
compared to 1993, following three years of decline starting in 1990. During the
1990s, Connecticut's growth in non-manufacturing employment has lagged that of
the New England region and the nation as a whole.

The non-manufacturing sector is comprised of industries that typically
provide a service. The four major industries in terms of employment are: trade;
finance, insurance, and real estate; business and personal services; and
government, which collectively comprise about 90% of employment in the
non-manufacturing sector.

After enjoying an extraordinary boom during the mid-1980s, Connecticut,
as well as the rest of the Northeast, experienced an economic slowdown before
the onset of the national recession in the latter half of 1990. Reflecting the
downturn, the unemployment rate in the State rose from a low of 3% in 1988 to
just above the national average of 7.4% during 1992. Since 1992, the
unemployment rate has declined annually to a rate of 5.5% for 1995 and 5.0% for
the first half of 1996.

FISCAL CONDITION IN RECENT YEARS

The State finances most of its operation through its General Fund. The
major components of General Fund revenues are state taxes, including the
personal income tax, the sales and use tax and the corporation business tax.
Miscellaneous fees, receipts, transfers and unrestricted federal grants account
for most of the other General Fund revenue. A cumulative budgetary-basis deficit
in the General Fund as of June 30, 1991 in the amount of $965,711,525 was funded
by the issuance of General Obligation Economic Recovery Notes. Economic recovery
notes outstanding at June 30, 1996 were $315.7 million; these notes mature on
various dates through 1996 and bear interest rates from 5.25% to 6.8%. For the
fiscal years ended June 30, 1992, 1993, 1994, and 1995, the operating surpluses
of the General Fund were $110.2, $113.5, $19.7 and $80.5 million, respectively.
For the fiscal year ended June 30, 1996, the operating surplus is expected to be
$250.0 million. By statute, $89.5 million of the operating surplus for the
fiscal year ended June 30, 1995 has been reserved for the payment of principal
and interest on the Economic Recovery Notes for the 1996-97 fiscal year, while
the remaining $160.5 million of the surplus has been reserved for transfer to
the Budget Reserve Fund. The improved revenue results are offset somewhat by
Medicaid expenditures higher than appropriations, the cost of the negotiated
settlement in the Connecticut Hospital Association v. O'Neill lawsuit and
additional expenditures required in the Department of Children and Families to
comply with a 1991 consent decree in the Juan F. v. O'Neill lawsuit.

The adopted budget for 1996-97 anticipates General Fund revenues of
$9,049.7 million and General Fund expenditures of $9,049.4 million, resulting in
a projected surplus of $0.3 million.

Beginning with the income year commencing on or after January 1, 1991,
the State imposed a personal income tax on the income of residents of the State
(including resident trusts and estates), part-year residents and certain
non-residents who have taxable income derived from or connected with sources
within Connecticut. Depending on federal income tax filing status and
Connecticut adjusted gross income, personal exemptions ranging from $12,000 to
$24,000 are available to taxpayers. In addition, tax credits ranging from 1% to
75% of a taxpayer's Connecticut tax liability are also available depending upon
federal income tax filing status and Connecticut adjusted gross income. Such
exemptions and tax credits are phased out at certain higher income levels.
Neither the personal exemption nor the tax credit described above is available
to a trust or an estate. Legislation enacted in 1995 effects a graduated rate
structure for personal income tax beginning in tax year 1996. Under this revised
structure, the top rate will remain at 4.5% with a rate of 3% on the first
$4,500 of taxable income for joint filers and the first $2,250 for single
filers. For tax year 1997, the 3% rate will be expanded to the first $9,000 of
taxable income for joint filers and the first $4,500 for single filers.

The Corporation Business Tax provides for three methods of computation.
The taxpayer's liability is the greatest amount computed under any of the three
methods.

The first method of computation is a tax measured by the net income of
a taxpayer (the "Income-Base Tax"). Net income, except as applied to insurance
companies, means federal gross income with limited variations less certain
deductions, most of which correspond to the deductions allowed under the
Internal Revenue Code of 1986, as amended from time to time. In the case of life
insurance companies subject to the Corporation Business Tax, net income means
life insurance company taxable income, as determined for federal income tax
purposes, with certain adjustments. Currently, the Income-Base Tax is levied at
the rate of ten and three quarters percent. As part of the State's overall
economic development plan to encourage companies to locate and expand in
Connecticut, Public Act 93-74 institutes a phase down in the corporation tax
rate while Public Act 95-160 further reduces the rate so that by the income year
commencing on or after January 1, 2000 the corporate rate will be 7.5%. The
second method of computing the Corporation Business Tax, from which domestic
insurance companies are exempted, is an alternative tax on capital. This
alternative tax is determined either as a specific maximum dollar amount or at a
flat rate on a defined base, usually related in whole or part to its capital
stock and balance sheet surplus, profit and deficit. The third method of
computing the Corporation Business Tax is the minimum tax which is $250.
Corporations must compute their tax under all three methods and pay the tax
under the highest computation.

In November 1992, electors approved an amendment to the State
Constitution providing that the amount of general budget expenditures authorized
for any fiscal year shall not exceed the estimated amount of revenue for such
fiscal year. This amendment also provides for a cap on budget expenditures. The
General Assembly is precluded from authorizing an increase in general budget
expenditures for any fiscal year above the amount of general budget expenditures
authorized for the previous fiscal year by a certain percentage which exceeds
the greater of the percentage increase in personal income or the percentage
increase in inflation, unless the Governor declares an emergency or the
existence of extraordinary circumstances and at least three-fifths of the
members of each house of the General Assembly vote to exceed such limit for the
purposes of such emergency or extraordinary circumstances. The limitation on
general budget expenditures does not include expenditures for the payment of
bonds, notes or other evidences of indebtedness. There is no statutory or
constitutional prohibition against bonding for general budget expenditures.

By statute, no bonds, notes or other evidences of indebtedness for
borrowed money payable from General Fund tax receipts of the State shall be
authorized by the General Assembly except as shall not cause the aggregate
amount of (1) the total amount of bonds, notes or other evidences of
indebtedness payable from General Fund tax receipts authorized by the General
Assembly but which have not been issued and (2) the total amount of such
indebtedness (excluding short-term and certain other indebtedness) which has
been issued and remains outstanding, to exceed 1.6 times the total estimated
General Fund tax receipts of the State for the fiscal year in which any such
authorization will become effective. As a result, the State had a debt incurring
margin as of October 15, 1996 of $1,785,115,346.

ADDITIONAL CONSIDERATIONS

The classification of Landmark Connecticut Tax Free Reserves under the
Investment Company Act of 1940 as a "non-diversified" investment company allows
it to invest more than 5% of its assets in the securities of any issuer, subject
to satisfaction of certain tax requirements. Because of the relatively small
number of issuers of Connecticut obligations, the Fund is likely to invest a
greater percentage of its assets in the securities of a single issuer than is an
investment company which invests in a broad range of Municipal Obligations.
Therefore, the Fund would be more susceptible than a diversified fund to any
single adverse economic or political occurrence or development affecting
Connecticut issuers. The Fund will also be subject to an increased risk of loss
if the issuer is unable to make interest or principal payments or if the market
value of such securities declines. It is also possible that there will not be
sufficient availability of suitable Connecticut tax-exempt obligations for the
Fund to achieve its objective of providing income exempt from Connecticut taxes.

Landmark Connecticut Tax Free Reserves may invest 25% or more of its
assets in Connecticut Municipal Obligations of the same type, including, without
limitation, the following: general obligations of the State of Connecticut and
its political subdivisions; lease rental obligations of state and local
authorities; obligations of state and local housing finance authorities,
municipal utilities systems or public housing authorities; or industrial
development or pollution control bonds issued for hospitals, electric utility
systems, steel companies, life care facilities or other purposes. This may make
the Fund more susceptible to adverse economic, political, or regulatory
occurrences affecting a particular category of issuers.

Connecticut Municipal Obligations also include obligations of the
governments of Puerto Rico and other U.S. territories and their political
subdivisions to the extent that these obligations are exempt from Connecticut
State personal income taxes. Accordingly, the Fund may be adversely affected by
local political and economic conditions and developments within Puerto Rico and
certain other U.S. territories affecting the issuers of such obligations. The
economy of Puerto Rico is dominated by the manufacturing and service sectors.
Although the economy of Puerto Rico expanded significantly from fiscal 1984
through fiscal 1990, the rate of this expansion slowed during fiscal 1991. In
the first eleven months of fiscal 1992, the Economic Activity Index, a composite
of thirteen economic indicators prepared by the Puerto Rico Planning Board,
increased 0.4% as compared to the same fiscal period for 1991, which period
showed a decrease of 0.5% over the same period of fiscal 1990. This trend is
similar to that in the United States. The Index may not necessarily change at
the same percentage rate as the gross product of Puerto Rico. Growth in fiscal
1995 will depend on several factors, including the state of the U.S. economy and
the relative stability in the price of oil, the exchange rate of the U.S. dollar
and the cost of borrowing. Although the Puerto Rico unemployment rate has
declined substantially since 1985, the unemployment rate for May, 1992 was
approximately 16.8%.

RECENT RATINGS OF CERTAIN GENERAL OBLIGATION BONDS

Moody's Investors Service, Inc., Standard & Poor's Ratings Group and
Fitch Investors Service, Inc. assigned their municipal bond ratings of Aa, AA-
and AA, respectively, to the outstanding general obligation bonds of the State.
Each such rating reflects only the views of the respective rating agency, and an
explanation of the significance of such rating may be obtained from such rating
agency. There is no assurance that such ratings will continue for any given
period of time or that they will not be revised or withdrawn entirely by the
rating agency if, in the judgment of such rating agency, circumstances so
warrant. A downward revision or withdrawal of any such rating may have an
adverse effect on the market price of the State's general obligation bonds.

LITIGATION

The State, its officers and employees are defendants in numerous
lawsuits. The ultimate disposition and fiscal consequences of these lawsuits are
not presently determinable. The Attorney General's Office has reviewed the
status of pending lawsuits and reports that it is the opinion of the Attorney
General that such pending litigation will not be finally determined so as to
result individually or in the aggregate in a final judgment against the State
which would materially adversely affect its financial position, except that in
the cases described below the fiscal impact of an adverse decision might be
significant but is not determinable at this time. The cases described in this
section generally do not include any individual case where the fiscal impact of
an adverse judgment is expected to be less than $15 million, but adverse
judgments in a number of such cases could, in the aggregate and in certain
circumstances, have a significant impact.

Connecticut Criminal Defense Lawyers Association v. Forst is an action
brought in 1989 in Federal District Court alleging a pervasive campaign by the
State and various State Police officials of illegal electronic surveillance,
wiretapping and bugging for a number of years at Connecticut State Police
facilities. The plaintiffs seek compensatory damages, punitive damages, as well
as other damages and costs and attorneys fees, as well as temporary and
permanent injunctive relief. In November 1991, the court issued an order which
will allow the plaintiffs to represent a class of all persons who participated
in wire or oral communications to, from, or within State Police facilities
between January 1, 1974 and November 9, 1989 and whose communications were
intercepted, recorded and/or used by the defendants in violation of the law.
This class includes a sub-class of the Connecticut State Police Union, current
and former Connecticut State Police officers who are not defendants in this or
any consolidated case, and other persons acting on behalf of the State Police
who participated in oral or wire communications to, from or within State Police
facilities between such dates.

Sheff v. O'Neill is a Superior Court action brought in 1989 on behalf
of black and Hispanic school children in the Hartford school district. The
plaintiffs sought a declaratory judgment that the public schools in the greater
Hartford metropolitan area are segregated de facto by race and ethnicity and are
inherently unequal to their detriment. They also sought injunctive relief
against state officials to provide them with an "integrated education." On April
12, 1995, the Superior Court entered judgment for the State. On July 9, 1996,
the State Supreme Court reversed the Superior Court judgment and remanded the
case with direction to render a declaratory judgment in favor of the plaintiffs.
The Court directed the legislature to develop appropriate measures to remedy the
racial and ethnic segregation in the Hartford public schools. The Supreme Court
also directed the Superior Court to retain jurisdiction of this matter.

The Connecticut Traumatic Brain Injury Association, Inc. v. Hogan is a
Federal District Court civil rights action brought in 1990 on behalf of all
persons with retardation or traumatic brain injury who have been, or may be,
placed in Norwich, Fairfield Hills or Connecticut Valley Hospitals. The
plaintiffs claim that the treatment and training they need is unavailable in
state hospitals for the mentally ill and that placement in those hospitals
violates their constitutional rights. The plaintiffs seek relief which would
require that the plaintiff class members be transferred to community residential
settings with appropriate support services. This case has been settled as to all
persons with mental retardation by their eventual discharge from Norwich and
Fairfield Hills Hospital. The case is still proceeding as to those persons with
traumatic brain injury.

Connecticut Hospital Association v. Rowland is an action brought in
1996 in Superior Court challenging the statute which requires payment by a
hospital to the State of the amount which exceeds the net revenue limit of a
hospital authorized by the Office of Health Care Access for the fiscal year 1995
and relevant future years, subject to certain adjustments. The plaintiffs claim
that the statute is unconstitutional and seek to enjoin its enforcement and the
collection of the excess amounts by the State.

Several suits have been filed since 1977 in the Federal District Court
and the Connecticut Superior Court on behalf of alleged Indian Tribes in various
parts of the State, claiming monetary recovery as well as ownership of land in
issue. The land involved is located generally in rural and residential areas.
However, a suit was brought in 1992 involving land within the City of
Bridgeport. The same plaintiff group in that suit subsequently also sued
concerning land in Trumbull and Southbury and has threatened to sue regarding
additional land in other towns in the State.

<PAGE>
SHAREHOLDER SERVICING AGENTS

FOR CITIBANK NEW YORK RETAIL BANKING AND
BUSINESS AND PROFESSIONAL CUSTOMERS:
Citibank, N.A.
450 West 33rd Street, New York, NY 10001
(212) 564-3456 or (800) 846-5300

FOR CITIGOLD CLIENTS:
Citigold
P.O. Box 5130, New York, NY 10126-5130
Call Your Citigold Executive or, in NY or CT (800) 285-1701,
or for all other states (800) 285-1707

FOR CITIBANK GLOBAL ASSET MANAGEMENT CLIENTS:
Citibank, N.A.
Citibank Global Asset Management
153 East 53rd Street, New York, NY 10043
(212) 559-7117

FOR CITIBANK NORTH AMERICAN INVESTOR SERVICES CLIENTS:
Citibank, N.A.
111 Wall Street, New York, NY 10043
Call Your Account Manager or (212) 657-9100

SECRETARY
Linda T. Gibson*

TREASURER
John R. Elder*

*Affiliated Person of Administrator and Distributor
- ----------------------------------------------------------------------------

INVESTMENT ADVISER
Citibank, N.A.
153 East 53rd Street, New York, NY 10043

ADMINISTRATOR AND DISTRIBUTOR
The Landmark Funds Broker-Dealer Services, Inc.
6 St. James Avenue, Boston, MA 02116
(617) 423-1679

TRANSFER AGENT AND CUSTODIAN State Street Bank and Trust Company 225 Franklin
Street, Boston, MA 02110

AUDITORS
Deloitte & Touche LLP
125 Summer Street, Boston, MA 02110

LEGAL COUNSEL

Bingham, Dana & Gould LLP
150 Federal Street, Boston, MA 02110

- ----------------------------------------------------------------------------

SHAREHOLDER SERVICING AGENTS
(See Inside of Cover)
<PAGE>

PART C

Item 24. Financial Statements and Exhibits.
(a) Financial Statements Included in Part A:
LANDMARK NEW YORK TAX FREE RESERVES
Condensed Financial Information - Financial Highlights for
each of the years in the ten-year period ended August 31,
1996.

LANDMARK CONNECTICUT TAX FREE RESERVES
Condensed Financial Information - Financial Highlights for the
period from December 1, 1993 (commencement of operations)
to August 31, 1994 and for the years ended August 31, 1995
and August 31, 1996.

Financial Statements Included in Part B:
LANDMARK NEW YORK TAX-FREE RESERVES
Portfolio of Investments at August 31, 1996*
Statement of Assets and Liabilities at August 31, 1996*
Statement of Operations for the fiscal year ended August
31, 1996*
Statement of Changes in Net Assets for the years ended August
31, 1996 and August 31, 1995*
Financial Highlights for each of the years in the five-year
period ended August 31, 1996*

LANDMARK CONNECTICUT TAX-FREE RESERVES
Portfolio of Investments at August 31, 1996*
Statement of Assets and Liabilities at August 31, 1996*
Statement of Operations for the fiscal year ended August
31, 1996*
Statement of Changes in Net Assets for the years ended August
31, 1996 and August 31, 1995*
Financial Highlights for the period from December 1, 1993
(commencement of operations) to August 31, 1994 and for the
years ended August 31, 1995 and August 31, 1996*
- ------------------
*Incorporated by reference to the Registrant's Annual Reports to Shareholders
of Landmark New York Tax-Free Reserves and Landmark Connecticut Tax-Free
Reserves for the fiscal year ended August 31, 1996, filed with the
Securities and Exchange Commission on the EDGAR system on October 29, 1996
(Accession Number 0000950156-96-000854).

(b) Exhibits

*1(a) Declaration of Trust of the Registrant
*1(b) Amendments to Declaration of Trust of the
Registrant
*2(a) Amended and Restated By-Laws of the Registrant
*2(b) Amendments to Amended and Restated By-Laws of
the Registrant
**4 Specimen of certificate representing ownership
of shares in the Registrant
*5 Advisory Agreements between the Registrant and
Citibank, N.A.
*6 Distribution Agreement between the Registrant
and The Landmark Funds Broker-Dealer Services,
Inc. ("LFBDS"), as distributor
*7 Custodian Contract between the Registrant and
State Street Bank and Trust Company ("State
Street"), as custodian, and amendment thereto
*9(a) Amended and Restated Administrative Services
Plan of the Registrant
*9(b) Administrative Services Agreement between the
Registrant and LFBDS, as administrator
*9(c) Sub-Administrative Services Agreement between
Citibank, N.A. and LFBDS
*9(d)(i) Form of Shareholder Servicing Agreement between
the Registrant and Citibank, N.A., as
shareholder servicing agent
*9(d)(ii) Form of Shareholder Servicing Agreement between
the Registrant and a federal savings bank, as
shareholder servicing agent
*9(d)(iii) Form of Shareholder Servicing Agreement between
the Registrant and LFBDS, as shareholder
servicing agent
*9(e) Transfer Agency and Servicing Agreement between
the Registrant and State Street, as transfer
agent
*9(f) Amended and Restated Exchange Privilege
Agreement between the Registrant, certain other
investment companies and LFBDS, as distributor
11 Consent of Deloitte & Touche LLP,
independent auditors of the Registrant
*15 Amended and Restated Distribution Plan of the
Registrant
25 Powers of Attorney for the Registrant
27 Financial data schedule

- ---------------------
* Incorporated herein by reference to Post-Effective Amendment No. 18 to the
Registrant's Registration Statement on Form N-1A as filed with the Securities
and Exchange Commission on August 29, 1996.
** Information defining the rights of shareholders is contained in the
Registrant's Declaration of Trust, as amended, incorporated herein by
reference as Exhibits No. 1(a) and 1(b).

<PAGE>

Item 25. Persons Controlled by or under Common Control with Registrant.

Not applicable.

Item 26. Number of Holders of Securities.

Title of Class Number of Record Holders
As of December 16, 1996
Shares of Beneficial Interest
(without par value)

Landmark New York Tax-Free Reserves 6
Landmark Connecticut Tax-Free Reserves 5

Item 27. Indemnification.

Reference is hereby made to (a) Article V of the Registrant's
Declaration of Trust, incorporated by reference herein as an Exhibit to its
Registration Statement on Form N-1A; (b) Section 4 of the Distribution Agreement
between the Registrant and The Landmark Funds Broker-Dealer Services, Inc.,
incorporated by reference herein as an Exhibit to the Registrant's Registration
Statement on Form N-1A; and (c) the undertaking of the Registrant regarding
indemnification set forth in its Registration Statement on Form N-1A.

The Trustees and officers of the Registrant and the personnel of the
Registrant's administrator are insured under an errors and omissions liability
insurance policy. The Registrant and its officers are also insured under the
fidelity bond required by Rule 17g-1 under the Investment Company Act of 1940.

Item 28. Business and Other Connections of Investment Adviser.

Citibank, N.A. ("Citibank") is a commercial bank offering a wide range
of banking and investment services to customers across the United States and
around the world. Citibank is a wholly-owned subsidiary of Citicorp, a
registered bank holding company. Citibank also serves as investment adviser to
the following registered investment companies (or series thereof): The Premium
Portfolios (Balanced Portfolio, Equity Portfolio, Government Income Portfolio,
International Equity Portfolio, Emerging Asian Markets Equity Portfolio and
Small Cap Equity Portfolio), Tax Free Reserves Portfolio, Cash Reserves
Portfolio, U.S. Treasury Reserves Portfolio, Landmark Fixed Income Funds
(Landmark Intermediate Income Fund), Landmark Tax Free Income Funds (Landmark
New York Tax Free Income Fund and Landmark National Tax Free Income Fund),
Landmark California Tax Free Reserves, Asset Allocation Portfolios (Asset
Allocation Portfolio 200, Asset Allocation Portfolio 300, Asset Allocation
Portfolio 400 and Asset Allocation Portfolio 500), Landmark VIP Funds (Landmark
VIP U.S. Government Fund, Landmark VIP Balanced Fund, Landmark VIP Equity Fund
and Landmark VIP International Equity Fund), and Variable Annuity Portfolios
(CitiSelectSM VIP Folio 200, CitiSelectSM VIP Folio 300, CitiSelectSM VIP Folio
400, CitiSelectSM VIP Folio 500 and Landmark Small Cap Equity VIP Fund). As of
December 31, 1995, Citibank and its affiliates managed assets in excess of $83
billion worldwide. The principal place of business of Citibank is located at 399
Park Avenue, New York, New York 10043.

The Chairman of the Board and a Director of Citibank is John S. Reed.
The following are Vice Chairmen of the Board and Directors of Citibank: Paul J.
Collins, William R. Rhodes and H. Onno Ruding. Other Directors of Citibank are
D. Wayne Calloway, Chairman and Chief Executive Officer, PepsiCo, Inc.,
Purchase, New York; Colby H. Chandler, Former Chairman and Chief Executive
Officer, Eastman Kodak Company; Kenneth T. Derr, Chairman and Chief Executive
Officer, Chevron Corporation; H.J. Haynes, Senior Counselor, Bechtel Group,
Inc., San Francisco, California; Rozanne L. Ridgway, President, The Atlantic
Council of the United States; Robert B. Shapiro, President and Chief Operating
Officer, Monsanto Company; Frank A. Shrontz, Chairman and Chief Executive
Officer, Boeing Company, Seattle, Washington; Mario Henrique Simonsen, Vice
Chairman, Brazilian Institute of Economics, The Getulio Vargas Foundation; Roger
B. Smith, Former Chairman and Chief Executive Officer, General Motors
Corporation; Franklin A. Thomas, President, The Ford Foundation, New York, New
York; and Edgar S. Woolard, Jr., Chairman and Chief Executive Officer, E.I.
DuPont De Nemours & Company.

Each of the individuals named above is also a Director of Citicorp. In
addition, the following persons have the affiliations indicated:

D. Wayne Calloway Director, Exxon Corporation
Director, General Electric Company
Director, PepsiCo., Inc.

Colby H. Chandler Director, Digital Equipment Corporation
Director, Ford Motor Company
Director, J.C. Penney Company, Inc.

Paul J. Collins Director, Kimberly-Clark Corporation

Kenneth T. Derr Director, American Telephone and Telegraph, Co.
Director, Chevron Corporation
Director, Potlatch Corporation

H.J. Haynes Director, Bechtel Group, Inc.
Director, Boeing Company
Director, Fremont Group, Inc.
Director, Hewlett-Packard Company
Director, Paccar Inc.
Director, Saudi Arabian Oil Company

John S. Reed Director, Monsanto Company
Director, Philip Morris Companies, Incorporated
Stockholder, Tampa Tank & Welding, Inc.

William R. Rhodes Director, Private Export Funding Corporation

Rozanne L. Ridgway Director, 3M
Director, Bell Atlantic Corporation
Director, Boeing Company
Director, Emerson Electric Company
Member-International Advisory Board,
New Perspective Fund, Inc.
Director, RJR Nabisco, Inc.
Director, Sara Lee Corporation
Director, Union Carbide Corporation

H. Onno Ruding Member, Board of Supervisory Directors,
Amsterdam Trustee's Kantoor
Board Member, Corning, Incorporated
Advisor, Intercena (C&A) (Netherlands)
Member, Board of Supervisory Directors,
Pechiney Nederland N.V.
Member, Board of Advisers, Robeco N.V.
Advisory Director, Unilever N.V.
Advisory Director, Unilever PLC

Robert B. Shapiro Director, G.D. Searle & Co.
Director, Silicon Graphics
Director, Monsanto Company
Director, The Nutrasweet Company

Frank A. Shrontz Director, 3M
Director, Baseball of Seattle, Inc.
Director, Boeing Company
Director, Boise Cascade Corp.

Roger B. Smith Director, International Paper Company
Director, Johnson & Johnson
Director, Pepsico, Inc.

Franklin A. Thomas Director, Aluminum Company of America
Director, American Telephone and Telegraph, Co.
Director, Cummins Engine Company, Inc.
Director, Pepsico, Inc.

Edgar S. Woolard, Jr. Director, E.I. DuPont De Nemours & Company

Item 29. Principal Underwriters.

(a) The Landmark Funds Broker-Dealer Services, Inc. ("LFBDS"), the
Registrant's Distributor, is also the distributor for Landmark International
Equity Fund, Landmark Emerging Asian Markets Equity Fund, Premium U.S. Treasury
Reserves, Premium Liquid Reserves, Landmark Institutional Liquid Reserves,
Landmark Institutional U.S. Treasury Reserves, Landmark Institutional Tax Free
Reserves, Landmark Tax Free Reserves, Landmark California Tax Free Reserves,
Landmark Cash Reserves, Landmark U.S. Treasury Reserves, Landmark U.S.
Government Income Fund, Landmark Intermediate Income Fund, Landmark Balanced
Fund, Landmark Equity Fund, Landmark Small Cap Equity Fund, Landmark National
Tax Free Income Fund, Landmark New York Tax Free Income Fund, Landmark VIP Funds
(Landmark VIP U.S. Government Fund, Landmark VIP Balanced Fund, Landmark VIP
Equity Fund and Landmark VIP International Equity Fund), Variable Annuity
Portfolios (CitiSelectSM VIP Folio 200, CitiSelectSM VIP Folio 300, CitiSelectSM
VIP Folio 400, CitiSelectSM VIP Folio 500 and Landmark Small Cap Equity VIP
Fund), CitiSelectSM Folio 200, CitiSelectSM Folio 300, CitiSelect FolioSM 400
and CitiSelectSM Folio 500. LFBDS is also the placement agent for International
Equity Portfolio, Balanced Portfolio, Equity Portfolio, Small Cap Equity
Portfolio, Government Income Portfolio, Emerging Asian Markets Equity Portfolio,
Tax Free Reserves Portfolio, Cash Reserves Portfolio, U.S. Treasury Reserves
Portfolio, Asset Allocation Portfolio 200, Asset Allocation Portfolio 300, Asset
Allocation Portfolio 400, and Asset Allocation Portfolio 500.

<PAGE>

(b) The information required by this Item 29 with respect to each
director and officer of LFBDS is incorporated by reference to Schedule A of Form
BD filed by LFBDS pursuant to the Securities and Exchange Act of 1934 (File No.
8-32417).

Item 30. Location of Accounts and Records.

The accounts and records of the Registrant are located, in whole or in
part, at the office of the Registrant and the following locations:

<TABLE>
<CAPTION>
NAME ADDRESS

<S> <C>
The Landmark Funds Broker-Dealer Services, Inc. 6 St. James Avenue
(administrator and distributor) Boston, MA 02116

State Street Bank and Trust Company 1776 Heritage Drive
(custodian and transfer agent) North Quincy, MA 02171

Citibank, N.A. 153 East 53rd Street
(investment adviser) New York, NY 10043

SHAREHOLDER SERVICING AGENTS

Citibank, N.A. 450 West 33rd Street
New York, NY 10001

Citibank, N.A. -- Citigold Citicorp Mortgage Inc. - Citigold
15851 Clayton Road
Ballwin, MO 63011

Citibank, N.A. -- The Citibank 153 East 53rd Street
Private Bank New York, NY 10043

Citibank, N.A. -- Citibank Global 153 East 53rd Street
Asset Management New York, NY 10043

Citibank, N.A. -- North American 111 Wall Street
Investor Services New York, NY 10094

Citicorp Investment Services One Court Square
Long Island City, NY 11120

The Landmark Funds Broker-Dealer Services, Inc. 6 St. James Avenue
Boston, MA 02116
</TABLE>

Item 31. Management Services.

Not applicable.

Item 32. Undertakings.

(a) Not applicable.

(b) Not applicable.

(c) The Registrant undertakes to furnish to each person to whom a
prospectus of each of the series of the Registrant is delivered
with a copy of such series' latest Annual Reports to
Shareholders, upon request without charge.

<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that this
Post-Effective Amendment to its Registration Statement on Form N-1A meets all of
the requirements for effectiveness pursuant to Rule 485(b) under the Securities
Act of 1933 and that the Registrant has duly caused this Post-Effective
Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Boston and Commonwealth
of Massachusetts on the 16th day of December, 1996.

LANDMARK MULTI-STATE TAX FREE FUNDS

By: Philip W. Coolidge
Philip W. Coolidge
President

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement has been signed below by
the following persons in the capacities indicated below on December 16, 1996.

<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
Philip W. Coolidge President, Principal Executive Officer and Trustee
- -----------------------------------
Philip W. Coolidge

John R. Elder Principal Accounting and Financial Officer
- -----------------------------------
John R. Elder

H.B. Alvord* Trustee
- -----------------------------------
H.B. Alvord

Elliott J. Berv* Trustee
- -----------------------------------
Elliot J. Berv

Mark T. Finn* Trustee
- -----------------------------------
Mark T. Finn

Riley C. Gilley* Trustee
- -----------------------------------
Riley C. Gilley

Diana R. Harrington* Trustee
- -----------------------------------
Diana R. Harrington

Susan B. Kerley* Trustee
- -----------------------------------
Susan B. Kerley

C. Oscar Morong, Jr.* Trustee
- -----------------------------------
C. Oscar Morong, Jr.

Walter E. Robb, III* Trustee
- -----------------------------------
Walter E. Robb, III

E. Kirby Warren* Trustee
- -----------------------------------
E. Kirby Warren

William S. Woods, Jr.* Trustee
- -----------------------------------
William S. Woods, Jr.

*By: Philip W. Coolidge
- -----------------------------------
Philip W. Coolidge
Executed by Philip W. Coolidge on behalf of those indicated pursuant to
Powers of Attorney.
</TABLE>
<PAGE>

EXHIBIT INDEX

Exhibit
No.: Description:

11 Consent of Deloitte & Touche LLP, independent auditors of the
Registrant
25 Powers of Attorney for the Registrant
27 Financial data schedule

<PAGE>

EXHIBIT 11

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in this Post Effective Amendment
No. 19 to Registration Statement No. 2-99977 of Landmark Multi-State Tax Free
Funds of our reports each dated October 4, 1996 appearing in the annual reports
to shareholders for the year ended August 31, 1996 of Landmark New York Tax Free
Reserves and Landmark Connecticut Tax Free Reserves (each a separate series of
Landmark Multi-State Tax Free Funds), and to the references to us under the
headings "Condensed Financial Information" in the Prospectus and "Independent
Accountants and Financial Statements" in the Statement of Additional
Information, both of which are part of such Registration Statement.

Deloitte & Touche LLP
Boston, Massachusetts
December 17, 1996

<PAGE>

EXHIBIT 25
LANDMARK MULTI-STATE TAX FREE FUNDS

The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as her true and lawful attorneys and agents to
execute in her name and on her behalf in any and all capacities the Registration
Statements on Form N-1A, and any and all amendments thereto, filed by Landmark
Multi-State Tax Free Funds (on behalf of its series, Landmark New York Tax Free
Reserves, Landmark California Tax Free Reserves, and Landmark Connecticut Tax
Free Reserves) (the "Registrant") with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, and under the Investment Company
Act of 1940, as amended, and any and all other instruments which such attorneys
and agents, or any of them, deem necessary or advisable to enable the Registrant
to comply with the Securities Act of 1933, as amended and the Investment Company
Act of 1940, as amended, the rules, regulations and requirements of the
Securities and Exchange Commission, and the securities or Blue Sky laws of any
state or other jurisdiction; and the undersigned hereby ratifies and confirms as
her own act and deed any and all that such attorneys and agents, or any of them,
shall do or cause to be done by virtue hereof. Any one of such attorneys and
agents shall have, and may exercise, all of the powers hereby conferred.

IN WITNESS WHEREOF, the undersigned has hereunto set her hand this 8th day of
November, 1996.

Susan B. Kerley
- -----------------------------
Susan B. Kerley
<PAGE>

LANDMARK MULTI-STATE TAX FREE FUNDS

IN WITNESS WHEREOF, the undersigned has hereunto set her hand this 8th day of
November, 1996.

Diana R. Harrington
- -----------------------------
Diana R. Harrington
<PAGE>

LANDMARK MULTI-STATE TAX FREE FUNDS

The undersigned hereby constitutes and appoints John R. Elder, Susan Jakuboski,
Molly S. Mugler and Linda T. Gibson, and each of them, with full powers of
substitution as his true and lawful attorneys and agents to execute in his name
and on his behalf in any and all capacities the Registration Statements on Form
N-1A, and any and all amendments thereto, filed by Landmark Multi-State Tax Free
Funds (on behalf of its series, Landmark New York Tax Free Reserves, Landmark
California Tax Free Reserves, and Landmark Connecticut Tax Free Reserves) (the
"Registrant") with the Securities and Exchange Commission under the Securities
Act of 1933, as amended, and under the Investment Company Act of 1940, as
amended, and any and all other instruments which such attorneys and agents, or
any of them, deem necessary or advisable to enable the Registrant to comply with
the Securities Act of 1933, as amended and the Investment Company Act of 1940,
as amended, the rules, regulations and requirements of the Securities and
Exchange Commission, and the securities or Blue Sky laws of any state or other
jurisdiction; and the undersigned hereby ratifies and confirms as his own act
and deed any and all that such attorneys and agents, or any of them, shall do or
cause to be done by virtue hereof. Any one of such attorneys and agents shall
have, and may exercise, all of the powers hereby conferred.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 8th day of
November, 1996.

Philip W. Coolidge
- -----------------------------
Philip W. Coolidge
<PAGE>

LANDMARK MULTI-STATE TAX FREE FUNDS

The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as his true and lawful attorneys and agents to
execute in his name and on his behalf in any and all capacities the Registration
Statements on Form N-1A, and any and all amendments thereto, filed by Landmark
Multi-State Tax Free Funds (on behalf of its series, Landmark New York Tax Free
Reserves, Landmark California Tax Free Reserves, and Landmark Connecticut Tax
Free Reserves) (the "Registrant") with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, and under the Investment Company
Act of 1940, as amended, and any and all other instruments which such attorneys
and agents, or any of them, deem necessary or advisable to enable the Registrant
to comply with the Securities Act of 1933, as amended and the Investment Company
Act of 1940, as amended, the rules, regulations and requirements of the
Securities and Exchange Commission, and the securities or Blue Sky laws of any
state or other jurisdiction; and the undersigned hereby ratifies and confirms as
his own act and deed any and all that such attorneys and agents, or any of them,
shall do or cause to be done by virtue hereof. Any one of such attorneys and
agents shall have, and may exercise, all of the powers hereby conferred.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 8th day of
November, 1996.

H.B. Alvord
- -----------------------------
H.B. Alvord
<PAGE>

LANDMARK MULTI-STATE TAX FREE FUNDS

The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as his true and lawful attorneys and agents to
execute in his name and on his behalf in any and all capacities the Registration
Statements on Form N-1A, and any and all amendments thereto, filed by Landmark
Multi-State Tax Free Funds (on behalf of its series, Landmark New York Tax Free
Reserves, Landmark California Tax Free Reserves, and Landmark Connecticut Tax
Free Reserves) (the "Registrant") with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, and under the Investment Company
Act of 1940, as amended, and any and all other instruments which such attorneys
and agents, or any of them, deem necessary or advisable to enable the Registrant
to comply with the Securities Act of 1933, as amended and the Investment Company
Act of 1940, as amended, the rules, regulations and requirements of the
Securities and Exchange Commission, and the securities or Blue Sky laws of any
state or other jurisdiction; and the undersigned hereby ratifies and confirms as
his own act and deed any and all that such attorneys and agents, or any of them,
shall do or cause to be done by virtue hereof. Any one of such attorneys and
agents shall have, and may exercise, all of the powers hereby conferred.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 8th day of
November, 1996.

Riley C. Gilley
- -----------------------------
Riley C. Gilley
<PAGE>

LANDMARK MULTI-STATE TAX FREE FUNDS

The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as his true and lawful attorneys and agents to
execute in his name and on his behalf in any and all capacities the Registration
Statements on Form N-1A, and any and all amendments thereto, filed by Landmark
Multi-State Tax Free Funds (on behalf of its series, Landmark New York Tax Free
Reserves, Landmark California Tax Free Reserves, and Landmark Connecticut Tax
Free Reserves) (the "Registrant") with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, and under the Investment Company
Act of 1940, as amended, and any and all other instruments which such attorneys
and agents, or any of them, deem necessary or advisable to enable the Registrant
to comply with the Securities Act of 1933, as amended and the Investment Company
Act of 1940, as amended, the rules, regulations and requirements of the
Securities and Exchange Commission, and the securities or Blue Sky laws of any
state or other jurisdiction; and the undersigned hereby ratifies and confirms as
his own act and deed any and all that such attorneys and agents, or any of them,
shall do or cause to be done by virtue hereof. Any one of such attorneys and
agents shall have, and may exercise, all of the powers hereby conferred.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 8th day of
November, 1996.

C. Oscar Morong, Jr.
- -----------------------------
C. Oscar Morong, Jr.
<PAGE>

LANDMARK MULTI-STATE TAX FREE FUNDS

The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as his true and lawful attorneys and agents to
execute in his name and on his behalf in any and all capacities the Registration
Statements on Form N-1A, and any and all amendments thereto, filed by Landmark
Multi-State Tax Free Funds (on behalf of its series, Landmark New York Tax Free
Reserves, Landmark California Tax Free Reserves, and Landmark Connecticut Tax
Free Reserves) (the "Registrant") with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, and under the Investment Company
Act of 1940, as amended, and any and all other instruments which such attorneys
and agents, or any of them, deem necessary or advisable to enable the Registrant
to comply with the Securities Act of 1933, as amended and the Investment Company
Act of 1940, as amended, the rules, regulations and requirements of the
Securities and Exchange Commission, and the securities or Blue Sky laws of any
state or other jurisdiction; and the undersigned hereby ratifies and confirms as
his own act and deed any and all that such attorneys and agents, or any of them,
shall do or cause to be done by virtue hereof. Any one of such attorneys and
agents shall have, and may exercise, all of the powers hereby conferred.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 8th day of
November, 1996.

E. Kirby Warren
- -----------------------------
E. Kirby Warren
<PAGE>

LANDMARK MULTI-STATE TAX FREE FUNDS

The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as his true and lawful attorneys and agents to
execute in his name and on his behalf in any and all capacities the Registration
Statements on Form N-1A, and any and all amendments thereto, filed by Landmark
Multi-State Tax Free Funds (on behalf of its series, Landmark New York Tax Free
Reserves, Landmark California Tax Free Reserves, and Landmark Connecticut Tax
Free Reserves) (the "Registrant") with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, and under the Investment Company
Act of 1940, as amended, and any and all other instruments which such attorneys
and agents, or any of them, deem necessary or advisable to enable the Registrant
to comply with the Securities Act of 1933, as amended and the Investment Company
Act of 1940, as amended, the rules, regulations and requirements of the
Securities and Exchange Commission, and the securities or Blue Sky laws of any
state or other jurisdiction; and the undersigned hereby ratifies and confirms as
his own act and deed any and all that such attorneys and agents, or any of them,
shall do or cause to be done by virtue hereof. Any one of such attorneys and
agents shall have, and may exercise, all of the powers hereby conferred.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 8th day of
November, 1996.

William S. Woods, Jr.
- -----------------------------
William S. Woods, Jr.
<PAGE>

LANDMARK MULTI-STATE TAX FREE FUNDS

The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as his true and lawful attorneys and agents to
execute in his name and on his behalf in any and all capacities the Registration
Statements on Form N-1A, and any and all amendments thereto, filed by Landmark
Multi-State Tax Free Funds (on behalf of its series, Landmark New York Tax Free
Reserves, Landmark California Tax Free Reserves, and Landmark Connecticut Tax
Free Reserves) (the "Registrant") with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, and under the Investment Company
Act of 1940, as amended, and any and all other instruments which such attorneys
and agents, or any of them, deem necessary or advisable to enable the Registrant
to comply with the Securities Act of 1933, as amended and the Investment Company
Act of 1940, as amended, the rules, regulations and requirements of the
Securities and Exchange Commission, and the securities or Blue Sky laws of any
state or other jurisdiction; and the undersigned hereby ratifies and confirms as
his own act and deed any and all that such attorneys and agents, or any of them,
shall do or cause to be done by virtue hereof. Any one of such attorneys and
agents shall have, and may exercise, all of the powers hereby conferred.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 8th day of
November, 1996.

Elliott J. Berv
- -----------------------------
Elliott J. Berv
<PAGE>

LANDMARK MULTI-STATE TAX FREE FUNDS

The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as his true and lawful attorneys and agents to
execute in his name and on his behalf in any and all capacities the Registration
Statements on Form N-1A, and any and all amendments thereto, filed by Landmark
Multi-State Tax Free Funds (on behalf of its series, Landmark New York Tax Free
Reserves, Landmark California Tax Free Reserves, and Landmark Connecticut Tax
Free Reserves) (the "Registrant") with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, and under the Investment Company
Act of 1940, as amended, and any and all other instruments which such attorneys
and agents, or any of them, deem necessary or advisable to enable the Registrant
to comply with the Securities Act of 1933, as amended and the Investment Company
Act of 1940, as amended, the rules, regulations and requirements of the
Securities and Exchange Commission, and the securities or Blue Sky laws of any
state or other jurisdiction; and the undersigned hereby ratifies and confirms as
his own act and deed any and all that such attorneys and agents, or any of them,
shall do or cause to be done by virtue hereof. Any one of such attorneys and
agents shall have, and may exercise, all of the powers hereby conferred.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 8th day of
November, 1996.

Mark T. Finn
- -----------------------------
Mark T. Finn
<PAGE>

LANDMARK MULTI-STATE TAX FREE FUNDS

The undersigned hereby constitutes and appoints Philip W. Coolidge, John R.
Elder, Susan Jakuboski, Molly S. Mugler and Linda T. Gibson, and each of them,
with full powers of substitution as his true and lawful attorneys and agents to
execute in his name and on his behalf in any and all capacities the Registration
Statements on Form N-1A, and any and all amendments thereto, filed by Landmark
Multi-State Tax Free Funds (on behalf of its series, Landmark New York Tax Free
Reserves, Landmark California Tax Free Reserves, and Landmark Connecticut Tax
Free Reserves) (the "Registrant") with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, and under the Investment Company
Act of 1940, as amended, and any and all other instruments which such attorneys
and agents, or any of them, deem necessary or advisable to enable the Registrant
to comply with the Securities Act of 1933, as amended and the Investment Company
Act of 1940, as amended, the rules, regulations and requirements of the
Securities and Exchange Commission, and the securities or Blue Sky laws of any
state or other jurisdiction; and the undersigned hereby ratifies and confirms as
his own act and deed any and all that such attorneys and agents, or any of them,
shall do or cause to be done by virtue hereof. Any one of such attorneys and
agents shall have, and may exercise, all of the powers hereby conferred.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 8th day of
November, 1996.

Walter E. Robb, III
- -----------------------------
Walter E. Robb, III

<PAGE>
<ARTICLE> 6
<CIK> 0000775613
<NAME> LANDMARK NEW YORK TAX FREE RESERVES
<SERIES>
<NUMBER>001
<NAME>LANDMARK MULTI-STATE TAX FREE FUNDS

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-END> AUG-31-1996
<INVESTMENTS-AT-COST> 1,000,213,083
<INVESTMENTS-AT-VALUE> 1,000,213,083
<RECEIVABLES> 6,241,934
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 68,045
<TOTAL-ASSETS> 1,006,523,062
<PAYABLE-FOR-SECURITIES> 63,200,000
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,631,571
<TOTAL-LIABILITIES> 64,831,571
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<PAID-IN-CAPITAL-COMMON> 941,710,083
<SHARES-COMMON-STOCK> 941,715,009
<SHARES-COMMON-PRIOR> 767,134,112
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (18,592)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 941,691,491
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 31,171,906
<OTHER-INCOME> 0
<EXPENSES-NET> 5,671,365
<NET-INVESTMENT-INCOME> 25,500,541
<REALIZED-GAINS-CURRENT> (18,487)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 25,482,054
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (25,500,541)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 982,347,236
<NUMBER-OF-SHARES-REDEEMED> (820,918,087)
<SHARES-REINVESTED> 13,151,748
<NET-CHANGE-IN-ASSETS> 174,562,410
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (105)
<OVERDISTRIB-NII-PRIOR> 0
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<GROSS-ADVISORY-FEES> 1,745,127
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 7,512,809
<AVERAGE-NET-ASSETS> 872,563
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.03
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> (0.03)
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<EXPENSE-RATIO> 0.65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000775613
<NAME> LANDMARK CONNECTICUT TAX FREE RESERVES
<SERIES>
<NUMBER> 003
<NAME> LANDMARK MULTI-STATE TAX FREE FUNDS

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-END> AUG-31-1996
<INVESTMENTS-AT-COST> 115,653,853
<INVESTMENTS-AT-VALUE> 115,653,853
<RECEIVABLES> 952,751
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 265,062
<TOTAL-ASSETS> 116,871,666
<PAYABLE-FOR-SECURITIES> 500,240
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 346,485
<TOTAL-LIABILITIES> 846,725
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 116,034,101
<SHARES-COMMON-STOCK> 116,034,101
<SHARES-COMMON-PRIOR> 46,561,186
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (9,160)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 116,024,941
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3,280,147
<OTHER-INCOME> 0
<EXPENSES-NET> 389,637
<NET-INVESTMENT-INCOME> 2,890,510
<REALIZED-GAINS-CURRENT> (4,176)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 2,886,334
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (2,890,510)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 274,274,165
<NUMBER-OF-SHARES-REDEEMED> (205,590,916)
<SHARES-REINVESTED> 789,666
<NET-CHANGE-IN-ASSETS> 69,468,739
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (4,984)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 187,676
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 971,527
<AVERAGE-NET-ASSETS> 93,838
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.03
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> (0.03)
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.42
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>