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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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For period ending February 28, 1997
File number 811-5014
ANNUAL SUPPLEMENT
Page 53 is to be filed only once each year at the end of Registrants fiscal
year.
105. Fidelity bond(s) in effect at the end of the period:
A. Insurer Name: ICI Mutual Insurance Co.
B. Second Insurer:
C. Aggregate face amount of coverage for Registrant on all bonds on
which it is named as an insured ($000 s omitted) $45,000
106. A. Is the bond part of a joint fidelity bond(s) shared with other
investment companies or other entities? Y
y/N
B. If the answer to 106A is Y (Yes), how many other investment
companies or other entities are covered by the bond? 63
NOTE: Count each series as a separate investment company.
107. A. Does the mandatory coverage of the fidelity bond have a
deductible? N
Y/N
B. If the answer to 107A is Y (Yes), what is the amount of the
deductible? $
108. A. Were any claims with respect to this Registrant filed under the
bond during the period? N
Y/N
B. If the answer to 108A is Y (Yes), what was the total amount of
such claim(s)? $
109. A. Were any losses incurred with respect to this Registrant that
could have been filed as a claim under the fidelity bond but
were not? N
Y/N
B. If the answer to sub-item 109A is Y (Yes), what was the total
amount of such losses? ($000 s omitted) $
110. A. Are Registrant s officers and directors covered as officers and
directors of Registrant under any errors and omissions insurance
policy owned by the Registrant or anyone else? Y
Y/N
B. Were any claims filed under such policy during the period with
respect to Registrant? N
Y/N
For period ending February 28, 1997
File number 811-5014 Exhibit 77D
PaineWebber Municipal Series
New York Tax-Free Income Fund amended its
non-fundamental investment policies to permit investment in municipal
securities rated below investment grade.
<PAGE>
FORM 10f-3 FUND: New York Tax-Free Income Fund
Record of Securities Purchased Under the Fund's Rule 10f-3 Procedures
1. Issuer: New York State Dormanth City University
2. Date of Purchase: 8-30-96
3. Date offering commenced: 8-28-96
4. Underwriters from whom purchased: Smith Barney
5. "Affiliated Underwriter" managing or participating in syndicate:
PaineWebber
6. Aggregate principal amount of purchase: 1,397,088.00/1,300,000
7. Aggregate principal amount of offering: 395,250,000
8. Purchase price (net of fees and expenses): 102.938
9. Initial public offering price: 102.938
10. Commission, spread or profit: --% $ $ --
11. Have the following conditions been satisfied? YES NO
a. The securities are part of an issue registered under
the Securities Act of 1933 which is being offered to
the public or are "municipal securities" as defined
in Section 3(a)(29) of the Securities Exchange Act
of 1934. __X__ _____
b. The securities were purchased prior to the end of
the end first full business day of the offering
at not more than the initial offering price
(or, if a rights offering, the securities were
purchased on or before the fourth day preceding
the day on which the offering terminated. __X__ _____
c. The underwriting was a firm commitment
underwriting. __X__ _____
d. The commission, spread or profit was reasonable
and fair in relation to that being received by
others for underwriting similar securities
during the same period. __X__ _____
e. (1) If securities are registered under the
Securities Act of 1933, the issuer of the
securities and its predecessor have been
in continuous operation for not less than
three years. _____ _n/a_
(2) If securities are municipal securities,
the issue of securities has received an investment
grade rating from a nationally recognized
statistical rating organization or, if the
issuer or entity supplying the revenues from
which the issue is to be paid shall have been
in continuous operation for less than three
years (including any predecessor), the issue has
received one of the three highest ratings from at
least one such rating organization. __X__ _____
f. The amount of such securities purchased by all
of the investment companies advised by Mitchell
Hutchins did not exceed 4% of the principal amount
of the offering or $500,000 in principal amount,
whichever is greater, provided that in no event did
such amount exceed 10% of the principal amount of the
offering. __X__ _____
g. The purchase price was less than 3% of the Fund's
total assets. __X__ _____
h. No Affiliated Underwriter was a direct or indirect
participant in or beneficiary of the sale or,
with respect to municipal securities, no purchases
were designated as group sales or otherwise allocated
to the account of any Affiliated Underwriter. __X__ _____
Approved: Elbridge T. Gerry III Date: October 1, 1996
Board of Trustees
PaineWebber Municipal Series
In planning and performing our audit of the financial statements of
PaineWebber Municipal Series (comprising, respectively, PaineWebber
Municipal High Income Fund and PaineWebber New York Tax-Free Income
Fund) for the year ended February 28, 1997, we considered its internal
control structure, including procedures for safeguarding securities, in
order to determine our auditing procedures for the purpose of expressing
our opinion on the financial statements and to comply with the requirements
of Form N-SAR, not to provide assurance on the internal control structure.
The management of PaineWebber Municipal Series is responsible for
establishing and maintaining an internal control structure. In fulfilling
this responsibility, estimates and judgments by management are required to
assess the expected benefits and related costs of internal control structure
policies and procedures. Two of the objectives of an internal control
structure are to provide management with reasonable, but not absolute,
assurance that assets are safeguarded against loss from unauthorized use or
disposition and that transactions are executed in accordance with management's
authorization and recorded properly to permit preparation of financial
statements in conformity with generally accepted accounting principles.
Because of inherent limitations in any internal control structure, errors or
irregularities may occur and not be detected. Also, projection of any
evaluation of the structure to future periods is subject to the risk that it
may become inadequate because of changes in conditions or that the
effectiveness of the design and operation may deteriorate.
Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure that might be material
weaknesses under standards established by the American Institute of Certified
Public Accountants. A material weakness is a condition in which the design or
operation of the specific internal control structure elements does not reduce
to a relatively low level the risk that errors or irregularities in amounts
that would be material in relation to the financial statements being audited
may occur and not be detected within a timely period by employees in the
normal course of performing their assigned functions. However, we noted no
matters involving the internal control structure, including procedures for
safeguarding securities, that we consider to be material weaknesses as defined
above as of February 28, 1997.
This report is intended solely for the information and use of management and
the Securities and Exchange Commission.
ERNST & YOUNG LLP
April 7, 1997
