As filed with the Securities and Exchange Commission on December 28, 1995
File No. 811-05813
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 10
Cash Reserves Portfolio
(Exact Name of Registrant as Specified in Charter)
c/o Signature Financial Group (Cayman), Ltd.
Elizabethan Square, George Town, Grand Cayman, Cayman Islands, BWI
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: 809-945-1824
Susan Jakuboski
c/o Signature Financial Group (Cayman), Ltd.
Elizabethan Square, George Town, Grand Cayman, Cayman Islands, BWI
(Name and Address of Agent for Service)
with a copy to
Roger P. Joseph, Esq.
Bingham, Dana & Gould
150 Federal Street
Boston, Massachusetts 02110 U.S.A.
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EXPLANATORY NOTE
This Registration Statement has been filed by the Registrant pursuant to
Section 8(b) of the Investment Company Act of 1940. However, beneficial
interests in the Registrant are not being registered under the Securities Act
of 1933 (the "1933 Act") since such interests will be issued solely in private
placement transactions which do not involve any "public offering" within the
meaning of Section 4(2) of the 1933 Act. Investments in the Registrant may only
be made by investment companies, insurance company separate accounts, common or
commingled trust funds or similar organizations or entities which are
"accredited investors" within the meaning of Regulation D under the 1933 Act.
This Registration Statement does not constitute an offer to sell, or the
solicitation of an offer to buy, any beneficial interests in the Registrant.
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PART A
Responses to Items 1 through 3 and 5A have been omitted pursuant to
paragraph 4 of Instruction F of the General Instructions to Form N-1A.
Item 4. General Description of Registrant.
Cash Reserves Portfolio (the "Portfolio") is a no-load, open-end management
investment company which was organized as a trust under the laws of the State
of New York on May 23, 1989. Beneficial interests in the Portfolio are issued
solely in private placement transactions which do not involve any "public
offering" within the meaning of Section 4(2) of the Securities Act of 1933, as
amended (the "1933 Act"). Investments in the Portfolio may only be made by
investment companies, insurance company separate accounts, common or commingled
trust funds or similar organizations or entities which are "accredited
investors" within the meaning of Regulation D under the 1933 Act. This
registration statement does not constitute an offer to sell, or the
solicitation of an offer to buy, any "security" within the meaning of the 1933
Act.
Investment Objective
The investment objective of the Portfolio is to provide its investors with
liquidity and as high a level of current income as is consistent with the
preservation of capital. The investment objective of the Portfolio may be
changed without the approval of the investors in the Portfolio, but not without
written notice thereof to the investors in the Portfolio at least 30 days prior
to implementing the change. There can, of course, be no assurance that the
investment objective of the Portfolio will be achieved.
Investment Policies
The Portfolio seeks its objective by investing in high quality U.S.
dollar-denominated money market instruments. These instruments include
short-term obligations of the U.S. Government, bank obligations (such as
certificates of deposit, bankers' acceptances and fixed time deposits) of U.S.
and non-U.S. banks and obligations issued or guaranteed by the governments of
Western Europe, Scandinavia, Australia, Japan and Canada. The U.S. Government
obligations in which the Portfolio invests include U.S. Treasury bills, notes
and bonds, and instruments issued by U.S. Government agencies or
instrumentalities. Some obligations of U.S. Government agencies and
instrumentalities are supported by the "full faith and credit" of the United
States, others by the right of the issuer to borrow from the U.S. Treasury and
others only by the credit of the agency or instrumentality. Under the
Investment Company Act of 1940, as amended (the "1940 Act"), the Portfolio is
classified as "diversified." A "diversified investment company" must invest at
least 75% of its assets in cash and cash items, U.S. Government
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securities, investment company securities and other securities limited as to
any one issuer to not more than 5% of the total assets of the investment
company and not more than 10% of the voting securities of the issuer.
Certain Additional Investment Policies
Maturity and Quality. All of the Portfolio's investments mature or are
deemed to mature within 397 days from the date of acquisition, and the average
maturity of the investments held by the Portfolio (on a dollar-weighted basis)
is 90 days or less. All of the Portfolio's investments are in "high quality"
securities (i.e., securities rated in the highest rating category for
short-term obligations by at least two nationally recognized statistical rating
organizations (each, an "NRSRO") assigning a rating to the security or issuer
or, if only one NRSRO assigns a rating, that NRSRO or, in the case of an
investment which is not rated, of comparable quality as determined by Citibank,
N.A. ("Citibank"), the Portfolio's investment adviser (the "Adviser")) and are
determined by the Adviser, pursuant to power delegated by the Portfolio's Board
of Trustees, to present minimal credit risks. Investments in high quality,
short-term instruments may, in many circumstances, result in a lower yield than
would be available from investments in instruments with a lower quality or a
longer term.
Investment Restrictions. Part B of this Registration Statement contains a
list of specific investment restrictions which govern the investment policies
of the Portfolio. Certain of these specific restrictions may not be changed
without shareholder approval. Except as otherwise indicated, the Portfolio's
investment objective 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 Portfolio's securities will
not be a violation of policy.
Brokerage Transactions. The primary consideration in placing the
Portfolio'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.
Investment Practices
Treasury Receipts. The Portfolio may invest in Treasury Receipts, which
are unmatured interest coupons of U.S. Treasury bonds and notes which have
been separated and resold in a custodial receipt program administered by the
U.S. Treasury.
Commercial Paper. The Portfolio may invest in commercial paper, which is
unsecured debt of corporations usually maturing in 270 days or less from its
date of issuance.
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Asset-Backed Securities. The Portfolio may invest in asset-backed
securities, which represent fractional interests in underlying pools of assets,
such as car installment loans or credit card receivables. The rate of return on
asset-backed securities may be affected by prepayment of the underlying loans
or receivables. Reinvestment of principal may occur at higher or lower rates
than the original yield.
Repurchase Agreements. The Portfolio may enter into repurchase agreements.
Repurchase agreements are transactions in which an institution sells the
Portfolio a security at one price, subject to the Portfolio'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 obligations to repurchase.
Lending of Portfolio Securities. Consistent with applicable regulatory
requirements and in order to generate additional income, the Portfolio may lend
its securities to broker-dealers and other institutional borrowers. Such loans
must be callable at any time and continuously secured by collateral (cash or
U.S. Government securities) in an amount not less than the market value,
determined daily, of the securities loaned. It is intended that the value of
securities loaned by the Portfolio would not exceed 33 1/3% of the Portfolio's
net assets.
In the event of the bankruptcy of the other party to a securities loan,
the Portfolio could experience delays in recovering either the securities lent
or cash. To the extent that, in the meantime, the value of the securities lent
or sold have increased or the value of the securities purchased have decreased,
the Portfolio could experience a loss.
Private Placements and Illiquid Investments. The Portfolio 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
Portfolio to sell them promptly at an acceptable price.
For more information regarding the Portfolio's permitted investments and
investment practices, see Part B of this Registration Statement.
Certain Risk Considerations
The risks of investing in the Portfolio vary depending upon the nature of
the securities held, and the investment practices employed, on its behalf.
Certain of these risks are described below.
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"Concentration" in Bank Obligations. The Portfolio invests at least 25% of
its assets, and may invest up to 100% of its assets, in bank obligations. This
concentration policy is fundamental, and may not be changed without the consent
of the Portfolio's investors. 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.
Non-U.S. Securities. All of the Portfolio's investments, including its
investments in non-U.S. securities, are in U.S. dollar-denominated securities.
However, investors in the Portfolio should be aware that investments in
non-U.S. securities involve risks relating to political, social and economic
developments abroad, as well as risks resulting from the differences between
the regulations to which U.S. and non-U.S. issuers and markets are subject.
These risks may include expropriation, confiscatory taxation, withholding
taxes on dividends and interest, limitations on the use or transfer of
Portfolio assets and political or social instability. In addition,
non-U.S. companies may not be subject to accounting standards or governmental
supervision comparable to U.S. companies, and there may be less public
information about their operations. Non-U.S. markets may be less liquid and
more volatile than U.S. markets, and may offer less protection to investors
such as the Portfolio.
Investment Practices. Certain of the investment practices employed for
the Portfolio may entail certain risks. See Part B of this Registration
Statement.
Item 5. Management of the Portfolio.
Trustees
The Portfolio's Board of Trustees provides broad supervision over the
affairs of the Portfolio. A majority of the Portfolio's Trustees are not
affiliated with the Adviser. More information on the Trustees and officers of
the Portfolio appears in Part B of this Registration Statement.
Investment Adviser
Citibank. Citibank is the Portfolio's investment adviser. The address of
Citibank is 153 East 53rd Street, New York, New York 10043. The Portfolio
draws on the strength and experience of Citibank. Citibank offers a wide
range of banking and investment
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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 $73 billion in assets worldwide, including the
Landmark Funds and Portfolios.
Citibank manages the assets of the Portfolio pursuant to an investment
advisory agreement (the "Advisory Agreement"). Subject to policies set by the
Portfolio's Trustees, Citibank makes investment decisions for the Portfolio.
Advisory Fees. For its services under the Advisory Agreement, the Adviser
receives an investment advisory fee, which is accrued daily and paid monthly,
of 0.15% of the Portfolio's average daily net assets on an annualized basis for
the Portfolio'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, 1995, the investment advisory fees
payable to Citibank were $4,097,854 (of which $2,306,161 was voluntarily waived
(after waiver, 0.15% of the Portfolio'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 Portfolio, 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 Portfolio 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 Portfolio. Citibank believes that its
services under the Advisory Agreement and the activities performed by it as
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 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 Portfolio. If Citibank or its
affiliates were to be prevented from acting as the Adviser or
sub-administrator, the Portfolio would seek alternative means for obtaining
these services. The Portfolio does not expect that investors would suffer any
adverse financial consequences as a result of any such occurrence.
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Administrative Services Plan
The Portfolio has an administrative services plan ("Administrative Services
Plan") which provides that the Portfolio may obtain the services of an
administrator, a transfer agent and a custodian, and may enter into agreements
providing for the payment of fees for such services. Under the Administrative
Services Plan, fees paid to the Administrator may not exceed 0.05% of the
Portfolio's average daily net assets on an annualized basis for the Portfolio's
then-current fiscal year. See "Administrator" and "Transfer Agent, Custodian
and Fund Accountant" below.
Administrator
Signature Financial Group (Cayman), Ltd., either directly or through a
wholly-owned subsidiary ("SFG"), is the Portfolio's administrator (the
"Administrator"), and supervises the overall administration of the Portfolio.
The address of SFG is Elizabethan Square, George Town, Grand Cayman, Cayman
Islands, British West Indies. SFG provides certain administrative services to
the Portfolio under an administrative services agreement ("Administrative
Services Agreement"). These administrative services include providing general
office facilities, supervising the overall administration of the Portfolio, and
providing persons satisfactory to the Board of Trustees to serve as Trustees
and officers of the Portfolio. These Trustees and officers may be directors,
officers or employees of SFG or its affiliates.
For these services, the Administrator receives fees accrued daily and paid
monthly of 0.05% of the assets of the Portfolio on an annualized basis for the
Portfolio's then-current fiscal year. The Administrator has voluntarily agreed
to waive a portion of the fees payable to it. For the fiscal year ended August
31, 1995, the fees payable to SFG under the Administrative Services Agreement
were $1,365,951 (all of which were voluntarily waived).
SFG is a wholly-owned subsidiary of Signature Financial Group, Inc.
Sub-Administrator
Pursuant to a sub-administrative services agreement, Citibank performs such
sub-administrative duties for the Portfolio as from time to time are agreed
upon by Citibank and SFG. Citibank's compensation as sub-administrator is paid
by SFG.
Transfer Agent, Custodian and Fund Accountant
State Street Canada, Inc. ("State Street Canada") acts as transfer agent
and dividend disbursing agent for the Portfolio. State Street Canada also
provides fund accounting services to the Portfolio and calculates the daily net
asset value for the Portfolio.
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The address of State Street Canada is 40 King Street West, Suite 5700, Toronto,
Ontario, Canada. State Street Bank and Trust Company ("State Street") acts as
the custodian of the Portfolio's assets. The address of State Street is 225
Franklin Street, Boston, Massachusetts 02110.
Expenses
The Portfolio pays all of its expenses, including the compensation of its
Trustees who are not affiliated with SFG; governmental fees; interest charges;
taxes; membership dues in the Investment Company Institute allocable to the
Portfolio; fees and expenses of independent auditors, of legal counsel and of
any transfer agent, custodian, registrar or dividend disbursing agent of the
Portfolio; insurance premiums; expenses of calculating the net asset value of
and the net income on the Portfolio; expenses connected with the execution,
recording and settlement of security transactions; fees and expenses of the
custodian for all services to the Portfolio, including safekeeping of funds and
securities and maintaining required books and accounts; expenses of preparing
and mailing reports to investors and to governmental officers and commissions;
and the advisory fees payable to the Adviser and the administrative fees
payable to the Administrator. For the fiscal year ended August 31, 1995, the
Portfolio's total expenses were 0.23% of its average net assets.
Item 6. Capital Stock and Other Securities.
Investments in the Portfolio have no preference, pre-emptive or conversion
rights and are fully paid and non-assessable, except as set forth below. The
Portfolio is not required and has no current intention to hold annual meetings
of investors, but the Portfolio will hold special meetings of investors when in
the judgment of the Trustees it is necessary or desirable to submit matters for
an investor vote. Investors 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 investors
in connection with requesting a meeting of investors for the purpose of
removing one or more Trustees. Investors also have the right to remove one or
more Trustees without a meeting by a declaration in writing by a specified
number of investors. Upon liquidation or dissolution of the Portfolio,
investors would be entitled to share pro rata in the net assets of the
Portfolio available for distribution to investors.
The Portfolio is organized as a trust under the laws of the State of New
York. Under the Declaration of Trust, the Trustees are authorized to issue
beneficial interests in the Portfolio. Each investor is entitled to a vote in
proportion to the value of its investment in the Portfolio. Investments in the
Portfolio may not be transferred, but an investor may withdraw all or any
portion of its investment at any time at net asset value. Investors in the
Portfolio (e.g., investment companies, insurance company separate accounts and
common and commingled trust funds) are each liable for all obligations
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of the Portfolio. However, it is not expected that the liabilities of the
Portfolio would ever exceed its assets.
The net income of the Portfolio is determined each day the New York Stock
Exchange is open for trading (a "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 3:00 p.m., Eastern time. All the net income of
the Portfolio so determined is allocated pro rata among the investors in the
Portfolio at the time of such determination.
For this purpose, the net income of the Portfolio (from the time of the
immediately preceding determination thereof) shall consist of (i) all income
accrued, less the amortization of any premium, on the assets of the Portfolio,
less (ii) all actual and accrued expenses of the Portfolio determined in
accordance with generally accepted accounting principles. Interest income
includes discount earned (including both original issue and market discount) on
discount paper accrued ratably to the date of maturity and any net realized
gains or losses on the assets of the Portfolio.
It is intended that the Portfolio's assets, income and distributions will
be managed in such a way that an investor in the Portfolio will be able to
satisfy the requirements of Subchapter M of the Internal Revenue Code of 1986,
as amended, assuming that the investor invested all of its investable assets in
the Portfolio.
Item 7. Purchase of Securities.
Beneficial interests in the Portfolio are issued solely in private
placement transactions which do not involve any "public offering" within the
meaning of Section 4(2) of the 1933 Act. Investments in the Portfolio may only
be made by investment companies, insurance company separate accounts, common or
commingled trust funds or similar organizations or entities which are
"accredited investors" within the meaning of Regulation D under the 1933 Act.
This registration statement does not constitute an offer to sell, or the
solicitation of an offer to buy, any "security" within the meaning of the 1933
Act.
An investment in the Portfolio may be made without a sales load. All
investments are made at net asset value next determined after an order is
received by the Portfolio. The net asset value of the Portfolio is determined
on each Business Day. Securities are valued at amortized cost, which the
Trustees of the Portfolio have determined in good faith constitutes fair value
for the purposes of complying with the 1940 Act. This valuation method will
continue to be used until such time as the Trustees of the Portfolio determine
that it does not constitute fair value for such purposes.
There is no minimum initial or subsequent investment in the Portfolio.
However, since the Portfolio intends to be as fully invested at all times as is
reasonably practicable in order to enhance the yield
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on its assets, investments must be made in federal funds (i.e., monies credited
to the account of the Portfolio's custodian bank by a Federal Reserve Bank).
The Portfolio reserves the right to cease accepting investments at any time
or to reject any investment order.
The exclusive placement agent for the Portfolio is The Landmark Funds
Broker-Dealer Services, Inc. ("LFBDS"). The address of LFBDS is
6 St. James Avenue, Boston, Massachusetts 02116. LFBDS receives no
compensation for serving as the exclusive placement agent for the Portfolio.
Item 8. Redemption or Repurchase.
An investor in the Portfolio may withdraw all or any portion of its
investment at any time at the net asset value next determined after a
withdrawal request in proper form is furnished by the investor to the
Portfolio. The proceeds of a withdrawal will be paid by the Portfolio in
federal funds normally on the Business Day the withdrawal is effected, but in
any event within seven days. Investments in the Portfolio may not be
transferred.
The right of any investor to receive payment with respect to any withdrawal
may be suspended or the payment of the withdrawal proceeds postponed during any
period in which the New York Stock Exchange is closed (other than weekends or
holidays) or trading on such Exchange is restricted, or, to the extent
otherwise permitted by the 1940 Act, if an emergency exists.
Item 9. Pending Legal Proceedings.
Not applicable.
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PART B
Item 10. Cover Page.
Not applicable.
Item 11. Table of Contents.
Page
General Information and History.................B-1
Investment Objective and Policies...............B-1
Management of the Portfolio.....................B-10
Control Persons and Principal Holders
of Securities.................................B-13
Investment Advisory and Other Services..........B-14
Brokerage Allocation and Other Practices........B-17
Capital Stock and Other Securities..............B-18
Purchase, Redemption and Pricing of
Securities....................................B-19
Tax Status......................................B-21
Underwriters....................................B-23
Calculations of Performance Data................B-23
Financial Statements............................B-23
Item 12. General Information and History.
Not applicable.
Item 13. Investment Objective and Policies.
The investment objective of Cash Reserves Portfolio (the "Portfolio") is to
provide its investors with liquidity and as high a level of current income as
is consistent with the preservation of capital. There can, of course, be no
assurance that the Portfolio will achieve its investment objective. The
investment objective of the Portfolio may be changed without the approval of
the investors in the Portfolio.
Except for the concentration policy with respect to bank obligations
described in paragraph (1) below, which is fundamental and may not be changed
without the approval of the investors in the Portfolio, the approval of the
investors in the Portfolio would not be required to change any of the
Portfolio's investment policies discussed below, including those concerning
securities transactions. Likewise, except for the concentration policy of the
Portfolio with respect to bank obligations described in paragraph (1) below,
which is fundamental and may not be changed without the approval of the
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Portfolio's investors, the approval of the investors in the Portfolio would not
be required to change the Portfolio's investment objective.
The Portfolio seeks its investment objective through investments limited to
the following types of high quality U.S. dollar-denominated money market
instruments. All investments by the Portfolio mature or are deemed to mature
within 397 days from the date of acquisition and the average maturity of the
investments held by the Portfolio (on a dollar-weighted basis) is 90 days or
less. All investments by the Portfolio are in "high quality" securities (i.e.,
securities rated in the highest rating category for short-term obligations by
at least two nationally recognized statistical rating organizations (each, an
"NRSRO") assigning a rating to the security or issuer or, if only one NRSRO
assigns a rating, that NRSRO or, in the case of an investment which is not
rated, of comparable quality as determined by the Adviser) and are determined
by the Adviser to present minimal credit risks. Investments in high quality,
short term instruments may, in many circumstances, result in a lower yield than
would be available from investments in instruments with a lower quality or a
longer term. Under the Investment Company Act of 1940, as amended (the "1940
Act"), the Portfolio is classified as "diversified." A "diversified investment
company" must invest at least 75% of its assets in cash and cash items, U.S.
Government securities, investment company securities and other securities
limited as to any one issuer to not more than 5% of the total assets of the
investment company and not more than 10% of the voting securities of the
issuer.
(1) Bank obligations. The Portfolio invests at least 25% of its
investable assets, and may invest up to 100% of its assets,
in bank obligations. This concentration policy is
fundamental and may not be changed without the approval of
the investors in the Portfolio. Bank obligations include,
but are not limited to, negotiable certificates of deposit,
bankers' acceptances and fixed time deposits. The Portfolio
limits its investments in U.S. bank obligations (including
their non-U.S. branches) to banks having total assets in
excess of $1 billion and which are subject to regulation by
an agency of the U.S. Government. The Portfolio may also
invest in certificates of deposit issued by banks the
deposits in which are insured by the Federal Deposit
Insurance Corporation ("FDIC"), through either the Bank
Insurance Fund or the Savings Association Insurance Fund,
having total assets of less than $1 billion, provided that
the Portfolio at no time owns more than $100,000 principal
amount of certificates of deposit (or any higher principal
amount which in the future may be fully insured by FDIC
insurance) of any one of those issuers. Fixed time
deposits are obligations which are payable at a stated
maturity date and bear a fixed rate of interest. Generally,
fixed time deposits may be withdrawn on demand by the
Portfolio, but they may be subject to early withdrawal
penalties which vary depending upon market conditions and
the remaining maturity of the obligation. Although fixed
time deposits do not have a market, there are no
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contractual restrictions on the Portfolio's right to transfer
a beneficial interest in the deposit to a third party.
U.S. banks organized under federal law are supervised
and examined by the Comptroller of the Currency and are
required to be members of the Federal Reserve System
and to be insured by the FDIC. U.S. banks organized
under state law are supervised and examined by state
banking authorities and are members of the Federal
Reserve System only if they elect to join. However,
state banks which are insured by the FDIC are subject
to federal examination and to a substantial body of
federal law and regulation. As a result of federal and
state laws and regulations, U.S. branches of U.S.
banks, among other things, are generally required to
maintain specified levels of reserves, and are subject
to other supervision and regulation designed to promote
financial soundness.
The Portfolio limits its investments in non-U.S. bank
obligations (i.e., obligations of non-U.S. branches and
subsidiaries of U.S. banks, and U.S. and non-U.S.
branches of non-U.S. banks) to U.S. dollar-denominated
obligations of banks which at the time of investment
are branches or subsidiaries of U.S. banks which meet
the criteria in the preceding paragraphs or are
branches of non-U.S. banks which (i) have more than $10
billion, or the equivalent in other currencies, in
total assets; (ii) in terms of assets are among the 75
largest non-U.S. banks in the world; (iii) have
branches or agencies in the United States; and (iv) in
the opinion of the Citibank, N.A. ("Citibank"), the
Portfolio's investment adviser (the "Adviser"), are of
an investment quality comparable with obligations of
U.S. banks which may be purchased by the Portfolio.
These obligations may be general obligations of the
parent bank, in addition to the issuing branch or
subsidiary, but the parent bank's obligations may be
limited by the terms of the specific obligation or by
governmental regulation. The Portfolio also limits its
investments in non-U.S. bank obligations to banks,
branches and subsidiaries located in Western Europe
(United Kingdom, France, Germany, Belgium, the
Netherlands, Italy, Switzerland), Scandinavia (Denmark,
Norway, Sweden), Australia, Japan, the Cayman Islands,
the Bahamas and Canada. The Portfolio does not
purchase any bank obligation of the Adviser or an
affiliate of the Adviser.
Since the Portfolio may hold obligations of non-U.S.
branches and subsidiaries of U.S. banks, and U.S. and
non-U.S. branches of non-U.S. banks, an investment in
the Portfolio involves certain additional risks. Such
investment risks include future political and economic
developments, the possible imposition of non-U.S.
withholding taxes on interest income payable on such
obligations held by the Portfolio, the possible seizure
or nationalization of non-U.S. deposits and the
possible establishment of exchange controls or other
non-U.S. governmental laws or restrictions applicable
to the payment of
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the principal of and interest on certificates of deposit or time
deposits that might affect adversely such payment on such obligations
held by the Portfolio. In addition, there may be less publicly-
available information about a non-U.S. branch or subsidiary of a U.S.
bank or a U.S. or non-U.S. branch of a non-U.S. bank than about a U.S.
bank and such branches and subsidiaries may not be subject to the same
or similar regulatory requirements that apply to U.S. banks, such as
mandatory reserve requirements, loan limitations and accounting,
auditing and financial record-keeping standards and requirements.
The provisions of federal law governing the establishment and operation
of U.S. branches do not apply to non-U.S. branches of U.S. banks.
However, the Portfolio may purchase obligations only of those non-U.S.
branches of U.S. banks which were established with the approval of the
Board of Governors of the Federal Reserve System (the "Board of
Governors"). As a result of such approval, these branches are subject
to examination by the Board of Governors and the Comptroller of the
Currency. In addition, such non-U.S. branches of U.S. banks are subject
to the supervision of the U.S. bank and creditors of the non-U.S. branch
are considered general creditors of the U.S. bank subject to whatever
defenses may be available under the governing non-U.S. law and to the
terms of the specific obligation. Nonetheless, the Portfolio generally
will be subject to whatever risk may exist that the non-U.S. country
may impose restrictions on payment of certificates of deposit or time
deposits.
U.S. branches of non-U.S. banks are subject to the laws of the state in
which the branch is located or to the laws of the United States. Such
branches are therefore subject to many of the regulations, including
reserve requirements, to which U.S. banks are subject. In addition,
the Portfolio may purchase obligations only of those U.S. branches of
non-U.S. banks which are located in states which impose the additional
requirement that the branch pledge to a designated bank within the
state an amount of its assets equal to 5% of its total liabilities.
Non-U.S. banks in whose obligations the Portfolio may invest may not
be subject to the laws and regulations referred to in the preceding
two paragraphs.
(2) Obligations of, or guaranteed by, non-U.S. governments. The Portfolio
limits its investments in non-U.S. government obligations to
obligations issued or guaranteed by the governments of Western Europe
(United Kingdom, France, Germany, Belgium, the Netherlands, Italy,
Switzerland), Scandinavia (Denmark, Norway, Sweden), Australia, Japan
and Canada. Generally, such obligations may be subject to the
additional risks described in paragraph 1 above in connection with the
purchase of non-U.S. bank obligations.
<PAGE>
(3) Commercial paper rated Prime-1 by Moody's Investors Service, Inc.
("Moody's") or A-1 by Standard & Poor's Ratings Group ("Standard
& Poor's") or, if not rated, determined to be of comparable
quality by the Adviser, such as unrated commercial paper issued
by corporations having an outstanding unsecured debt issue
currently rated Aaa by Moody's or AAA by Standard & Poor's.
(4) Obligations of, or guaranteed by, the U.S. Government, its
agencies or instrumentalities. These include issues of the U.S.
Treasury, such as bills, certificates of indebtedness, notes and
bonds, and issues of agencies and instrumentalities established
under the authority of an Act of Congress. Some of the latter
category of obligations are supported by the full faith and credit
of the United States, others are supported by the right of the
issuer to borrow from the U.S. Treasury, and still others are
supported only by the credit of the agency or instrumentality.
Examples of each of the three types of obligations described in
the preceding sentence are (i) obligations guaranteed by the
Export-Import Bank of the United States, (ii) obligations of the
Federal National Mortgage Association, and (iii) obligations of
the Student Loan Marketing Association, respectively.
(5) Repurchase agreements, providing for resale within 397 days or
less, covering obligations of, or guaranteed by, the U.S.
Government, its agencies or instrumentalities which may have
maturities in excess of 397 days. A repurchase agreement arises
when a buyer purchases an obligation and simultaneously agrees
with the vendor to resell the obligation to the vendor at an
agreed-upon price and time, which is usually not more than
seven days from the date of purchase. The resale price of a
repurchase agreement is greater than the purchase price,
reflecting an agreed-upon market rate which is effective for
the period of time the buyer's funds are invested in the
obligation and which is not related to the coupon rate on the
purchased obligation. Obligations serving as collateral for
each repurchase agreement are delivered to the Portfolio's
custodian either physically or in book entry form and the
collateral is marked to the market daily to ensure that each
repurchase agreement is fully collateralized at all times. A
buyer of a repurchase agreement runs a risk of loss if, at
the time of default by the issuer, the value of the collateral
securing the agreement is less than the price paid for the
repurchase agreement. If the vendor of a repurchase agreement
becomes bankrupt, the Portfolio might be delayed, or may incur
costs or possible losses of principal and income, in selling
the collateral. The Portfolio may enter into repurchase
agreements only with a vendor which is a member bank of the
Federal Reserve System or which is a "primary dealer" (as
designated by the Federal Reserve Bank of New York) in U.S.
Government obligations. The Portfolio will not enter into any
<PAGE>
repurchase agreements with the Adviser or an affiliate of the
Adviser. The restrictions and procedures described above which
govern the Portfolio's investment in repurchase agreements are
designed to minimize the Portfolio's risk of losses in making
those investments.
(6) Asset-backed securities, which may include securities such as
Certificates for Automobile Receivables ("CARS") and Credit
Card Receivable Securities ("CARDS"), as well as other
asset-backed securities that may be developed in the future.
CARS represent fractional interests in pools of car installment
loans, and CARDS represent fractional interests in pools of
revolving credit card receivables. The rate of return on
asset-backed securities may be affected by early prepayment of
principal on the underlying loans or receivables. Prepayment
rates vary widely and may be affected by changes in market
interest rates. It is not possible to accurately predict the
average life of a particular pool of loans or receivables.
Reinvestment of principal may occur at higher or lower rates
than the original yield. Therefore, the actual maturity and
realized yield on asset-backed securities will vary based upon
the prepayment experience of the underlying pool of loans or
receivables. (See "Asset-Backed Securities.")
The Portfolio does not purchase securities which the Portfolio believes, at
the time of purchase, will be subject to exchange controls or non-U.S.
withholding taxes; however, there can be no assurance that such laws may not
become applicable to certain of the Portfolio's investments. In the event
exchange controls or non-U.S. withholding taxes are imposed with respect to any
of the Portfolio's investments, the effect may be to reduce the income received
by the Portfolio on such investments.
Asset-Backed Securities
As set forth above, the Portfolio may purchase asset-backed securities that
represent fractional interests in pools of retail installment loans, both
secured (such as Certificates for Automobile Receivables) and unsecured, or
leases or revolving credit receivables, both secured and unsecured (such as
Credit Card Receivable Securities). These assets are generally held by a trust
and payments of principal and interest or interest only are passed through
monthly or quarterly to certificate holders and may be guaranteed up to certain
amounts by letters of credit issued by a financial institution affiliated or
unaffiliated with the trustee or originator of the trust.
Underlying automobile sales contracts, leases or credit card receivables
are subject to prepayment, which may reduce the overall return to certificate
holders. Nevertheless, principal repayment rates tend not to vary much with
interest rates and the short-term nature of the underlying loans, leases or
receivables tends to dampen the impact of any change in the prepayment level.
Certificate
<PAGE>
holders may also experience delays in payment on the certificates if the full
amounts due on underlying loans, leases or receivables are not realized by the
Portfolio because of unanticipated legal or administrative costs of enforcing
the contracts or because of depreciation or damage to the collateral (usually
automobiles) securing certain contracts, or other factors. If consistent with
its investment objective and policies, the Portfolio may invest in other
asset-backed securities that may be developed in the future.
Lending of Securities
Consistent with applicable regulatory requirements and in order to generate
income, the Portfolio may lend its securities to broker-dealers and other
institutional borrowers. Such loans will usually be made only to member banks
of the U.S. Federal Reserve System and to member firms of the New York Stock
Exchange (and subsidiaries thereof). Loans of securities would be secured
continuously by collateral in cash, cash equivalents, or U.S. Treasury
obligations maintained on a current basis at an amount at least equal to the
market value of the securities loaned. The cash collateral would be invested in
high quality short-term instruments. The Portfolio would have the right to call
a loan and obtain the securities loaned at any time on customary industry
settlement notice (which will not usually exceed five days). During the
existence of a loan, the Portfolio would continue to receive the equivalent of
the interest or dividends paid by the issuer on the securities loaned and would
also receive compensation based on investment of the collateral. The Portfolio
would not, however, have the right to vote any securities having voting rights
during the existence of the loan, but would call the loan in anticipation of an
important vote to be taken among holders of the securities or of the giving or
withholding of its consent on a material matter affecting the investment. As
with other extensions of credit, there are risks of delay in recovery or even
loss of rights in the collateral should the borrower fail financially. However,
the loans would be made only to entities deemed by the Adviser to be of good
standing, and when, in the judgment of the Adviser, the consideration which can
be earned currently from loans of this type justifies the attendant risk. If
the Adviser determines to make loans, it is not intended that the value of the
securities loaned by the Portfolio would exceed 33 1/3% of the value of its net
assets.
Investment Restrictions
The Portfolio has adopted the following policies which may not be changed
without approval by holders of a "majority of the outstanding shares" of the
Portfolio, which as used in this Registration Statement means the vote of the
lesser of (i) 67% or more of the outstanding "voting securities" of the
Portfolio present at a meeting, if the holders of more than 50% of the
outstanding "voting securities" of the Portfolio are present or represented by
proxy, or (ii) more than 50% of the outstanding "voting securities" of the
Portfolio. The term "voting
<PAGE>
securities" as used in this paragraph has the same meaning as in the 1940
Act.
The Portfolio may not:
(1) borrow money, except that as a temporary measure for extraordinary or
emergency purposes the Portfolio may borrow from banks in an amount not to
exceed 1/3 of the value of its net assets, including the amount borrowed from
banks (moreover, the Portfolio will not purchase any securities at any time at
which borrowings exceed 5% of its total assets (taken at market value)) (it is
intended that the Portfolio would borrow money only from banks and only to
accommodate requests for the withdrawal of all or a portion of a beneficial
interest in the Portfolio while effecting an orderly liquidation of
securities); for additional related restrictions, see clause (i) under the
caption "State and Federal Restrictions" below;
(2) purchase any security or evidence of interest therein on margin,
except that the Portfolio may obtain such short term credit as may be necessary
for the clearance of purchases and sales of securities;
(3) underwrite securities issued by other persons and except insofar as
the Portfolio may technically be deemed an underwriter under the Securities Act
of 1933 in selling a security;
(4) make loans to other persons except (a) through the lending of
securities held by the Portfolio, but not in excess of 33 1/3% of the
Portfolio's net assets, (b) through the use of fixed time deposits or
repurchase agreements or the purchase of short term obligations, or (c) by
purchasing all or a portion of an issue of debt securities of types commonly
distributed privately to financial institutions; for purposes of this paragraph
4 the purchase of short term commercial paper or a portion of an issue of debt
securities which are part of an issue to the public shall not be considered the
making of a loan; for additional related restrictions, see clause (x) under the
caption "State and Federal Restrictions" below;
(5) purchase or sell real estate (including limited partnership interests
but excluding securities secured by real estate or interests therein),
interests in oil, gas or mineral leases, commodities or commodity contracts in
the ordinary course of business (the Portfolio reserves the freedom of action
to hold and to sell real estate acquired as a result of the ownership of
securities by the Portfolio);
(6) concentrate its investments in any particular industry, but if it is
deemed appropriate for the achievement of its investment objective, up to 25%
of the assets of the Portfolio (taken at market value at the time of each
investment) may be invested in any one industry, except that the Portfolio will
invest at least 25% of its assets and may invest up to 100% of its assets in
bank obligations; or
(7) issue any senior security (as that term is defined in the 1940 Act) if
such issuance is specifically prohibited by the 1940 Act or
<PAGE>
the rules and regulations promulgated thereunder, except as appropriate to
evidence a debt incurred without violating Investment Restriction (1) above.
State and Federal Restrictions: In order to comply with certain state and
federal statutes and policies, the Portfolio does not as a matter of operating
policy:
(i) borrow money for any purpose in excess of 10% of its total assets
(taken at cost),
(ii) pledge, mortgage or hypothecate for any purpose in excess of 10% of
its net assets (taken at market value),
(iii) sell any security which it does not own unless by virtue of its
ownership of other securities the Portfolio has at the time of sale a right to
obtain securities, without payment of further consideration, equivalent in kind
and amount to the securities sold; provided, that if such right is conditional
the sale is made upon the same conditions,
(iv) invest for the purpose of exercising control or management,
(v) purchase securities issued by any registered investment company except
by purchase in the open market where no commission or profit to a sponsor or
dealer results from such purchase other than the customary broker's commission
or except when such purchase, though not made in the open market, is part of a
plan of merger or consolidation; provided, however, that the Portfolio will not
purchase the securities of any registered investment company if such purchase
at the time thereof would cause more than 10% of its total assets (taken at the
greater of cost or market value) to be invested in the securities of such
issuers or would cause more than 3% of the outstanding voting securities of any
such issuer to be held by the Portfolio; and provided, further, that the
Portfolio shall not purchase securities issued by any open-end investment
company,
(vi) taken together with any investments described in clause (x) below,
invest more than 10% of its net assets in securities that are not readily
marketable, including debt securities for which there is no established market
and fixed time deposits and repurchase agreements maturing in more than seven
days,
(vii) purchase securities of any issuer if such purchase at the time
thereof would cause the Portfolio to hold more than 10% of any class of
securities of such issuer, for which purposes all indebtedness of an issuer
shall be deemed a single class,
(viii) purchase or retain any securities issued by an issuer any of whose
officers, directors, trustees or security holders is an officer or Trustee of
the Portfolio, or is an officer or director of the Adviser, if after the
purchase of the securities of such issuer by the Portfolio one or more of such
persons owns beneficially more than 1/2 of 1% of the shares or securities, or
both, all taken at market value, of
<PAGE>
such issuer, and such persons owning more than 1/2 of 1% of such shares or
securities together own beneficially more than 5% of such shares or securities,
or both, all taken at market value,
(ix) write, purchase or sell any put or call option or
any combination thereof,
(x) taken together with any investments described in clause (vi) above,
invest in securities which are subject to legal or contractual restrictions on
resale (other than fixed time deposits and repurchase agreements maturing in
not more than seven days) if, as a result thereof, more than 10% of the net
assets (taken at market value) would be so invested (including fixed time
deposits and repurchase agreements maturing in more than seven days),
(xi) purchase securities of any issuer if such purchase at the time thereof
would cause more than 10% of the voting securities of such issuer to be held by
the Portfolio, or
(xii) make short sales of securities or maintain a short position, unless
at all times when a short position is open it owns an equal amount of such
securities or securities convertible into or exchangeable, without payment of
any further consideration, for securities of the same issue as, and equal in
amount to, the securities sold short, and unless not more than 10% of the net
assets of the Portfolio (taken at market value) is held as collateral for such
sales at any one time. (The Portfolio does not presently intend to make such
sales.)
These policies are not fundamental and may be changed by the Portfolio
without the approval of the investors in the Portfolio in response to changes
in the various state and federal requirements.
Percentage and Rating Restrictions: If a percentage or a rating restriction
on investment or utilization of assets set forth above or referred to elsewhere
in this Registration Statement is adhered to at the time an investment is made
or assets are so utilized, a later change in percentage resulting from changes
in the value of the securities held by the Portfolio or a later change in the
rating of a security held by the Portfolio is not considered a violation of
policy.
Item 14. Management of the Portfolio.
The Trustees and officers of the Portfolio 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 Portfolio. Unless
otherwise indicated below, the address of each Trustee and officer is 6 St.
James Avenue, Boston, Massachusetts. The address of the Portfolio is
Elizabethan Square, George Town, Grand Cayman, Cayman Islands, British West
Indies.
<PAGE>
Trustees
ELLIOTT J. BERV (aged 52) - 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* (aged 44) - President of the Portfolio; Chairman, Chief
Executive Officer and President, Signature Financial Group, Inc. and The
Landmark Funds Broker-Dealer Services, Inc. (since December, 1988).
MARK T. FINN (aged 52) - 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.
WALTER E. ROBB, III (aged 69) - 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.
Officers
PHILIP W. COOLIDGE* (aged 44) - President of the Portfolio; Chairman, Chief
Executive Officer and President, Signature Financial Group, Inc. and The
Landmark Funds Broker-Dealer Services, Inc. (since December, 1988).
DAVID G. DANIELSON* (aged 30) - Assistant Treasurer of the Portfolio;
Assistant Manager, Signature Financial Group, Inc. (since May, 1991);
Graduate Student, Northeastern University (April, 1990 to March, 1991).
JOHN R. ELDER* (aged 47) - Treasurer of the Portfolio; Vice President,
Signature Financial Group, Inc. (since April, 1995); Treasurer of the
Phoenix Family of Mutual Funds, Phoenix Home Life Mutual Insurance Company
(1983 to March, 1995).
LINDA T. GIBSON* (aged 30) - Assistant Secretary of the Portfolio; Legal
Counsel, Signature Financial Group, Inc. (since June, 1991); Law Student,
Boston University School of Law (September, 1989 to May, 1992); Product
Manager, Signature Financial Group, Inc. (January, 1989 to September, 1989).
SUSAN JAKUBOSKI* (aged 31) - Vice President, Assistant Treasurer and
Assistant Secretary of the Portfolio (since August, 1994); Manager,
Signature Financial Group (Grand Cayman) Ltd. (since August, 1994);
<PAGE>
Senior Fund Administrator, Signature Financial Group, Inc. (since August,
1994); Assistant Treasurer, Signature Broker-Dealer Services, Inc. (since
September, 1994); Fund Compliance Administrator, Concord Financial Group
(November, 1990 to August, 1994); Senior Fund Accountant, Neuberger &
Berman Management, Inc. (from February, 1988 to November, 1990); Customer
Service Representative, I.B.J. Schroder (prior to 1988). Her address is
Elizabethan Square, George Town, Grand Cayman, Cayman Islands, British
West Indies.
JAMES S. LELKO, JR.* (aged 30) - Assistant Treasurer of the Portfolio;
Assistant Manager, Signature Financial Group, Inc. (since January, 1993);
Senior Tax Compliance Accountant, the Putnam Companies (September, 1988 to
December, 1992).
THOMAS M. LENZ* (aged 37) - Secretary of the Portfolio; Vice President and
Associate General Counsel, Signature Financial Group, Inc. (since November,
1989); Assistant Secretary, Signature Broker-Dealer Services, Inc. (since
February, 1991); Attorney, Ropes & Gray (September, 1984 to November, 1989).
MOLLY S. MUGLER* (aged 44) - Assistant Secretary of the Portfolio; Legal
Counsel and Assistant Secretary, Signature Financial Group, Inc. (since
December, 1988); Assistant Secretary, The Landmark Funds Broker-Dealer
Services, Inc. (since December, 1988).
BARBARA M. O'DETTE* (aged 36) - Assistant Treasurer of the Portfolio;
Assistant Treasurer, Signature Financial Group, Inc. and The Landmark Funds
Broker-Dealer Services, Inc. (since December, 1988).
ANDRES E. SALDANA* (aged 33) - Assistant Secretary of the Portfolio; Legal
Counsel and Assistant Secretary, Signature Financial Group, Inc. (since
November, 1992); Attorney, Ropes & Gray (September, 1990 to November, 1992).
DANIEL E. SHEA* (aged 33) - Assistant Treasurer of the Portfolio; Assistant
Manager of Fund Administration, Signature Financial Group, Inc. (since
November, 1993); Supervisor and Senior Technical Advisor, Putnam Investments
(prior to 1990).
The Trustees and officers of the Portfolio also hold comparable positions
with certain other funds for which Signature Financial Group (Grand Cayman),
Ltd., either directly or through a wholly-owned subsidiary ("SFG"), the
Portfolio's administrator and a wholly-owned subsidiary of Signature Financial
Group, Inc., or an affiliate serves as the distributor or administrator. Mr.
Coolidge is also a Trustee of Landmark Funds III, Landmark Premium Funds and
Landmark Institutional Trust, open-end investment companies, series of each of
which are investors in the Portfolio, and each officer of the Portfolio other
than Ms. Jakuboski holds the same position with those investment companies.
Each officer of the Portfolio holds similar positions with Excelsior Funds, an
open-end registered investment company, a series of which is an investor in the
Portfolio.
<PAGE>
The Trustees of the Portfolio (with the exception of Mr. Coolidge, who
received no remuneration from the Portfolio) received the following
remuneration from the Portfolio during its fiscal year ended August 31, 1995:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Pension or Total
Retirement Compensation
Benefits from Registrant
Aggregate Accrued as Estimated and Fund
Name of Person, Compensation Part of Fund Annual Benefits Complex Paid to
Position from Registrant Expenses Upon Retirement Trustees (1)
Elliott J.
Berv, Trustee $12,461.23 -- -- $40,000.00
Mark T. Finn,
Trustee $11,181.08 -- -- $40,000.00
Walter E. Robb, III, $14,547.71 -- -- $44,500.00
Trustee
- ---------------------
(1) Messrs. Berv, Finn and Robb are trustees of 12, 14 and 12 funds,
respectively, of the Landmark family of funds.
</TABLE>
The Portfolio's Declaration of Trust provides that it 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
Portfolio, unless, as to liability to the Portfolio 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 Portfolio. 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 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.
Item 15. Control Persons and Principal Holders of Securities.
Landmark Cash Reserves (a series of Landmark Funds III), Premium Liquid
Reserves (a series of Landmark Premium Funds), Landmark Institutional Liquid
Reserves (a series of Landmark Institutional Trust) and Excelsior Institutional
Money Fund (a series of Excelsior Funds) (collectively, the "Funds") and Citi
Liquid Reserves, Ltd., Citi Premium Liquid Reserves, Ltd. and Citi
Institutional Liquid Reserves, Ltd. (collectively, the "Citi Funds") own all of
the beneficial interests in the Portfolio. The following is a list of the
record holders of beneficial interests in the Portfolio:
<PAGE>
Beneficial Interest
Name of Record Holder (as of 12/18/95)
Landmark Cash Reserves 30%
Premium Liquid Reserves 9%
Landmark Institutional
Liquid Reserves 28%
Excelsior Institutional
Money Market Fund 13%
Citi Liquid Reserves, Ltd. 0%
Citi Premium Liquid
Reserves, Ltd. 1%
Citi Institutional Liquid
Reserves, Ltd. 19%
The Funds are registered investment companies which have informed the
Portfolio that whenever requested to vote on matters pertaining to the
Portfolio, each will hold a meeting of shareholders and will cast its vote as
instructed by its shareholders.
Item 16. Investment Advisory and Other Services.
Citibank manages the assets of the Portfolio pursuant to an investment
advisory agreement (the "Advisory Agreement"). Subject to such policies as the
Board of Trustees of the Portfolio may determine, the Adviser manages the
securities of the Portfolio and makes investment decisions for the Portfolio.
The Adviser furnishes at its own expense all services, facilities and personnel
necessary in connection with managing the Portfolio's investments and effecting
securities transactions for the Portfolio. The Advisory Agreement will continue
in effect as long as such continuance is specifically approved at least
annually by the Board of Trustees of the Portfolio or by a vote of a majority
of the outstanding voting securities of the Portfolio, and, in either case, by
a majority of the Trustees of the Portfolio 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 Portfolio when authorized
either by a vote of a majority of the outstanding voting securities of the
Portfolio or by a vote of a majority of its Board of Trustees, 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 not 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 Portfolio, except for willful misfeasance, bad
<PAGE>
faith or gross negligence or reckless disregard of its or their obligations and
duties under the Advisory Agreement.
Part A of this Registration Statement contains a description of the fees
payable to the Adviser for services under the Advisory Agreement. For the
fiscal years ended August 31, 1993, August 31, 1994 and August 31, 1995, the
fees paid to the Adviser under the Advisory Agreement were $2,108,642,
$1,806,314 and $4,097,854, respectively (of which $943,419 was voluntarily
waived for the year ended August 31, 1994 and $2,306,161 was voluntarily waived
for the year ended August 31, 1995).
The Portfolio has adopted an Administrative Services Plan (the
"Administrative Plan") which provides that the Portfolio may obtain the
services of an administrator, a transfer agent and a custodian, and may enter
into agreements providing for the payment of fees for such services. Under the
Administrative Plan, the administrative services fee payable to SFG may not
exceed 0.05% of the Portfolio's average daily net assets on an annualized basis
for its 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 Portfolio's Trustees and a majority of the Portfolio's
Trustees who are not "interested persons" of the Portfolio 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 Portfolio provide to its Board of
Trustees and the 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 by a vote of a
majority of the Portfolio's Qualified Trustees or by a vote of a majority of
the outstanding voting securities of the Portfolio. 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 Portfolio and may not be materially amended in any case
without a vote of the majority of both the Trustees and the Qualified Trustees.
Pursuant to an Administrative Services Agreement (the "Administrative
Services Agreement"), SFG provides the Portfolio with general office facilities
and supervises the overall administration of the Portfolio, 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 Portfolio; preparation and filing of all documents required for
compliance by the Portfolio with applicable laws and regulations; and arranging
for the maintenance of books and records of the Portfolio. The Administrator
provides persons satisfactory to the Board of Trustees of the Portfolio to
serve as officers of the Portfolio. Such officers, as well as certain other
employees and Trustees of the Portfolio, may be directors, officers or
employees of the Administrator or its affiliates.
<PAGE>
The Administrative Services Agreement continues in effect if such
continuance is specifically approved at least annually by the Portfolio's Board
of Trustees or by a vote of a majority of the outstanding voting securities of
the Portfolio and, in either case, by a majority of the Trustees of the
Portfolio who are not parties to the Administrative Services Agreement or
interested persons of any such party. The Administrative Services Agreement
terminates automatically if it is assigned and may be terminated without
penalty by a vote of a majority of the outstanding voting securities in the
portfolio or by either party on not more than 60 days' nor less than 30 days;
written notice. The Administrative Services Agreement also provides that
neither SFG, as 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 portfolio, 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 Administrative Services Agreement was
most recently approved by the Portfolio's Board of Trustees on May 5, 1995.
For its services under the Administrative Services Agreement, SFG receives
a fee accrued daily and paid monthly of 0.05% of the assets of the Portfolio.
For the fiscal year ended August 31, 1993, the fees payable to LFBDS under a
prior administrative services agreement with the Portfolio were $702,881 (of
which $596,227 was voluntarily waived). For the fiscal years ended August 31,
1994 and August 31, 1995, the fees payable to SFG under the Administrative
Services Agreement were $602,105 and $1,365,951, respectively (all of which
were voluntarily waived for the years ended August 31, 1994 and August 31,
1995).
The Administrative Services Agreement provides that SFG may render
administrative services to others.
SFG is a wholly-owned subsidiary of Signature Financial Group, Inc.
Pursuant to a sub-administrative services agreement, Citibank performs such
sub-administrative duties for the Portfolio as are from time to time agreed
upon by Citibank and SFG. Citibank's sub-administrative duties may include
providing equipment and clerical personnel necessary for maintaining the
organization of the Portfolio, participation in the preparation of documents
required for compliance by the Portfolio with applicable laws and regulations,
preparation of certain documents in connection with meetings of Trustees and
investors in the Portfolio, and other functions which would otherwise be
performed by SFG as set forth above. For performing such sub-administrative
services, Citibank receives such compensation as is from time to time agreed
upon by SFG and Citibank not in excess of the amount paid to SFG for its
services under the Administrative Services Agreement discussed above (i.e., not
more than 0.05% per annum of the average daily net assets of the Portfolio).
All such compensation is paid by SFG.
<PAGE>
The Portfolio has entered into a Transfer Agency Agreement and a Custodian
Agreement with State Street Bank and Trust Company ("State Street") pursuant to
which State Street acts as custodian and State Street Canada acts as transfer
agent and provides fund accounting services for the Portfolio. The principal
business address of State Street is 225 Franklin Street, Boston, Massachusetts
and the principal business address of State Street Canada is 40 King Street
West, Suite 5700, Toronto, Ontario, Canada.
Price Waterhouse are the independent certified public accountants for the
Portfolio, providing audit services, and assistance and consultation with
respect to the preparation of filings with the Securities and Exchange
Commission. The principal business address of Price Waterhouse is Suite 3000,
Box 190, 1 First Canadian Place, Toronto, Ontario M5X 1H7.
Item 17. Brokerage Allocation and Other Practices.
The Portfolio's purchases and sales of securities usually are principal
transactions. 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 Portfolio does not
anticipate paying brokerage commissions. Any transaction for which the
Portfolio pays a brokerage commission will be effected at the best price and
execution available. Purchases from underwriters of 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 the investors in the Portfolio 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 Portfolio are made independently from those
for any other account or investment company that is or may in the future become
managed by the Adviser or its affiliates. If, however, the Portfolio and other
investment companies 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 Portfolio
or the size of the position obtainable for the Portfolio. In addition, when
purchases or sales of the same security for the Portfolio and for other
investment companies or accounts 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.
<PAGE>
No transactions are executed with the Adviser or an affiliate of the
Adviser, in any case acting either as principal or as broker.
Item 18. Capital Stock and Other Securities.
Under the Declaration of Trust, the Trustees are authorized to issue
beneficial interests in the Portfolio. Investors are entitled to participate
pro rata in distributions of taxable income, loss, gain and credit of the
Portfolio. Upon liquidation or dissolution of the Portfolio, investors are
entitled to share pro rata in the Portfolio's net assets available for
distribution to its investors. Investments in the Portfolio have no preference,
pre-emptive, conversion or similar rights and are fully paid and
non-assessable, except as set forth below. Investments in the Portfolio may not
be transferred. Certificates representing an investor's beneficial interest in
the Portfolio are issued only upon the written request of an investor.
Each investor is entitled to a vote in proportion to the value of its
investment in the Portfolio. Investors in the Portfolio do not have cumulative
voting rights, and investors holding more than 50% of the aggregate beneficial
interest in the Portfolio may elect all of the Trustees of the Portfolio if
they choose to do so and in such event the other investors in the Portfolio
would not be able to elect any Trustee. The Portfolio is not required and has
no current intention to hold annual meetings of investors but the Portfolio
will hold special meetings of investors when in the judgment of the Portfolio's
Trustees it is necessary or desirable to submit matters for an investor vote.
No material amendment may be made to the Portfolio's Declaration of Trust
without the vote of a majority of the Portfolio's outstanding voting
securities.
The Portfolio may enter into a merger or consolidation, or sell all or
substantially all of its assets, if approved by a vote of two-thirds of the
Portfolio's outstanding voting securities. The Portfolio may also be terminated
(i) by a vote of two-thirds of the Portfolio's outstanding voting securities or
(ii) by the Trustees of the Portfolio by written notice to the holders of the
Portfolio's outstanding voting securities.
The Portfolio is organized as a trust under the laws of the State of New
York. Investors in the Portfolio are personally liable for its obligations and
liabilities, subject, however, to indemnification by the Portfolio in the event
that there is imposed upon an investor a greater portion of the liabilities and
obligations of the Portfolio than its proportionate beneficial interest in the
Portfolio. The Declaration of Trust also provides that the Portfolio shall
maintain appropriate insurance (for example, fidelity bonding and errors and
omissions insurance) for the protection of the Portfolio, its investors,
Trustees, officers, employees and agents covering possible tort and other
liabilities. Thus, the risk of an investor incurring financial loss on account
of investor liability is limited to circumstances in which both inadequate
insurance existed and the Portfolio itself was unable to meet
<PAGE>
its obligations. It is not expected that the liabilities of the Portfolio
would ever exceed its assets.
The Portfolio's Declaration of Trust further provides that obligations of
the Portfolio are not binding upon the Trustees individually, but only upon the
property of the Portfolio and that the 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.
Each investor in the Portfolio may add to or reduce its investment in the
Portfolio on each business day. At 3:00 p.m., Eastern time, on each such
business day, the value of each investor's interest in the Portfolio is
determined by multiplying the net asset value of the Portfolio by the
percentage representing that investor's share of the aggregate beneficial
interests in the Portfolio effective for that day. Any additions or
withdrawals, which are to be effected on that day, are then effected. The
investor's percentage of the aggregate beneficial interests in the Portfolio is
then re-computed as the percentage equal to the fraction (i) the numerator of
which is the value of such investor's investment in the Portfolio as of 3:00
p.m., Eastern time, on such day plus or minus, as the case may be, the amount
of any additions to or withdrawals from the investor's investment in the
Portfolio effected on such day, and (ii) the denominator of which is the
aggregate net asset value of the Portfolio 3:00 p.m., Eastern time, on such day
plus or minus, as the case may be, the amount of the net additions to or
withdrawals from the aggregate investments in the Portfolio by all investors in
the Portfolio. The percentage so determined is then applied to determine the
value of the investor's interest in the Portfolio as of 3:00 p.m., Eastern
time, on the following business day of the Portfolio.
Item 19. Purchase, Redemption and Pricing of Securities.
Beneficial interests in the Portfolio are issued solely in private
placement transactions which do not involve any "public offering" within the
meaning of Section 4(2) of the Securities Act of 1933, as amended (the "1933
Act"). Investments in the Portfolio may only be made by investment companies,
insurance company separate accounts, common or commingled trust funds or
similar organizations or entities which are "accredited investors" within the
meaning of Regulation D under the 1933 Act. This registration statement does
not constitute an offer to sell, or the solicitation of an offer to buy, any
"security" within the meaning of the 1933 Act.
The Portfolio determines its net asset value as of 3:00 p.m., Eastern time,
on each day on which the New York Stock Exchange is open for trading. As of the
date of this Registration Statement, the New York Stock Exchange will be
open for trading every weekday except for
<PAGE>
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. Purchases and withdrawals will be effected
at the time of determination of net asset value next following the receipt of
any purchase or withdrawal order.
The securities held by the Portfolio 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 or other factors cause the market value
of the securities held by the Portfolio to deviate more than 1/2 of 1% from
their value determined on the basis of amortized cost, the Portfolio's Board of
Trustees 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 an investment company would
receive if the instrument were sold.
Pursuant to the rules of the Securities and Exchange Commission, the
Portfolio's Board of Trustees has established procedures to stabilize the value
of the Portfolio'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 quotations. Should
that deviation exceed 1/2 of 1%, the Portfolio's Board of Trustees will
consider whether any action should be initiated to eliminate or reduce material
dilution or other unfair results to the investors in the Portfolio. 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 Portfolio 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, limits its investments, including repurchase agreements, to those U.S.
dollar-denominated instruments that have been determined by the Adviser to
present minimal credit risk and comply with certain reporting and recordkeeping
procedures. The Portfolio has also established procedures to ensure that
securities purchased by it meet its high quality criteria. See "Investment
Objective and Policies."
Subject to compliance with applicable regulations, the Portfolio has
reserved the right to pay the redemption price of beneficial interests in the
Portfolio, 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 beneficial interests being redeemed. If a holder of beneficial
interests received a distribution in kind, such holder could incur brokerage or
other charges in converting the securities to cash.
<PAGE>
The Portfolio may suspend the right of redemption or postpone the date of
payment for beneficial interests in the Portfolio more than seven days during
any period when (a) trading in the markets the Portfolio normally utilizes is
restricted, or an emergency, as defined by the rules and regulations of the
Securities and Exchange Commission exists making disposal of the Portfolio's
investments or determination of its net asset value not reasonably practicable;
(b) the New York Stock Exchange is closed (other than customary weekend and
holiday closings); or (c) the Securities and Exchange Commission has by order
permitted such suspension.
Item 20. Tax Status.
The Portfolio is organized as a trust under New York law. The Portfolio has
determined, on the basis of a ruling of the Internal Revenue Service, that it
is properly treated as a partnership for federal income tax purposes.
Accordingly, the Portfolio is not subject to any federal income tax, but each
investor in the Portfolio must take into account its share of the Portfolio's
ordinary income and capital gain in determining its income tax liability. The
determination of such share is made in accordance with the governing
instruments of the Portfolio and the Internal Revenue Code of 1986, as amended
(the "Code"), and regulations promulgated thereunder.
The Portfolio's tax year-end is August 31. Although, as described above,
the Portfolio is not subject to federal income tax, it files appropriate
federal income tax returns.
The Portfolio believes that, in the case of an investor in the Portfolio
that seeks to qualify as a regulated investment company ("RIC") under the Code,
the investor should be treated for federal income tax purposes as an owner of
an undivided interest in the assets and operations of the Portfolio, and
accordingly should be deemed to own a proportionate share of each of the assets
of the Portfolio and should be entitled to treat as earned by it the portion of
the Portfolio's gross income attributable to that share. The Portfolio also
believes that each such investor should be deemed to hold its proportionate
share of the Portfolio's assets for the period the Portfolio has held the
assets or for the period the investor has been a partner in the Portfolio,
whichever is shorter. Each such investor should consult its tax advisers
regarding whether, in light of its particular tax status and any special tax
rules applicable to it, this approach applies to its investment in the
Portfolio, or whether the Portfolio should be treated, as to it, as a separate
entity as to which the investor has no direct interest in Portfolio assets or
operations.
In order to enable an investor in the Portfolio that is otherwise eligible
to qualify as a RIC under the Code to so qualify, the Portfolio intends to
satisfy the requirements of Subchapter M of the Code relating to the nature of
the Portfolio's gross income and the composition (diversification) and holding
period of the Portfolio's assets as if those requirements were directly
applicable
<PAGE>
to the Portfolio, and to allocate and permit withdrawals of its net investment
income and any net realized capital gains in a manner that will enable an
investor that is a RIC to comply with the qualification requirements imposed by
Subchapter M of the Code.
The Portfolio will allocate at least annually among its investors each
investor's distributive share of the Portfolio's net investment income
(including net investment income derived from interest on U.S. Treasury
obligations), net realized capital gains, and any other items of income, gain,
loss, deduction, or credit in a manner intended to comply with the Code and
applicable Treasury regulations.
To the extent the cash proceeds of any withdrawal or distribution exceed an
investor's adjusted tax basis in its partnership interest in the Portfolio, the
investor will generally recognize gain for federal income tax purposes. If,
upon a complete withdrawal (i.e., a redemption of its entire interest in the
Portfolio), the investor's adjusted tax basis in its partnership interest in
the Portfolio exceeds the proceeds of the withdrawal, the investor will
generally recognize a loss for federal income tax purposes. An investor's
adjusted tax basis in its partnership interest in the Portfolio will generally
be the aggregate price paid therefor, increased by the amounts of its
distributive share of items of realized net income (including income, if any,
exempt from Federal income tax) and gain, and reduced, but not below zero, by
the amounts of its distributive share of items of realized net loss and the
amounts of any distributions received by the investor.
Portfolio income allocated to investors that is derived from interest on
obligations of the U.S. Government and certain of its agencies and
instrumentalities (but generally not from capital gains realized upon the
disposition of such obligations) may be exempt from state and local taxes. The
Portfolio intends to advise investors of the extent, if any, to which its
income consists of such interest. Investors are urged to consult their tax
advisers regarding the possible exclusion of such portion of the income
allocated to them by the Portfolio for state and local income tax purposes.
There are certain tax issues which will be relevant to only certain of the
Portfolio's investors, specifically, investors which are segregated asset
accounts and investors who contribute assets other than cash to the Portfolio.
It is intended that such segregated asset accounts will be able to satisfy
diversification requirements applicable to them and that such contributions of
assets will not be taxable provided certain requirements are met.
The above discussion does not address the special tax rules applicable to
certain classes of investors, such as tax-exempt entities, insurance companies,
and financial institutions, or the state, local, or non-United States tax laws
that may be applicable to certain investors. Investors should consult their own
tax advisers with respect to the special tax rules that may apply in their
<PAGE>
particular situations, as well as the state, local, or foreign tax consequences
to them of investing in the Portfolio.
Item 21. Underwriters.
The exclusive placement agent for the Portfolio is LFBDS, which receives no
compensation for serving in this capacity. Investment companies, insurance
company separate accounts, common and commingled trust funds and similar
organizations and entities may continuously invest in the Portfolio.
Item 22. Calculations of Performance Data.
Not applicable.
Item 23. Financial Statements.
The financial statements contained in the Annual Report of the Portfolio
(Accession Number 850615-95-000002) for the fiscal year ended August 31, 1995
are incorporated by reference into this Statement of Additional Information.
A copy of the Annual Report of the Portfolio accompanies this Statement of
Additional Information.
<PAGE>
PART C
Item 24. Financial Statements and Exhibits.
(a) Financial Statements Included in Part A:
Not applicable.
Financial Statements Included in Part B:
Portfolio of Investments at August 31, 1995*
Statement of Assets and Liabilities at August 31, 1995*
Statement of Operations for the year ended August 31, 1995*
Statement of Changes in Net Assets for the years ended August 31,
1995 and August 31, 1994*
Financial Highlights for each of the years in the five-year period ended
August 31, 1995 and for the period from May 3, 1990 (commencement of
operations) to August 31, 1990*
Notes to Financial Statements - October 5, 1995*
Independent Auditors' Report - October 5, 1995*
- ---------------
* Incorporated herein by reference to the Annual Report of the Registrant for
the fiscal year ended August 31, 1995, filed with the Securities and
Exchange Commission on the EDGAR system on or about October 26, 1995
(Accession Number 850615-95-000002).
(b) Exhibits:
*1(a) Copy of the Declaration of Trust of the Registrant
1(b) Amendment to the Declaration of Trust of the Registrant
*2 By-laws of the Registrant
**4 Specimen of certificate representing ownership of a
beneficial interest in the Registrant
*5 Form of Investment Advisory Agreement between the
Registrant and Citibank, N.A., as investment adviser
*8 Form of Custodian Agreement between the Registrant and
State Street Bank and Trust Company, as custodian
<PAGE>
*9(a) Form of Transfer Agency and Service Agreement between
the Registrant and State Street Bank and Trust
Company, as transfer agent
***9(b) Form of Administrative Service Agreement between the
Registrant and Signature Financial Group (Cayman),
Ltd., as administrator
***9(c) Copy of the Amended and Restated Administrative
Services Plan of the Registrant
**10 Opinion and consent of Rogers & Wells, special counsel
to the Registrant
11 Consent of Price Waterhouse, independent auditors of
the Registrant
27 Financial Data Schedule
------------
* Incorporated herein by reference to Registrant's Registration
Statement on Form N-1A (File No. 811-05813) as filed with the
Securities and Exchange Commission on May 23, 1989.
** Incorporated herein by reference to Amendment No. 1 to
Registrant's Registration Statement on Form N-1A (File No.
811-05813) as filed with the Securities and Exchange
Commission on July 7, 1989.
*** Incorporated herein by reference to Amendment No. 7 to
Registrant's Registration Statement on Form N-1A (File No.
811-05813) as filed with the Securities and Exchange
Commission on January 3, 1994.
Item 25. Persons Controlled by or under Common Control with Registrant.
Not applicable.
Item 26. Number of Holders of Securities.
(1) (2)
Title of Class Number of Record Holders
(as of December 15, 1995)
Beneficial Interests 8
Item 27. Indemnification.
Reference is hereby made to Article V of the Registrant's Declaration of
Trust, filed as an Exhibit to its Registration Statement on Form N-1A.
<PAGE>
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, U.S. Treasury
Reserves Portfolio, Landmark Multi-State Tax Free Funds (Landmark California
Tax Free Reserves, Landmark Connecticut Tax Free Reserves, Landmark New York
Tax Free Reserves), 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) and Landmark VIP Funds (Landmark
VIP U.S. Government Portfolio, Landmark VIP Balanced Portfolio, Landmark VIP
Equity Portfolio and Landmark VIP International Equity Portfolio). As of
December 31, 1994, Citibank and its affiliates managed assets in excess of $73
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, Pei-yuan Chia, 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.
<PAGE>
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.
Pei-yuan Chia None
Paul J. Collins Director, Kimberly-Clark Corporation
Kenneth T. Derr 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
<PAGE>
Robert B. Shapiro Director, G.D. Searle & Co.
Director, Liposome Technology, Inc.
Director, Monsanto Company
Director, The Nutrasweet Company
Frank A. Shrontz Director, 3M
Director, Baseball of Seattle, Inc.
Director, Boeing Company
Director, Boise Cascade Corp.
Mario Henrique Simonsen Director, Companhia Bozano Simonsen
Comercioe E Industria
Director, Companhia Monteia & Aranha
President, Simposium Consultoria E
Servicos Tecnicos LTDA
Roger B. Smith Director, International Paper Company
Director, Johnson & Johnson
Director, Pepsico, Inc.
Director, Rubatex Corporation
Franklin A. Thomas Director, Aluminum Company of America
Director, American Telephone & Telegraph
Co.
Director, CBS, Inc.
Director, Cummins Engine Company, Inc.
Director, Pepsico, Inc.
Edgar S. Woolard, Jr. Director, E.I. DuPont De Nemours &
Company
Director, International Business
Machines Corp.
Director, Seagram Company, Ltd.
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, Landmark U.S.
Treasury Reserves, Landmark Cash Reserves, Premium U.S. Treasury Reserves,
Premium Liquid Reserves, Landmark Institutional U.S. Treasury Reserves,
Landmark Institutional Liquid Reserves, Landmark Tax Free Reserves, Landmark
California Tax Free Reserves, Landmark Connecticut Tax Free Reserves, Landmark
New York Tax Free 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, and Landmark VIP Funds (Landmark VIP
U.S. Government Portfolio, Landmark VIP Balanced Portfolio, Landmark VIP Equity
Portfolio and Landmark VIP International Equity Portfolio). LFBDS is also the
placement agent
<PAGE>
for International Equity Portfolio, Balanced Portfolio, Equity Portfolio,
Small Cap Equity Portfolio, Government Income Portfolio, Emerging Asian
Markets Equity Portfolio, U.S. Treasury Reserves Portfolio and Tax Free
Reserves Portfolio.
(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).
(c) Not applicable.
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:
Name Address
Signature Financial Group Elizabethan Square
(Cayman), Ltd. George Town
(administrator) Grand Cayman, Cayman Island, BWI
The Landmark Funds 6 St. James Avenue
Broker-Dealer Services, Inc. Boston, MA 02116
(exclusive placement agent)
State Street Canada, Inc. 40 King Street West
(transfer agent) Ontario, Canada
State Street Bank and Trust 225 Franklin Street
company (custodian) Boston, MA 02110
Citibank, N.A. 153 East 53rd Street
(investment adviser) New York, NY 10043
Item 31. Management Services.
Not applicable.
Item 32. Undertakings.
Not applicable.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Investment Company Act of 1940, the
Registrant has duly caused this Amendment to its Registration Statement on Form
N-1A to be signed on its behalf by the undersigned, thereto duly authorized, in
George Town, Grand Cayman, Cayman Islands, BWI, on the 27th
day of December, 1995.
CASH RESERVES PORTFOLIO
By: Susan Jakuboski
Susan Jakuboski,
Assistant Treasurer
<PAGE>
EXHIBIT INDEX
Number
1(b) Amendment to the Declaration of Trust of the
Registrant
11 Consent of Price Waterhouse, independent
auditors of the Registrant
27 Financial Data Schedule
EXHIBIT 1(b)
CASH RESERVES PORTFOLIO
Second Amendment of Amended and Restated Declaration of Trust
The undersigned, being a majority of the Trustees of Cash Reserves
Portfolio (the "Trust"), a trust established pursuant to a Declaration of
Trust, dated as of May 23, 1989 and amended and restated as of December 13,
1989, as amended and as further amended from time to time (as so amended from
time to time, the "Declaration of Trust"), hereby, pursuant to Section 10.4(a)
of the Declaration of Trust, amend the Declaration of Trust, effective May 5,
1995, as follows:
(a) Section 1.2 of the Declaration of Trust is hereby amended by adding the
following definition in appropriate place in the alphabetical sequence thereof:
"Emergency Meeting" shall mean a meeting of the Trustees or of a
committee of the Trustees (a) called by the Chairman, if any, the
President, the Secretary, an Assistant Secretary or any two Trustees, (b)
the notice of which is given or confirmed in writing and specifies that the
meeting is an "Emergency Meeting", and (c) except as provided in clauses
(a) and (b) of this definition, held in accordance with the provisions set
forth in Section 2.5 hereof.
(b) Article III of the Declaration of Trust is hereby amended by adding
the following new section after Section 3.10 thereof:
3.11.Limitation on Powers. Anything in this Declaration of Trust to
the contrary notwithstanding, (a) no Trustee shall be authorized or
empowered by the terms of this Declaration of Trust or otherwise to take
any action on behalf of the Trust in his or her capacity as Trustee while
physically present in the United States of America or any of its
territories or possessions or areas subject to its jurisdiction unless such
action is taken at an Emergency Meeting by the Trustees or by a committee
of the Trustees thereunto duly authorized, and (b) unless such action is
taken at an Emergency Meeting by the Trustees or by a committee of the
Trustees thereunto duly authorized, no action taken on behalf of the Trust
by a Trustee or by the Trustees or any committee thereof while physically
present in the United States of America or any of its territories or
possessions or areas subject to its jurisdiction shall be a valid exercise
of such Trustee's or Trustees' authority and any such action shall be
considered null and void.
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused these presents to be
executed and delivered at Hamilton, Bermuda, May 5, 1995.
Elliott J. Berv
Elliott J. Berv, Trustee
Philip W. Coolidge
Philip W. Coolidge, Trustee
Mark T. Finn
Mark T. Finn, Trustee
Walter E. Robb
Walter E. Robb, Trustee
EXHIBIT 11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in Part B constituting part
of this Amendment No. 10 to the registration statement on Form N-1A (the
"Registration Statement") of Cash Reserves Portfolio of our report dated
October 5, 1995, relating to the August 31, 1995 financial statements and
financial highlights of the Cash Reserves Portfolio, which is also incorporated
by reference into the Registration Statement. We also consent to the reference
to us the heading "Investment Advisory and Other Services" in Part B of
the Registration Statement.
Price Waterhouse
Chartered Accountants
Toronto, Ontario
December 27, 1995
[ARTICLE] 6
[CIK] 0000850615
[NAME] CASH RESERVES PORTFOLIO
<TABLE>
<S> <C>
[PERIOD-TYPE] 12-mos
[FISCAL-YEAR-END] Aug-31-1995
[PERIOD-END] Aug-31-1995
[INVESTMENTS-AT-COST] 5,049,825,616
[INVESTMENTS-AT-VALUE] 5,049,825,616
[RECEIVABLES] 41,822,762
[ASSETS-OTHER] 0
[OTHER-ITEMS-ASSETS] 609
[TOTAL-ASSETS] 5,091,648,987
[PAYABLE-FOR-SECURITIES] 325,869,262
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 0
[TOTAL-LIABILITIES] 325,869,262
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 4,765,406,105
[SHARES-COMMON-STOCK] 0
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 0
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 0
[NET-ASSETS] 4,765,406,105
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 163,277,950
[OTHER-INCOME] 0
[EXPENSES-NET] 2,734,751
[NET-INVESTMENT-INCOME] 160,543,199
[REALIZED-GAINS-CURRENT] 0
[APPREC-INCREASE-CURRENT] 0
[NET-CHANGE-FROM-OPS] 160,543,199
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 23,437,948,762
[NUMBER-OF-SHARES-REDEEMED] (20,980,446,443)
[SHARES-REINVESTED] 0
[NET-CHANGE-IN-ASSETS] 2,618,045,518
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 4,097,854
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 6,406,863
[AVERAGE-NET-ASSETS] 2,731,902
[PER-SHARE-NAV-BEGIN] 0.00
[PER-SHARE-NII] 0.00
[PER-SHARE-GAIN-APPREC] 0.00
[PER-SHARE-DIVIDEND] 0.00
[PER-SHARE-DISTRIBUTIONS] 0.00
[RETURNS-OF-CAPITAL] 0.00
[PER-SHARE-NAV-END] 0.00
[EXPENSE-RATIO] 0.10
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
