AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 28, 1999
FILE NO. 811-05813
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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. 14
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: 345-945-1824
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 LLP
150 FEDERAL STREET
BOSTON, MASSACHUSETTS 02110 U.S.A.
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EXPLANATORY NOTE
Cash Reserves Portfolio has filed this Registration Statement pursuant to
Section 8(b) of the Investment Company Act of 1940. However, beneficial
interests in the Portfolio are not being registered under the Securities Act of
1933, since such interests will be issued solely in private placement
transactions that do not involve any "public offering" within the meaning of
Section 4(2) of the 1933 Act. Only investment companies, insurance company
separate accounts, common or commingled trust funds or similar organizations or
entities that are "accredited investors" within the meaning of Regulation D
under the 1933 Act may make investments in the Portfolio. This Registration
Statement is not an offer to sell, or the solicitation of an offer to buy, any
beneficial interests in the Portfolio.
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PART A
Responses to Items 1,2,3,5 and 9 have been omitted pursuant to General
Instruction B.2(b) of Form N-1A.
Item 4. Investment Objectives, Principal Investment Strategies, and Related
Risks.
PORTFOLIO GOAL
The goal of Cash Reserves Portfolio is to provide its investors with liquidity
and as high a level of current income as is consistent with preservation of
capital. The Portfolio's goal may be changed without the approval of its
investors, but not without written notice thereof to the Portfolio's investors
at least 30 days prior to implementing the change. Of course, there is no
assurance that the Portfolio will achieve its goal.
MAIN INVESTMENT STRATEGIES
The Portfolio invests only in high quality, short-term money market instruments
denominated in U.S. dollars. These may include:
o obligations of U.S. and non-U.S. banks;
o commercial paper and asset backed securities;
o short-term obligations of the U.S. government and its agencies and
instrumentalities, and repurchase agreements for these obligations; and
o obligations issued or guaranteed by the governments of Western Europe,
Australia, Japan and Canada.
The Portfolio invests at least 25%, and may invest up to 100%, of its assets in
bank obligations, such as certificates of deposit, fixed time deposits and
bankers' acceptances.
The Portfolio's principal investment strategies are the strategies that, in the
opinion of Citibank, N.A., the Portfolio's investment adviser, are most likely
to be important in trying to achieve the Portfolio's investment goal. Of
course, there can be no assurance that the Portfolio will achieve its goal.
Please note that the Portfolio may also use strategies and invest in securities
that are not described below but that are described in Part B to this
Registration Statement. The Portfolio may not use all of the strategies and
techniques or invest in all of the types of securities described in this Part A
or in Part B to this Registration Statement.
The Portfolio complies with industry regulations that apply to money market
funds. These regulations require that the Portfolio's investments mature or be
deemed to mature within 397 days from the date purchased and that the average
maturity of the Portfolio's investments (on a dollar-weighted basis) be 90 days
or less. In addition, all of the Portfolio's investments must be in U.S.
dollar-denominated high quality securities which have been determined by
Citibank to present minimal credit risks. To be high quality, a security (or
its issuer) must be rated in one of the two highest short-term rating
categories by nationally recognized rating agencies, such as Moody's or
Standard & Poor's, or, in Citibank's opinion, be of comparable quality.
Investors should note that within these two rating categories there may be
sub-categories or gradations indicating relative quality. If the credit quality
of a security deteriorates after the Portfolio buys it, Citibank will decide
whether the security should be held or sold.
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WHAT ARE MONEY MARKET INSTRUMENTS?
A money market instrument is a short-term IOU issued by banks or other
corporations, or the U.S. or a foreign government and state or local
governments. Money market instruments have maturity dates of 13 months or less.
Money market instruments may include certificates of deposit, bankers'
acceptances, variable rate demand notes (where the interest rate is reset
periodically and the holder may demand payment from the issuer at any time),
fixed-term obligations, commercial paper (short term unsecured debt of
corporations), asset-backed securities (which are backed by pools of accounts
receivable such as car installment loans or credit card receivables) and
repurchase agreements. In a repurchase agreement, the seller sells a security
and agrees to buy it back at a later date (usually within seven days) and at a
higher price, which reflects an agreed upon interest rate.
The Portfolio invests in high quality U.S. dollar-denominated money market
instruments of U.S. and non-U.S. issuers. These obligations include U.S.
government obligations, obligations of U.S. and non-U.S. banks, obligations
issued or guaranteed by the governments of Western Europe, Australia, Japan and
Canada, commercial paper, asset backed securities and repurchase agreements.
The Portfolio's U.S. government obligations may include U.S. Treasury bills,
bonds and notes and obligations of U.S. government agencies and
instrumentalities that may, but need not, be backed by the full faith and
credit of the United States. While the Portfolio can invest in all of these
types of obligations, the Portfolio concentrates in bank obligations, including
certificates of deposit, fixed time deposits and bankers' acceptances. This
means that the Portfolio invests at least 25% of its assets in bank
obligations, and the Portfolio may invest up to all of its assets in bank
obligations. Except for this concentration policy, the Portfolio's investment
goal and policies may be changed without a vote of investors.
The Portfolio invests only in "first tier" securities. These securities are
rated in the highest short-term rating category by nationally recognized rating
agencies or, in Citibank's opinion, are of comparable quality.
Management Style. Managers of mutual funds use different styles when selecting
securities to purchase. Citibank's portfolio managers use a "top-down" approach
when selecting securities for the Portfolio. When using a "top-down" approach,
the portfolio manager looks first at broad economic factors and market
conditions, such as prevailing and anticipated interest rates. On the basis of
those factors and conditions, the manager selects optimal interest rates and
maturities and chooses certain sectors or industries within the overall market.
The manager then looks at individual issuers within those sectors or industries
to select securities for the investment portfolio.
Since the Portfolio maintains a weighted average maturity of no more than 90
days, many of its investments are held until maturity. The manager may sell a
security before maturity when it is necessary to do so to meet redemption
requests. The manager may also sell a security if the manager believes the
issuer is no longer as creditworthy, or in order to adjust the average weighted
maturity of the Portfolio's investment portfolio (for example, to reflect
changes in the manager's expectations concerning interest rates), or when the
manager believes there is superior value in other market sectors or industries.
MAIN RISKS
Investing in a mutual fund involves risk. It is possible to lose money by
investing in the Portfolio. Please remember that an investment in the Portfolio
is not a deposit of Citibank and is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency.
The principal risks of investing in the Portfolio are described below. Please
note that there are many other factors that could adversely affect your
investment and that could prevent the Portfolio from achieving its goals, which
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are not described here. More information about risks appears in Part B to this
Registration Statement. Before investing, you should carefully consider the
risks that you will assume.
YIELD FLUCTUATION. The Portfolio invests in short term money market
instruments. As a result, the amount of income paid to you by the Portfolio
will go up or down depending on day to day variations in short term interest
rates. Investing in high quality, short term instruments may result in a lower
yield (the income on your investment) than investing in lower quality or
longer-term instruments.
CREDIT RISK. The Portfolio invests in high quality debt securities, meaning
securities that are rated, when the Portfolio buys them, in one of the two
highest short term rating categories by nationally recognized rating agencies
or, in Citibank's opinion, are of comparable quality. However, it is possible
that some issuers will be unable to make the required payments on debt
securities held by the Portfolio. Debt securities also fluctuate in value based
on the perceived creditworthiness of issuers. A default on an investment held
by the Portfolio could cause the value of your investment in the Portfolio, or
its yield, to decline.
INTEREST RATE AND MARKET RISK. A major change in interest rates or a
significant decline in the market value of Portfolio investments, or other
market event could cause the value of your investment in the Portfolio, or its
yield, to decline.
FOREIGN SECURITIES. You should be aware that investments in foreign 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 of assets, confiscatory taxation, withholding taxes on
dividends and interest paid on Portfolio investments, fluctuations in currency
exchange rates, currency exchange controls and other limitations on the use or
transfer of assets by the Portfolio or issuers of securities, and political or
social instability. In addition, foreign 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. Foreign
markets may be less liquid and more volatile than U.S. markets. As a result,
there may be rapid changes in the value of foreign securities. Non-U.S. markets
also may offer less protection to investors such as the Portfolio.
CONCENTRATION IN THE BANKING INDUSTRY. The Portfolio concentrates in bank
obligations. This means that an investment in the Portfolio is particularly
susceptible to adverse events affecting the banking industry. Banks are highly
regulated. Decisions by regulators may limit the loans banks make and interest
rates and fees they charge, and may reduce bank profitability. Banks also
depend on being able to obtain funds at reasonable costs to finance their
lending operations. This makes them sensitive to changes in money market and
general economic conditions. When a bank's borrowers get in financial trouble,
their failure to repay the bank will also affect the bank's financial
situation.
YEAR 2000 RISK. The Portfolio could be adversely affected if the computer
systems used by the Portfolio or its service providers have not been programmed
to process information accurately on or after January 1, 2000. The Portfolio,
and its service providers, have made efforts to resolve any potential Year 2000
problems. While it is likely these efforts will be successful, the failure to
implement any necessary modifications could have an adverse impact on the
Portfolio. The Portfolio also could be adversely affected if the issuers of
securities held by the Portfolio or the markets on which those securities are
traded do not solve their Year 2000 problems, or if it costs them large amounts
of money to do so.
Item 6. Management, Organization and Capital Structure.
INVESTMENT ADVISER
The Portfolio draws on the strength and experience of Citibank. Citibank is the
investment adviser of the Portfolio, and subject to policies set by the
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Portfolio's Trustees, Citibank makes investment decisions. Citibank has been
managing money since 1822. With its affiliates, it currently manages more than
$351 billion in assets worldwide.
Citibank, with its headquarters at 153 East 53rd Street, New York, New York, is
a wholly-owned subsidiary of Citicorp, which is, in turn, a wholly-owned
subsidiary of Citigroup Inc.
Citibank and its affiliates may have banking and investment banking
relationships with the issuers of securities that are held in the Portfolio.
However, in making investment decisions for the Portfolio Citibank does not
obtain or use material inside information acquired by any division, department
or affiliate of Citibank in the course of those relationships. Citibank and its
affiliates may have loans outstanding that are repaid with proceeds of
securities purchased by the Portfolio.
ADVISORY FEES
For the services it provided under the investment advisory agreement for the
Portfolio, for the Portfolio's fiscal year ended August 31, 1999, the
investment advisory fees paid to Citibank, after waivers, were 0.08% of the
Portfolio's average daily net assets for that fiscal year.
CAPITAL STOCK
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 holds 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 investors) 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 of the Portfolio.
However, it is not expected that the liabilities of the Portfolio would ever
exceed its assets.
Item 7. Investor Information.
HOW NET INCOME IS CALCULATED
The Portfolio calculates its net income at 3:00 p.m. Eastern time, every day
the New York Stock Exchange is open for trading. All the Portfolio's net income
so determined is allocated pro rata among the investors in the Portfolio at the
time of such determination. On days when the financial markets in which the
Portfolio invests close early, net income may be calculated as of the earlier
close of those markets. The Portfolio's securities are valued at amortized
cost, which is approximately equal to market value.
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
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amended, assuming that the investor invested all of its investable assets in
the Portfolio.
THE PURCHASE AND REDEMPTION OF BENEFICIAL INTERESTS IN THE PORTFOLIO
Beneficial interests in the Portfolio are issued solely in private placement
transactions that do not involve any "public offering" within the meaning of
Section 4(2) of the Securities Act of 1933. Only investment companies,
insurance company separate accounts, common or commingled trust funds or
similar organizations or entities that are "accredited investors" within the
meaning of Regulation D under the 1933 Act may invest in the Portfolio. This
Registration Statement is not 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
once during each Business Day as of 3:00 p.m., Eastern time. 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
Investment Company Act of 1940. 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 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.
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 (a day the New York Stock Exchange is open for trading) the
withdrawal is effected, but in any event within seven days. Investments in the
Portfolio may not be transferred.
Subject to compliance with applicable regulations, the Portfolio may 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 into cash.
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 the Exchange is restricted, or, to the extent otherwise
permitted by the 1940 Act, if an emergency exists.
TAX MATTERS
The Portfolio expects to be treated as a partnership for federal income tax
purposes. As a result, the Portfolio does not expect to pay any federal income
or excise taxes, and, generally, investors in the Portfolio should not have to
pay federal taxes when they invest in or receive distributions or make
withdrawals from the Portfolio. However, each investor, in determining its own
federal income and excise tax liabilities, if any, will have to include the
investor's share from time to time of the Portfolio's ordinary income,
expenses, capital gains or losses, credits, and other items, whether or not
distributed.
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The Portfolio also expects that investors which seek to qualify as regulated
investment companies under the Internal Revenue Code will be able to look to
their proportionate share of the assets and gross income of the Portfolio for
purposes of determining their compliance with the requirements applicable to
such companies.
The foregoing tax discussion is only for an investor's general information, and
does not take account of the special rules applicable to certain investors
(such as tax-exempt investors) or a number of special circumstances. Each
investor should consult its own tax advisers regarding the tax consequences in
its circumstances of an investment in the Portfolio, as well as any state,
local or foreign tax consequences to them of investing in the Portfolio.
Item 8. Distribution Arrangements.
The exclusive placement agent for the Portfolio is CFBDS, Inc. CFBDS receives
no compensation for serving as the Portfolio's exclusive placement agent.
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PART B
Item 10. Cover Page and Table of Contents.
This Part B sets forth information with respect to Cash Reserves
Portfolio (the "Portfolio"), an investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"). The date of this
Part B and Part A to the Registration Statement for the Portfolio is December
31, 1999.
TABLE OF CONTENTS Page
Portfolio History.......................................................B-2
Description of the Portfolio and Its Investments and Risks..............B-2
Management of the Portfolio.............................................B-8
Control Persons and Principal Holders
of Securities.........................................................B-9
Investment Advisory and Other Services..................................B-10
Brokerage Allocation and Other Practices................................B-12
Capital Stock and Other Securities......................................B-12
Purchase, Redemption and Pricing of
Securities............................................................B-13
Taxation of the Portfolio...............................................B-14
Underwriters............................................................B-16
Calculations of Performance Data........................................B-16
Financial Statements....................................................B-16
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Item 11. Portfolio History.
The Portfolio was organized as a trust under the laws of the State of
New York on May 23, 1989.
Item 12. Description of the Portfolio and Its Investments and Risks.
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. 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. The Portfolio would, however, give written notice to
its investors at least 30 days prior to implementing any change in its
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 "first tier" 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
Citibank, N.A., the Portfolio's investment adviser ("Citibank" or 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. The Portfolio may hold uninvested cash
reserves pending investment. Under 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"), 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 contractual restrictions on the Portfolio's right
to transfer a beneficial interest in the deposit to a third party.
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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 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,
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 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
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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, 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.
(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. Commercial paper is unsecured debt
of corporations usually maturing in 270 days or less from its date of
issuance.
(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, bonds and 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, 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 Home Loan Mortgage Corporation, 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 or a subcustodian either physically or in
<PAGE>
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 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. (See "Repurchase Agreements.")
(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. 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 it 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 or to prevent the Portfolio from receiving any
value in U.S. dollars from its investment in non-U.S. securities.
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 CARS) and unsecured, or leases or revolving credit
receivables, both secured and unsecured (such as CARDS). 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. Reinvestment of principal may occur at higher or lower
rates than the original yield. Certificate 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
objectives and policies, the Portfolio may invest in other asset-backed
securities.
REPURCHASE AGREEMENTS
The Portfolio may invest its assets in repurchase agreements only with
member banks of the Federal Reserve System or "primary dealers" (as designated
by the Federal Reserve Bank of New York) in U.S. government securities. Under
<PAGE>
the terms of a typical repurchase agreement, the Portfolio would acquire an
underlying debt instrument for a relatively short period (usually not more than
one week) subject to an obligation of the seller to repurchase and the
Portfolio to resell the instrument at a fixed price and time, thereby
determining the yield during the Portfolio's holding period. This results in a
fixed rate of return insulated from market fluctuations during such period. A
repurchase agreement is subject to the risk that the seller may fail to
repurchase the security. All repurchase agreements entered into by the
Portfolio shall be fully collateralized at all times during the period of the
agreement in that the value of the underlying security shall be at least equal
to the amount of the loan, including the accrued interest thereon, and the
Portfolio or its custodian or sub-custodian shall have control of the
collateral, which the Adviser believes will give the Portfolio a valid,
perfected security interest in the collateral. This might become an issue in
the event of the bankruptcy of the other party to the transaction. In the event
of default by the seller under a repurchase agreement construed to be a
collateralized loan, the underlying securities are not owned by the Portfolio
but only constitute collateral for the seller's obligation to pay the
repurchase price. Therefore, the Portfolio may suffer time delays and incur
costs in connection with the disposition of the collateral. The Adviser
believes that the collateral underlying repurchase agreements may be more
susceptible to claims of the seller's creditors than would be the case with
securities owned by the Portfolio. The Portfolio will not invest in a
repurchase agreement maturing in more than seven days if any such investment
together with illiquid securities held by the Portfolio exceed 10% of the
Portfolio's total net assets. Repurchase agreements are also subject to
the same risks described herein with respect to stand-by commitments.
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. Either party has the right to terminate a
loan at any time on customary industry settlement notice (which will not
usually exceed three business 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/or with respect to cash
collateral would receive compensation based on investment of the collateral
(subject to a rebate payable to the borrower). The borrower alternatively may
pay the Portfolio a fee for use of the borrowed securities. 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 their 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. In
addition, the Portfolio could suffer loss if the borrower terminates the loan
and the Portfolio is forced to liquidate investments in order to return the
cash collateral to the buyer. 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.
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
<PAGE>
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.
INVESTMENT RESTRICTIONS
The Portfolio has adopted the following policies which may not be
changed without approval by holders of a "majority of the outstanding voting
securities" 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 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);
(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, as amended (the "1933 Act"), 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;
(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 the rules and
regulations promulgated thereunder, except as appropriate to evidence a debt
incurred without violating Investment Restriction (1) above.
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
<PAGE>
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 13. 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 21 Milk Street, Boston, Massachusetts 02109. The address of the
Portfolio is Elizabethan Square, George Town, Grand Cayman, Cayman Islands,
British West Indies.
TRUSTEES
ELLIOTT J. BERV; 56 - President and Chief Executive Officer, Catalyst, Inc.
(Management Consultants) (since June 1992); President and Director, Elliott J.
Berv & Associates (Management Consultants) (since May 1984). His address is 24
Atlantic Drive, Scarborough, Maine.
PHILIP W. COOLIDGE*; 48 -- President of the Portfolio; Chief Executive Officer
and President, Signature Financial Group, Inc. and CFBDS, Inc.
RILEY C. GILLEY; 73 -- Vice President and General Counsel, Corporate Property
Investors (November, 1988 to December, 1991); Partner, Breed, Abbott & Morgan
(Attorneys) (Retired, December, 1987). His address is 4041 Gulf Shore Boulevard
North, Naples, Florida.
WALTER E. ROBB, III; 73 -- President, Benchmark Consulting Group, Inc. (since
1991); Principal, Robb Associates (Corporate Financial Advisors) (since 1978);
President and Treasurer, Benchmark Advisors, Inc. (Corporate Financial
Advisors) (since 1989); Trustee of certain registered investment companies in
the MFS Family of Funds (since 1985). His address is 35 Farm Road, Sherborn,
Massachusetts.
OFFICERS
PHILIP W. COOLIDGE*; 48 -- President of the Portfolio; Chief Executive Officer
and President, Signature Financial Group, Inc. and CFBDS, Inc.
CHRISTINE D. DORSEY*; 29 -- Assistant Secretary and Assistant Treasurer of the
Portfolio; Vice President, Signature Financial Group, Inc. (since January
1996); Paralegal and Compliance Officer, various financial companies (July 1992
to January 1996).
LINWOOD C. DOWNS*; 38 -- Assistant Treasurer of the Portfolio; Chief Financial
Officer and Senior Vice President, Signature Financial Group, Inc; Treasurer,
CFBDS, Inc.
TAMIE EBANKS-CUNNINGHAM*; 27 -- Assistant Secretary of the Portfolio; Office
Manager, Signature Financial Group (Cayman) Ltd. (since April 1995);
Administrator, Cayman Islands Primary School (prior to April 1995). Her address
is P.O. Box 2494, Elizabethan Square, George Town, Grand Cayman, Cayman
Islands, B.W.I.
LINDA T. GIBSON*; 34 -- Secretary of the Portfolio; Senior Vice President,
Signature Financial Group, Inc.; Secretary, CFBDS, Inc.
SUSAN JAKUBOSKI*; 35 -- Vice President, Assistant Treasurer and Assistant
Secretary of the Portfolio; Vice President, Signature Financial Group (Cayman)
Ltd. (since July 1994).
<PAGE>
MOLLY S. MUGLER*; 48 -- Assistant Secretary and Assistant Treasurer of the
Portfolio; Vice President, Signature Financial Group, Inc.; Assistant
Secretary, CFBDS, Inc.
JULIE J. WYETZNER*; 40 -- Vice President, Assistant Secretary and Assistant
Treasurer of the Portfolio; Vice President, Signature Financial Group, Inc.
The Trustees and officers of the Portfolio also hold comparable
positions with certain other funds for which Signature Financial Group (Cayman)
Ltd. ("SFG" or the "Administrator"), 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
CitiFunds Trust III, CitiFunds Premium Trust and CitiFunds Institutional Trust,
open-end investment companies, series of each of which are investors in the
Portfolio, and each officer of the Portfolio holds the same position with those
investment companies.
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, 1999:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PENSION OR
RETIREMENT BENEFITS TOTAL COMPENSATION
AGGREGATE ACCRUED AS ESTIMATED ANNUAL FROM REGISTRANT AND
NAME OF PERSON, COMPENSATION FROM PART OF PORTFOLIO BENEFITS UPON PORTFOLIO COMPLEX
POSITION REGISTRANT EXPENSES RETIREMENT PAID TO TRUSTEES(1)
Elliott J. Berv, Trustee $28,093 None None $69,500
Riley C. Gilley, Trustee $8,989 None None $65,250
Walter E. Robb, III, Trustee $22,236 None None $67,500
</TABLE>
- ----------------------------
(1) Messrs. Coolidge, Berv, Gilley and Robb are trustees of 49, 27, 33 and
30, funds, respectively, in the family of open-end registered
investment companies advised or managed by Citibank.
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 14. Control Persons and Principal Holders of Securities.
CitiFunds Cash Reserves (a series of CitiFunds Trust III), CitiFunds
Premium Liquid Reserves (a series of CitiFunds Premium Trust) and CitiFunds
Institutional Liquid Reserves (a series of CitiFunds Institutional Trust)
(collectively, the "Funds") and Citi Liquid Reserves, Ltd., Citi Premium Liquid
Reserves, Ltd., and Citi Institutional Liquid Reserves, Ltd. 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 12/22/99)
------------------------------------------------------------------
CitiFunds Cash Reserves 16.9%
CitiFunds Premium Liquid Reserves 5.5%
CitiFunds Institutional Liquid Reserves 39.1%
Citi Liquid Reserves, Ltd. 0.9%
Citi Premium Liquid Reserves, Ltd. 37.2%
Citi Institutional Liquid Reserves, Ltd. 0.4%
The Funds are registered investment companies which have informed the
Portfolio that whenever requested to vote on matters pertaining to the
Portfolio (other than a vote to continue the Portfolio following the withdrawal
of an investor) each will hold a meeting of shareholders and will cast its vote
as instructed by its shareholders, or otherwise act in accordance with
applicable law. Notwithstanding the foregoing, at any meeting of shareholders
of a Fund, a shareholder servicing agent may vote any shares of which it is the
holder of record and for which it does not receive voting instructions
proportionately in accordance with instructions it received for all other
shares of which that shareholder servicing agent is the holder of record.
Item 15. 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 by the Portfolio without penalty
on not more than 60 days' nor less than 30 days' written notice 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 nor its personnel shall be liable
for any error of judgment or mistake of law or for any loss arising out of any
investment or for any act or omission in the execution of security transactions
for the Portfolio, except for willful misfeasance, bad faith or gross
negligence or reckless disregard of its or their obligations and duties under
the Advisory Agreement.
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 years ended August 31, 1997, 1998 and 1999, the fees
paid to the Adviser under the Advisory Agreement, after waivers, were
$4,395,286, $6,739,206 and $9,422,276, respectively.
<PAGE>
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; the 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 Trustees and officers of the Portfolio. Such Trustees and
officers, as well as certain other employees and Trustees of the Portfolio, may
be directors, officers or employees of the Administrator or its affiliates.
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.
For these 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 years ended August 31, 1997, 1998 and 1999, the fees
payable to SFG under the Administrative Services Agreement were voluntarily
waived.
The Administrative Services Agreement provides that SFG may render
administrative services to others.
<PAGE>
SFG is a wholly-owned subsidiary of Signature Financial Group, Inc., a
Delaware corporation.
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.
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, Inc.
("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 02110 and the principal business
address of State Street Canada is 40 King Street West, Suite 5700, Toronto,
Ontario, Canada.
PricewaterhouseCoopers LLP 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 PricewaterhouseCoopers
LLP is Suite 3000, Box 82, Royal Trust Towers, Toronto Dominion Center,
Toronto, Ontario, Canada M5K 1G8.
Item 16. Brokerage Allocation and Other Practices.
The Portfolio's purchases and sales of portfolio securities usually are
principal transactions. Portfolio securities are normally purchased directly
from the issuer or from an underwriter or market maker for the securities.
There usually are no brokerage commissions paid for such purchases. The
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 portfolio
securities include a commission or concession paid by the issuer to the
underwriter, and purchases from dealers serving as market makers include the
spread between the bid and asked price.
Allocation of transactions, including their frequency, to various
dealers is determined by the Adviser in its best judgment and in a manner
deemed to be in the best interest of 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 17. 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
holds special meetings of investors when it is required to do so by law, or 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 affirmative vote of a majority of
the outstanding voting securities of the Portfolio.
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 (e.g., 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 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
<PAGE>
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 18. 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 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 normally 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 the following
holidays (or the days on which they are observed): New Year's Day, Martin
Luther King Jr. 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. On days when the financial
markets in which the Portfolio invests close early, the Portfolio's net asset
value is determined as of the close of these markets if such time is earlier
than the time at which the net asset value is normally calculated.
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 the Portfolio 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 would
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 its 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 or on behalf of the
Portfolio's Board of Trustees to present minimal credit risks and complies with
certain reporting and recordkeeping procedures. The Portfolio has also
established procedures to ensure that securities purchased by it meet its high
quality criteria.
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
<PAGE>
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.
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 19. Taxation of the Portfolio.
The Portfolio is organized as a trust under New York law. The Portfolio
has determined, on the basis in part 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, expenses, capital gains or losses, credits and
other items 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. 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) of
the Portfolio's assets as if those requirements were directly applicable 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,
<PAGE>
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 particular situations, as well as the state, local, or foreign
tax consequences to them of investing in the Portfolio.
Item 20. Underwriters.
The exclusive placement agent for the Portfolio is CFBDS, Inc., 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 21. Calculation of Performance Data.
Not applicable.
Item 22. Financial Statements.
The financial statements contained in the Annual Report of the
Portfolio, as filed with the Securities and Exchange Commission on October 21,
1999 (Accession Number 0000930413-99-001297), for the fiscal year ended August
31, 1999 are incorporated by reference into this Part B.
A copy of the Annual Report of the Portfolio accompanies this Part B.
<PAGE>
PART C
Item 23. Exhibits.
** a(1) Amended and Restated Declaration of Trust of the
Registrant
*, ** and a(2) Amendments to the Declaration of Trust of the
filed herewith Registrant
** b By-laws of the Registrant
** d Investment Advisory Agreement between the
Registrant and Citibank, N.A., as investment
adviser
** e Placement Agency Agreement between the Registrant
and CFBDS, Inc. (formerly known as The Landmark
Funds Broker-Dealer Services, Inc.) ("CFBDS"), as
exclusive placement agent
** g Custodian Contract between the Registrant and
State Street Bank and Trust Company ("State
Street"), as custodian
** h(1) Transfer Agency and Service Agreement between the
Registrant and State Street, as transfer agent
** h(2) Amended and Restated Administrative Services Plan
of the Registrant
** h(3) Administrative Service Agreement between the
Registrant and Signature Financial Group
(Cayman), Ltd. ("SFG"), as administrator
** h(4) Sub-Administrative Services Agreement between
SFG, and Citibank, N.A.
- -----------------------------------------------------
* 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 December 28, 1995.
** 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 December 30, 1996.
Item 24. Persons Controlled by or under Common Control with Registrant.
Not applicable.
Item 25. 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.
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.
<PAGE>
Item 26. 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, which is,
in turn, a wholly owned subsidiary of Citigroup Inc. Citibank also serves as
investment adviser to the following registered investment companies (or series
thereof): Asset Allocation Portfolios (Large Cap Value Portfolio, Small Cap
Value Portfolio, International Portfolio, Foreign Bond Portfolio, Intermediate
Income Portfolio and Short-Term Portfolio), The Premium Portfolios (High Yield
Portfolio, U.S. Fixed Income Portfolio, Large Cap Growth Portfolio,
International Equity Portfolio, Government Income Portfolio and Small Cap
Growth Portfolio), Tax Free Reserves Portfolio, U.S. Treasury Reserves
Portfolio, CitiFundsSM Multi-State Tax Free Trust (CitiFundsSM New York Tax
Free Reserves, CitiFundsSM Connecticut Tax Free Reserves and CitiFundsSM
California Tax Free Reserves), CitiFundsSM Tax Free Income Trust (CitiFundsSM
National Tax Free Income Portfolio, CitiFundsSM New York Tax Free Income
Portfolio and CitiFundsSM California Tax Free Income Portfolio), CitiFundsSM
Institutional Trust (CitiFundsSM Institutional Cash Reserves) and Variable
Annuity Portfolios (CitiSelect VIP Folio 100 Income, CitiSelect VIP Folio 200
Conservative, CitiSelect VIP Folio 300 Balanced, CitiSelect VIP Folio 400
Growth, CitiSelect VIP Folio 500 Growth Plus and CitiFundsSM Small Cap Growth
VIP Portfolio). Citibank and its affiliates manage assets in excess of $351
billion worldwide. The principal place of business of Citibank is located at
399 Park Avenue, New York, New York 10043.
John S. Reed is the Chairman of the Board and a Director of Citibank.
Victor J. Menezes is the President and a Director of Citibank. William R.
Rhodes and H. Onno Ruding are Vice Chairmen and Directors of Citibank. The
other Directors of Citibank are Paul S. Collins, Vice Chairman of Citigroup,
Inc. and Robert I. Lipp, Chairman and Chief Executive Officer of Travelers
Insurance Group and of Travelers Property Casualty Corp.
Each of the individuals named above is also a Director of Citicorp. In
addition, the following persons have the affiliations indicated:
<TABLE>
<CAPTION>
<S> <C>
Paul J. Collins Director, Kimberly-Clark Corporation
Robert I. Lipp Chairman, Chief Executive Officer and President,Travelers
Property Casualty Corp.
John S. Reed Director, Monsanto Company
Director, Philip Morris Companies
Incorporated
Stockholder, Tampa Tank & Welding, Inc.
William R. Rhodes Director, Private Export Funding
Corporation
H. Onno Ruding Supervisory Director, Amsterdamsch
Trustees Cantoor B.V.
Director, Pechiney S.A.
Advisory Director, Unilever NV and Unilever PLC
Director, Corning Incorporated
</TABLE>
<PAGE>
Item 27. Principal Underwriters.
(a) CFBDS, the Registrant's Distributor, is also the distributor for
CitiFundsSM International Growth & Income Portfolio, CitiFundsSM International
Growth Portfolio, CitiFundsSM U.S. Treasury Reserves, CitiFundsSM Cash
Reserves, CitiFundsSM Premium U.S. Treasury Reserves, CitiFundsSM Premium
Liquid Reserves, CitiFundsSM Institutional U.S. Treasury Reserves, CitiFundsSM
Institutional Liquid Reserves, CitiFundsSM Institutional Cash Reserves,
CitiFundsSM Tax Free Reserves, CitiFundsSM Institutional Tax Free Reserves,
CitiFundsSM California Tax Free Reserves, CitiFundsSM Connecticut Tax Free
Reserves, CitiFundsSM New York Tax Free Reserves, CitiFundsSM Intermediate
Income Portfolio, CitiFundsSM Short-Term U.S. Government Income Portfolio,
CitiFundsSM New York Tax Free Income Portfolio, CitiFundsSM National Tax Free
Income Portfolio, CitiFundsSM California Tax Free Income Portfolio, CitiFundsSM
Small Cap Value Portfolio, CitiFundsSM Growth & Income Portfolio, CitiFundsSM
Large Cap Growth Portfolio, CitiFundsSM Small Cap Growth Portfolio, CitiFundsSM
Balanced Portfolio, CitiSelect Folio 100 Income, CitiSelect Folio 200
Conservative, CitiSelect Folio 300 Balanced, CitiSelect Folio 400 Growth,
CitiSelect Folio 500 Growth Plus, CitiSelect VIP Folio 100 Income, CitiSelect
VIP Folio 200 Conservative, CitiSelect VIP Folio 300 Balanced, CitiSelect VIP
Folio 400 Growth, CitiSelect VIP Folio 500 Growth Plus and CitiFundsSM Small
Cap Growth VIP Portfolio. CFBDS is also the placement agent for High Yield
Portfolio, Government Income Portfolio, International Equity Portfolio, Large
Cap Growth Portfolio, Small Cap Growth Portfolio, Large Cap Value Portfolio,
Small Cap Value Portfolio, International Portfolio, Foreign Bond Portfolio,
Intermediate Income Portfolio, Short-Term Portfolio, Tax Free Reserves
Portfolio and U.S. Treasury Reserves Portfolio. CFBDS also serves as the
distributor for the following funds: The Travelers Fund UL for Variable
Annuities, The Travelers Fund VA for Variable Annuities, The Travelers Fund BD
for Variable Annuities, The Travelers Fund BD II for Variable Annuities, The
Travelers Fund BD III for Variable Annuities, The Travelers Fund BD IV for
Variable Annuities, The Travelers Fund ABD for Variable Annuities, The
Travelers Fund ABD II for Variable Annuities, The Travelers Separate Account PF
for Variable Annuities, The Travelers Separate Account PF II for Variable
Annuities, The Travelers Separate Account QP for Variable Annuities, The
Travelers Separate Account TM for Variable Annuities, The Travelers Separate
Account TM II for Variable Annuities, The Travelers Separate Account Five for
Variable Annuities, The Travelers Separate Account Six for Variable Annuities,
The Travelers Separate Account Seven for Variable Annuities, The Travelers
Separate Account Eight for Variable Annuities, The Travelers Fund UL for Life
Insurance, The Travelers Fund UL II for Life Insurance, The Travelers Fund UL
III for Life Insurance, The Travelers Variable Life Insurance Separate Account
One, The Travelers Variable Life Insurance Separate Account Two, The Travelers
Variable Life Insurance Separate Account Three, The Travelers Variable Life
Insurance Separate Account Four, The Travelers Separate Account MGA, The
Travelers Separate Account MGA II, The Travelers Growth and Income Stock
Account for Variable Annuities, The Travelers Quality Bond Account for Variable
Annuities, The Travelers Money Market Account for Variable Annuities, The
Travelers Timed Growth and Income Stock Account for Variable Annuities, The
Travelers Timed Short-Term Bond Account for Variable Annuities, The Travelers
Timed Aggressive Stock Account for Variable Annuities, The Travelers Timed Bond
<PAGE>
Account for Variable Annuities, Small Cap Fund, Government Fund, Growth Fund,
Growth and Income Fund, International Equity Fund, Mid Cap Fund, Municipal Bond
Fund, Select Small Cap Portfolio, Select Government Portfolio, Select Growth
Portfolio, Select Growth and Income Portfolio, Select Mid Cap Portfolio,
Balanced Investments, Emerging Markets Equity Investments, Government Money
Investments, High Yield Investments, Intermediate Fixed Income Investments,
International Equity Investments, International Fixed Income Investments, Large
Capitalization Growth Investments, Large Capitalization Value Equity
Investments, Long- Term Bond Investments, Mortgage Backed Investments,
Municipal Bond Investments, S&P 500 Index Investments, Small Capitalization
Growth Investments, Small Capitalization Value Equity Investments, Multi-Sector
Fixed Income Investments, Multi-Strategy Market Neutral Investments,
Appreciation Portfolio, Diversified Strategic Income Portfolio, Emerging Growth
Portfolio, Equity Income Portfolio, Equity Index Portfolio, Growth & Income
Portfolio, Intermediate High Grade Portfolio, International Equity Portfolio,
Money Market Portfolio, Total Return Portfolio, Smith Barney Adjustable Rate
Government Income Fund, Smith Barney Aggressive Growth Fund Inc., Smith Barney
Appreciation Fund Inc., Smith Barney Arizona Municipals Fund Inc., Smith Barney
California Municipals Fund Inc., Balanced Portfolio, Conservative Portfolio,
Growth Portfolio, High Growth Portfolio, Income Portfolio, Global Portfolio,
Select Balanced Portfolio, Select Conservative Portfolio, Select Growth
Portfolio, Select High Growth Portfolio, Select Income Portfolio, Concert
Social Awareness Fund, Smith Barney Large Cap Blend Fund, Smith Barney
Fundamental Value Fund Inc., Large Cap Value Fund, Short-Term High Grade Bond
Fund, U.S. Government Securities Fund, Smith Barney Balanced Fund, Smith Barney
Convertible Fund, Smith Barney Diversified Strategic Income Fund, Smith Barney
Exchange Reserve Fund, Smith Barney High Income Fund, Smith Barney Municipal
High Income Fund, Smith Barney Premium Total Return Fund, Smith Barney Total
Return Bond Fund, Cash Portfolio, Government Portfolio, Municipal Portfolio,
Concert Peachtree Growth Fund, Smith Barney Contrarian Fund, Smith Barney
Government Securities Fund, Smith Barney Hansberger Global Small Cap Value
Fund, Smith Barney Hansberger Global Value Fund, Smith Barney Investment Grade
Bond Fund, Smith Barney Premier Selections Fund, Smith Barney Small Cap Value
Fund, Smith Barney Small Cap Growth Fund, Smith Barney Intermediate Maturity
California Municipals Fund, Smith Barney Intermediate Maturity New York
Municipals Fund, Smith Barney Large Capitalization Growth Fund, Smith Barney
S&P 500 Index Fund, Smith Barney Mid Cap Blend Fund, Smith Barney EAFE Index
Fund, Smith Barney US 5000 Index Fund, Smith Barney Managed Governments Fund
Inc., Smith Barney Managed Municipals Fund Inc., Smith Barney Massachusetts
Municipals Fund, Cash Portfolio, Government Portfolio, Retirement Portfolio,
California Money Market Portfolio, Florida Portfolio, Georgia Portfolio,
Limited Term Portfolio, National Portfolio, Massachusetts Money Market
Portfolio, New York Money Market Portfolio, New York Portfolio, Pennsylvania
Portfolio, Smith Barney Municipal Money Market Fund, Inc., Smith Barney Natural
Resources Fund, Smith Barney Financial Services Fund, Smith Barney Health
Sciences Fund, Smith Barney Technology Fund, Smith Barney New Jersey Municipals
Fund Inc., Smith Barney Oregon Municipals Fund, Zeros Plus Emerging Growth
Series 2000, Smith Barney Security and Growth Fund, Smith Barney Small Cap
Blend Fund, Inc., Smith Barney Telecommunications Income Fund, Income and
Growth Portfolio, Reserve Account Portfolio, U.S. Government/High Quality
Securities Portfolio, Emerging Markets Portfolio, European Portfolio, Global
Government Bond Portfolio, International Balanced Portfolio, International
Equity Portfolio, Pacific Portfolio, AIM Capital Appreciation Portfolio, Smith
<PAGE>
Aggressive Growth Portfolio, Smith Mid Cap Portfolio, Alliance Growth
Portfolio, INVESCO Global Strategic Income Portfolio, MFS Total Return
Portfolio, Putnam Diversified Income Portfolio, Smith Barney High Income
Portfolio, Smith Barney Large Cap Value Portfolio, Smith Barney International
Equity Portfolio, Smith Barney Large Capitalization Growth Portfolio, Smith
Barney Money Market Portfolio, Smith Barney Pacific Basin Portfolio, Travelers
Managed Income Portfolio, Van Kampen Enterprise Portfolio, Centurion U.S.
Equity Fund, Centurion International Equity Fund, Centurion U.S. Contra Fund,
Centurion International Contra Fund, Global High-Yield Bond Fund, International
Equity Fund, Emerging Opportunities Fund, Core Equity Fund, Long-Term Bond
Fund, Global Dimensions Fund L.P., Citicorp Private Equity L.P., AIM V.I.
Capital Appreciation Fund, AIM V.I. Government Series Fund, AIM V.I. Growth
Fund, AIM V.I. International Equity Fund, AIM V.I. Value Fund, Fidelity VIP
Growth Portfolio, Fidelity VIP High Income Portfolio, Fidelity VIP Equity
Income Portfolio, Fidelity VIP Overseas Portfolio, Fidelity VIP II Contrafund
Portfolio, Fidelity VIP II Index 500 Portfolio, MFS World Government Series,
MFS Money Market Series, MFS Bond Series, MFS Total Return Series, MFS Research
Series, MFS Emerging Growth Series, Salomon Brothers Institutional Money Market
Fund, Salomon Brothers Cash Management Fund, Salomon Brothers New York
Municipal Money Market Fund, Salomon Brothers National Intermediate Municipal
Fund, Salomon Brothers U.S. Government Income Fund, Salomon Brothers High Yield
Bond Fund, Salomon Brothers International Equity Fund, Salomon Brothers
Strategic Bond Fund, Salomon Brothers Large Cap Growth Fund, Salomon Brothers
Balanced Fund, Salomon Brothers Small Cap Growth Fund, Salomon Brothers Asia
Growth Fund, Salomon Brothers Capital Fund Inc, Salomon Brothers Investors
Value Fund Inc, Salomon Brothers Opportunity Fund Inc, Salomon Brothers
Institutional High Yield Bond Fund, Salomon Brothers Institutional Emerging
Markets Debt Fund, Salomon Brothers Variable Investors Fund, Salomon Brothers
Variable Capital Fund, Salomon Brothers Variable Total Return Fund, Salomon
Brothers Variable High Yield Bond Fund, Salomon Brothers Variable Strategic
Bond Fund, Salomon Brothers Variable U.S. Government Income Fund, Salomon
Brothers Variable Asia Growth Fund, and Salomon Brothers Variable Small Cap
Growth Fund.
(b) The information required by this Item 29 with respect to each
director and officer of CFBDS is incorporated by reference to Schedule A of
Form BD filed by CFBDS pursuant to the Securities and Exchange Act of 1934
(File No. 8-32417).
(c) Not applicable.
Item 28. 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 (Cayman), Ltd. Elizabethan Square
(administrator) George Town
Grand Cayman, Cayman Island, BWI
CFBDS, Inc. 21 Milk Street
(exclusive placement agent) Boston, MA 02109
State Street Canada, Inc. 40 King Street West
(transfer agent) Ontario, Canada
State Street Bank and Trust Company 225 Franklin Street
(custodian) Boston, MA 02110
Citibank, N.A. 153 East 53rd Street
(investment adviser) New York, NY 10043
Item 29. Management Services.
Not applicable.
Item 30. 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
Grand Cayman, Cayman Islands, on the 28th day of December, 1999.
CASH RESERVES PORTFOLIO
By: Tamie Ebanks
-------------------
Tamie Ebanks,
Assistant Secretary
<PAGE>
EXHIBIT INDEX
Exhibit: Description:
a(2) Amendments to the Declaration of Trust of the Registrant
Exhibit a(2)
CASH RESERVES PORTFOLIO
AMENDMENT TO
DECLARATION OF TRUST
The undersigned, constituting a majority of the Trustees of Cash Reserves
Portfolio (the "Trust"), a trust organized under the laws of the State of New
York, pursuant to the Trust's Declaration of Trust dated May 23, 1989, as
amended and restated (the "Declaration"), do hereby amend Article III of the
Declaration to provide that Section 3.11 of the Declaration shall not apply
from and after January 1, 1999.
Elliott J. Berv Philip W. Coolidge
- ------------------------------- -------------------------------
ELLIOTT J. BERV PHILIP W. COOLIDGE
As Trustee and Not Individually As Trustee and Not Individually
Riley C. Gilley Walter E. Robb
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RILEY C. GILLEY WALTER E. ROBB, III
As Trustee and Not Individually As Trustee and Not Individually
