AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 2, 2001
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. 15
CASH RESERVES PORTFOLIO
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
388 GREENWICH STREET, NEW YORK, NEW YORK 10013
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 800-451-2010
ROBERT I. FRENKEL
7 WORLD TRADE CENTER, NEW YORK, NEW YORK 10048
(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 the Portfolio's manager 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 the
manager to present minimal credit risks. To be high quality, a security (or its
issuer) must be rated in the highest short-term rating category by nationally
recognized rating agencies, such as Moody's or Standard & Poor's, or, if
unrated, in the manager'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, the manager 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, if unrated, in the manager's opinion, are of comparable quality.
Management Style. Managers of mutual funds use different styles when selecting
securities to purchase. The manager uses a "top-down" approach when selecting
securities for the Portfolio. When using a "top-down" approach, the 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
are not described here. More information about risks appears in Part B to this
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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 the highest short
term rating category by nationally recognized rating agencies or, if unrated,
in the manager'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.
Item 6. Management, Organization and Capital Structure.
INVESTMENT ADVISER
The Portfolio draws on the strength and experience of Citibank. Citibank is the
manager of the Portfolio, and subject to policies set by the 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 the Portfolio's
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manager 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, 2000, 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
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.
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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.
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.
<PAGE>
Item 8. Distribution Arrangements.
The exclusive placement agent for the Portfolio is Salomon Smith Barney, Inc.
Salomon Smith Barney, Inc. receives no compensation for serving as the
Portfolio's exclusive placement agent.
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MARKED
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 January 1, 2001.
TABLE OF CONTENTS Page
Portfolio History.......................................................B-2
Description of the Portfolio and Its Investments and Risks..............B-2
Management of the Portfolio.............................................B-7
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-15
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 manager ("Citibank" or the "Manager")) under procedures
approved by the Board of Trustees and are determined by the Manager 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 Manager, 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 Manager or an affiliate of the
Manager.
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 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
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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
Manager under procedures approved by the Board of Trustees, 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) 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 the terms of a typical repurchase agreement, the
Portfolio would acquire an underlying debt instrument (an obligation of,
or guaranteed by, the U.S. government, its agencies or
instrumentalities) 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 Manager believes will give the Portfolio a valid, perfected security
interest in the collateral. This might become an issue in the event of
<PAGE>
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 Manager 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.
(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.
<PAGE>
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 Manager to be of good
standing, and when, in the judgment of the Manager, 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 Manager 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
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);
<PAGE>
(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
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 388
Greenwich Street, New York, New York 10013.
TRUSTEES
ELLIOTT J. BERV; 57 - President and Chief Executive Officer, Catalyst, Inc.
(Management Consultants) (since June 1992); President and Director, Elliott J.
Berv & Associates (Management Consultants) (since May 1984).
RILEY C. GILLEY; 74 -- Vice President and General Counsel, Corporate Property
Investors (November, 1988 to December, 1991); Partner, Breed, Abbott & Morgan
(Attorneys) (Retired, December, 1987).
<PAGE>
WALTER E. ROBB, III; 74 -- 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).
OFFICERS
HEATH B. McLENDON*; 67 - President of the Portfolio; Chairman, President, and
Chief Executive Officer of SSB Citi Fund Management LLC ("SSB Citi") (since
March 1996); Managing Director of Salomon Smith Barney (since August 1993);
President of Travelers Investment Adviser, Inc. ("TIA"); Chairman or
Co-Chairman of the Board of seventy-one investment companies associated with
Salomon Smith Barney. His address is 7 World Trade Center, New York, New York
10048.
LEWIS E. DAIDONE*; 43 - Senior Vice President and Treasurer of the Portfolio;
Managing Director of Salomon Smith Barney; Chief Financial Officer of the Smith
Barney mutual funds; Treasurer and Senior Vice President or Executive Vice
President of sixty-one investment companies associated with Citigroup; Director
and Senior Vice President of SSB Citi and TIA. His address is 125 Broad Street,
New York, New York 10004.
IRVING DAVID*; 40 - Controller of the Portfolio; Director of Salomon Smith
Barney; formerly Assistant Treasurer of First Investment Management Company.
Controller or Assistant Treasurer of fifty-three investment companies
associated with Citigroup. His address is 125 Broad Street, New York, New York
10004.
FRANCES GUGGINO*; 43 - Assistant Controller of the Portfolio; Vice President of
Citibank since February, 1991.
PAUL BROOK*; 46 - Assistant Controller of the Portfolio; Director of Salomon
Smith Barney; Controller or Assistant Treasurer of forty-three investment
companies associated with Citigroup; from 1997-1998 Managing Director of AMT
Capital Services Inc.; prior to 1997 Partner with Ernst & Young LLP. His
address is 125 Broad Street, New York, New York 10004.
ANTHONY PACE*; 35; Assistant Treasurer of the Portfolio. Mr. Pace is Vice
President - Mutual Fund Administration for Salomon Smith Barney Inc. Since
1986, when he joined the company as a Fund Accountant, Mr. Pace has been
responsible for accounts payable, financial reporting and performance of mutual
funds and other investment products.
MARIANNE MOTLEY*; 41 -- Assistant Treasurer of the Portfolio. Ms. Motley is
Director - Mutual Fund Administration for Salomon Smith Barney Inc. Since 1994,
when she joined the company as a Vice President, Ms. Motley has been
responsible for accounts payable, financial reporting and performance of mutual
funds and other investment products.
ROBERT I. FRENKEL, ESQ.*; 46 -- Secretary of the Portfolio. Mr. Frenkel is a
Managing Director and General Counsel - Global Mutual Funds for SSB Citi Asset
Management Group. Since 1994, when he joined Citibank as a Vice President and
Division Counsel, he has been responsible for legal affairs relating to mutual
funds and other investment products.
THOMAS C. MANDIA, ESQ.*; 38 -- Assistant Secretary of the Portfolio. Mr. Mandia
is a Vice President and Associate General Counsel for SSB Citi Asset Management
Group. Since 1992, he has been responsible for legal affairs relating to mutual
funds and other investment products.
ROSEMARY D. EMMENS, ESQ.*; 31 -- Assistant Secretary of the Portfolio. Ms.
Emmens has been a Vice President and Associate General Counsel of SSB Citi
Asset Management Group since 1998, where she has been responsible for legal
<PAGE>
affairs relating to mutual funds and other investment products. Before joining
Citibank, Ms. Emmens was Counsel at The Dreyfus Corporation since 1995.
HARRIS GOLDBLAT, ESQ.*; 31 -- Assistant Secretary of the Portfolio. Mr.
Goldblat has been an Associate General Counsel at SSB Citi Asset Management
Group since April 2000, where he has been responsible for legal affairs
relating to mutual funds and other investment products. From June 1997 to March
2000, he was an associate at the law firm of Stroock & Stroock & Lavan LLP, New
York City, and from September 1996 to May 1997, he was an associate at the law
firm of Sills Cummis Radin Tischman Epstein & Gross, Newark, NJ. From August
1995 to September 1996, Mr. Goldblat served as a law clerk to the Honorable
James M. Havey, P.J.A.D., in New Jersey.
The Trustees of the Portfolio received the following remuneration from the
Portfolio during its fiscal year ended August 31, 2000:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PENSION OR
RETIREMENT TOTAL
AGGREGATE BENEFITS ESTIMATED COMPENSATION
NAME OF PERSON, COMPENSATION ACCRUED AS ANNUAL BENEFITS FROM
POSITION FROM PART OF UPON REGISTRANT AND
REGISTRANT PORTFOLIO RETIREMENT PORTFOLIO
EXPENSES COMPLEX PAID
TO TRUSTEES(1)
Elliott J. Berv, $28,093 None None $68,000
Trustee
Riley C. Gilley, $8,989 None None $70,500
Trustee
Walter E. Robb, III, $22,236 None None $63,000
Trustee
</TABLE>
(1) Messrs. Berv, Gilley and Robb are trustees of 28, 31 and 31, 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.
Citi Cash Reserves (a series of CitiFunds Trust III), Citi Premium Liquid
Reserves (a series of CitiFunds Premium Trust) and Citi 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:
BENEFICIAL INTEREST
NAME OF RECORD HOLDER (as of 12/22/99)
============================================ == ===========================
Citi Cash Reserves 16.9%
Citi Premium Liquid Reserves 5.5%
Citi Institutional Liquid Reserves 39.1%
<PAGE>
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 Manager manages the
securities of the Portfolio and makes investment decisions for the Portfolio.
The Manager 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 Manager 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
Manager 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 Manager 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 Manager 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 Manager has voluntarily agreed to
waive a portion of its investment advisory fee.
For the fiscal years ended August 31, 1998, 1999 and 2000, the fees paid
to the Manager under the Advisory Agreement, after waivers, were $6,739,206,
$9,422,276 and $11,359,641, respectively.
The Portfolio, the Manager and the placement agent for the Portfolio
each have adopted a code of ethics pursuant to Rule 17j-1 under the 1940 Act.
Each code of ethics permits personnel subject to such code to invest in
securities, including securities that may be purchased or held by the
Portfolio. However, the codes of ethics contain provisions and requirements
designed to identify and address certain conflicts of interest between personal
investment activities and the interests of the Portfolio. Of course, there can
be no assurance that the codes of ethics will be effective in identifying and
addressing all conflicts of interest relating to personal securities
transactions.
The Portfolio has adopted an Administrative Services Plan (the
"Administrative Plan") which provides that the Portfolio may obtain the
<PAGE>
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 the
administrator from the Portfolio 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"), SSB Citi Fund Management LLC ("SSB Citi" or the
"Administrator"), an affiliate of Citibank, 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 SSB Citi, 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 providing services under the Administrative Services Agreement, SSB
Citi receives a fee accrued daily and paid monthly of 0.05% of the assets of
the Portfolio. For the fiscal years ended August 31, 1998, 1999 and 2000, the
fees payable to Signature Financial Group (Cayman) Ltd., the former
administrator for the Portfolio, under a prior Administrative Services
Agreement were voluntarily waived.
The Administrative Services Agreement provides that the Administrator may
render administrative services to others.
The Portfolio has entered into a Transfer Agency and Service Agreement
with Citi Fiduciary Trust Company ("Citi Fiduciary") pursuant to which Citi
Fiduciary acts as transfer agent for the Portfolio. Under the Transfer Agency
and Service Agreement, Citi Fiduciary maintains the account records for the
Portfolio, handles certain communications between investors and the Portfolio
and distributes distributions payable by the Portfolio. The principal business
address of Citi Fiduciary is 125 Broad Street, New York, New York 10004.
<PAGE>
The Portfolio has entered into a Transfer Agency and Service Agreement
with State Street Bank and Trust Company ("State Street"), pursuant to which
State Street acts as sub-transfer agent for the Fund. The Portfolio also has
entered into a Custodian Agreement with State Street pursuant to which State
Street acts as custodian and provides fund accounting services for the
Portfolio. The principal business address of State Street is 225 Franklin
Street, Boston, Massachusetts 02110.
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 Manager 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 Manager or its affiliates. If, however, the Portfolio and other
investment companies or accounts managed by the Manager 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 Manager occur
contemporaneously, the purchase or sale orders may be aggregated in order to
obtain any price advantages available to large denomination purchases or sales.
No transactions are executed with the Manager or an affiliate of the
Manager, 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
<PAGE>
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
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.
<PAGE>
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
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.
<PAGE>
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, 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.
<PAGE>
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 Salomon Smith Barney,
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 25, 2000
(Accession Number 0000930413-00-001323), for the fiscal year ended August 31,
2000 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
*, **, *** a(2) Amendments to the Declaration of Trust of the Registrant
** b By-laws of the Registrant
** d Investment Advisory Agreement between the Registrant and
Citibank, N.A., as investment adviser
** g Custodian Contract between the Registrant and State Street
Bank and Trust Company ("State Street"), as custodian
** h(1) Amended and Restated Administrative Services Plan of the
Registrant
**** p Codes of Ethics
-------------------------------------------------------------
* 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.
*** 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, 1999.
**** Incorporated herein by reference to the Registration Statement on Form
N-1A for CitiFunds Trust I (File No. 811-4006) as filed with the
Securities and Exchange Commission on September 12, 2000 and to the
Registration Statement on Form N-1A for CitiFunds Trust III (File No.
811-4052) as filed with the Securities and Exchange Commission on
December 29, 2000.
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.
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, CitiFunds Multi-State Tax Free Trust (Citi New York Tax Free
<PAGE>
Reserves, Citi Connecticut Tax Free Reserves and Citi California Tax Free
Reserves), CitiFunds Tax Free Income Trust (CitiFunds National Tax Free Income
Portfolio, CitiFunds New York Tax Free Income Portfolio and CitiFunds
California Tax Free Income Portfolio), CitiFunds Institutional Trust (Citi
Institutional Cash Reserves) and Variable Annuity Portfolios (CitiSelect VIP
Folio 200 Conservative, CitiSelect VIP Folio 300 Balanced, CitiSelect VIP Folio
400 Growth, CitiSelect VIP Folio 500 Growth Plus and CitiFunds 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.
Victor J. Menezes is the Chairman 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:
Paul J. Collins Director, Kimberly-Clark Corporation
Director, Nokia Corporation
Robert I. Lipp Chairman, Chief Executive Officer and President,
Travelers Property Casualty Corp.
William R. Rhodes Director, Private Export Funding
Corporation
Director, Cononco, Inc.
H. Onno Ruding Supervisory Director, Amsterdamsch
Trustees Cantoor B.V.
Director, Pechiney S.A.
Advisory Director, Unilever NV and Unilever PLC
Director, Corning Incorporated
Item 27. Principal Underwriters.
(a) Salomon Smith Barney, Inc., the Registrant's placement agent, also is
the distributor for Citi U.S. Treasury Reserves, Citi Cash Reserves, Citi
Premium U.S. Treasury Reserves, Citi Premium Liquid Reserves, Citi
Institutional U.S. Treasury Reserves, Citi Institutional Liquid Reserves, Citi
Institutional Cash Reserves, Citi Tax Free Reserves, Citi Institutional Tax
Free Reserves, Citi California Tax Free Reserves, Citi Connecticut Tax Free
Reserves, Citi New York Tax Free Reserves, Citi Short-Term U.S. Government
Income Fund, Citi New York Tax Free Income Fund, Citi National Tax Free Income
Fund, Citi California Tax Free Income Fund, Citi Nasdaq-100 Index Fund, Citi
Small Cap Index Fund, Citi U.S. 1000 Index Fund, Citi Global Titans Index Fund,
Citi Financial Services Index Fund, Citi Health Science Index Fund, Citi
Technology Index Fund, Citi U.S. Bond Index Fund, Citi International Index
Portfolio, CitiSelect VIP Folio 200 Conservative, CitiSelect VIP Folio 300
Balanced, CitiSelect VIP Folio 400 Growth, CitiSelect VIP Folio 500 Growth Plus
and CitiFunds Small Cap Growth VIP Portfolio. Salomon Smith Barney, Inc. also
is the placement agent for Large Cap Growth Portfolio, Small Cap Growth
Portfolio, Government Income Portfolio, International Equity Portfolio, Tax
Free Reserves Portfolio and U.S. Treasury Reserves Portfolio. Salomon Smith
Barney, Inc. is also the distributor for the following Smith Barney funds:
Smith Barney Diversified Large Cap Growth Fund, Smith Barney Small Cap Growth
Opportunities, Smith Barney International Large Cap Fund, Consulting Group
Capital Markets Funds, Concert Investment Series, Greenwich Street Series Fund,
Smith Barney Adjustable Rate Government Income Fund, Smith Barney Aggressive
<PAGE>
Growth Fund Inc., Smith Barney Appreciation Fund Inc., Smith Barney Arizona
Municipals Fund Inc., Smith Barney California Municipals Fund Inc., Smith
Barney Concert Allocation Series Inc., Smith Barney Equity Funds, Smith Barney
Fundamental Value Fund Inc., Smith Barney Funds, Inc., Smith Barney Income
Funds, Smith Barney Institutional Cash Management Fund, Inc., Smith Barney
Investment Trust, Smith Barney Managed Governments Fund Inc., Smith Barney
Managed Municipals Fund Inc., Smith Barney Massachusetts Municipals Fund, Smith
Barney Money Funds, Inc., Smith Barney Muni Funds, Smith Barney Municipal Money
Market Fund, Inc., Smith Barney New Jersey Municipals Fund Inc., Smith Barney
Oregon Municipals Fund Inc., Smith Barney Principal Return Fund, Smith Barney
Sector Series Inc., Smith Barney Small Cap Blend Fund, Inc., Smith Barney
Telecommunications Trust, Smith Barney Variable Account Funds, Smith Barney
World Funds, Inc., Travelers Series Fund Inc., and various series of unit
investment trusts.
(b) The information required by this Item 27 with respect to each
director, officer and partner of Salomon Smith Barney is incorporated by
reference to Schedule A of FORM BD filed by Salomon Smith Barney pursuant to
the Securities Exchange Act of 1934 (SEC File No. 812-8510).
(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
Salomon Smith Barney, Inc. 388 Greenwich Street
(placement agent) New York, NY 10013
State Street Bank and Trust State Street South
Company (custodian) 1776 Heritage Drive
North Quincy, MA 02171
Citi Fiduciary Trust 388 Greenwich Street
Company (transfer agent) New York, NY 10013
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
New York, New York, on the 2nd day of January, 2001.
CASH RESERVES PORTFOLIO
By: Thomas C. Mandia
Thomas C. Mandia,
Assistant Secretary
<PAGE>
EXHIBIT INDEX
Exhibit: Description:
** a(1) Amended and Restated Declaration of Trust of the Registrant
*, **, *** a(2) Amendments to the Declaration of Trust of the Registrant
** b By-laws of the Registrant
** d Investment Advisory Agreement between the Registrant and
Citibank, N.A., as investment adviser
** g Custodian Contract between the Registrant and State Street
Bank and Trust Company ("State Street"), as custodian
** h(1) Amended and Restated Administrative Services Plan of the
Registrant
**** p Codes of Ethics
-------------------------------------------------------------
* 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.
*** 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, 1999.
**** Incorporated herein by reference to the Registration Statement on Form
N-1A for CitiFunds Trust I (File No. 811-4006) as filed with the
Securities and Exchange Commission on September 12, 2000 and to the
Registration Statement on Form N-1A for CitiFunds Trust III (File No.
811-4052) as filed with the Securities and Exchange Commission on
December 29, 2000.
