1933 Act File No. 33-31602
1940 Act File No. 811-5950
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Pre-Effective Amendment No.
Post-Effective Amendment No. 7 X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 8 X
MONEY MARKET OBLIGATIONS TRUST
(Exact Name of Registrant as Specified in Charter)
Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779
(Address of Principal Executive Offices)
(412) 288-1900
(Registrant's Telephone Number)
John W. McGonigle, Esquire,
Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b)
on _________________ pursuant to paragraph (b)
X 60 days after filing pursuant to paragraph (a)
on pursuant to paragraph (a) of Rule 485.
Registrant has filed with the Securities and Exchange Commission a
declaration pursuant to Rule 24f-2 under the Investment Company Act of
1940, and:
X filed the Notice required by that Rule on September 25, 1993; or
intends to file the Notice required by that Rule on or about
____________; or
during the most recent fiscal year did not sell any securities pursuant
to Rule 24f-2 under the Investment Company Act of 1940, and, pursuant to
Rule 24f-2(b)(2), need not file the Notice.
Copies to:
Thomas J. Donnelly, Esquire Charles H. Morin, Esquire
Houston, Houston & Donnelly Dickstein, Shapiro & Morin
2510 Centre City Tower 2101 L Street, N.W.
650 Smithfield Street Washington, D.C. 20037
Pittsburgh, Pennsylvania 15222
CROSS-REFERENCE SHEET
This Amendment to the Registration Statement of MONEY MARKET
OBLIGATIONS TRUST, which consists of 4 portfolios, (1) Government
Obligations Fund; (2) Prime Obligations Fund; (3) Tax-Free Obligations
Fund; and (4) Treasury Obligations Fund, is comprised of the following:
PART A. INFORMATION REQUIRED IN A PROSPECTUS.
Prospectus Heading
(Rule 404(c) Cross Reference)
Item 1. Cover Page (1-4) Cover Page.
Item 2. Synopsis (1-4) Summary of Fund Expenses;
(1-4) Financial Highlights.
Item 3. Condensed Financial
Information (1-4) Performance Information.
Item 4. General Description of
Registrant (1-4) General Information; (1-4)
Investment Information; (1-4)
Investment Objective; (1-4)
Investment Policies; (2,3)
Investment Risks; (1-4) Investment
Limitations; (1-4) Regulatory
Compliance.
Item 5. Management of the Fund (1-4) Trust Information; (1-4)
Management of the Trust; (1-4)
Distribution of Shares; (1-4)
Administration of the Fund.
Item 6. Capital Stock and Other
Securities (1-4) Dividends; (1-4) Capital
Gains; (1-4) Shareholder
Information; (1-4) Voting Rights;
(1-4) Massachusetts Partnership
Law; (1-4) Federal Income Tax;
(1-4) Pennsylvania Corporate and
Personal Property Taxes; (3) State
and Local Taxes.
Item 7. Purchase of Securities Being
Offered (1-4) Net Asset Value; (1-4)
Investing in the Fund; (1-4) Share
Purchases; (1-4) Minimum
Investment Required; (1-4)
Subaccounting Services; (1-4)
Certificates and Confirmations.
Item 8. Redemption or Repurchase (1-4) Redeeming Shares; (1-4)
Telephone Redemption; (1-4)
Written Requests; (1-4) Accounts
with Low Balances.
Item 9. Pending Legal Proceedings None.
PART B. INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION.
Item 10. Cover Page (1-4) Cover Page.
Item 11. Table of Contents (1-4) Table of Contents.
Item 12. General Information and
History (1-4) Not Applicable.
Item 13. Investment Objectives and
Policies (1-4) Investment Policies; (3)
Investment Risks.
Item 14. Management of the Fund (1-4) Money Market Obligations
Trust Management.
Item 15. Control Persons and Principal
Holders of Securities Not Applicable.
Item 16. Investment Advisory and Other
Services (1-4) Investment Adviser(s); (1-4)
Fund Administration.
Item 17. Brokerage Allocation (1-4) Brokerage Transactions.
Item 18. Capital Stock and Other
Securities
Item 19. Purchase, Redemption and
Pricing of Securities
Being Offered (1-4) Determining Net Asset Value;
(1-4) Redemption in Kind.
Item 20. Tax Status (1-4) The Fund's Tax Status.
Item 21. Underwriters Not Applicable.
Item 22. Calculation of Performance
Data (1-4) Performance Information.
Item 23. Financial Statements (1-4) To be filed in Part A, by
amendment. Financial Statements
of Institutional Shares of each
Fund are incorporated herein by
reference to Registrant's
Post-Effective Amendment No. 6 on
Form N-1A filed on September 27,
1993. (File No. 33-31602).
Government Obligations Fund
(A Portfolio of Money Market Obligations Trust)
Institutional Service Shares
Prospectus
The Institutional Service Shares of Government Obligations Fund (the "Fund")
offered by this prospectus represent interests in a diversified portfolio of
Money Market Obligations Trust (the "Trust"), an open-end management
investment company (a mutual fund). The Fund invests in U.S. government
securities to achieve current income consistent with stability of principal.
Shares of the Fund are offered for sale as an investment vehicle for large
institutions, corporations and fiduciaries.
The shares offered by this prospectus are not deposits or obligations of any
bank, are not endorsed or guaranteed by any bank and are not insured or
guaranteed by the U.S. government, the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other government agency.
Investment in these shares involves investment risks including possible loss
of principal. The Fund attempts to maintain a stable net asset value of
$1.00 per share; there can be no assurance that the Fund will be able to do
so.
This prospectus contains the information you should read and know before you
invest in the Fund. Keep this prospectus for future reference.
The Fund has also filed a Statement of Additional Information dated July
___, 1994, with the Securities and Exchange Commission. The information
contained in the Statement of Additional Information is incorporated by
reference into this prospectus. You may request a copy of the Statement of
Additional Information free of charge by calling 1-800-235-4669. To obtain
other information, or make inquiries about the Fund, contact the Fund at the
address listed in the back of this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
Prospectus dated July ___, 1994
Summary of Fund Expenses 1
General Information 2
Investment Information 2
Investment Objective 2
Investment Policies 2
Investment Limitations 3
Regulatory Compliance 4
Trust Information 4
Management of the Trust 4
Distribution of Shares 5
Administration of the Fund 6
Expenses of the Fund and Institutional Service Shares 6
Net Asset Value 7
Investing in the Fund 7
Share Purchases 7
Minimum Investment Required 8
Subaccounting Services 8
Certificates and Confirmations 8
Dividends 8
Capital Gains 8
Redeeming Shares 8
By Mail 8
Telephone Redemption 9
Accounts with Low Balances 10
Shareholder Information 10
Voting Rights 10
Massachusetts Partnership Law 10
Tax Information 11
Federal Income Tax 11
Other Classes of Shares 11
Performance Information 11
Financial Highlights 13
Addresses 14
Summary of Fund Expenses
Institutional Service Shares
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases (as a
percentage of offering price) None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price). None
Contingent Deferred Sales Charge (as a percentage of
original purchase price or redemption proceeds,
as applicable) None
Redemption Fee (as a percentage of amount redeemed,
if applicable) . None
Exchange Fee None
Annual Institutional Service Shares Operating Expenses*
(As a percentage of projected average net assets)
Management Fee (after waiver) (1) 0.09%
12b-1 Fee.(2) 0.00%
Total Other Expenses 0.36%
Shareholder Servicing Fee . 0.25%
Total Institutional Service Shares Operating Expenses (3) 0.45%
(1) The estimated management fee has been reduced to reflect the anticipated
voluntary waiver of a portion of the management fee. The adviser can
terminate this voluntary waiver at any time at its sole discretion. The
maximum management fee is 0.20%.
(2) The Institutional Service Shares have no present intention of paying or
accruing the 12b-1 fee during the period ending July 31, 1994. If
the Institutional Service Shares were paying or accruing the 12b-1 fee,
the Class would be able to pay up to 0.25% of its average daily net
assets for the 12b-1 fee. See "Trust Information".
(3) The Total Institutional Service Shares Operating Expenses are estimated
to be 0.56% absent the anticipated voluntary waiver of a portion of the
management fee.
* Total Institutional Service Operating Expenses are estimated based on
average expenses expected to be incurred during the period ending
July 31, 1994. During the course of this period, expenses may be more or
less than the average amount shown.
The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder of Institutional Service
Shares of the Fund will bear, either directly or indirectly. For more
complete descriptions of the various costs and expenses, see "Investing in
the Fund" and "Trust Information." Wire-transferred redemptions of less than
$5,000 may be subject to additional fees.
EXAMPLE 1 year 3 years
You would pay the following expenses on a $1,000
investment assuming (1) 5% annual return and (2)
redemption at the end of each time period.
$5 $14
The above example should not be considered a representation of past or
future expenses. Actual expenses may be greater or less than those shown.
This example is
based on estimated data for the Fund's fiscal year ending July 31, 1994.
The information set forth in the foregoing table and example relates only
to Institutional Service Shares of the Fund. The Fund also offers another
class of shares called Institutional Shares. Institutional Service Shares
and Institutional Shares are subject to certain of the same expenses;
however, Institutional Shares are not subject to a 12b-1 fee. See "Other
Classes of Shares."
General Information
The Trust was established as a Massachusetts business trust under a
Declaration of Trust dated October 3, 1988. The Declaration of Trust permits
the Trust to offer separate series of shares of beneficial interest
representing interests in separate portfolios of securities. The shares in
any one portfolio may be offered in separate classes. With respect to this
Fund, as of the date of this prospectus, the Trustees have established two
classes of shares known as Institutional Service Shares and Institutional
Shares. This prospectus relates only to Institutional Service Shares
("Shares") of the Fund, which are designed primarily for financial
institutions as a convenient means of accumulating an interest in a
professionally managed, diversified portfolio investing only in short-term
U.S. government securities. A minimum initial investment of $25,000 is
required.
Eligibility for investment in the Trust is contingent upon an investor
accumulating and maintaining a minimum aggregate investment of $200,000,000
in Federated funds within a twelve-month period. For this purpose, 1) an
investor is defined as a financial institution or its collective customers,
including affiliate financial institutions and their collective customers,
or other institutions that are determined to qualify by Federated Securities
Corp., and 2) Federated funds are those mutual funds which are distributed
by Federated Securities Corp., or are advised by or administered by
investment advisers or administrators affiliated with Federated Securities
Corp. ("Federated Funds"). An investor's minimum investment will be
calculated by combining all accounts the investor maintains with the
Federated Funds, which includes the Trust.
The Fund attempts to stabilize the value of a share at $1.00. Shares are
currently sold and redeemed at that price.
Investment Information
Investment Objective
The investment objective of the Fund is current income consistent with
stability of principal. This investment objective cannot be changed without
shareholder approval. While there is no assurance that the Fund will achieve
its investment objective, it endeavors to do so by following the investment
policies described in this prospectus.
Investment Policies
The Fund pursues its investment objective by investing only in a portfolio
of U.S. government securities maturing in 13 months or less. The average
maturity of the securities in the Fund's portfolio, computed on a
dollar-weighted basis, will be 90 days or less. Unless indicated otherwise,
investment policies may be changed by the Trustees without shareholder
approval. Shareholders will be notified before any material change in these
policies becomes effective.
Acceptable Investments. The Fund invests only in U.S. government
securities. These instruments are either issued or guaranteed by the U.S.
government, its agencies, or instrumentalities. These securities include,
but are not limited to:
direct obligations of the U.S. Treasury, such as U.S. Treasury bills,
notes, and bonds; and
notes, bonds, and discount notes of U.S. government agencies or
instrumentalities, such as Central Bank for Cooperatives, Farm Credit
System, Farmers Home Administration, Federal Farm Credit Banks, Federal
Farm Credit System, Federal Home Loan Banks, Federal Home Loan Mortgage
Corporation, Federal Intermediate Credit Banks, Federal Land Banks,
Federal National Mortgage Association, Government National Mortgage
Association, and Student Loan Marketing Association.
Some obligations issued or guaranteed by agencies or instrumentalities of
the U.S. government, such as Government National Mortgage Association
participation certificates, are backed by the full faith and credit of the
U.S. Treasury. No assurances can be given that the U.S. government will
provide financial support to other agencies or instrumentalities, since it
is not obligated to do so. These instrumentalities are supported by:
the issuer's right to borrow an amount limited to a specific line of
credit from the U.S. Treasury;
discretionary authority of the U.S. government to purchase certain
obligations of an agency or instrumentality; or
the credit of the agency or instrumentality.
Repurchase Agreements. Certain securities in which the Fund invests may be
purchased pursuant to repurchase agreements. Repurchase agreements are
arrangements in which banks, brokers/dealers, and other recognized financial
institutions sell securities to the Fund and agree at the time of sale to
repurchase them at a mutually agreed upon time and price. To the extent that
the seller does not repurchase the securities from the Fund, the Fund could
receive less than the repurchase price on any sale of such securities.
Lending of Portfolio Securities. In order to generate additional income, the
Fund may lend its portfolio securities on a short-term or long-term basis,
or both, up to one-third of the value of its total assets to broker/dealers,
banks, or other institutional borrowers of securities. The Fund will only
enter into loan arrangements with broker/dealers, banks, or other
institutions which the adviser has determined are creditworthy under
guidelines established by the Fund's Trustees and will receive collateral at
all times equal to at least 100% of the value of the securities loaned.
When-Issued And Delayed Delivery Transactions. The Fund may purchase
securities on a when-issued or delayed delivery basis. These transactions
are arrangements in which the Fund purchases securities with payment and
delivery scheduled for a future time. The seller's failure to complete these
transactions may cause the Fund to miss a price or yield considered to be
advantageous.
Investment Limitations
The Fund will not borrow money directly or through reverse repurchase
agreements (arrangements in which the Fund sells a money market instrument
for a percentage of its cash value with an agreement to buy it back on a set
date) or pledge securities except, under certain circumstances, the Fund may
borrow up to one-third of the value of its total assets and pledge assets to
secure such borrowings.
The above investment limitation cannot be changed without shareholder
approval. The following limitation, however, may be changed by the Trustees
without shareholder approval. Shareholders will be notified before any
material change in this limitation becomes effective.
The Fund will not invest more than 10% of its net assets in illiquid
securities, including repurchase agreements providing for settlement in more
than seven days after notice.
Regulatory Compliance
The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in
this prospectus and its Statement of Additional Information, in order to
comply with applicable laws and regulations, including the provisions of and
regulations under the Investment Company Act of 1940, as amended. In
particular, the Fund will comply with the various requirements of Rule 2a-7,
which regulates money market mutual funds. The Fund will determine the
effective maturity of its investments according to Rule 2a-7. The Fund may
change these operational policies to reflect changes in the laws and
regulations without the approval of its shareholders.
Trust Information
Management of the Trust
Board of Trustees. The Trust is managed by a Board of Trustees. The
Trustees are responsible for managing the Fund's business affairs and for
exercising all the Trust's powers except those reserved for the
shareholders. An Executive Committee of the Board of Trustees handles the
Board's responsibilities between meetings of the Board.
Investment Adviser. Investment decisions for the Fund are made by Federated
Management, the Fund's investment adviser, subject to direction by the
Trustees. The adviser continually conducts investment research and
supervision for the Fund and is responsible for the purchase and sale of
portfolio instruments.
Advisory Fees. The adviser receives an annual investment advisory fee
equal to .20 of 1% of the Fund's average daily net assets. The adviser
has undertaken to reimburse the Fund up to the amount of the advisory fee
for operating expenses in excess of limitations established by certain
states. The adviser also may voluntarily choose to waive a portion of its
fee or reimburse other expenses of the Fund, but reserves the right to
terminate such waiver or reimbursement at any time at its sole
discretion.
Adviser's Background. Federated Management, a Delaware business trust,
organized on April 11, 1989, is a registered investment adviser under the
Investment Advisers Act of 1940. It is a subsidiary of Federated
Investors. All of the Class A (voting) shares of Federated Investors are
owned by a trust, the trustees of which are John F. Donahue, Chairman and
Trustee of Federated Investors, Mr. Donahue's wife, and Mr. Donahue's
son, J. Christopher Donahue, who is President and Trustee of Federated
Investors.
Federated Management and other subsidiaries of Federated Investors serve
as investment advisers to a number of investment companies and private
accounts. Certain other subsidiaries also provide administrative services
to a number of investment companies. Total assets under management or
administration by these and other subsidiaries of Federated Investors are
approximately $70 billion. Federated Investors, which was founded in 1956
as Federated Investors, Inc., develops and manages mutual funds primarily
for the financial industry. Federated Investors' track record of
competitive performance and its disciplined, risk averse investment
philosophy serve approximately 3,500 client institutions nationwide.
Through these same client institutions, individual shareholders also have
access to this same level of investment expertise.
Distribution of Shares
Federated Securities Corp. is the principal distributor for Institutional
Service Shares of the Fund. It is a Pennsylvania corporation organized on
November 14, 1969, and is the principal distributor for a number of
investment companies. Federated Securities Corp. is a subsidiary of
Federated Investors.
Distribution and Shareholder Services Plans. Under a distribution plan
adopted in accordance with Investment Company Act Rule 12b-1 (the
"Distribution Plan"), the Fund will pay to the distributor an amount,
computed at an annual rate of .25 of 1% of the average daily net asset value
of the Institutional Service Shares to finance any activity which is
principally intended to result in the sale of shares subject to the
Distribution Plan. The distributor may select financial institutions such as
banks, fiduciaries, custodians for public funds, investment advisers, and
broker/dealers to provide sales support services as agents for their clients
or customers. In addition, the Fund has adopted a Shareholder Services Plan
(the "Services Plan") under which it will pay financial institutions an
amount not exceeding .25 of 1% of the average daily net asset value of the
Institutional Service Shares to provide administrative support services to
their customers who own shares of the Fund. From time to time and for such
periods as deemed appropriate, the amounts stated above may be reduced
voluntarily. Activities and services under these arrangements may include,
but are not limited to, providing advertising and marketing materials to
prospective shareholders, providing personal services to shareholders, and
maintaining shareholder accounts.
Financial institutions will receive fees based upon shares owned by their
clients or customers. The schedules of such fees and the basis upon which
such fees will be paid will be determined from time to time by the Fund or
the distributor, as appropriate.
The Distribution Plan is a compensation-type plan. As such, the Fund makes
no payments to the distributor except as described above. Therefore, the
Fund does not pay for unreimbursed expenses of the distributor, including
amounts expended by the distributor in excess of amounts received by it from
the Fund, interest, carrying or other financing charges in connection with
excess amounts expended, or the distributor's overhead expenses. However,
the distributor may be able to recover such amounts or may earn a profit
from future payments made by the Fund under the Distribution Plan.
Administration of the Fund
Administrative Services. Federated Administrative Services, a subsidiary of
Federated Investors, provides certain administrative personnel and services
(including certain legal and financial reporting services) necessary to
operate the Fund. Federated Administrative Services provides these at an
annual rate which relates to the average aggregate daily net assets of all
Federated Funds as specified below:
Maximum Administrative Average Aggregate Daily Net Assets
Fee of the Fund
.15 of 1% on the first $250 million
.125 of 1% on the next $250 million
.10 of 1% on the next $250 million
.075 of 1% on assets in excess of $750 million
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares.
Federated Administrative Services may choose voluntarily to waive a portion
of its fee.
Custodian. State Street Bank and Trust Company, Boston, Massachusetts is
custodian for the securities and cash of the Fund.
Transfer Agent and Dividend Disbursing Agent. Federated Services Company,
Boston, Massachusetts is transfer agent for the shares of, and dividend
disbursing agent for the Fund.
Legal Counsel. Legal counsel is provided by Houston, Houston and Donnelly,
Pittsburgh, Pennsylvania and Dickstein, Shapiro and Morin, Washington, D.C.
Independent Public Accountants. The independent public accountants for the
Fund are Arthur Andersen & Co., Pittsburgh, Pennsylvania.
Expenses of the Fund and Institutional Service Shares
Holders of Shares pay their allocable portion of Fund and Trust expenses.
The Trust expenses for which holders of Shares pay their allocable portion
include, but are not limited to: the cost of organizing the Trust and
continuing its existence; registering the Trust with federal and state
securities authorities; Trustees' fees; auditors' fees; the cost of meetings
of Trustees; legal fees of the Trust; association membership dues; and such
non-recurring and extraordinary items as may arise.
The Fund expenses for which holders of Shares pay their allocable portion
include, but are not limited to: registering the Fund and Shares of the
Fund; investment advisory services; taxes and commissions; custodian fees;
insurance premiums; auditors' fees; and such non-recurring and extraordinary
items as may arise.
At present, the only expenses allocated to the Shares as a class are
expenses under the Fund's Rule 12b-1 Plan and Shareholder Services Plan
which relate to the Shares. However, the Board of Trustees reserves the
right to allocate certain other expenses to holders of Shares as it deems
appropriate "Class Expenses." In any case, Class Expenses would be limited
to: transfer agent fees as identified by the transfer agent as attributable
to holders of Shares; printing and postage expenses related to preparing and
distributing materials such as shareholder reports, prospectuses and proxies
to current shareholders; registration fees paid to the Securities and
Exchange Commission and registration fees paid to state securities
commissions; expenses related to administrative personnel and services as
required to support holders of Shares; legal fees relating solely to Shares;
and Trustees' fees incurred as a result of issues relating solely to Shares.
Net Asset Value
The Fund attempts to stabilize the net asset value of Shares at $1.00 by
valuing the portfolio securities using the amortized cost method. The net
asset value per share is determined by subtracting liabilities attributable
to Shares from the value of Fund assets attributable to Shares, and dividing
the remainder by the number of Shares outstanding. The Fund cannot guarantee
that its net asset value will always remain at $1.00 per share.
The net asset value is determined at 12:00 noon, 3:00 p.m., and 4:00 p.m.
(Eastern time) Monday through Friday except on: (i) days on which there are
not sufficient changes in the value of the Fund's portfolio securities that
its net asset value might be materially affected; (ii) days during which no
shares are tendered for redemption and no orders to purchase shares are
received; or (iii) the following holidays: New Year's Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day,
and Christmas Day.
Investing in the Fund
Share Purchases
Shares are sold at their net asset value, without a sales charge, next
determined after an order is received, on days on which the New York Stock
Exchange and the Federal Reserve Wire System are open for business. Shares
may be purchased either by wire or mail. The Fund reserves the right to
reject any purchase request.
To make a purchase, open an account by calling Federated Securities Corp.
Information needed to establish the account will be taken by telephone.
By Wire. To purchase by Federal Reserve wire, call the Fund before 3:00
p.m., (Eastern time) to place an order. The order is considered received
immediately. Payment by federal funds must be received before 3:00 p.m.,
(Eastern time) that day. Federal funds should be wired as follows: State
Street Bank and Trust Company, Boston, Massachusetts; Attention: EDGEWIRE;
For Credit to: Government Obligations Fund_Institutional Service Shares:
Fund Number (this number can be found on the account statement or by
contacting the Fund); Group Number or Order Number; Nominee or Institution
Name; and ABA Number 011000028.
By Mail. To purchase by mail, send a check made payable to Government
Obligations Fund_Institutional Service Shares to: Government Obligations
Fund, P.O. Box 8602, Boston, Massachusetts 02266-8602. Orders by mail are
considered received when payment by check is converted into federal funds.
This is normally the next business day after the check is received.
Minimum Investment Required
The minimum initial investment is $25,000. Eligibility for investment in the
Trust is contingent upon an investor accumulating and maintaining a minimum
aggregate investment of $200,000,000 in Federated Funds within a
twelve-month period.
Subaccounting Services
Financial institutions are encouraged to open single master accounts.
However, certain financial institutions may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements.
The transfer agent charges a fee based on the level of subaccounting
services rendered. Financial institutions may charge or pass through
subaccounting fees as part of or in addition to normal trust or agency
account fees. They may also charge fees for other services provided which
may be related to the ownership of Fund shares. This prospectus should,
therefore, be read together with any agreement between the customer and the
financial institution with regard to the services provided, the fees charged
for those services and any restrictions and limitations imposed.
Certificates and Confirmations
As transfer agent for the Fund, Federated Services Company maintains a share
account for each shareholder. Share certificates are not issued unless
requested by contacting the Fund or Federated Services Company in writing.
Monthly confirmations are sent to report transactions such as all purchases
and redemptions as well as dividends paid during the month.
Dividends
Dividends are declared daily and paid monthly. Shares purchased by wire
before 3:00 p.m. (Eastern time) begin earning dividends that day. Shares
purchased by check begin earning dividends on the day after the check is
converted into federal funds. Dividends are automatically reinvested in
additional Shares unless cash payments are requested by contacting the Fund.
Capital Gains
Capital gains, if any, could result in an increase in dividends. Capital
losses could result in a decrease in dividends. If, for some extraordinary
reason, the Fund realizes net long-term capital gains, it will distribute
them at least once every 12 months.
Redeeming Shares
Shares are redeemed at their net asset value next determined after the Fund
receives the redemption request. Redemptions will be made on days on which
the Fund computes its net asset value. Redemption requests must be received
in proper form and can be made as described below.
By Mail
Shares may be redeemed by sending a written request to: Government
Obligations Fund, P.O. Box 8602, Boston, Massachusetts 02266-8602. The
written request should state: Government Obligations Fund_Institutional
Service Shares; shareholder's name; the account number; and the share or
dollar amount requested. Sign the request exactly as the shares are
registered. Shareholders should call the Fund for assistance in redeeming by
mail.
If share certificates have been issued, they must be properly endorsed and
should be sent by registered or certified mail with the written request.
Shareholders requesting a redemption of $50,000 or more, a redemption of any
amount to be sent to an address other than that on record with the Fund, or
a redemption payable other than to the shareholder of record must have their
signatures guaranteed by:
a trust company or commercial bank whose deposits are insured by the
Bank Insurance Fund which is administered by the Federal Deposit
Insurance Corporation ("FDIC");
a member firm of the New York, American, Boston, Midwest, or Pacific
Stock Exchanges;
a savings bank or savings and loan association whose deposits are
insured by the Savings Association Insurance Fund, which is
administered by the FDIC; or
any other "eligible guarantor institution," as defined in the
Securities Exchange Act of 1934.
The Fund does not accept signatures guaranteed by a notary public.
The Fund and its transfer agent have adopted standards for accepting
signature guarantees from the above institutions. The Fund may elect in the
future to limit eligible signature guarantors to institutions that are
members of the signature guarantee program. The Fund and its transfer agent
reserve the right to amend these standards at any time without notice.
Normally, a check for the proceeds is mailed within one business day, but in
no event more than seven days, after receipt of a proper written redemption
request. Dividends are paid up to and including the day that a redemption
request is processed.
Telephone Redemption
Shares may be redeemed by telephoning the Fund. If the redemption request is
received before 12:00 noon (Eastern time), the proceeds will be wired the
same day to the shareholder's account at a domestic commercial bank which is
a member of the Federal Reserve System, and those shares redeemed will not
be entitled to that day's dividend. A daily dividend will be paid on shares
redeemed if the redemption request is received after 12:00 noon (Eastern
time). However, the proceeds are not wired until the following business day.
Under limited circumstances, arrangements may be made with the distributor
for same-day payment of proceeds, without that day's dividend, for
redemption requests received before 3:00 p.m., Eastern time.
An authorization form permitting the Fund to accept telephone requests must
first be completed. Authorization forms and information on this service are
available from Federated Securities Corp. Telephone redemption instructions
may be recorded.
In the event of drastic economic or market changes, a shareholder may
experience difficulty in redeeming by telephone. If such a case should
occur, another method of redemption, such as "By Mail," should be
considered. If at any time the Fund shall determine it necessary to
terminate or modify this method of redemption, shareholders would be
promptly notified.
If reasonable procedures are not followed by the Fund, it may be liable for
losses due to unauthorized or fraudulent telephone instructions.
Accounts with Low Balances
Due to the high cost of maintaining accounts with low balances, the Fund may
redeem shares in any account and pay the proceeds to the shareholder if the
account balance falls below a required minimum value of $25,000 or the
aggregate investment in Federated Funds falls below the required minimum of
$200,000,000 to be maintained from and after twelve months from account
opening, due to shareholder redemptions.
Before shares are redeemed to close an account, the shareholder is notified
in writing and allowed 30 days to purchase additional shares to meet the
minimum requirement.
Shareholder Information
Voting Rights
Each share of the Trust gives the shareholder one vote in Trustee elections
and other matters submitted to shareholders for vote. All shares of all
classes of each portfolio in the Trust have equal voting rights, except that
in matters affecting only a particular portfolio or class, only shares of
that portfolio or class are entitled to vote. As a Massachusetts business
trust, the Trust is not required to hold annual shareholder meetings.
Shareholder approval will be sought only for certain changes in the Trust's
or the Fund's operation and for the election of Trustees under certain
circumstances.
Trustees may be removed by the Trustees or by shareholders at a special
meeting. A special meeting of the shareholders for this purpose shall be
called by the Trustees upon the written request of shareholders owning at
least 10% of the outstanding shares of the Trust.
Massachusetts Partnership Law
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect
its shareholders, the Trust has filed legal documents with Massachusetts
that expressly disclaim the liability of its shareholders for acts or
obligations of the Trust. These documents require notice of this disclaimer
to be given in each agreement, obligation, or instrument the Trust or its
Trustees enter into or sign.
In the unlikely event a shareholder is held personally liable for the
Trust's obligations, the Trust is required by the Declaration of Trust to
use its property to protect or compensate the shareholder. On request, the
Trust will defend any claim made and pay any judgment against a shareholder
for any act or obligation of the Trust. Therefore, financial loss resulting
from liability as a shareholder will occur only if the Trust itself cannot
meet its obligations to indemnify shareholders and pay judgments against
them.
Tax Information
Federal Income Tax
The Fund will pay no federal income tax because it expects to meet
requirements of the Internal Revenue Code applicable to regulated investment
companies and to receive the special tax treatment afforded to such
companies. The Fund will be treated as a single, separate entity for federal
income tax purposes so that income (including capital gains) and losses
realized by the Trust's other portfolios will not be combined for tax
purposes with those realized by the Fund.
Unless otherwise exempt, shareholders are required to pay federal income tax
on any dividends and other distributions received. This applies whether
dividends and distributions are received in cash or as additional shares.
State and Local Taxes. Shareholders are urged to consult their own tax
advisers regarding the status of their accounts under state and local tax
laws.
Pennsylvania Corporate and Personal Property Taxes
In the opinion of Houston, Houston & Donnelly, counsel to the Fund:
the Fund is not subject to Pennsylvania corporate or personal property
taxes; and
Fund shares may be subject to personal property taxes imposed by
counties, municipalities, and school districts in Pennsylvania to the
extent that the portfolio securities in the Fund would be subject to
such taxes if owned directly by residents of those jurisdictions.
Other Classes of Shares
Institutional Shares are sold at net asset value to accounts for which
financial institutions act in an agency or fiduciary capacity. Investments
in Institutional Shares are subject to a minimum initial investment of
$25,000. Institutional Shares are not sold pursuant to a 12b-1 Plan.
Financial institutions providing distribution or administrative services may
receive different compensation depending upon which class of shares of the
Fund is sold. The amount of dividends payable to shareholders of
Institutional Shares will exceed that payable to the shareholders of
Institutional Service Shares by the difference between class expenses and
any 12b-1 Plan expenses borne by Institutional Service Shares. The stated
advisory fee is the same for both classes of shares.
Performance Information
From time to time the Fund advertises its yield and effective yield for
Shares.
Yield represents the annualized rate of income earned on an investment over
a seven-day period. It is the annualized dividends earned during the period
on an investment shown as a percentage of the investment. The effective
yield is calculated similarly to the yield, but when annualized, the income
earned by an investment is assumed to be reinvested daily. The effective
yield will be slightly higher than the yield because of the compounding
effect of this assumed reinvestment.
Advertisements and sales literature may also refer to total return. Total
return represents the change, over a specified period of time, in the value
of an investment in the Shares after reinvesting all income distributions.
It is calculated by dividing that change by the initial investment and is
expressed as a percentage.
Performance figures will be calculated separately for each class of shares.
Because each class of shares is subject to different expenses, the
performance of Institutional Shares will exceed the yield and effective
yield of Institutional Service Shares for the same period.
From time to time the Fund may advertise its performance using certain
financial publications and/or compare its performance to certain indices.
Government Obligations Fund
Financial Highlights
Institutional Shares
(For a share outstanding throughout each period)
Year Ended July 31,
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1993 1992 1991 1990
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Income from investment operations
Net investment income 0.0317 0.0460 0.0697 0.0277
Less distributions
Dividends to shareholders from net
investment income (0.0317) (0.0460) (0.0697 (0.0277)
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total return* 3.22% 4.70% 7.20% 2.80%(c)
Ratios/supplemental data
Net assets, end of period(000 omitted) $ 707,146 $ 679,533 $331,454 $ 148,598
Ratio of expenses to average net assets 0.20%(b) 0.20%(b) 0.20%(b) 0.20%(a)(b)
Ratio of net investment income to average
net assets 3.16%(b) 4.55%(b) 6.77%(b) 8.24%(a)(b)
</TABLE>
* Reflects operations for the period from March 31, 1990 (date of initial
public investment) to July 31, 1990.
(a) Computed on an annualized basis.
(b) For the fiscal years ended July 31, 1993, 1992, and 1991 and for the
period from March 31, 1990 (date of initial public investment,) to July
31, 1990, the investment adviser voluntarily waived all or a portion of
its fee and/or reimbursed certain other operating expenses of the Fund.
Had the adviser not undertaken such action, the ratio of expenses and
net investment income would have been 0.31% and 3.05%, 0.32% and 4.43%,
0.42% and 6.55%, and 0.54% and 7.90%,, respectively.
(c) Cumulative total return.
(See Notes to Financial Statements)
Addresses
Government Obligations Fund
Institutional Service Shares Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Investment Adviser
Federated Management Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Custodian
State Street Bank and Trust Company
P.O. Box 8602
Boston, Massachusetts 02266-8602
Transfer Agent and Dividend Disbursing Agent
Federated Services Company P.O. Box 8602
Boston, Massachusetts 02266-8602
Legal Counsel
Houston, Houston and Donnelly 2510 Centre City Tower
Pittsburgh, Pennsylvania 15222
Legal Counsel
Dickstein, Shapiro and Morin 2101 L Street, N.W.
Washington, D.C. 20037
Independent Public Accountants
Arthur Andersen & Co. 2100 One PPG Place
Pittsburgh, Pennsylvania 15222
Government Obligations Fund
Institutional Service Shares
Prospectus
A diversified Portfolio of Money Market Obligations Trust,
an Open-End Management Investment Company
Prospectus dated July __, 1994
Federated Securities Corporation
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
Government Obligations Fund
(A PORTFOLIO OF Money Market Obligations Trust)
Institutional Shares
Institutional Service Shares
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information should be read with the
prospectus(es) of Government Obligations Fund (the "Fund") dated July __,
1994 and September 30, 1993 This Statement is not a prospectus. To receive a
copy of a prospectus, write or call the Trust.
Statement dated July __, 1994
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
Investment Policies 1
Variable Rate U.S. Government Securities 1
When-Issued And Delayed Delivery Transactions 1
Repurchase Agreements 1
Reverse Repurchase Agreements 1
Lending of Portfolio Securities 1
Investment Limitations 2
Selling Short and Buying on Margin 2
Issuing Senior Securities and Borrowing Money 2
Pledging Assets 2
Lending Cash or Securities 2
Investing in Commodities 2
Investing in Real Estate 2
Underwriting 2
Concentration of Investments 2
Diversification of Investments 2
Investing in Restricted Securities 3
Investing in Illiquid Securities 3
Investing in Securities of Other Investment Companies 3
Investing in New Issuers 3
Investing for Control 3
Investing in Issuers Whose Securities Are Owned by Officers of the Trust 3
Investing in Options 3
Investing in Minerals 3
Brokerage Transactions 3
Money Market Obligations Trust Management 4
The Funds 7
Share Ownership 8
Trustee Liability 8
Investment Advisory Services 8
Investment Adviser(s) 8
Advisory Fees 8
Fund Administration 9
Shareholder Services Plan 9
Distribution Plan 9
Determining Net Asset Value 9
Redemption in Kind 10
The Fund's Tax Status 10
Performance Information 10
Yield 10
Effective Yield 10
Total Return 11
Performance Comparisons 11
Financial Statement 12
Investment Policies
Unless indicated otherwise, the policies described below may be changed by
the Trustees without shareholder approval. Shareholders will be notified
before any material change in these policies becomes effective.
Variable Rate U.S. Government Securities
Some of the short-term U.S. government securities the Fund may purchase
carry variable interest rates. These securities have a rate of interest
subject to adjustment at least annually. This adjusted interest rate is
ordinarily tied to some objective standard, such as the 91-day U.S. Treasury
bill rate. Variable interest rates will reduce the changes in the market
value of such securities from their original purchase prices. Accordingly,
the potential for capital appreciation or capital depreciation should not be
greater than that of fixed interest rate U.S. government securities having
maturities equal to the interest rate adjustment dates of the variable rate
U.S. government securities. The Fund may purchase variable rate U.S.
government securities upon the determination by the Board of Trustees that
the interest rate as adjusted will cause the instrument to have a current
market value that approximates its par value on the adjustment date.
When-Issued And Delayed Delivery Transactions
These transactions are made to secure what is considered to be an
advantageous price or yield for the Fund. Settlement dates may be a month or
more after entering into these transactions, and the market values of the
securities purchased may vary from the purchase prices. No fees or other
expenses, other than normal transaction costs, are incurred. However, liquid
assets of the Fund sufficient to make payment for the securities to be
purchased are segregated on the Fund's records at the trade date. These
assets are marked to market daily and are maintained until the transaction
has been settled. The Fund does not intend to engage in when-issued and
delayed delivery transactions to an extent that would cause the segregation
of more than 20% of the total value of its assets.
Repurchase Agreements
The Fund or its custodian will take possession of the securities subject to
repurchase agreements, and these securities will be marked to market daily.
In the event that a defaulting seller filed for bankruptcy or became
insolvent, disposition of such securities by the Fund might be delayed
pending court action. The Fund believes that under the regular procedures
normally in effect for custody of the Fund's portfolio securities subject to
repurchase agreements, a court of competent jurisdiction would rule in favor
of the Fund and allow retention or disposition of such securities. The Fund
will only enter into repurchase agreements with banks and other recognized
financial institutions, such as broker/dealers, which are deemed by the
Fund's adviser to be creditworthy pursuant to guidelines established by the
Trustees.
Reverse Repurchase Agreements
The Fund may also enter into reverse repurchase agreements. These
transactions are similar to borrowing cash. In a reverse repurchase
agreement, the Fund transfers possession of a portfolio instrument in return
for a percentage of the instrument's market value in cash and agrees that on
a stipulated date in the future the Fund will repurchase the portfolio
instrument by remitting the original consideration plus interest at an
agreed upon rate. The use of reverse repurchase agreements may enable the
Fund to avoid selling portfolio instruments at a time when a sale may be
deemed to be disadvantageous, but does not ensure this result. When
effecting reverse repurchase agreements, liquid assets of the Fund, in a
dollar amount sufficient to make payment for the obligations to be
purchased, are: segregated on the Fund's records at the trade date; marked
to market daily; and maintained until the transaction is settled.
Lending of Portfolio Securities
The collateral received when the Fund lends portfolio securities must be
valued daily and, should the market value of the loaned securities increase,
the borrower must furnish additional collateral to the Fund. During the time
portfolio securities are on loan, the borrower pays the Fund any dividends
or interest paid on such securities. Loans are subject to termination at the
option of the Fund or the borrower. The Fund may pay reasonable
administrative and custodial fees in connection with a loan and may pay a
negotiated portion of the interest earned on the cash or equivalent
collateral to the borrower or placing broker.
Investment Limitations
Selling Short and Buying on Margin
The Fund will not sell any securities short or purchase any securities on
margin but may obtain such short-term credits as are necessary for clearance
of transactions.
Issuing Senior Securities and Borrowing Money
The Fund will not issue senior securities except that the Fund may borrow
money directly or through reverse repurchase agreements in amounts up to
one-third of the value of its total assets, including the amounts borrowed.
The Fund will not borrow money or engage in reverse repurchase agreements
for investment leverage, but rather as a temporary, extraordinary, or
emergency measure or to facilitate management of the portfolio by enabling
the Fund to meet redemption requests when the liquidation of portfolio
securities is deemed to be inconvenient or disadvantageous. The Fund will
not purchase any securities while borrowings in excess of 5% of the value of
its total assets are outstanding. During the period any reverse repurchase
agreements are outstanding, the Fund will restrict the purchase of portfolio
securities to money market instruments maturing on or before the expiration
date of the reverse repurchase agreements, but only to the extent necessary
to assure completion of the reverse repurchase agreements.
Pledging Assets
The Fund will not mortgage, pledge, or hypothecate any assets except to
secure permitted borrowings. In those cases, it may pledge assets having a
market value not exceeding the lesser of the dollar amounts borrowed or 15%
of the value of total assets of the Fund at the time of the pledge.
Lending Cash or Securities
The Fund will not lend any of its assets, except portfolio securities. This
shall not prevent the Fund from purchasing or holding bonds, debentures,
notes, certificates of indebtedness or other debt securities, entering into
repurchase agreements or engaging in other transactions where permitted by
its investment objective, policies and limitations or Declaration of Trust.
The above limitations cannot be changed without shareholder approval. The
following investment limitations, however, may be changed by Trustees
without shareholder approval. Shareholders will be notified before any
material change in these limitations becomes effective.
Investing in Commodities
The Fund will not purchase or sell commodities, commodity contracts, or
commodity futures contracts.
Investing in Real Estate
The Fund will not purchase or sell real estate, including limited
partnership interests, although it may invest in securities of issuers whose
business involves the purchase or sale of real estate or in securities which
are secured by real estate or interests in real estate.
Underwriting
The Fund will not underwrite any issue of securities, except as it may be
deemed to be an underwriter under the Securities Act of 1933 in connection
with the sale of securities in accordance with its investment objective,
policies, and limitations.
Concentration of Investments
The Fund will not invest 25% or more of the value of its total assets in any
one industry, except that the Fund may invest 25% or more of the value of
its total assets in cash, cash items, or securities issued or guaranteed by
the government of the United States or its agencies, or instrumentalities
and repurchase agreement collateralized by such U.S. government securities.
Diversification of Investments
With respect to securities comprising 75% of the value of its total assets,
the Fund will not purchase securities of any one issuer (other than cash,
cash items, or securities issued or guaranteed by the government of the
United States or its agencies or instrumentalities and repurchase agreements
collateralized by such U.S. government securities) if as a result more than
5% of the value of its total assets would be invested in the securities of
that issuer, or if it would own more than 10% of the outstanding voting
securities of that issuer.
Investing in Restricted Securities
The Fund will not invest more than 10% of the value of its net assets in
illiquid securities, including repurchase agreements providing for
settlement more than seven days after notice.
Investing in Illiquid Securities
The Fund will not invest more than 10% of the value of its net assets in
illiquid securities.
Investing in Securities of Other Investment Companies
The Fund will not purchase securities of other investment companies, except
as part of a merger, consolidation, or other acquisition.
Investing in New Issuers
The Fund will not invest more than 5% of the value of its total assets in
securities of issuers which have records of less than three years of
continuous operations, including the operation of any predecessor.
Investing for Control
The Fund will not invest in securities of a company for the purpose of
exercising control or management.
Investing in Issuers Whose Securities Are Owned by Officers of
the Trust
The Fund will not purchase or retain the securities of any issuer if the
Officers and Trustees of the Trust or its investment adviser owning
individually more than .50 of 1% of the issuer's securities together own
more than 5% of the issuer's securities.
Investing in Options
The Fund will not invest in puts, calls, straddles, spreads, or any
combination of them.
Investing in Minerals
The Fund will not purchase or sell interests in oil, gas, or other mineral
exploration or development programs or leases, although it may purchase the
securities of issuers which invest in or sponsor such programs.
For purposes of the above limitations, the Fund considers instruments issued
by a U.S. branch of a domestic bank or savings and loan having capital,
surplus, and undivided profits in excess of $100,000,000 at the time of
investment to be "cash items". Except with respect to borrowing money, if a
percentage limitation is adhered to at the time of investment, a later
increase or decrease in percentage resulting from any change in value or net
assets will not result in a violation of such limitation.
The Fund did not borrow money, issue senior securities, pledge securities,
invest in illiquid securities, or engage in when-issued and delayed delivery
transactions or reverse repurchase agreements in excess of 5% of the value
of its net assets during the last fiscal period and has no present intent to
do so during the coming fiscal year.
Brokerage Transactions
When selecting brokers and dealers to handle the purchase and sale of
portfolio instruments, the adviser looks for prompt execution of the order
at a favorable price. In working with dealers, the adviser will generally
use those who are recognized dealers in specific portfolio instruments,
except when a better price and execution of the order can be obtained
elsewhere. The adviser makes decisions on portfolio transactions and selects
brokers and dealers subject to guidelines established by the Board of
Trustees. The adviser may select brokers and dealers who offer brokerage and
research services. These services may be furnished directly to the Fund or
to the adviser and may include: advice as to the advisability of investing
in securities; security analysis and reports; economic studies; industry
studies; receipt of quotations for portfolio evaluations; and similar
services. Research services provided by brokers and dealers may be used by
the adviser or its affiliates in advising the Trust and other accounts. To
the extent that receipt of these services may supplant services for which
the adviser or its affiliates might otherwise have paid, it would tend to
reduce their expenses. The adviser and its affiliates exercise reasonable
business judgment in selecting brokers who offer brokerage and research
services to execute securities transactions. They determine in good faith
that commissions charged by such persons are reasonable in relationship to
the value of the brokerage and research services provided. During the fiscal
year(s) ended July 31, 1993, 1992 and 1991, the Trust paid no brokerage
commissions.
Although investment decisions for the Fund are made independently from those
of the other accounts managed by the adviser, investments of the type the
Fund may make may also be made by those other accounts. When the Fund and
one or more other accounts managed by the adviser are prepared to invest in,
or desire to dispose of, the same security, available investments or
opportunities for sales will be allocated in a manner believed by the
adviser to be equitable to each. In some cases, this procedure may adversely
affect the price paid or received by the Fund or the size of the position
obtained or disposed of by the Fund. In other cases, however, it is believed
that coordination and the ability to participate in volume transactions will
be to the benefit of the Fund.
Money Market Obligations Trust Management
Officers and Trustees. Officers and Trustees are listed with their
addresses, principal occupations, and present positions, including any
affiliation with Federated Management, Federated Investors, Federated
Securities Corp., Federated Administrative Services, Inc./Federated
Administrative Services, and the Funds (as defined below).
Positions with Principal Occupations
Name and Address the Trust During Past Five Years
John F. Donahue@* Chairman and Chairman and Trustee, Federated
Federated Investors Trustee Investors; Chairman and Trustee,
Tower Federated Advisers, Federated
Pittsburgh, PA Management, and Federated
Research; Director, AEtna Life
and Casualty Company; Chief
Executive Officer and Director,
Trustee, or Managing General
Partner of the Funds; formerly,
Director, The Standard Fire
Insurance Company. Mr. Donahue
is the father of J. Christopher
Donahue,
President and Trustee of the Trust.
John T. Conroy, Jr. Trustee President, Investment Properties
Wood/IPC Commercial Corporation; Senior Vice-President,
Department John R. Wood and Associates, Inc.,
John R. Wood and Realtors; President, Northgate
Associates, Inc., Realtors Village Development Corporation;
3255 Tamiami Trail North General Partner or Trustee in
Naples, FL private real estate ventures in
Southwest Florida; Director,
Trustee, or Managing General
Partner of the Funds; formerly,
President, Naples Property
Management, Inc.
William J. Copeland Trustee Director and Member of the
One PNC Plaza - 23rd Floor Executive Committee, Michael
Pittsburgh, PA Baker, Inc.; Director, Trustee,
or Managing General Partner of
the Funds; formerly, Vice
Chairman and Director, PNC
Bank, N.A., and PNC Bank Corp.
and Director, Ryan Homes, Inc.
J. Christopher Donahue* President and President and Trustee, Federated
Federated Investors Trustee Investors; Trustee; Federated
Tower Advisers, Federated
Pittsburgh, PA Management, and Federated
Research; President and Director,
Federated Administrative Services/
Federated Administrative Services,
Inc.; Trustee, Federated Services
Company; President or Vice
President of the Funds; Director,
Trustee, or Managing General
Partner of some of the Funds.
Mr. Donahue is the son of John F.
Donahue, Chairman and
Trustee of the Trust.
James E. Dowd Trustee Attorney-at-law; Director, The
571 Hayward Mill Road Emerging Germany Fund, Inc.;
Concord, MA Director, Trustee, or Managing
General Partner of the Funds;
formerly, Director, Blue Cross
of Massachusetts, Inc.
Lawrence D. Ellis, M.D. Trustee Hematologist, Oncologist, and
3471 Fifth Avenue Internist, Presbyterian and
Suite 1111 Montefiore Hospitals; Clinical
Pittsburgh, PA Professor of Medicine and
Trustee, University of
Pittsburgh; Director, Trustee,
or Managing General Partner of
the Funds.
Edward L. Flaherty, Jr.@ Trustee Attorney-at-law; Partner, Meyer
5916 Penn Mall and Flaherty; Director, Eat'N
Pittsburgh, PA Park Restaurants, Inc., and
Statewide Settlement Agency,
Inc.; Director, Trustee, or
Managing General Partner of
the Funds; formerly, Counsel,
Horizon Financial, F.A.,
Western Region.
Peter E. Madden Trustee Consultant; State Representative,
225 Franklin Street Commonwealth of Massachusetts;
Boston, MA Director, Trustee, or Managing
General Partner of the Funds;
formerly, President, State Street
Bank and Trust Company and
State Street Boston Corporation
and Trustee, Lahey Clinic
Foundation, Inc.
Gregor F. Meyer Trustee Attorney-at-law; Partner, Meyer
5916 Penn Mall and Flaherty; Chairman, Meritcare,
Pittsburgh, PA Inc.; Director, Eat'N Park
Restaurants, Inc.; Director,
Trustee,
or Managing General Partner of the
Funds; formerly, Vice Chairman,
Horizon Financial, F.A.
Wesley W. Posvar Trustee Professor, Foreign Policy and
1202 Cathedral of Management Consultant; Trustee,
Learning Carnegie Endowment for
University of Pittsburgh International Peace, RAND
Pittsburgh, PA Corporation, Online Computer
Library Center, Inc., and U.S.
Space Foundation; Chairman,
Czecho Slovak Management
Center; Director, Trustee, or
Managing General Partner of the
Funds; President Emeritus,
University of Pittsburgh; formerly,
Chairman, National Advisory
Council for Environmental Policy
and Technology.
Marjorie P. Smuts Trustee Public relations/marketing
4905 Bayard Street consultant; Director, Trustee,
Pittsburgh, PA or Managing General Partner of
the Funds.
Richard B. Fisher Vice President Executive Vice President and
Federated Investors Trustee, Federated Investors;
Tower Chairman and Director,
Pittsburgh, PA Federated Securities Corp.;
President or Vice President of
the Funds; Director or Trustee
of some of the Funds.
Edward C. Gonzales Vice President Vice President, Treasurer, and
Federated Investors and Treasurer Trustee, Federated Investors; Vice
Tower President and Treasurer, Federated
Pittsburgh, PA Advisers, Federated Management,
and Federated Research; Executive
Vice President, Treasurer, and
Director, Federated Securities Corp.;
Trustee, Federated Services
Company; Chairman, Treasurer,
and Director, Federated
Administrative Services/Federated
Administrative Services, Inc.;
Trustee or Director of some of the
Funds; Vice President and
Treasurer of the Funds.
John W. McGonigle Vice President Vice President, Secretary, General
Federated Investors and Secretary Counsel, and Trustee, Federated
Tower Investors; Vice President, Secretary,
Pittsburgh, PA and Trustee, Federated Advisers,
Federated Management, and
Federated Research; Trustee,
Federated Services Company;
Executive Vice President, Secretary,
and Director, Federated
Administrative Services/Federated
Administrative Services, Inc.;
Director and Executive Vice
President, Federated Securities
Corp.; Vice President and Secretary
of the Funds.
John A. Staley, IV Vice President Vice President and Trustee,
Federated Investors Federated Investors; Executive Vice
Tower President, Federated Securities
Pittsburgh, PA Corp.; President and Trustee,
Federated Advisers, Federated
Management, and Federated
Research; Vice President of the
Funds; Director, Trustee, or
Managing General Partner of some
of the Funds; formerly, Vice
President, The Standard Fire
Insurance Company and President
of its Federated Research Division.
* This Trustee is deemed to be an "interested person" of the Trust as
defined in the Investment Company Act of 1940.
@ Member of the Trust's Executive Committee. The Executive Committee of the
Board of Trustees handles the responsibilities of the Board of Trustees
between meetings of the Board.
The Funds
"The Funds," and "Funds" mean the following investment companies: American
Leaders Fund, Inc.; Annuity Management Series; Automated Cash Management
Trust; Automated Government Money Trust; California Municipal Cash Trust;
Cash Trust Series II; Cash Trust Series, Inc.; DG Investor Series; Edward D.
Jones & Co. Daily Passport Cash Trust; Federated ARMs Fund; Federated
Exchange Fund, Ltd.; Federated GNMA Trust; Federated Government Trust;
Federated Growth Trust; Federated High Yield Trust; Federated Income
Securities Trust; Federated Income Trust; Federated Index Trust; Federated
Intermediate Government Trust; Federated Master Trust; Federated Municipal
Trust; Federated Short-Intermediate Government Trust; Federated Short-Term
U.S. Government Trust; Federated Stock Trust; Federated Tax-Free Trust;
Federated U.S. Government Bond Fund; First Priority Funds; Fixed Income
Securities, Inc.; Fortress Adjustable Rate U.S. Government Fund, Inc.;
Fortress Municipal Income Fund, Inc.; Fortress Utility Fund, Inc.; Fund for
U.S. Government Securities, Inc.; Government Income Securities, Inc.; High
Yield Cash Trust; Insight Institutional Series, Inc.; Insurance Management
Series; Intermediate Municipal Trust; International Series, Inc.; Investment
Series Funds, Inc.; Investment Series Trust; Liberty Equity Income Fund,
Inc.; Liberty High Income Bond Fund, Inc.; Liberty Municipal Securities
Fund, Inc.; Liberty U.S. Government Money Market Trust; Liberty Term Trust,
Inc. - 1999; Liberty Utility Fund, Inc.; Liquid Cash Trust; Managed Series
Trust; Mark Twain Funds; Money Market Management, Inc.; Money Market
Obligations Trust; Money Market Trust; Municipal Securities Income Trust;
New York Municipal Cash Trust; 111 Corcoran Funds; Peachtree Funds; The
Planters Funds; Portage Funds; RIMCO Monument Funds; The Shawmut Funds;
Short-Term Municipal Trust; Signet Select Funds; Star Funds; The Starburst
Funds; The Starburst Funds II; Stock and Bond Fund, Inc.; Sunburst Funds;
Targeted Duration Trust; Tax-Free Instruments Trust; Trademark Funds; Trust
for Financial Institutions; Trust For Government Cash Reserves; Trust for
Short-Term U.S. Government Securities; Trust for U.S. Treasury Obligations;
World Investment Series, Inc.
Share Ownership
Officers and Trustees own less than 1% of the Trust's outstanding shares.
As of April 28, 1994, the following shareholders of record owned 5% or more
of the outstanding Institutional Shares of the Fund: EDRAYCO, Gainesvill,
FL, owned approximately 49,593,895 shares (6.9%); MISCO, Jackson, MS, owned
approximately 42,645,456 shares (6%); Parcol & Co., Akron, OH, owned
approximately 60,947,395 shares (8.5%); First New Hampshire Investment
Services, Concord, NH, owned approximately 114,122,835 shares (16%);
Commerce Bank of Kansas City, Kansas City, MO, owned approximately
62,794,181 shares (8.8%); Var & Co., St. Paul, MN, owned approximately
136383,351 shares (19.1%); and JATO, Minneapolis, MN, owned approximately
36,075,821 shares (5.3%).
As of April 28, 1994, there were no shareholders of record who owned 5% or
more of the outstanding Institutional Service Shares of the Fund.
Trustee Liability
The Declaration of Trust provides that the Trustees will not be liable for
errors of judgment or mistakes or fact or law. However, they are not
protected against any liability to which they would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of their office.
Investment Advisory Services
Investment Adviser(s)
The Government Obligations Fund's investment adviser is Federated
Management. It is a subsidiary of Federated Investors. All the voting
securities of Federated Investors are owned by a trust, the trustees of
which are John F. Donahue, his wife and his son, J. Christopher Donahue.
The adviser shall not be liable to Trust, the Fund, or any shareholder of
the Fund for any losses that may be sustained in the purchase, holding, or
sale of any security or for anything done or omitted by it, except acts or
omissions involving willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties imposed upon it by its contract with Trust.
Advisory Fees
For its advisory services, Federated Management receives an annual
investment advisory fee as described in the prospectus. For the fiscal years
ended July 3l, l993, l992 and l991, the Fund's adviser earned $1,343,686,
$910,523, and $434,684, respectively for services provided on behalf of
Institutional Shares, of which $768,184, $552,320, and $434,684,
respectively, were voluntarily waived because of undertakings to limit the
Fund's expenses.
State Expense Limitations
The adviser has undertaken to comply with the expense limitations
established by certain states for investment companies whose shares are
registered for sale in those states. If the Fund's normal operating
expenses (including the investment advisory fee, but not including
brokerage commissions, interest, taxes, and extraordinary expenses) exceed
2-1/2% per year of the first $30 million of average net assets, 2% per year
of the next $70 million of average net assets, and 1-1/2% per year of the
remaining average net assets, the adviser will reimburse the Fund for its
expenses over the limitation.
If the Fund's monthly projected operating expenses exceed this limitation,
the investment advisory fee paid will be reduced by the amount of the
excess, subject to an annual adjustment. If the expense limitation is
exceeded, the amount to be reimbursed by the adviser will be limited, in
any single fiscal year, by the amount of the investment advisory fees.
This arrangement is not part of the advisory contract and may be amended or
rescinded in the future.
Fund Administration
Federated Administrative Services, a subsidiary of Federated Investors,
provides administrative personnel and services to the Trust for a fee as
described in the prospectus for each class of shares of the Fund. For the
fiscal years ended July 31, 1993, 1992, and 1991, Federated Administrative
Services, Inc., the Trust's former administrator, earned $377,706, $274,492,
and $253,110, respectively. John A. Staley, IV, an officer of the Trust and
Dr. Henry J. Gailliot, an officer of Federated Management, the adviser to
the Fund, each hold approximately l5% and 20%, respectively, of the
outstanding common stock of Commercial Data Services, Inc., a company which
provides computer processing services to Federated Administrative Services,
Inc., and Federated Administrative Services. For the fiscal years ended
December 31, 1993, 1992, and 1991, Federated Administrative Services, Inc.
paid approximately $161,547, $201,799, and $170,529, respectively for
services provided by Commercial Data Services, Inc., to the Funds.
Shareholder Services Plan
With respect to Institutional Service Shares the Fund has adopted a
Shareholder Services Plan. This arrangement permits the payment of fees to
Federated Shareholder Services and, indirectly to financial institutions to
cause services to be provided to shareholders by a representative who has
knowledge of the shareholder's particular circumstances and goals. These
activities and services may include, but are not limited to, providing
office space, equipment, telephone facilities, and various clerical,
supervisory, computer, and other personnel as necessary or beneficial to
establish and maintain shareholder accounts and records; processing purchase
and redemption transactions and automatic investments of client account cash
balances; answering routine client inquiries; and assisting clients in
changing dividend options, account designation, and addresses.
Distribution Plan
With respect to Institutional Service Shares the Fund has adopted a Plan
pursuant to Rule 12b-1 which was promulgated by the Securities and Exchange
Commission pursuant to the Investment Company Act of 1940. The Plan permits
the payment of fees to brokers for distribution and administrative services
and to administrators for administrative services. The Plan is designed to
(i) stimulate brokers to provide distribution and administrative support
services to shareholders and (ii) stimulate administrators to render
administrative support services to shareholders. The administrative services
are provided by a representative who has knowledge of the shareholder's
particular circumstances and goals. By adopting the Plan, the Board of
Trustees expects that the Fund will be able to achieve a more predictable
flow of cash for investment purposes and to meet redemptions. This will
facilitate more efficient portfolio management and assist the Fund in
seeking to achieve its investment objectives. By identifying potential
investors whose needs are served by the Fund's objectives, and properly
servicing these accounts, it may be possible to curb sharp fluctuations in
rates of redemptions and sales. Other benefits may include: (1) an efficient
and effective administrative system; (2) a more efficient use of shareholder
assets by having them rapidly invested with a minimum of delay and
administrative detail; and (3) an efficient and reliable shareholder records
system and prompt responses to shareholder requests and inquiries concerning
their accounts.
Custodian and Portfolio Recordkeeper. State Street Bank and Trust Company,
Boston, Massachusetts is custodian for the securities and cash of the Fund.
Federated Services Company, Pittsburgh, Pennsylvania provides certain
accounting and recordkeeping services with respect to the Fund's portfolio
investments.
Determining Net Asset Value
The Trustees have decided that the best method for determining the value of
portfolio instruments is amortized cost. Under this method, portfolio
instruments are valued at the acquisition cost as adjusted for amortization
of premium or accumulation of discount rather than at current market value.
Accordingly, neither the amount of daily income nor the net asset value is
affected by any unrealized appreciation or depreciation of the portfolio. In
periods of declining interest rates, the indicated daily yield on shares of
the Fund computed by dividing the annualized daily income on the Fund's
portfolio by the net asset value computed as above may tend to be higher
than a similar computation made by using a method of valuation based upon
market prices and estimates. In periods of rising interest rates, the
opposite may be true.
The Fund's use of the amortized cost method of valuing portfolio instruments
depends on its compliance with certain conditions in Rule 2a-7 (the "Rule")
promulgated by the Securities and Exchange Commission under the Investment
Company Act of 1940. Under the Rule, the Trustees must establish procedures
reasonably designed to stabilize the net asset value per share, as computed
for purposes of distribution and redemption, at $1.00 per share, taking into
account current market conditions and the Fund's investment objective. The
procedures include monitoring the relationship between the amortized cost
value per share and the net asset value per share based upon available
indications of market value. The Trustees will decide what, if any, steps
should be taken if there is a difference of more than 0.5 of 1% between the
two values. The Trustees will take any steps they consider appropriate (such
as redemption in kind or shortening the average portfolio maturity) to
minimize any material dilution or other unfair results arising from
differences between the two methods of determining net asset value.
Redemption in Kind
The Fund is obligated to redeem shares solely in cash up to $250,000 or 1%
of the Fund's net asset value, whichever is less, for any one shareholder
within a 90-day period. Any redemption beyond this amount will also be in
cash unless the Trustees determine that further payments should be in kind.
In such cases, the Fund will pay all or a portion of the remainder of the
redemption in portfolio instruments valued in the same way as the Fund
determines net asset value. The portfolio instruments will be selected in a
manner that the Trustees deem fair and equitable. Redemption in kind is not
as liquid as a cash redemption. If redemption is made in kind, shareholders
who sell these securities could receive less than the redemption value and
could incur certain transaction costs.
The Fund's Tax Status
To qualify for the special tax treatment afforded to regulated investment
companies, the Fund must, among other requirements: derive at least 90% of
its gross income from dividends, interest, and gains from the sale of
securities; derive less than 30% of its gross income from the sale of
securities held less than three months; invest in securities within certain
statutory limits; and distribute to its shareholders at least 90% of its net
income earned during the year.
Performance Information
Performance depends upon such variables as: portfolio quality; average
portfolio maturity; type of instruments in which the portfolio is invested;
changes in interest rates; changes in expenses; and the relative amount of
cash flow. To the extent that financial institutions and broker/dealers
charge fees in connection with services provided in conjunction with an
investment in shares of the Fund, the performance will be reduced for those
shareholders paying those fees.
Yield
The Fund calculates its yield based upon the seven days ending on the day of
the calculation, called the "base period." This yield is computed by:
determining the net change in the value of a hypothetical account with a
balance of one share at the beginning of the base period, with the net
change excluding capital changes but including the value of any additional
shares purchased with dividends earned from the original one share and all
dividends declared on the original and any purchased shares; dividing the
net change in the account's value by the value of the account at the
beginning of the base period to determine the base period return; and
multiplying the base period return by 365/7.
Effective Yield
The Fund calculates its effective yield by compounding the unannualized base
period return by: adding 1 to the base period return; raising the sum to the
365/7th power; and subtracting 1 from the result.
Total Return
Average annual total return is the average compounded rate of return for a
given period that would equate a $1,000 initial investment to the ending
redeemable value of that investment. The ending redeemable value is
compounded by multiplying the number of shares owned at the end of the
period by the net asset value per share at the end of the period. The number
of shares owned at the end of the period is based on the number of shares
purchased at the beginning of the period with $1,000, adjusted over the
period by any additional shares, assuming the monthly reinvestment of all
dividends and distributions.
Performance Comparisons
Investors may use financial publications and/or indices to obtain a more
complete view of the Fund's performance. When comparing performance,
investors should consider all relevant factors such as the composition of
any index used, prevailing market conditions, portfolio compositions of
other funds, and methods used to value portfolio securities and compute net
asset value. The financial publications and/or indices which the Fund uses
in advertising may include:
Lipper Analytical Services, Inc. ranks funds in various fund categories
based on total return, which assumes the reinvestment of all income
dividends and capital gains distributions, if any.
Donoghue's Money Fund Report publishes annualized yields of money market
funds weekly. Donoghue's Money Market Insight publication reports monthly and
12-month-to-date investment results for the same money funds.
Money, a monthly magazine, regularly
ranks money market funds in various
categories based on the latest
available seven-day effective yield.
Salomon 30-Day CD Index compares rate levels of 30-day certificates of
deposit from the top ten prime representative banks.
Salomon 30-Day Treasury Bill Index is a weekly quote of the most
representative yields for selected securities, issued by the U.S. Treasury,
maturing in 30 days.
Discount Corporation of New York 30-Day Federal Agencies, is a weekly quote
of the average daily offering price for selected federal agency issues
maturing in 30 days.
Financial Statements
The Financial Statements for the fiscal year ended July 30, 1993 are
incorporated herein by reference to the Fund's prospectus dated September
30, 1993 (File No. 33-31602). A copy of the prospectus may be obtained
without charge by contacting the Fund.
Prime Obligations Fund
(A Portfolio of Money Market Obligations Trust)
Institutional Service Shares
Prospectus
The Institutional Service Shares of Prime Obligations Fund (the "Fund")
offered by this prospectus represent interests in a diversified portfolio of
Money Market Obligations Trust (the "Trust"), an open-end management
investment company (a mutual fund). The Fund invests in money market
securities to achieve current income consistent with stability of principal.
Shares of the Fund are offered for sale as an investment vehicle for large
institutions, corporations and fiduciaries.
The shares offered by this prospectus are not deposits or obligations of any
bank, are not endorsed or guaranteed by any bank and are not insured or
guaranteed by the U.S. government, the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other government agency.
Investment in these shares involves investment risks including possible loss
of principal. The Fund attempts to maintain a stable net asset value of
$1.00 per share; there can be no assurance that the Fund will be able to do
so.
This prospectus contains the information you should read and know before you
invest in the Fund. Keep this prospectus for future reference.
The Fund has also filed a Statement of Additional Information dated July
___, 1994, with the Securities and Exchange Commission. The information
contained in the Statement of Additional Information is incorporated by
reference into this prospectus. You may request a copy of the Statement of
Additional Information free of charge by calling 1-800-235-4669. To obtain
other information, or make inquiries about the Fund, contact the Fund at the
address listed in the back of this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
Prospectus dated July ___, 1994
Summary of Fund Expenses
1
General Information
2
Investment Information
2
Investment Objective
2
Investment Policies
2
Investment Risks
5
Investment Limitations
6
Regulatory Compliance
6
Trust Information
6
Management of the Trust
6
Distribution of Shares
7
Administration of the Fund
8
Expenses of the Fund and
Institutional Service Shares
8
Net Asset Value
9
Investing in the Fund
9
Share Purchases
9
Minimum Investment Required
10
Subaccounting Services
10
Certificates and Confirmations
10
Dividends
10
Capital Gains
10
Redeeming Shares
10
By Mail
10
Telephone Redemption
11
Accounts with Low Balances
12
Shareholder Information
12
Voting Rights
12
Massachusetts Partnership Law
12
Tax Information
13
Federal Income Tax
13
Pennsylvania Corporate and
Personal Property Taxes
13
Other Classes of Shares
13
Performance Information
13
Prime Obligations Fund
15
Financial Highlights
15
Addresses
16
Summary of Fund Expenses
Institutional Service Shares
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases (as a
percentage of offering price) None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price). None
Contingent Deferred Sales Charge (as a percentage of original
purchase price or redemption proceeds, as applicable) None
Redemption Fee (as a percentage of amount redeemed, if
applicable) . None
Exchange Fee None
Annual Institutional Service Shares Operating Expenses*
(As a percentage of projected average net assets)
Management Fee (after waiver) (1) 0.11%
12b-1 Fee.(2) 0.00%
Total Other Expenses 0.34%
Shareholder Servicing Fee . 0.25%
Total Institutional Service Shares Operating Expenses (3) 0.45%
(1) The estimated management fee has been reduced to reflect the
anticipated voluntary waiver of a portion of the management fee. The
adviser can terminate this voluntary waiver at any time at its sole
discretion. The maximum management fee is 0.20%.
(2) The Institutional Service Shares have no present intention of paying
or accruing the 12b-1 fee during the period ending July 31, 1994.
If the Institutional Service Shares were paying or accruing the 12b-1 fee,
the Class would be able to pay up to 0.25% of its average daily net
assets for the 12b-1 fee. See "Trust Information".
(3) The Total Institutional Service Shares Operating Expenses are
estimated to be 0.54% absent the anticipated voluntary waiver of a
portion of the management fee.
* Total Institutional Service Operating Expenses are estimated based on
average expenses expected to be incurred during the period ending
July 31, 1994. During the course of this period, expenses may be more or
less than the average amount shown.
The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder of Institutional Service
Shares of the Fund will bear, either directly or indirectly. For more
complete descriptions of the various costs and expenses, see "Investing in
the Fund" and "Trust Information." Wire-transferred redemptions of less than
$5,000 may be subject to additional fees.
EXAMPLE 1 year 3 years
You would pay the following expenses on a $1,000
investment assuming (1) 5% annual return and
(2) redemption at the end of each time period. $5 $14
The above example should not be considered a representation of past or
future expenses. Actual expenses may be greater or less than those shown.
This example is based on estimated data for the Fund's fiscal year ending
July 31, 1994.
The information set forth in the foregoing table and example relates
only to Institutional Service Shares of the Fund. The Fund also offers
another class of shares called Institutional Shares. Institutional Service
Shares and Institutional Shares are subject to certain of the same expenses;
however, Institutional Shares are not subject to a 12b-1 fee. See "Other
Classes of Shares."
General Information
The Trust was established as a Massachusetts business trust under a
Declaration of Trust dated October 3, 1988. The Declaration of Trust permits
the Trust to offer separate series of shares of beneficial interest
representing interests in separate portfolios of securities. The shares in
any one portfolio may be offered in separate classes. With respect to this
Fund, as of the date of this prospectus, the Trustees have established two
classes of shares known as Institutional Service Shares and Institutional
Shares. This prospectus relates only to Institutional Service Shares
("Shares") of the Fund, which are designed primarily for financial
institutions as a convenient means of accumulating an interest in a
professionally managed, diversified portfolio investing in short-term money
market securities. A minimum initial investment of $25,000 is required.
Eligibility for investment in the Trust is contingent upon an investor
accumulating and maintaining a minimum aggregate investment of $200,000,000
in Federated funds within a twelve-month period. For this purpose, 1) an
investor is defined as a financial institution or its collective customers,
including affiliate financial institutions and their collective customers,
or other institutions that are determined to qualify by Federated Securities
Corp., and 2) Federated funds are those mutual funds which are distributed
by Federated Securities Corp., or are advised by or administered by
investment advisers or administrators affiliated with Federated Securities
Corp. ("Federated Funds"). An investor's minimum investment will be
calculated by combining all accounts the investor maintains with the
Federated Funds, which includes the Trust.
The Fund attempts to stabilize the value of a share at $1.00. Shares are
currently sold and redeemed at that price.
Investment Information
Investment Objective
The investment objective of the Fund is current income consistent with
stability of principal. This investment objective cannot be changed without
shareholder approval. While there is no assurance that the Fund will achieve
its investment objective, it endeavors to do so by following the investment
policies described in this prospectus.
Investment Policies
The Fund pursues its investment objective by investing in a portfolio of
money market securities maturing in 13 months or less. The average maturity
of the securities in the Fund's portfolio, computed on a dollar-weighted
basis, will be 90 days or less. Unless indicated otherwise, investment
policies may be changed by the Trustees without shareholder approval.
Shareholders will be notified before any material change in these policies
becomes effective.
Acceptable Investments. The Fund invests in high quality money market
instruments that are either rated in the highest short-term rating category
by one or more nationally recognized statistical rating organizations
("NRSROs") or are of comparable quality to securities having such ratings.
Examples of these instruments include, but are not limited to:
domestic issues of corporate debt obligations, including variable rate
demand notes;
commercial paper (including Canadian Commercial Paper and Europaper);
certificates of deposit, demand and time deposits, bankers' acceptances
and other instruments of domestic and foreign banks and other deposit
institutions ("Bank Instruments");
short-term credit facilities;
asset-backed securities;
obligations issued or guaranteed as to payment of principal and
interest by the U.S. Government or one of its agencies or
instrumentalities ("Government Securities"); and
other money market instruments.
The Fund invests only in instruments denominated and payable in U.S.
dollars.
Variable Rate Demand Notes. Variable rate demand notes are long-term debt
instruments that have variable or floating interest rates and provide the
Fund with the right to tender the security for repurchase at its stated
principal amount plus accrued interest. Such securities typically bear
interest at a rate that is intended to cause the securities to trade at
par. The interest rate may float or be adjusted at regular intervals
(ranging from daily to annually), and is normally based on an interest
index or a stated percentage of a prime rate or another published rate.
Most variable rate demand notes allow the Fund to demand the repurchase
of the security on not more than seven days' prior notice. Other notes
only permit the Fund to tender the security at the time of each interest
rate adjustment or at other fixed intervals. See "Demand Features." The
Fund treats variable rate demand notes as maturing on the later of the
date of the next interest rate adjustment or the date on which the Fund
may next tender the security for repurchase.
Bank Instruments. The Fund only invests in Bank Instruments either
issued by an institution having capital, surplus and undivided profits
over $100 million, or insured by the Bank Insurance Fund ("BIF") or the
Savings Association Insurance Fund ("SAIF"). Bank Instruments may include
Eurodollar Certificates of Deposit ("ECDs"), Yankee Certificates of
Deposit ("Yankee CDs") and Eurodollar Time Deposits ("ETDs"). The Fund
will treat securities credit enhanced with a bank's letter of credit as
Bank Instruments.
Short-Term Credit Facilities. The Fund may enter into, or acquire
participations in, short-term borrowing arrangements with corporations,
consisting of either a short-term revolving credit facility or a master
note agreement payable upon demand. Under these arrangements, the
borrower may reborrow funds during the term of the facility. The Fund
treats any commitments to provide such advances as a standby commitment
to purchase the borrower's notes.
Asset-Backed Securities. Asset-backed securities are securities issued
by special purpose entities whose primary assets consist of a pool of
loans or accounts receivable. The securities may take the form of
beneficial interests in special purpose trusts, limited partnership
interests, or commercial paper or other debt securities issued by a
special purpose corporation. Although the securities often have some form
of credit or liquidity enhancement, payments on the securities depend
predominantly upon collections of the loans and receivables held by the
issuer.
Ratings. An NRSRO's highest rating category is determined without regard
for sub-categories and gradations. For example, securities rated A-1 or A-1+
by Standard & Poor's Corporation ("S&P"), Prime-1 by Moody's Investors
Service, Inc. ("Moody's"), or F-1 (+ or -) by Fitch Investors Service, Inc.
("Fitch") are all considered rated in the highest short-term rating
category. The Fund will follow applicable regulations in determining whether
a security rated by more than one NRSRO can be treated as being in the
highest short-term rating category; currently, such securities must be rated
by two NRSROs in their highest rating category. See "Regulatory Compliance."
Credit Enhancement. Certain of the Fund's acceptable investments may be
credit enhanced by a guaranty, letter of credit, or insurance. The Fund
typically evaluates the credit quality and ratings of credit enhanced
securities based upon the financial condition and ratings of the party
providing the credit enhancement (the "credit enhancer"), rather than the
issuer. Generally, the Fund will not treat credit enhanced securities as
having been issued by the credit enhancer for diversification purposes.
However, under certain circumstances applicable regulations may require the
Fund to treat the securities as having been issued by both the issuer and
the credit enhancer. The bankruptcy, receivership, or default of the credit
enhancer will adversely affect the quality and marketability of the
underlying security.
Demand Features. The Fund may acquire securities that are subject to puts
and standby commitments ("demand features") to purchase the securities at
their principal amount (usually with accrued interest) within a fixed period
(usually seven days) following a demand by the Fund. The demand feature may
be issued by the issuer of the underlying securities, a dealer in the
securities, or by another third party, and may not be transferred separately
from the underlying security. The Fund uses these arrangements to provide
the Fund with liquidity and not to protect against changes in the market
value of the underlying securities. The bankruptcy, receivership, or default
by the issuer of the demand feature, or a default on the underlying security
or other event that terminates the demand feature before its exercise, will
adversely affect the liquidity of the underlying security. Demand features
that are exercisable even after a payment default on the underlying security
may be treated as a form of credit enhancement.
Repurchase Agreements. Certain securities in which the Fund invests may be
purchased pursuant to repurchase agreements. Repurchase agreements are
arrangements in which banks, brokers/dealers, and other recognized financial
institutions sell securities to the Fund and agree at the time of sale to
repurchase them at a mutually agreed upon time and price. To the extent that
the seller does not repurchase the securities from the Fund, the Fund could
receive less than the repurchase price on any sale of such securities.
Restricted and Illiquid Securities. The Fund may invest in restricted
securities. Restricted securities are any securities in which the Fund may
otherwise invest pursuant to its investment objective and policies but which
are subject to restrictions on resale under federal securities law. However,
the Fund will limit investments in illiquid securities, including certain
restricted securities not determined by the Trustees to be liquid,
non-negotiable time deposits, and repurchase agreements providing for
settlement in more than seven days after notice, to 10% of its net assets.
The Fund may invest in commercial paper issued in reliance on the exemption
from registration afforded by Section 4(2) of the Securities Act of 1933.
Section 4(2) commercial paper is restricted as to disposition under federal
securities law, and is generally sold to institutional investors, such as
the Fund, who agree that they are purchasing the paper for investment
purposes and not with a view to public distribution. Any resale by the
purchaser must be in an exempt transaction. Section 4(2) commercial paper is
normally resold to other institutional investors like the Fund through or
with the assistance of the issuer or investment dealers who make a market in
Section 4(2) commercial paper, thus providing liquidity. The Fund believes
that Section 4(2) commercial paper and possibly certain other restricted
securities which meet the criteria for liquidity established by the Trustees
of the Fund are quite liquid. The Fund intends, therefore, to treat the
restricted securities which meet the criteria for liquidity established by
the Trustees, including Section 4(2) commercial paper, as determined by the
Fund's investment adviser, as liquid and not subject to the investment
limitation applicable to illiquid securities. In addition, because Section
4(2) commercial paper is liquid, the Fund intends to not subject such paper
to the limitation applicable to restricted securities.
Lending of Portfolio Securities. In order to generate additional income, the
Fund may lend its portfolio securities on a short-term or long-term basis,
or both, up to one-third of the value of its total assets to broker/dealers,
banks, or other institutional borrowers of securities. The Fund will only
enter into loan arrangements with broker/dealers, banks, or other
institutions which the adviser has determined are creditworthy under
guidelines established by the Fund's Trustees and will receive collateral at
all times equal to at least 100% of the value of the securities loaned.
When-Issued And Delayed Delivery Transactions. The Fund may purchase
securities on a when-issued or delayed delivery basis. These transactions
are arrangements in which the Fund purchases securities with payment and
delivery scheduled for a future time. The seller's failure to complete these
transactions may cause the Fund to miss a price or yield considered to be
advantageous
Concentration of Investments. Generally, in excess of 50% of the assets of
the Fund will be invested in commercial paper and variable rate demand
notes. The Fund will invest 25% or more of its total assets in commercial
paper issued by finance companies. The finance companies in which the Fund
intends to invest can be divided into two categories, commercial finance
companies and consumer finance companies. Commercial finance companies are
principally engaged in lending to corporations or other businesses. Consumer
finance companies are primarily engaged in lending to individuals. Captive
finance companies or finance subsidiaries which exist to facilitate the
marketing and financial activities of their parent will, for purposes of
industry concentration, be classified in the industry of their parent's
corporation.
In addition, the Fund may invest 25% or more of the value of its total
assets in instruments issued by a U.S. branch of a domestic bank or savings
and loan having capital, surplus, and undivided profits in excess of
$100,000,000 at the time of investment.
Investment Risks
ECDs, ETDs, Yankee CDs, CCPs and Europaper are subject to different risks
than domestic obligations of domestic banks or corporations. Examples of
these risks include international economic and political developments,
foreign governmental restrictions that may adversely affect the payment of
principal or interest, foreign withholding or other taxes on interest
income, difficulties in obtaining or enforcing a judgment against the
issuing entity, and the possible impact of interruptions in the flow of
international currency transactions. Risks may also exist for ECDs, ETDs,
and Yankee CDs because the banks issuing these instruments, or their
domestic or foreign branches, are not necessarily subject to the same
regulatory requirements that apply to domestic banks, such as reserve
requirements, loan limitations, examinations, accounting, auditing,
recordkeeping, and the public availability of information. These factors
will be carefully considered by the Fund's adviser in selecting investments
for the Fund.
Investment Limitations
The Fund will not borrow money directly or through reverse repurchase
agreements (arrangements in which the Fund sells a money market instrument
for a percentage of its cash value with an agreement to buy it back on a set
date) or pledge securities except, under certain circumstances, the Fund may
borrow up to one-third of the value of its total assets and pledge assets to
secure such borrowings. This investment limitation cannot be changed without
shareholder approval.
Regulatory Compliance
The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in
this prospectus and its Statement of Additional Information, in order to
comply with applicable laws and regulations, including the provisions of and
regulations under the Investment Company Act of 1940, as amended. In
particular, the Fund will comply with the various requirements of Rule 2a-7
which regulates money market mutual funds. For example, with limited
exceptions, Rule 2a-7 prohibits the investment of more than 5% of the Fund's
total assets in the securities of any one issuer, although the Fund's
investment limitation only requires such 5% diversification with respect to
75% of its assets. The Fund will invest more than 5% of its assets in any
one issuer only under the circumstances permitted by Rule 2a-7. The Fund
will also determine the effective maturity of its investments, as well as
its ability to consider a security as having received the requisite
short-term ratings by NRSROs, according to Rule 2a-7. The Fund may change
these operational policies to reflect changes in the laws and regulations
without the approval of its shareholders.
Trust Information
Management of the Trust
Board of Trustees. The Trust is managed by a Board of Trustees. The
Trustees are responsible for managing the Fund's business affairs and for
exercising all the Trust's powers except those reserved for the
shareholders. An Executive Committee of the Board of Trustees handles the
Board's responsibilities between meetings of the Board.
Investment Adviser. Investment decisions for the Fund are made by Federated
Management, the Fund's investment adviser, subject to direction by the
Trustees. The adviser continually conducts investment research and
supervision for the Fund and is responsible for the purchase and sale of
portfolio instruments.
Advisory Fees. The adviser receives an annual investment advisory fee
equal to .20 of 1% of the Fund's average daily net assets. The adviser
has undertaken to reimburse the Fund up to the amount of the advisory fee
for operating expenses in excess of limitations established by certain
states. The adviser also may voluntarily choose to waive a portion of its
fee or reimburse other expenses of the Fund, but reserves the right to
terminate such waiver or reimbursement at any time at its sole
discretion.
Adviser's Background. Federated Management, a Delaware business trust,
organized on April 11, 1989, is a registered investment adviser under the
Investment Advisers Act of 1940. It is a subsidiary of Federated
Investors. All of the Class A (voting) shares of Federated Investors are
owned by a trust, the trustees of which are John F. Donahue, Chairman and
Trustee of Federated Investors, Mr. Donahue's wife, and Mr. Donahue's
son, J. Christopher Donahue, who is President and Trustee of Federated
Investors.
Federated Management and other subsidiaries of Federated Investors serve
as investment advisers to a number of investment companies and private
accounts. Certain other subsidiaries also provide administrative services
to a number of investment companies. Total assets under management or
administration by these and other subsidiaries of Federated Investors are
approximately $70 billion. Federated Investors, which was founded in 1956
as Federated Investors, Inc., develops and manages mutual funds primarily
for the financial industry. Federated Investors' track record of
competitive performance and its disciplined, risk averse investment
philosophy serve approximately 3,500 client institutions nationwide.
Through these same client institutions, individual shareholders also have
access to this same level of investment expertise.
Distribution of Shares
Federated Securities Corp. is the principal distributor for Institutional
Service Shares of the Fund. It is a Pennsylvania corporation organized on
November 14, 1969, and is the principal distributor for a number of
investment companies. Federated Securities Corp. is a subsidiary of
Federated Investors.
Distribution and Shareholder Services Plans. Under a distribution plan
adopted in accordance with Investment Company Act Rule 12b-1 (the
"Distribution Plan"), the Fund will pay to the distributor an amount,
computed at an annual rate of .25 of 1% of the average daily net asset value
of the Institutional Service Shares to finance any activity which is
principally intended to result in the sale of shares subject to the
Distribution Plan. The distributor may select financial institutions such as
banks, fiduciaries, custodians for public funds, investment advisers, and
broker/dealers to provide sales support services as agents for their clients
or customers. In addition, the Fund has adopted a Shareholder Services Plan
(the "Services Plan") under which it will pay financial institutions an
amount not exceeding .25 of 1% of the average daily net asset value of the
Institutional Service Shares to provide administrative support services to
their customers who own shares of the Fund. From time to time and for such
periods as deemed appropriate, the amounts stated above may be reduced
voluntarily. Activities and services under these arrangements may include,
but are not limited to, providing advertising and marketing materials to
prospective shareholders, providing personal services to shareholders, and
maintaining shareholder accounts.
Financial institutions will receive fees based upon shares owned by their
clients or customers. The schedules of such fees and the basis upon which
such fees will be paid will be determined from time to time by the Fund or
the distributor, as appropriate.
The Distribution Plan is a compensation-type plan. As such, the Fund makes
no payments to the distributor except as described above. Therefore, the
Fund does not pay for unreimbursed expenses of the distributor, including
amounts expended by the distributor in excess of amounts received by it from
the Fund, interest, carrying or other financing charges in connection with
excess amounts expended, or the distributor's overhead expenses. However,
the distributor may be able to recover such amounts or may earn a profit
from future payments made by the Fund under the Distribution Plan.
Administration of the Fund
Administrative Services. Federated Administrative Services, a subsidiary of
Federated Investors, provides certain administrative personnel and services
(including certain legal and financial reporting services) necessary to
operate the Fund. Federated Administrative Services provides these at an
annual rate which relates to the average aggregate daily net assets of all
Federated Funds as specified below:
Maximum Administrative Average Aggregate Daily Net Assets
Fee of the Fund
.15 of 1% on the first $250 million
.125 of 1% on the next $250 million
.10 of 1% on the next $250 million
.075 of 1% on assets in excess of $750 million
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares.
Federated Administrative Services may choose voluntarily to waive a portion
of its fee.
Custodian. State Street Bank and Trust Company, Boston, Massachusetts is
custodian for the securities and cash of the Fund.
Transfer Agent and Dividend Disbursing Agent. Federated Services Company,
Boston, Massachusetts is transfer agent for the shares of, and dividend
disbursing agent for the Fund.
Legal Counsel. Legal counsel is provided by Houston, Houston and Donnelly,
Pittsburgh, Pennsylvania and Dickstein, Shapiro and Morin, Washington, D.C.
Independent Public Accountants. The independent public accountants for the
Fund are Arthur Andersen & Co., Pittsburgh, Pennsylvania.
Expenses of the Fund and Institutional Service Shares
Holders of Shares pay their allocable portion of Fund and Trust expenses.
The Trust expenses for which holders of Shares pay their allocable portion
include, but are not limited to: the cost of organizing the Trust and
continuing its existence; registering the Trust with federal and state
securities authorities; Trustees' fees; auditors' fees; the cost of meetings
of Trustees; legal fees of the Trust; association membership dues; and such
non-recurring and extraordinary items as may arise.
The Fund expenses for which holders of Shares pay their allocable portion
include, but are not limited to: registering the Fund and Shares of the
Fund; investment advisory services; taxes and commissions; custodian fees;
insurance premiums; auditors' fees; and such non-recurring and extraordinary
items as may arise.
At present, the only expenses allocated to the Shares as a class are
expenses under the Fund's Rule 12b-1 Plan and Shareholder Services Plan
which relate to the Shares. However, the Board of Trustees reserves the
right to allocate certain other expenses to holders of Shares as it deems
appropriate "Class Expenses." In any case, Class Expenses would be limited
to: transfer agent fees as identified by the transfer agent as attributable
to holders of Shares; printing and postage expenses related to preparing and
distributing materials such as shareholder reports, prospectuses and proxies
to current shareholders; registration fees paid to the Securities and
Exchange Commission and registration fees paid to state securities
commissions; expenses related to administrative personnel and services as
required to support holders of Shares; legal fees relating solely to Shares;
and Trustees' fees incurred as a result of issues relating solely to Shares.
Net Asset Value
The Fund attempts to stabilize the net asset value of Shares at $1.00 by
valuing the portfolio securities using the amortized cost method. The net
asset value per share is determined by subtracting liabilities attributable
to Shares from the value of Fund assets attributable to Shares, and dividing
the remainder by the number of Shares outstanding. The Fund cannot guarantee
that its net asset value will always remain at $1.00 per share.
The net asset value is determined at 12:00 noon, 3:00 p.m., and 4:00 p.m.
(Eastern time) Monday through Friday except on: (i) days on which there are
not sufficient changes in the value of the Fund's portfolio securities that
its net asset value might be materially affected; (ii) days during which no
shares are tendered for redemption and no orders to purchase shares are
received; or (iii) the following holidays: New Year's Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day,
and Christmas Day.
Investing in the Fund
Share Purchases
Shares are sold at their net asset value, without a sales charge, next
determined after an order is received, on days on which the New York Stock
Exchange and the Federal Reserve Wire System are open for business. Shares
may be purchased either by wire or mail. The Fund reserves the right to
reject any purchase request.
To make a purchase, open an account by calling Federated Securities Corp.
Information needed to establish the account will be taken by telephone.
By Wire. To purchase by Federal Reserve wire, call the Fund before 3:00
p.m., (Eastern time) to place an order. The order is considered received
immediately. Payment by federal funds must be received before 3:00 p.m.,
(Eastern time) that day. Federal funds should be wired as follows: State
Street Bank and Trust Company, Boston, Massachusetts; Attention: EDGEWIRE;
For Credit to: Prime Obligations Fund_Institutional Service Shares: Fund
Number (this number can be found on the account statement or by contacting
the Fund); Group Number or Order Number; Nominee or Institution Name; and
ABA Number 011000028.
By Mail. To purchase by mail, send a check made payable to Prime
Obligations Fund_Institutional Service Shares to: Prime Obligations Fund,
P.O. Box 8602, Boston, Massachusetts 02266-8602. Orders by mail are
considered received when payment by check is converted into federal funds.
This is normally the next business day after the check is received.
Minimum Investment Required
The minimum initial investment is $25,000. Eligibility for investment in the
Trust is contingent upon an investor accumulating and maintaining a minimum
aggregate investment of $200,000,000 in Federated Funds within a
twelve-month period.
Subaccounting Services
Financial institutions are encouraged to open single master accounts.
However, certain financial institutions may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements.
The transfer agent charges a fee based on the level of subaccounting
services rendered. Financial institutions may charge or pass through
subaccounting fees as part of or in addition to normal trust or agency
account fees. They may also charge fees for other services provided which
may be related to the ownership of Fund shares. This prospectus should,
therefore, be read together with any agreement between the customer and the
financial institution with regard to the services provided, the fees charged
for those services and any restrictions and limitations imposed.
Certificates and Confirmations
As transfer agent for the Fund, Federated Services Company maintains a share
account for each shareholder. Share certificates are not issued unless
requested by contacting the Fund or Federated Services Company in writing.
Monthly confirmations are sent to report transactions such as all purchases
and redemptions as well as dividends paid during the month.
Dividends
Dividends are declared daily and paid monthly. Shares purchased by wire
before 3:00 p.m. (Eastern time) begin earning dividends that day. Shares
purchased by check begin earning dividends on the day after the check is
converted into federal funds. Dividends are automatically reinvested in
additional Shares unless cash payments are requested by contacting the Fund.
Capital Gains
Capital gains, if any, could result in an increase in dividends. Capital
losses could result in a decrease in dividends. If, for some extraordinary
reason, the Fund realizes net long-term capital gains, it will distribute
them at least once every 12 months.
Redeeming Shares
Shares are redeemed at their net asset value next determined after the Fund
receives the redemption request. Redemptions will be made on days on which
the Fund computes its net asset value. Redemption requests must be received
in proper form and can be made as described below.
By Mail
Shares may be redeemed by sending a written request to: Prime Obligations
Fund, P.O. Box 8602, Boston, Massachusetts 02266-8602. The written request
should state: Prime Obligations Fund_Institutional Service Shares;
shareholder's name; the account number; and the share or dollar amount
requested. Sign the request exactly as the shares are registered.
Shareholders should call the Fund for assistance in redeeming by mail.
If share certificates have been issued, they must be properly endorsed and
should be sent by registered or certified mail with the written request.
Shareholders requesting a redemption of $50,000 or more, a redemption of any
amount to be sent to an address other than that on record with the Fund, or
a redemption payable other than to the shareholder of record must have their
signatures guaranteed by:
a trust company or commercial bank whose deposits are insured by the
Bank Insurance Fund which is administered by the Federal Deposit
Insurance Corporation ("FDIC");
a member firm of the New York, American, Boston, Midwest, or Pacific
Stock Exchanges;
a savings bank or savings and loan association whose deposits are
insured by the Savings Association Insurance Fund, which is
administered by the FDIC; or
any other "eligible guarantor institution," as defined in the
Securities Exchange Act of 1934.
The Fund does not accept signatures guaranteed by a notary public.
The Fund and its transfer agent have adopted standards for accepting
signature guarantees from the above institutions. The Fund may elect in the
future to limit eligible signature guarantors to institutions that are
members of the signature guarantee program. The Fund and its transfer agent
reserve the right to amend these standards at any time without notice.
Normally, a check for the proceeds is mailed within one business day, but in
no event more than seven days, after receipt of a proper written redemption
request. Dividends are paid up to and including the day that a redemption
request is processed.
Telephone Redemption
Shares may be redeemed by telephoning the Fund. If the redemption request is
received before 12:00 noon (Eastern time), the proceeds will be wired the
same day to the shareholder's account at a domestic commercial bank which is
a member of the Federal Reserve System, and those shares redeemed will not
be entitled to that day's dividend. A daily dividend will be paid on shares
redeemed if the redemption request is received after 12:00 noon (Eastern
time). However, the proceeds are not wired until the following business day.
Under limited circumstances, arrangements may be made with the distributor
for same-day payment of proceeds, without that day's dividend, for
redemption requests received before 3:00 p.m., Eastern time.
An authorization form permitting the Fund to accept telephone requests must
first be completed. Authorization forms and information on this service are
available from Federated Securities Corp. Telephone redemption instructions
may be recorded.
In the event of drastic economic or market changes, a shareholder may
experience difficulty in redeeming by telephone. If such a case should
occur, another method of redemption, such as "By Mail,_ should be
considered. If at any time the Fund shall determine it necessary to
terminate or modify this method of redemption, shareholders would be
promptly notified.
If reasonable procedures are not followed by the Fund, it may be liable for
losses due to unauthorized or fraudulent telephone instructions.
Accounts with Low Balances
Due to the high cost of maintaining accounts with low balances, the Fund may
redeem shares in any account and pay the proceeds to the shareholder if the
account balance falls below a required minimum value of $25,000 or the
aggregate investment in Federated Funds falls below the required minimum of
$200,000,000 to be maintained from and after twelve months from account
opening, due to shareholder redemptions.
Before shares are redeemed to close an account, the shareholder is notified
in writing and allowed 30 days to purchase additional shares to meet the
minimum requirement.
Shareholder Information
Voting Rights
Each share of the Trust gives the shareholder one vote in Trustee elections
and other matters submitted to shareholders for vote. All shares of all
classes of each portfolio in the Trust have equal voting rights, except that
in matters affecting only a particular portfolio or class, only shares of
that portfolio or class are entitled to vote. As a Massachusetts business
trust, the Trust is not required to hold annual shareholder meetings.
Shareholder approval will be sought only for certain changes in the Trust's
or the Fund's operation and for the election of Trustees under certain
circumstances. As of April 28, 1994, Var & Co., St. Paul, Minnesota, owned
32.3% of the voting securities of the Fund, and, therefore, may for certain
purposes be deemed to control the Fund and be able to affect the outcome of
certain matters presented for a vote of shareholders.
Trustees may be removed by the Trustees or by shareholders at a special
meeting. A special meeting of the shareholders for this purpose shall be
called by the Trustees upon the written request of shareholders owning at
least 10% of the outstanding shares of the Trust.
Massachusetts Partnership Law
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect
its shareholders, the Trust has filed legal documents with Massachusetts
that expressly disclaim the liability of its shareholders for acts or
obligations of the Trust. These documents require notice of this disclaimer
to be given in each agreement, obligation, or instrument the Trust or its
Trustees enter into or sign.
In the unlikely event a shareholder is held personally liable for the
Trust's obligations, the Trust is required by the Declaration of Trust to
use its property to protect or compensate the shareholder. On request, the
Trust will defend any claim made and pay any judgment against a shareholder
for any act or obligation of the Trust. Therefore, financial loss resulting
from liability as a shareholder will occur only if the Trust itself cannot
meet its obligations to indemnify shareholders and pay judgments against
them.
Tax Information
Federal Income Tax
The Fund will pay no federal income tax because it expects to meet
requirements of the Internal Revenue Code applicable to regulated investment
companies and to receive the special tax treatment afforded to such
companies. The Fund will be treated as a single, separate entity for federal
income tax purposes so that income (including capital gains) and losses
realized by the Trust's other portfolios will not be combined for tax
purposes with those realized by the Fund.
Unless otherwise exempt, shareholders are required to pay federal income tax
on any dividends and other distributions received. This applies whether
dividends and distributions are received in cash or as additional shares.
State and Local Taxes. Shareholders are urged to consult their own tax
advisers regarding the status of their accounts under state and local tax
laws.
Pennsylvania Corporate and Personal Property Taxes
In the opinion of Houston, Houston & Donnelly, counsel to the Fund:
the Fund is not subject to Pennsylvania corporate or personal property
taxes; and
Fund shares may be subject to personal property taxes imposed by
counties, municipalities, and school districts in Pennsylvania to the
extent that the portfolio securities in the Fund would be subject to
such taxes if owned directly by residents of those jurisdictions.
Other Classes of Shares
Institutional Shares are sold at net asset value to accounts for which
financial institutions act in an agency or fiduciary capacity. Investments
in Institutional Shares are subject to a minimum initial investment of
$25,000. Institutional Shares are not sold pursuant to a 12b-1 Plan.
Financial institutions providing distribution or administrative services may
receive different compensation depending upon which class of shares of the
Fund is sold. The amount of dividends payable to shareholders of
Institutional Shares will exceed that payable to the shareholders of
Institutional Service Shares by the difference between class expenses and
any 12b-1 Plan expenses borne by Institutional Service Shares. The stated
advisory fee is the same for both classes of shares.
Performance Information
From time to time the Fund advertises its yield and effective yield for
Shares.
Yield represents the annualized rate of income earned on an investment over
a seven-day period. It is the annualized dividends earned during the period
on an investment shown as a percentage of the investment. The effective
yield is calculated similarly to the yield, but when annualized, the income
earned by an investment is assumed to be reinvested daily. The effective
yield will be slightly higher than the yield because of the compounding
effect of this assumed reinvestment.
Advertisements and sales literature may also refer to total return. Total
return represents the change, over a specified period of time, in the value
of an investment in the Shares after reinvesting all income distributions.
It is calculated by dividing that change by the initial investment and is
expressed as a percentage.
Performance figures will be calculated separately for each class of shares.
Because each class of shares is subject to different expenses, the
performance of Institutional Shares will exceed the yield and effective
yield of Institutional Service Shares for the same period.
From time to time, the Fund may advertise its performance using certain
financial publications and/or compare its performance with certain indices.
Prime Obligations Fund
Financial Highlights
Institutional Shares
(For a share outstanding throughout each period)
Year Ended July 31,
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1993 1992 1991 1990
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Income from investment operations
Net investment income 0.0320 0.0464 0.0707 0.0286
Less distributions
Dividends to shareholders from net
investment income (0.0320) (0.0464) (0.0707) (0.0286)
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total return* 3.25% 4.74% 7.30% 2.89%(c)
Ratios/supplemental data
Net assets, end of period(000 omitted) $ 1,098,159 $ 917,418 $ 473,593 $ 34,777
Ratio of expenses to average net assets 0.20%(b) 0.20%(b) 0.20%(b) 0.20%(a)(b)
Ratio of net investment income to average
net assets 3.20%(b) 4.53%(b) 6.54%(b) 8.21%(a)(b)
</TABLE>
* Reflects operations for the period from March 26, 1990 (date of initial
public investment) to July 31, 1990.
(a) Computed on an annualized basis.
(b) For the fiscal years ended July 31, 1993, 1992,
and 1991 and for the period from March 26, 1990 (date of initial public
investment) to July 31, 1990, the investment adviser voluntarily waived
all or a portion of its fee and/or reimbursed certain other operating
expenses of the Fund. Had the adviser not undertaken such action, the
ratio of expenses and net investment income would have been 0.29% and
3.11%, 0.30% and 4.43%, 0.44% and 6.30%, and 0.88% and 7.53%,
respectively.
(c) Cumulative total return.
(See Notes to Financial Statements)
Addresses
Prime Obligations Fund
Institutional Service Shares Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Investment Adviser
Federated Management Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Custodian
State Street Bank and Trust Company
P.O. Box 8602
Boston, Massachusetts 02266-8602
Transfer Agent and Dividend Disbursing Agent
Federated Services Company P.O. Box 8602
Boston, Massachusetts 02266-8602
Legal Counsel
Houston, Houston and Donnelly 2510 Centre City Tower
Pittsburgh, Pennsylvania 15222
Legal Counsel
Dickstein, Shapiro and Morin 2101 L Street, N.W.
Washington, D.C. 20037
Independent Public Accountants
Arthur Andersen & Co. 2100 One PPG Place
Pittsburgh, Pennsylvania 15222
Prime Obligations Fund
Institutional Service Shares
Prospectus
A diversified Portfolio of Money Market Obligations Trust,
an Open-End Management Investment Company
Prospectus dated July ___, 1994
Federated Securities Corporation
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, Pennsylvania 15222-3779
Prime Obligations Fund
(A PORTFOLIO OF Money Market Obligations Trust)
Institutional Shares
Institutional Service Shares
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information should be read with the
prospectus(es) of Prime Obligations Fund (the "Fund") dated July __, 1994
and September 30, 1993. This Statement is not a prospectus. To receive a
copy of a prospectus, write or call the Trust.
Statement dated July __, 1994
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
Investment Policies 1
Bank Instruments 1
When-Issued And Delayed Delivery Transactions
1
Repurchase Agreements 1
Reverse Repurchase Agreements 1
U.S. Government Obligations 1
Lending of Portfolio Securities 2
Investment Limitations 2
Selling Short and Buying on Margin 2
Issuing Senior Securities and Borrowing Money
2
Pledging Assets 2
Lending Cash or Securities 2
Investing in Commodities and Real Estate
2
Underwriting 2
Concentration of Investments 3
Diversification of Investments 3
Investing in Restricted Securities 3
Investing in Illiquid Securities 3
Investing in Securities of Other Investment Companies
3
Investing in New Issuers 3
Investing for Control 3
Investing in Issuers Whose Securities Are Owned by Officers of the Trust
3
Investing in Options 3
Investing in Minerals 3
Brokerage Transactions 4
Money Market Obligations Trust Management
4
The Funds 7
Share Ownership 8
Trustee Liability 8
Investment Advisory Services 8
Investment Adviser(s) 8
Advisory Fees 8
Fund Administration 9
Shareholder Services Plan 9
Distribution Plan 9
Determining Net Asset Value 10
Redemption in Kind 10
The Fund's Tax Status 10
Performance Information 10
Yield 10
Effective Yield 11
Total Return 11
Performance Comparisons 11
Financial Statements 12
Appendix 13
Investment Policies
Unless indicated otherwise, the policies described below may be changed by
the Trustees without shareholder approval. Shareholders will be notified
before any material change in these policies becomes effective.
Bank Instruments
The instruments of banks and savings and loans whose deposits are insured by
the Bank Insurance Fund ("BIF") or the Savings Association Insurance Fund
("SAIF") such as certificates of deposit, demand and time deposits, savings
shares, and bankers' acceptances, are not necessarily guaranteed by those
organizations. In addition to domestic bank instruments, the Fund may invest
in: Eurodollar Certificates of Deposit issued by foreign branches of U.S. or
foreign banks; Eurodollar Time Deposits, which are U.S. dollar-denominated
deposits in foreign branches of U.S. or foreign banks; Canadian Time
Deposits, which are U.S. dollar-denominated deposits issued by branches of
major Canadian banks located in the United States; and Yankee Certificates
of Deposit, which are U.S. dollar-denominated certificates of deposit issued
by U.S. branches of foreign banks and held in the United States.
When-Issued And Delayed Delivery Transactions
These transactions are made to secure what is considered to be an
advantageous price or yield for the Fund. Settlement dates may be a month or
more after entering into these transactions, and the market values of the
securities purchased may vary from the purchase prices. No fees or other
expenses, other than normal transaction costs, are incurred. However, liquid
assets of the Fund sufficient to make payment for the securities to be
purchased are segregated on the Fund's records at the trade date. These
assets are marked to market daily and are maintained until the transaction
has been settled. The Fund does not intend to engage in when-issued and
delayed delivery transactions to an extent that would cause the segregation
of more than 20% of the total value of its assets.
Repurchase Agreements
The Fund or its custodian will take possession of the securities subject to
repurchase agreements, and these securities will be marked to market daily.
In the event that a defaulting seller filed for bankruptcy or became
insolvent, disposition of such securities by the Fund might be delayed
pending court action. The Fund believes that under the regular procedures
normally in effect for custody of the Fund's portfolio securities subject to
repurchase agreements, a court of competent jurisdiction would rule in favor
of the Fund and allow retention or disposition of such securities. The Fund
will only enter into repurchase agreements with banks and other recognized
financial institutions, such as broker/dealers, which are deemed by the
Fund's adviser to be creditworthy pursuant to guidelines established by the
Trustees.
Reverse Repurchase Agreements
The Fund may also enter into reverse repurchase agreements. These
transactions are similar to borrowing cash. In a reverse repurchase
agreement, the Fund transfers possession of a portfolio instrument in return
for a percentage of the instrument's market value in cash and agrees that on
a stipulated date in the future the Fund will repurchase the portfolio
instrument by remitting the original consideration plus interest at an
agreed upon rate. The use of reverse repurchase agreements may enable the
Fund to avoid selling portfolio instruments at a time when a sale may be
deemed to be disadvantageous, but does not ensure this result. When
effecting reverse repurchase agreements, liquid assets of the Fund, in a
dollar amount sufficient to make payment for the obligations to be
purchased, are: segregated on the Fund's records at the trade date; marked
to market daily; and maintained until the transaction is settled.
U.S. Government Obligations
The types of U.S. government obligations in which the Fund may invest
generally include direct obligations of the U.S. Treasury (such as U.S.
Treasury bills, notes, and bonds) and obligations issued or guaranteed by
U.S. government agencies or instrumentalities. These securities are backed
by:
the full faith and credit of the U.S. Treasury;
the issuer's right to borrow from the U.S. Treasury;
the discretionary authority of the U.S. government to purchase certain
obligations of agencies or instrumentalities; or
the credit of the agency or instrumentality issuing the obligations.
Lending of Portfolio Securities
The collateral received when the Fund lends portfolio securities must be
valued daily and, should the market value of the loaned securities increase,
the borrower must furnish additional collateral to the Fund. During the time
portfolio securities are on loan, the borrower pays the Fund any dividends
or interest paid on such securities. Loans are subject to termination at the
option of the Fund or the borrower. The Fund may pay reasonable
administrative and custodial fees in connection with a loan and may pay a
negotiated portion of the interest earned on the cash or equivalent
collateral to the borrower or placing broker.
Investment Limitations
Selling Short and Buying on Margin
The Fund will not sell any securities short or purchase any securities on
margin but may obtain such short-term credits as are necessary for clearance
of transactions.
Issuing Senior Securities and Borrowing Money
The Fund will not issue senior securities except that the Fund may borrow
money directly or through reverse repurchase agreements in amounts up to
one-third of the value of its total assets, including the amounts borrowed.
The Fund will not borrow money or engage in reverse re purchase agreements
for investment leverage, but rather as a temporary, extraordinary, or
emergency measure or to facilitate management of the portfolio by enabling
the Fund to meet redemption requests when the liquidation of portfolio
securities is deemed to be inconvenient or disadvantageous. The Fund will
not purchase any securities while borrowings in excess of 5% of the value of
its total assets are outstanding. During the period any reverse repurchase
agreements are outstanding, the Fund will restrict the purchase of portfolio
securities to money market instruments maturing on or before the expiration
date of the reverse repurchase agreements, but only to the extent necessary
to assure completion of the reverse repurchase agreement.
Pledging Assets
The Fund will not mortgage, pledge, or hypothecate any assets except to
secure permitted borrowings. In those cases, it may pledge assets having a
market value not exceeding the lesser of the dollar amounts borrowed or 15%
of the value of total assets of the Fund at the time of the pledge.
Lending Cash or Securities
The Fund will not lend any assets, except portfolio securities. This shall
not prevent the Fund from purchasing or holding bonds, debentures, notes,
certificates of indebtedness, or other debt securities, entering into
repurchase agreements, or engaging in other transactions where permitted by
the Fund's investment objective, policies, and limitations or Declaration of
Trust.
Investing in Commodities and Real Estate
The Fund will not purchase or sell commodities, commodity contracts, or
commodity futures contracts. The Fund will not purchase or sell real estate,
including limited partnership interests, although it may invest in
securities of issuers whose business involves the purchase or sale of real
estate or in securities which are secured by real estate or interests in
real estate.
Underwriting
The Fund will not underwrite any issue of securities, except as it may be
deemed to be an underwriter under the Securities Act of 1933 in connection
with the sale of securities in accordance with its investment objective,
policies, and limitations.
Concentration of Investments
The Fund will not invest 25% or more of the value of its total assets in any
one industry except that the Fund will generally invest 25% or more of the
value of its total assets in commercial paper issued by finance companies.
The Fund may invest 25% or more of the value of its total assets in cash,
cash items, or securities issued or guaranteed by the government of the
United States or its agencies, or instrumentalities and repurchase agreement
collateralized by such U.S. government securities.
Diversification of Investments
With respect to securities comprising 75% of the value of its total assets,
the Fund will not purchase securities issued by any one issuer (other than
cash, cash items, or securities issued or guaranteed by the government of
the United States or its agencies or instrumentalities and repurchase
agreements collateralized by such U.S. government securities) if as a result
more than 5% of the value of its total assets would be invested in the
securities of that issuer, or if it would own more than 10% of the
outstanding voting securities of that issuer.
Investing in Restricted Securities
The Fund will not invest more than 10% of the value of its net assets in
securities subject to legal or contractual restrictions on resale, except
for commercial paper issued under Section 4(2) of the Securities Act of
1933.
The above limitations cannot be changed without shareholder approval. The
following investment limitations, however, may be changed by Trustees
without shareholder approval. Shareholders will be notified before any
material change in these limitations becomes effective.
Investing in Illiquid Securities
The Fund will not invest more than 10% of the value of its net assets in
illiquid securities.
Investing in Securities of Other Investment Companies
The Fund will not purchase securities of other investment companies, except
as part of a merger, consolidation, or other acquisition.
Investing in New Issuers
The Fund will not invest more than 5% of the value of its total assets in
securities of issuers which have records of less than three years of
continuous operations, including the operation of any predecessor.
Investing for Control
The Fund will not invest in securities of a company for the purpose of
exercising control or management.
Investing in Issuers Whose Securities Are Owned by Officers of
the Trust
The Fund will not purchase or retain the securities of any issuer if the
Officers and Trustees of the Trust or its investment adviser owning
individually more than .50 of 1% of the issuer's securities together own
more than 5% of the issuer's securities.
Investing in Options
The Fund will not invest in puts, calls, straddles, spreads, or any
combination of them.
Investing in Minerals
The Fund will not purchase or sell interests in oil, gas, or other mineral
exploration or development programs or leases, although it may purchase the
securities of issuers which invest in or sponsor such programs.
For purposes of the above limitations, the Fund considers instruments issued
by a U.S. branch of a domestic bank or savings and loan having capital,
surplus, and undivided profits in excess of $100,000,000 at the time of
investment to be "cash items." Except with respect to borrowing money, if a
percentage limitation is adhered to at the time of investment, a later
increase or decrease in percentage resulting from any change in value or net
assets will not result in a violation of such limitation.
The Fund did not issue senior securities, pledge securities, invest in
illiquid securities, or engage in when-issued and delayed delivery
transactions or reverse repurchase agreements in excess of 5% of the value
of its net assets during the last fiscal period and has not present intent
to do so during the coming fiscal year.
Brokerage Transactions
When selecting brokers and dealers to handle the purchase and sale of
portfolio instruments, the adviser looks for prompt execution of the order
at a favorable price. In working with dealers, the adviser will generally
use those who are recognized dealers in specific portfolio instruments,
except when a better price and execution of the order can be obtained
elsewhere. The adviser makes decisions on portfolio transactions and selects
brokers and dealers subject to guidelines established by the Board of
Trustees. The adviser may select brokers and dealers who offer brokerage and
research services. These services may be furnished directly to the Fund or
to the adviser and may include: advice as to the advisability of investing
in securities; security analysis and reports; economic studies; industry
studies; receipt of quotations for portfolio evaluations; and similar
services. Research services provided by brokers and dealers may be used by
the adviser or its affiliates in advising the Trust and other accounts. To
the extent that receipt of these services may supplant services for which
the adviser or its affiliates might otherwise have paid, it would tend to
reduce their expenses. The adviser and its affiliates exercise reasonable
business judgment in selecting brokers who offer brokerage and research
services to execute securities transactions. They determine in good faith
that commissions charged by such persons are reasonable in relationship to
the value of the brokerage and research services provided. During the fiscal
year(s) ended July 31, 1993, 1992 and 1991, the Trust paid no brokerage
commissions.
Although investment decisions for the Fund are made independently from those
of the other accounts managed by the adviser, investments of the type the
Fund may make may also be made by those other accounts. When the Fund and
one or more other accounts managed by the adviser are prepared to invest in,
or desire to dispose of, the same security, available investments or
opportunities for sales will be allocated in a manner believed by the
adviser to be equitable to each. In some cases, this procedure may adversely
affect the price paid or received by the Fund or the size of the position
obtained or disposed of by the Fund. In other cases, however, it is believed
that coordination and the ability to participate in volume transactions will
be to the benefit of the Fund.
Money Market Obligations Trust Management
Officers and Trustees. Officers and Trustees are listed with their
addresses, principal occupations, and present positions, including any
affiliation with Federated Management, Federated Investors, Federated
Securities Corp., Federated Administrative Services, Inc./Federated
Administrative Services, and the Funds (as defined below).
Positions with Principal Occupations
Name and Address the Trust During Past Five Years
John F. Donahue@* Chairman and Chairman and Trustee, Federated
Federated Investors Trustee Investors; Chairman and Trustee,
Tower Federated Advisers, Federated
Pittsburgh, PA Management, and Federated
Research; Director, AEtna Life
and Casualty Company; Chief
Executive Officer and Director,
Trustee, or Managing General
Partner of the Funds; formerly,
Director, The Standard Fire
Insurance Company. Mr. Donahue
is the father of J. Christopher
Donahue,
President and Trustee of the Trust.
John T. Conroy, Jr. Trustee President, Investment Properties
Wood/IPC Commercial Corporation; Senior Vice-President,
Department John R. Wood and Associates, Inc.,
John R. Wood and Realtors; President, Northgate
Associates, Inc., Realtors Village Development Corporation;
3255 Tamiami Trail North General Partner or Trustee in
Naples, FL private real estate ventures in
Southwest Florida; Director,
Trustee, or Managing General
Partner of the Funds; formerly,
President, Naples Property
Management, Inc.
William J. Copeland Trustee Director and Member of the
One PNC Plaza - 23rd Floor Executive Committee, Michael
Pittsburgh, PA Baker, Inc.; Director, Trustee,
or Managing General Partner of
the Funds; formerly, Vice
Chairman and Director, PNC
Bank, N.A., and PNC Bank Corp.
and Director, Ryan Homes, Inc.
J. Christopher Donahue* President and President and Trustee, Federated
Federated Investors Trustee Investors; Trustee; Federated
Tower Advisers, Federated
Pittsburgh, PA Management, and Federated
Research; President and Director,
Federated Administrative Services/
Federated Administrative Services,
Inc.; Trustee, Federated Services
Company; President or Vice
President of the Funds; Director,
Trustee, or Managing General
Partner of some of the Funds.
Mr. Donahue is the son of John F.
Donahue, Chairman and
Trustee of the Trust.
James E. Dowd Trustee Attorney-at-law; Director, The
571 Hayward Mill Road Emerging Germany Fund, Inc.;
Concord, MA Director, Trustee, or Managing
General Partner of the Funds;
formerly, Director, Blue Cross
of Massachusetts, Inc.
Lawrence D. Ellis, M.D. Trustee Hematologist, Oncologist, and
3471 Fifth Avenue Internist, Presbyterian and
Suite 1111 Montefiore Hospitals; Clinical
Pittsburgh, PA Professor of Medicine and
Trustee, University of
Pittsburgh; Director, Trustee,
or Managing General Partner of
the Funds.
Edward L. Flaherty, Jr.@ Trustee Attorney-at-law; Partner, Meyer
5916 Penn Mall and Flaherty; Director, Eat'N
Pittsburgh, PA Park Restaurants, Inc., and
Statewide Settlement Agency,
Inc.; Director, Trustee, or
Managing General Partner of
the Funds; formerly, Counsel,
Horizon Financial, F.A.,
Western Region.
Peter E. Madden Trustee Consultant; State Representative,
225 Franklin Street Commonwealth of Massachusetts;
Boston, MA Director, Trustee, or Managing
General Partner of the Funds;
formerly, President, State Street
Bank and Trust Company and
State Street Boston Corporation
and Trustee, Lahey Clinic
Foundation, Inc.
Gregor F. Meyer Trustee Attorney-at-law; Partner, Meyer
5916 Penn Mall and Flaherty; Chairman, Meritcare,
Pittsburgh, PA Inc.; Director, Eat'N Park
Restaurants, Inc.; Director, Trustee,
or Managing General Partner of the
Funds; formerly, Vice Chairman,
Horizon Financial, F.A.
Wesley W. Posvar Trustee Professor, Foreign Policy and
1202 Cathedral of Management Consultant; Trustee,
Learning Carnegie Endowment for
University of Pittsburgh International Peace, RAND
Pittsburgh, PA Corporation, Online Computer
Library Center, Inc., and U.S.
Space Foundation; Chairman,
Czecho Slovak Management
Center; Director, Trustee, or
Managing General Partner of the
Funds; President Emeritus,
University of Pittsburgh; formerly,
Chairman, National Advisory
Council for Environmental Policy
and Technology.
Marjorie P. Smuts Trustee Public relations/marketing
4905 Bayard Street consultant; Director, Trustee,
Pittsburgh, PA or Managing General Partner of
the Funds.
Richard B. Fisher Vice President Executive Vice President and
Federated Investors Trustee, Federated Investors;
Tower Chairman and Director,
Pittsburgh, PA Federated Securities Corp.;
President or Vice President of
the Funds; Director or Trustee
of some of the Funds.
Edward C. Gonzales Vice President Vice President, Treasurer, and
Federated Investors and Treasurer Trustee, Federated Investors; Vice
Tower President and Treasurer, Federated
Pittsburgh, PA Advisers, Federated Management,
and Federated Research; Executive
Vice President, Treasurer, and
Director, Federated Securities Corp.;
Trustee, Federated Services
Company; Chairman, Treasurer,
and Director, Federated
Administrative Services/Federated
Administrative Services, Inc.;
Trustee or Director of some of the
Funds; Vice President and
Treasurer of the Funds.
John W. McGonigle Vice President Vice President, Secretary, General
Federated Investors and Secretary Counsel, and Trustee, Federated
Tower Investors; Vice President, Secretary,
Pittsburgh, PA and Trustee, Federated Advisers,
Federated Management, and
Federated Research; Trustee,
Federated Services Company;
Executive Vice President, Secretary,
and Director, Federated
Administrative Services/Federated
Administrative Services, Inc.;
Director and Executive Vice
President, Federated Securities
Corp.; Vice President and Secretary
of the Funds.
John A. Staley, IV Vice President Vice President and Trustee,
Federated Investors Federated Investors; Executive Vice
Tower President, Federated Securities
Pittsburgh, PA Corp.; President and Trustee,
Federated Advisers, Federated
Management, and Federated
Research; Vice President of the
Funds; Director, Trustee, or
Managing General Partner of some
of the Funds; formerly, Vice
President, The Standard Fire
Insurance Company and President
of its Federated Research Division.
* This Trustee is deemed to be an "interested person" of the Trust as
defined in the Investment Company Act of 1940.
@ Member of the Trust's Executive Committee. The Executive Committee of the
Board of Trustees handles the responsibilities of the Board of Trustees
between meetings of the Board.
The Funds
"The Funds," and "Funds" mean the following investment companies: American
Leaders Fund, Inc.; Annuity Management Series; Automated Cash Management
Trust; Automated Government Money Trust; California Municipal Cash Trust;
Cash Trust Series II; Cash Trust Series, Inc.; DG Investor Series; Edward D.
Jones & Co. Daily Passport Cash Trust; Federated ARMs Fund; Federated
Exchange Fund, Ltd.; Federated GNMA Trust; Federated Government Trust;
Federated Growth Trust; Federated High Yield Trust; Federated Income
Securities Trust; Federated Income Trust; Federated Index Trust; Federated
Intermediate Government Trust; Federated Master Trust; Federated Municipal
Trust; Federated Short-Intermediate Government Trust; Federated Short-Term
U.S. Government Trust; Federated Stock Trust; Federated Tax-Free Trust;
Federated U.S. Government Bond Fund; First Priority Funds; Fixed Income
Securities, Inc.; Fortress Adjustable Rate U.S. Government Fund, Inc.;
Fortress Municipal Income Fund, Inc.; Fortress Utility Fund, Inc.; Fund for
U.S. Government Securities, Inc.; Government Income Securities, Inc.; High
Yield Cash Trust; Insight Institutional Series, Inc.; Insurance Management
Series; Intermediate Municipal Trust; International Series, Inc.; Investment
Series Funds, Inc.; Investment Series Trust; Liberty Equity Income Fund,
Inc.; Liberty High Income Bond Fund, Inc.; Liberty Municipal Securities
Fund, Inc.; Liberty U.S. Government Money Market Trust; Liberty Term Trust,
Inc. - 1999; Liberty Utility Fund, Inc.; Liquid Cash Trust; Managed Series
Trust; Mark Twain Funds; Money Market Management, Inc.; Money Market
Obligations Trust; Money Market Trust; Municipal Securities Income Trust;
New York Municipal Cash Trust; 111 Corcoran Funds; Peachtree Funds; The
Planters Funds; Portage Funds; RIMCO Monument Funds; The Shawmut Funds;
Short-Term Municipal Trust; Signet Select Funds; Star Funds; The Starburst
Funds; The Starburst Funds II; Stock and Bond Fund, Inc.; Sunburst Funds;
Targeted Duration Trust; Tax-Free Instruments Trust; Trademark Funds; Trust
for Financial Institutions; Trust For Government Cash Reserves; Trust for
Short-Term U.S. Government Securities; Trust for U.S. Treasury Obligations;
World Investment Series, Inc.
Share Ownership
Officers and Trustees own less than 1% of the Trust's outstanding shares.
As of April 28, 1994, the following shareholders of record owned 5% or more
of the outstanding Institutional Shares of the Fund: National City Bank,
Cleveland, OH, owned approximately 61,256,78l shares (5.2%); FTC & Co.,
Denver, CO, owned approximately 73,621,107 shares (6.2%); Morand & Company,
Chicago, IL, owned approximately 91,444,115 shares (7.8%); and Var & Co.,
St. Paul, MN, owned approximately 378,718,580 shares (32.3%).
As of April 28, 1994, there were no shareholders of record who owned 5% of
more of the outstanding Institutional Service Shares of the Fund.
Trustee Liability
The Declaration of Trust provides that the Trustees will not be liable for
errors of judgment or mistakes or fact or law. However, they are not
protected against any liability to which they would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of their office.
Investment Advisory Services
Investment Adviser(s)
The Prime Obligations Fund's investment adviser is Federated Management. It
is a subsidiary of Federated Investors. All the voting securities of
Federated Investors are owned by a trust, the trustees of which are John F.
Donahue, his wife and his son, J. Christopher Donahue.
The adviser shall not be liable to Trust, the Fund, or any shareholder of
the Fund for any losses that may be sustained in the purchase, holding, or
sale of any security or for anything done or omitted by it, except acts or
omissions involving willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties imposed upon it by its contract with Trust.
Advisory Fees
For its advisory services, Federated Management receives an annual
investment advisory fee as described in the prospectus. For the fiscal years
ended July 3l, l993, l992 and l991, the Fund's adviser earned $2,033,502,
$1,227,947, and $453,389, respectively, for services provided on behalf of
Institutional Shares, of which $955,268, $633,165, and $453,389,
respectively, were voluntarily waived because of undertakings to limit the
Fund's expenses.
State Expense Limitations
The adviser has undertaken to comply with the expense limitations
established by certain states for investment companies whose shares are
registered for sale in those states. If the Fund's normal operating
expenses (including the investment advisory fee, but not including
brokerage commissions, interest, taxes, and extraordinary expenses) exceed
2-1/2% per year of the first $30 million of average net assets, 2% per year
of the next $70 million of average net assets, and 1-1/2% per year of the
remaining average net assets, the adviser will reimburse the Fund for its
expenses over the limitation.
If the Fund's monthly projected operating expenses exceed this limitation,
the investment advisory fee paid will be reduced by the amount of the
excess, subject to an annual adjustment. If the expense limitation is
exceeded, the amount to be reimbursed by the adviser will be limited, in
any single fiscal year, by the amount of the investment advisory fees.
This arrangement is not part of the advisory contract and may be amended or
rescinded in the future.
Fund Administration
Federated Administrative Services, a subsidiary of Federated Investors,
provides administrative personnel and services to the Trust for a fee as
described in the prospectus for each class of shares of the Fund. For the
fiscal years ended July 31, 1993, 1992, and 1991, Federated Administrative
Services, Inc., the Trust's former administrator, earned $455,288, $283,251,
and $248,329, respectively. John A. Staley, IV, an officer of the Trust and
Dr. Henry J. Gailliot, an officer of Federated Management, the adviser to
the Fund, each hold approximately l5% and 20%, respectively, of the
outstanding common stock of Commercial Data Services, Inc., a company which
provides computer processing services to Federated Administrative Services,
Inc., and Federated Administrative Services. For the fiscal years ended
December 31, 1993, 1992, and 1991, Federated Administrative Services, Inc.
paid approximately $161,547, $201,799, and $170,529, respectively for
services provided by Commercial Data Services, Inc., to the Funds.
Shareholder Services Plan
With respect to Institutional Service Shares the Fund has adopted a
Shareholder Services Plan. This arrangement permits the payment of fees to
Federated Shareholder Services and, indirectly to financial institutions to
cause services to be provided to shareholders by a representative who has
knowledge of the shareholder's particular circumstances and goals. These
activities and services may include, but are not limited to, providing
office space, equipment, telephone facilities, and various clerical,
supervisory, computer, and other personnel as necessary or beneficial to
establish and maintain shareholder accounts and records; processing purchase
and redemption transactions and automatic investments of client account cash
balances; answering routine client inquiries; and assisting clients in
changing dividend options, account designation, and addresses.
Distribution Plan
With respect to Institutional Service Shares the Fund has adopted a Plan
pursuant to Rule 12b-1 which was promulgated by the Securities and Exchange
Commission pursuant to the Investment Company Act of 1940. The Plan permits
the payment of fees to brokers for distribution and administrative services
and to administrators for administrative services. The Plan is designed to
(i) stimulate brokers to provide distribution and administrative support
services to shareholders and (ii) stimulate administrators to render
administrative support services to shareholders. The administrative services
are provided by a representative who has knowledge of the shareholder's
particular circumstances and goals. By adopting the Plan, the Board of
Trustees expects that the Fund will be able to achieve a more predictable
flow of cash for investment purposes and to meet redemptions. This will
facilitate more efficient portfolio management and assist the Fund in
seeking to achieve its investment objectives. By identifying potential
investors whose needs are served by the Fund's objectives, and properly
servicing these accounts, it may be possible to curb sharp fluctuations in
rates of redemptions and sales. Other benefits may include: (1) an efficient
and effective administrative system; (2) a more efficient use of shareholder
assets by having them rapidly invested with a minimum of delay and
administrative detail; and (3) an efficient and reliable shareholder records
system and prompt responses to shareholder requests and inquiries concerning
their accounts.
Custodian and Portfolio Recordkeeper. State Street Bank and Trust Company,
Boston, Massachusetts is custodian for the securities and cash of the Fund.
Federated Services Company, Pittsburgh, Pennsylvania provides certain
accounting and recordkeeping services with respect to the Fund's portfolio
investments.
Determining Net Asset Value
The Trustees have decided that the best method for determining the value of
portfolio instruments is amortized cost. Under this method, portfolio
instruments are valued at the acquisition cost as adjusted for amortization
of premium or accumulation of discount rather than at current market value.
Accordingly, neither the amount of daily income nor the net asset value is
affected by any unrealized appreciation or depreciation of the portfolio. In
periods of declining interest rates, the indicated daily yield on shares of
the Fund computed by dividing the annualized daily income on the Fund's
portfolio by the net asset value computed as above may tend to be higher
than a similar computation made by using a method of valuation based upon
market prices and estimates. In periods of rising interest rates, the
opposite may be true.
The Fund's use of the amortized cost method of valuing portfolio instruments
depends on its compliance with certain conditions in Rule 2a-7 (the "Rule")
promulgated by the Securities and Exchange Commission under the Investment
Company Act of 1940. Under the Rule, the Trustees must establish procedures
reasonably designed to stabilize the net asset value per share, as computed
for purposes of distribution and redemption, at $1.00 per share, taking into
account current market conditions and the Fund's investment objective. The
procedures include monitoring the relationship between the amortized cost
value per share and the net asset value per share based upon available
indications of market value. The Trustees will decide what, if any, steps
should be taken if there is a difference of more than 0.5 of 1% between the
two values. The Trustees will take any steps they consider appropriate (such
as redemption in kind or shortening the average portfolio maturity) to
minimize any material dilution or other unfair results arising from
differences between the two methods of determining net asset value.
Redemption in Kind
The Fund is obligated to redeem shares solely in cash up to $250,000 or 1%
of the Fund's net asset value, whichever is less, for any one shareholder
within a 90-day period. Any redemption beyond this amount will also be in
cash unless the Trustees determine that further payments should be in kind.
In such cases, the Fund will pay all or a portion of the remainder of the
redemption in portfolio instruments valued in the same way as the Fund
determines net asset value. The portfolio instruments will be selected in a
manner that the Trustees deem fair and equitable. Redemption in kind is not
as liquid as a cash redemption. If redemption is made in kind, shareholders
who sell these securities could receive less than the redemption value and
could incur certain transaction costs.
The Fund's Tax Status
To qualify for the special tax treatment afforded to regulated investment
companies, the Fund must, among other requirements: derive at least 90% of
its gross income from dividends, interest, and gains from the sale of
securities; derive less than 30% of its gross income from the sale of
securities held less than three months; invest in securities within certain
statutory limits; and distribute to its shareholders at least 90% of its net
income earned during the year.
Performance Information
Performance depends upon such variables as: portfolio quality; average
portfolio maturity; type of instruments in which the portfolio is invested;
changes in interest rates; changes in expenses; and the relative amount of
cash flow. To the extent that financial institutions and broker/dealers
charge fees in connection with services provided in conjunction with an
investment in shares of the Fund, the performance will be reduced for those
shareholders paying those fees.
Yield
The Fund calculates its yield based upon the seven days ending on the day of
the calculation, called the "base period." This yield is computed by:
determining the net change in the value of a hypothetical account with a
balance of one share at the beginning of the base period, with the net
change excluding capital changes but including the value of any additional
shares purchased with dividends earned from the original one share and all
dividends declared on the original and any purchased shares; dividing the
net change in the account's value by the value of the account at the
beginning of the base period to determine the base period return; and
multiplying the base period return by 365/7.
Effective Yield
The Fund calculates its effective yield by compounding the unannualized base
period return by: adding 1 to the base period return; raising the sum to the
365/7th power; and subtracting 1 from the result.
Total Return
Average annual total return is the average compounded rate of return for a
given period that would equate a $1,000 initial investment to the ending
redeemable value of that investment. The ending redeemable value is
compounded by multiplying the number of shares owned at the end of the
period by the net asset value per share at the end of the period. The number
of shares owned at the end of the period is based on the number of shares
purchased at the beginning of the period with $1,000, adjusted over the
period by any additional shares, assuming the monthly reinvestment of all
dividends and distributions.
Performance Comparisons
Investors may use financial publications and/or indices to obtain a more
complete view of the Fund's performance. When comparing performance,
investors should consider all relevant factors such as the composition of
any index used, prevailing market conditions, portfolio compositions of
other funds, and methods used to value portfolio securities and compute net
asset value. The financial publications and/or indices which the Fund uses
in advertising may include:
Lipper Analytical Services, Inc. ranks funds in various fund categories
based on total return, which assumes the reinvestment of all income
dividends and capital gains distributions, if any.
Donoghue's Money Fund Report publishes annualized yields of money market
funds weekly. Donoghue's Money Market Insight publication reports monthly and
12-month-to-date investment results for the same money funds.
Bank Rate Monitor_ National Index, Miami Beach, Florida, published weekly, is
an average of the interest rates of personal money market deposit accounts at
ten of the largest banks and thrifts in each of the five largest Standard
Metropolitan Statistical Areas. If more than one rate is offered, the lowest
rate is used. Account minimums and compounding methods may vary.
Financial Statements
The Financial Statements for the fiscal year ended July 30, 1993 are
incorporated herein by reference to the Fund's prospectus dated September
30, 1993 (File No. 33-31602). A copy of the prospectus may be obtained
without charge by contacting the Fund.
Appendix
STANDARD AND POOR'S CORPORATION CORPORATE BOND RATING DEFINITIONS
AAA_Debt rated AAA has the highest rating assigned by Standard & Poor's
Corporation. Capacity to pay interest and repay principal is extremely
strong. AA_Debt rated AA has a very strong capacity to pay interest and
repay principal and differs from the higher rated issues only in small
degree. A_Debt rated A has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse effect of
changes in circumstances and economic conditions than debt in higher rated
categories.
MOODY'S INVESTORS SERVICE, INC., CORPORATE BOND RATING DEFINITIONS
AAA_Bonds which are rated AAA are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues. AA_Bonds which are rated AA are judged to be of high quality by all
standards. Together with the AAA group, they comprise what are generally
known as high grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in AAA securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than in AAA securities. A_Bonds which are rated A possess many
favorable investment attributes and are to be considered as upper medium
grade obligations. Factors giving security to principal and interest are
considered adequate but elements may be present which suggest a
susceptibility to impairment sometime in the future.
STANDARD & POOR'S CORPORATION COMMERCIAL PAPER RATING DEFINITIONS
A-1 -- This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics are denoted with a plus (+) sign
designation.
A-2 -- Capacity for timely payment on issues with this designation is
strong. However, the relative degree of safety is not as high as for issues
designated "A-1."
MOODY'S INVESTORS SERVICE, INC. COMMERCIAL PAPER RATING DEFINITIONS
P-1 _ Issuers rated Prime-1 (or related supporting institutions) have a
superior capacity for repayment of short-term promissory obligations.
Prime-1 repayment capacity will normally be evidenced by the following
characteristics: conservative capitalization structure with moderate
reliance on debt and ample asset protection; broad margins in earning
coverage of fixed financial charges and high internal cash generation;
well-established access to a range of financial markets and assured sources
of alternate liquidity.
P-2 _ Issuers rated Prime-2 (or supporting institutions) have a strong
ability for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above, but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be
more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
FITCH INVESTORS SERVICE, INC. SHORT-TERM DEBT RATING DEFINITIONS
F-1+ _ Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1 _ Very Strong Credit Quality. Issues assigned this rating reflect an
assurance for timely payment only slightly less in degree than issues rated
"F-1+."
F-2 _ Good Credit Quality. Issues carrying this rating have a satisfactory
degree of assurance for timely payment, but the margin of safety is not as
great as the "F-1+" and "F-1" categories.
Tax-Free Obligations Fund
(A Portfolio of Money Market Obligations Trust)
Institutional Service Shares
Prospectus
The Institutional Service Shares of Tax-Free Obligations Fund (the "Fund")
offered by this prospectus represent interests in a diversified portfolio of
Money Market Obligations Trust (the "Trust"), an open-end management
investment company (a mutual fund). The Fund invests in municipal securities
to achieve dividend income exempt from federal regular income tax consistent
with stability of principal. Shares of the Fund are offered for sale as an
investment vehicle for large institutions, corporations and fiduciaries.
The shares offered by this prospectus are not deposits or obligations of any
bank, are not endorsed or guaranteed by any bank and are not insured or
guaranteed by the U.S. government, the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other government agency.
Investment in these shares involves investment risks including possible loss
of principal. The Fund attempts to maintain a stable net asset value of
$1.00 per share; there can be no assurance that the Fund will be able to do
so.
This prospectus contains the information you should read and know before you
invest in the Fund. Keep this prospectus for future reference.
The Fund has also filed a Statement of Additional Information dated July
___, 1994, with the Securities and Exchange Commission. The information
contained in the Statement of Additional Information is incorporated by
reference into this prospectus. You may request a copy of the Statement of
Additional Information free of charge by calling 1-800-235-4669. To obtain
other information, or make inquiries about the Fund, contact the Fund at the
address listed in the back of this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
Prospectus dated July ___, 1994
Summary of Fund Expenses 1
General Information 2
Investment Information 2
Investment Objective 2
Investment Policies 2
Municipal Securities. 5
Investment Risks 5
Investment Limitations 6
Regulatory Compliance 6
Trust Information 6
Management of the Trust 6
Distribution of Shares 7
Administration of the Fund 8
Expenses of the Fund and Institutional Service Shares
8
Net Asset Value 9
Investing in the Fund 9
Share Purchases 9
Minimum Investment Required 9
Subaccounting Services 10
Certificates and Confirmations 10
Dividends 10
Capital Gains 10
Redeeming Shares 10
By Mail 10
Telephone Redemption 11
Accounts with Low Balances 12
Shareholder Information 12
Voting Rights 12
Massachusetts Partnership Law 12
Tax Information 13
Federal Income Tax 13
Pennsylvania Corporate and Personal Property Taxes
13
State and Local Taxes 13
Other Classes of Shares 14
Performance Information 14
Financial Highlights 15
Addresses 16
Summary of Fund Expenses
Institutional Service Shares
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases (as a
percentage of offering price) None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price). None
Contingent Deferred Sales Charge (as a percentage of
original purchase price or redemption proceeds,
as applicable) None
Redemption Fee (as a percentage of amount redeemed,
if applicable) . None
Exchange Fee None
Annual Institutional Service Shares Operating Expenses*
(As a percentage of projected average net assets)
Management Fee (after waiver) (1) 0.06%
12b-1 Fee.(2) 0.00%
Total Other Expenses 0.39%
Shareholder Servicing Fee . 0.25%
Total Institutional Service Shares Operating Expenses (3) 0.45%
(1) The estimated management fee has been reduced to reflect the
anticipated voluntary waiver of a portion of the management fee. The
adviser can terminate this voluntary waiver at any time at its sole
discretion. The maximum management fee is 0.20%.
(2) The Institutional Service Shares have no present intention of paying or
accruing the 12b-1 fee during the period ending July 31, 1994. If the
Institutional Service Shares were paying or accruing the 12b-1 fee,
the Class would be able to pay up to 0.25% of its average daily net
assets for the 12b-1 fee. See "Trust Information".
(3) The Total Institutional Service Shares Operating Expenses
are estimated to be 0.59% absent the anticipated voluntary waiver of
a portion of the management fee.
* Total Institutional Service Expenses are estimated based on
average expenses expected to be incurred during the period ending
July 31, 1994. During the course of this period, expenses may be more or
less than the average amount shown.
The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder of Institutional Service
Shares of the Fund will bear, either directly or indirectly. For more
complete descriptions of the various costs and expenses, see "Investing in
the Fund" and "Trust Information." Wire-transferred redemptions of less than
$5,000 may be subject to additional fees.
EXAMPLE 1 year 3 years
You would pay the following expenses on a $1,000
investment assuming (1) 5% annual return and (2)
redemption at the end of each time period. $5 $14
The above example should not be considered a representation of past or
future expenses. Actual expenses may be greater or less than those shown.
This example is based on estimated data for the Fund's fiscal year ending
July 31, 1994.
The information set forth in the foregoing table and example relates only
to Institutional Service Shares of the Fund. The Fund also offers another
class of shares called Institutional Shares. Institutional Service Shares
and Institutional Shares are subject to certain of the same expenses;
however, Institutional Shares are not subject to a 12b-1 fee. See "Other
Classes of Shares."
General Information
The Trust was established as a Massachusetts business trust under a
Declaration of Trust dated October 3, 1988. The Declaration of Trust permits
the Trust to offer separate series of shares of beneficial interest
representing interests in separate portfolios of securities. The shares in
any one portfolio may be offered in separate classes. With respect to this
Fund, as of the date of this prospectus, the Trustees have established two
classes of shares known as Institutional Service Shares and Institutional
Shares. This prospectus relates only to Institutional Service Shares
("Shares") of the Fund, which are designed primarily for financial
institutions as a convenient means of accumulating an interest in a
professionally managed, diversified portfolio investing in short-term money
market securities. A minimum initial investment of $25,000 is required.
Eligibility for investment in the Trust is contingent upon an investor
accumulating and maintaining a minimum aggregate investment of $200,000,000
in Federated funds within a twelve-month period. For this purpose, 1) an
investor is defined as a financial institution or its collective customers,
including affiliate financial institutions and their collective customers,
or other institutions that are determined to qualify by Federated Securities
Corp., and 2) Federated funds are those mutual funds which are distributed
by Federated Securities Corp., or are advised by or administered by
investment advisers or administrators affiliated with Federated Securities
Corp. ("Federated Funds"). An investor's minimum investment will be
calculated by combining all accounts the investor maintains with the
Federated Funds, which includes the Trust.
The Fund attempts to stabilize the value of a share at $1.00. Shares are
currently sold and redeemed at that price.
Investment Information
Investment Objective
The investment objective of the Fund is dividend income exempt from federal
regular income tax consistent with stability of principal . This investment
objective cannot be changed without shareholder approval. While there is no
assurance that the Fund will achieve its investment objective, it endeavors
to do so by following the investment policies described in this prospectus.
Investment Policies
The Fund pursues its investment objective by investing in a portfolio of
municipal securities (as defined below) maturing in 13 months or less. As a
matter of investment policy, which cannot be changed without shareholder
approval, at least 80% of the Fund's annual interest income will be exempt
from federal regular income tax. (Federal regular income tax does not
include the federal individual alternative minimum tax or the federal
alternative minimum tax for corporations.) The average maturity of the
securities in the Fund's portfolio, computed on a dollar-weighted basis,
will be 90 days or less. Unless indicated otherwise, investment policies may
be changed by the Trustees without shareholder approval. Shareholders will
be notified before any material change in these policies becomes effective.
Acceptable Investments. The Fund invests primarily in debt obligations
issued by or on behalf of states, territories, and possessions of the United
States, including the District of Columbia, and any political subdivision or
financing authority of any of these, the income from which is, in the
opinion of qualified legal counsel, exempt from federal regular income tax
("Municipal Securities"). Examples of Municipal Securities include, but are
not limited to:
tax and revenue anticipation notes ("TRANs") issued to finance working
capital needs in anticipation of receiving taxes or other revenues;
bond anticipation notes ("BANs") that are intended to be refinanced
through a later issuance of longer-term bonds;
municipal commercial paper and other short-term notes;
variable rate demand notes;
municipal bonds (including bonds having serial maturities and
pre-refunded bonds) and leases;
construction loan notes insured by the Federal Housing Administration
and financed by the Federal or Government National Mortgage
Associations; and
participation, trust, and partnership interests in any of the foregoing
obligations.
Variable Rate Demand Notes. Variable rate demand notes are long-term debt
instruments that have variable or floating interest rates and provide the
Fund with the right to tender the security for repurchase at its stated
principal amount plus accrued interest. Such securities typically bear
interest at a rate that is intended to cause the securities to trade at
par. The interest rate may float or be adjusted at regular intervals
(ranging from daily to annually), and is normally based on an interest
rate or interest rate index. Most variable rate demand notes allow the
Fund to demand the repurchase of the security on not more than seven days
prior notice. Other notes only permit the Fund to tender the security at
the time of each interest rate adjustment or at other fixed intervals.
See "Demand Features." The Fund treats variable rate demand notes as
maturing on the later of the date of the next interest rate adjustment or
the date on which the Fund may next tender the security for repurchase.
Participation Interests. The Fund may purchase interests in Municipal
Securities from financial institutions such as commercial and investment
banks, savings and loan associations, and insurance companies. These
interests may take the form of participations, beneficial interests in a
trust, partnership interests or any other form of indirect ownership that
allows the Fund to treat the income from the investment as exempt from
federal income tax. The Fund invests in these participation interests in
order to obtain credit enhancement or demand features that would not be
available through direct ownership of the underlying Municipal
Securities.
Municipal Leases. Municipal leases are obligations issued by state and
local governments or authorities to finance the acquisition of equipment
and facilities. They may take the form of a lease, an installment
purchase contract, a conditional sales contract, or a participation
interest in any of the above.
Ratings. The securities in which the Fund invests must be rated in the
highest short-term rating category by one or more nationally recognized
statistical rating organizations ("NRSROs") or be of comparable quality to
securities having such ratings. An NRSRO's highest rating category is
determined without regard for sub-categories and gradations. For example,
securities rated SP-1+ or SP-1 by Standard & Poor's Corporation ("S&P"),
MIG-1 by Moody's Investors Service, Inc. ("Moody's"), or FIN-1+ or FIN-1 by
Fitch Investors Service, Inc. ("Fitch") are all considered rated in the
highest short-term rating category. The Fund will follow applicable
regulations in determining whether a security rated by more than one NRSRO
can be treated as being in the highest short-term rating category;
currently, such securities must be rated by two NRSROs in their highest
rating category. See "Regulatory Compliance."
Further, the Fund has the ability but no present intention of investing in:
securities that are rated MIG-2 or VMIG-2 by Moody's, SP-2 by S&P, FIN-2 by
Fitch; tax-exempt commercial paper that is rated P-2 by Moody's, A-2 by S&P,
or F-2 by Fitch; and securities that are not rated but are deemed to be of
comparable quality. Shareholders will be notified should the Fund decide to
invest in these securities.
Credit Enhancement. Certain of the Fund's acceptable investments may be
credit enhanced by a guaranty, letter of credit, or insurance. The Fund
typically evaluates the credit quality and ratings of credit enhanced
securities based upon the financial condition and ratings of the party
providing the credit enhancement (the "credit enhancer"), rather than the
issuer. However, credit enhanced securities will not be treated as having
been issued by the credit enhancer for diversification purposes, unless the
Fund has invested more than 10% of its assets in securities issued,
guaranteed or otherwise credit enhanced by the credit enhancer, in which
case the securities will be treated as having been issued by both the issuer
and the credit enhancer. The bankruptcy, receivership, or default of the
credit enhancer will adversely affect the quality and marketability of the
underlying security.
The Fund may have more than 25% of its total assets invested in securities
credit enhanced by banks.
Demand Features. The Fund may acquire securities that are subject to puts
and standby commitments ("demand features") to purchase the securities at
their principal amount (usually with accrued interest) within a fixed period
(usually seven days) following a demand by the Fund. The demand feature may
be issued by the issuer of the underlying securities, a dealer in the
securities, or by another third party, and may not be transferred separately
from the underlying security. The Fund uses these arrangements to provide
the Fund with liquidity and not to protect against changes in the market
value of the underlying securities. The bankruptcy, receivership, or default
by the issuer of the demand feature, or a default on the underlying security
or other event that terminates the demand feature before its exercise, will
adversely affect the liquidity of the underlying security. Demand features
that are exercisable even after a payment default on the underlying security
may be treated as a form of credit enhancement.
Restricted and Illiquid Securities. The Fund may invest in restricted
securities. Restricted securities are any securities in which the Fund may
invest pursuant to its investment objective and policies but which are
subject to restrictions on resale under federal securities laws. Under
criteria established by the Trustees, certain restricted securities are
determined to be liquid. To the extent that restricted securities are not
determined to be liquid, the Fund will limit their purchase, together with
other illiquid securities, to 10% of its net assets.
When-Issued And Delayed Delivery Transactions. The Fund may purchase
securities on a when-issued or delayed delivery basis. These transactions
are arrangements in which the Fund purchases securities with payment and
delivery scheduled for a future time. The seller's failure to complete these
transactions may cause the Fund to miss a price or yield considered to be
advantageous.
Temporary Investments. From time to time, when the investment adviser
determines that market conditions call for a temporary defensive posture,
the Fund may invest in tax-exempt or taxable securities such as: obligations
issued by or on behalf of municipal or corporate issuers having the same
quality characteristics as described above; obligations issued or guaranteed
by the U.S. government, its agencies, or instrumentalities; instruments
issued by a U.S. branch of a domestic bank or other deposit institution
having capital, surplus, and undivided profits in excess of $100,000,000 at
the time of investment; and repurchase agreements (arrangements in which the
organization selling the Fund a temporary investment agrees at the time of
sale to repurchase it at a mutually agreed upon time and price).
Although the Fund is permitted to make taxable, temporary investments, there
is no current intention to do so. However, the interest from certain
Municipal Securities is subject to the federal alternative minimum tax.
Municipal Securities.
Municipal Securities are generally issued to finance public works, such as
airports, bridges, highways, housing, hospitals, mass transportation
projects, schools, streets, and water and sewer works. They are also issued
to repay outstanding obligations, to raise funds for general operating
expenses, and to make loans to other public institutions and facilities.
Municipal Securities include industrial development bonds issued by or on
behalf of public authorities to provide financing aid to acquire sites or
construct and equip facilities for privately or publicly owned corporations.
The availability of this financing encourages these corporations to locate
within the sponsoring communities and thereby increases local employment.
The two principal classifications of Municipal Securities are "general
obligation" and "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its full faith and credit and taxing power for the
payment of principal and interest. Interest on and principal of revenue
bonds, however, are payable only from the revenue generated by the facility
financed by the bond or other specified sources of revenue. Revenue bonds do
not represent a pledge of credit or create any debt of or charge against the
general revenues of a municipality or public authority. Industrial
development bonds are typically classified as revenue bonds.
Investment Risks
Yields on Municipal Securities depend on a variety of factors, including:
the general conditions of the short-term municipal note market and of the
municipal bond market; the size of the particular offering; the maturity of
the obligations; and the rating of the issue. The ability of the Fund to
achieve its investment objective also depends on the continuing ability of
the issuers of Municipal Securities and participation interests, or the
credit enhancers of either, to meet their obligations for the payment of
interest and principal when due. In addition, from time to time, the supply
of Municipal Securities acceptable for purchase by the Fund could become
limited.
The Fund may invest in Municipal Securities which are repayable out of
revenue streams generated from economically related projects or facilities
and/or whose issuers are located in the same state. Sizable investments in
these Municipal Securities could involve an increased risk to the Fund
should any of these related projects or facilities experience financial
difficulties.
Obligations of issuers of Municipal Securities are subject to the provisions
of bankruptcy, insolvency, and other laws affecting the rights and remedies
of creditors. In addition, the obligations of such issuers may become
subject to laws enacted in the future by Congress, state legislators, or
referenda extending the time for payment of principal and/or interest, or
imposing other constraints upon enforcement of such obligations or upon the
ability of states or municipalities to levy taxes. There is also the
possibility that, as a result of litigation or other conditions, the power
or ability of any issuer to pay, when due, the principal of and interest on
its municipal securities may be materially affected.
Investment Limitations
The Fund will not borrow money or pledge securities except, under certain
circumstances, the Fund may borrow up to one-third of the value of its total
assets and pledge assets to secure such borrowings. This investment
limitation cannot be changed without shareholder approval.
Regulatory Compliance
The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in
this prospectus and its Statement of Additional Information, in order to
comply with applicable laws and regulations, including the provisions of and
regulations under the Investment Company Act of 1940, as amended. In
particular, the Fund will comply with the various requirements of Rule 2a-7,
which regulates money market mutual funds. The Fund will determine the
effective maturity of its investments, as well as its ability to consider a
security as having received the requisite short-term ratings by NRSROs,
according to Rule 2a-7. The Fund may change these operational policies to
reflect changes in the laws and regulations without the approval of its
shareholders.
Trust Information
Management of the Trust
Board of Trustees. The Trust is managed by a Board of Trustees. The
Trustees are responsible for managing the Fund's business affairs and for
exercising all the Trust's powers except those reserved for the
shareholders. An Executive Committee of the Board of Trustees handles the
Board's responsibilities between meetings of the Board.
Investment Adviser. Investment decisions for the Fund are made by Federated
Management, the Fund's investment adviser, subject to direction by the
Trustees. The adviser continually conducts investment research and
supervision for the Fund and is responsible for the purchase and sale of
portfolio instruments.
Advisory Fees. The adviser receives an annual investment advisory fee
equal to .20 of 1% of the Fund's average daily net assets. The adviser
has undertaken to reimburse the Fund up to the amount of the advisory fee
for operating expenses in excess of limitations established by certain
states. The adviser also may voluntarily choose to waive a portion of its
fee or reimburse other expenses of the Fund, but reserves the right to
terminate such waiver or reimbursement at any time at its sole
discretion.
Adviser's Background. Federated Management, a Delaware business trust,
organized on April 11, 1989, is a registered investment adviser under the
Investment Advisers Act of 1940. It is a subsidiary of Federated
Investors. All of the Class A (voting) shares of Federated Investors are
owned by a trust, the trustees of which are John F. Donahue, Chairman and
Trustee of Federated Investors, Mr. Donahue's wife, and Mr. Donahue's
son, J. Christopher Donahue, who is President and Trustee of Federated
Investors.
Federated Management and other subsidiaries of Federated Investors serve
as investment advisers to a number of investment companies and private
accounts. Certain other subsidiaries also provide administrative services
to a number of investment companies. Total assets under management or
administration by these and other subsidiaries of Federated Investors are
approximately $70 billion. Federated Investors, which was founded in 1956
as Federated Investors, Inc., develops and manages mutual funds primarily
for the financial industry. Federated Investors' track record of
competitive performance and its disciplined, risk averse investment
philosophy serve approximately 3,500 client institutions nationwide.
Through these same client institutions, individual shareholders also have
access to this same level of investment expertise.
Distribution of Shares
Federated Securities Corp. is the principal distributor for Institutional
Service Shares of the Fund. It is a Pennsylvania corporation organized on
November 14, 1969, and is the principal distributor for a number of
investment companies. Federated Securities Corp. is a subsidiary of
Federated Investors.
Distribution and Shareholder Services Plans. Under a distribution plan
adopted in accordance with Investment Company Act Rule 12b-1 (the
"Distribution Plan"), the Fund will pay to the distributor an amount,
computed at an annual rate of .25 of 1% of the average daily net asset value
of the Institutional Service Shares to finance any activity which is
principally intended to result in the sale of shares subject to the
Distribution Plan. The distributor may select financial institutions such as
banks, fiduciaries, custodians for public funds, investment advisers, and
broker/dealers to provide sales support services as agents for their clients
or customers. In addition, the Fund has adopted a Shareholder Services Plan
(the "Services Plan") under which it will pay financial institutions an
amount not exceeding .25 of 1% of the average daily net asset value of the
Institutional Service Shares to provide administrative support services to
their customers who own shares of the Fund. From time to time and for such
periods as deemed appropriate, the amounts stated above may be reduced
voluntarily. Activities and services under these arrangements may include,
but are not limited to, providing advertising and marketing materials to
prospective shareholders, providing personal services to shareholders, and
maintaining shareholder accounts.
Financial institutions will receive fees based upon shares owned by their
clients or customers. The schedules of such fees and the basis upon which
such fees will be paid will be determined from time to time by the Fund or
the distributor, as appropriate.
The Distribution Plan is a compensation-type plan. As such, the Fund makes
no payments to the distributor except as described above. Therefore, the
Fund does not pay for unreimbursed expenses of the distributor, including
amounts expended by the distributor in excess of amounts received by it from
the Fund, interest, carrying or other financing charges in connection with
excess amounts expended, or the distributor's overhead expenses. However,
the distributor may be able to recover such amounts or may earn a profit
from future payments made by the Fund under the Distribution Plan.
Administration of the Fund
Administrative Services. Federated Administrative Services, a subsidiary of
Federated Investors, provides certain administrative personnel and services
(including certain legal and financial reporting services) necessary to
operate the Fund. Federated Administrative Services provides these at an
annual rate which relates to the average aggregate daily net assets of all
Federated Funds as specified below:
Maximum Administrative Average Aggregate Daily Net Assets
Fee of the Fund
.15 of 1% on the first $250 million
.125 of 1% on the next $250 million
.10 of 1% on the next $250 million
.075 of 1% on assets in excess of $750 million
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares.
Federated Administrative Services may choose voluntarily to waive a portion
of its fee.
Custodian. State Street Bank and Trust Company, Boston, Massachusetts is
custodian for the securities and cash of the Fund.
Transfer Agent and Dividend Disbursing Agent. Federated Services Company,
Boston, Massachusetts is transfer agent for the shares of, and dividend
disbursing agent for the Fund.
Legal Counsel. Legal counsel is provided by Houston, Houston and Donnelly,
Pittsburgh, Pennsylvania and Dickstein, Shapiro and Morin, Washington, D.C.
Independent Public Accountants. The independent public accountants for the
Fund are Arthur Andersen & Co., Pittsburgh, Pennsylvania.
Expenses of the Fund and Institutional Service Shares
Holders of Shares pay their allocable portion of Fund and Trust expenses.
The Trust expenses for which holders of Shares pay their allocable portion
include, but are not limited to: the cost of organizing the Trust and
continuing its existence; registering the Trust with federal and state
securities authorities; Trustees' fees; auditors' fees; the cost of meetings
of Trustees; legal fees of the Trust; association membership dues; and such
non-recurring and extraordinary items as may arise.
The Fund expenses for which holders of Shares pay their allocable portion
include, but are not limited to: registering the Fund and Shares of the
Fund; investment advisory services; taxes and commissions; custodian fees;
insurance premiums; auditors' fees; and such non-recurring and extraordinary
items as may arise.
At present, the only expenses allocated to the Shares as a class are
expenses under the Fund's Rule 12b-1 Plan and Shareholder Services Plan
which relate to the Shares. However, the Board of Trustees reserves the
right to allocate certain other expenses to holders of Shares as it deems
appropriate "Class Expenses." In any case, Class Expenses would be limited
to: transfer agent fees as identified by the transfer agent as attributable
to holders of Shares; printing and postage expenses related to preparing and
distributing materials such as shareholder reports, prospectuses and proxies
to current shareholders; registration fees paid to the Securities and
Exchange Commission and registration fees paid to state securities
commissions; expenses related to administrative personnel and services as
required to support holders of Shares; legal fees relating solely to Shares;
and Trustees' fees incurred as a result of issues relating solely to Shares.
Net Asset Value
The Fund attempts to stabilize the net asset value of Shares at $1.00 by
valuing the portfolio securities using the amortized cost method. The net
asset value per share is determined by subtracting liabilities attributable
to Shares from the value of Fund assets attributable to Shares, and dividing
the remainder by the number of Shares outstanding. The Fund cannot guarantee
that its net asset value will always remain at $1.00 per share.
The net asset value is determined at 12:00 noon, 3:00 p.m., and 4:00 p.m.
(Eastern time) Monday through Friday except on: (i) days on which there are
not sufficient changes in the value of the Fund's portfolio securities that
its net asset value might be materially affected; (ii) days during which no
shares are tendered for redemption and no orders to purchase shares are
received; or (iii) the following holidays: New Year's Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day,
and Christmas Day.
Investing in the Fund
Share Purchases
Shares are sold at their net asset value, without a sales charge, next
determined after an order is received, on days on which the New York Stock
Exchange and the Federal Reserve Wire System are open for business. Shares
may be purchased either by wire or mail. The Fund reserves the right to
reject any purchase request.
To make a purchase, open an account by calling Federated Securities Corp.
Information needed to establish the account will be taken by telephone.
By Wire. To purchase by Federal Reserve wire, call the Fund before 3:00
p.m., (Eastern time) to place an order. The order is considered received
immediately. Payment by federal funds must be received before 3:00 p.m.,
(Eastern time) that day. Federal funds should be wired as follows: State
Street Bank and Trust Company, Boston, Massachusetts; Attention: EDGEWIRE;
For Credit to: Tax-Free Obligations Fund_Institutional Service Shares: Fund
Number (this number can be found on the account statement or by contacting
the Fund); Group Number or Order Number; Nominee or Institution Name; and
ABA Number 011000028.
By Mail. To purchase by mail, send a check made payable to Tax-Free
Obligations Fund_Institutional Service Shares to: Tax-Free Obligations Fund,
P.O. Box 8602, Boston, Massachusetts 02266-8602. Orders by mail are
considered received when payment by check is converted into federal funds.
This is normally the next business day after the check is received.
Minimum Investment Required
The minimum initial investment is $25,000. Eligibility for investment in the
Trust is contingent upon an investor accumulating and maintaining a minimum
aggregate investment of $200,000,000 in Federated Funds within a
twelve-month period.
Subaccounting Services
Financial institutions are encouraged to open single master accounts.
However, certain financial institutions may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements.
The transfer agent charges a fee based on the level of subaccounting
services rendered. Financial institutions may charge or pass through
subaccounting fees as part of or in addition to normal trust or agency
account fees. They may also charge fees for other services provided which
may be related to the ownership of Fund shares. This prospectus should,
therefore, be read together with any agreement between the customer and the
financial institution with regard to the services provided, the fees charged
for those services and any restrictions and limitations imposed.
Certificates and Confirmations
As transfer agent for the Fund, Federated Services Company maintains a share
account for each shareholder. Share certificates are not issued unless
requested by contacting the Fund or Federated Services Company in writing.
Monthly confirmations are sent to report transactions such as all purchases
and redemptions as well as dividends paid during the month.
Dividends
Dividends are declared daily and paid monthly. Shares purchased by wire
before 3:00 p.m. (Eastern time) begin earning dividends that day. Shares
purchased by check begin earning dividends on the day after the check is
converted into federal funds. Dividends are automatically reinvested in
additional Shares unless cash payments are requested by contacting the Fund.
Capital Gains
Capital gains, if any, could result in an increase in dividends. Capital
losses could result in a decrease in dividends. If, for some extraordinary
reason, the Fund realizes net long-term capital gains, it will distribute
them at least once every 12 months.
Redeeming Shares
Shares are redeemed at their net asset value next determined after the Fund
receives the redemption request. Redemptions will be made on days on which
the Fund computes its net asset value. Redemption requests must be received
in proper form and can be made as described below.
By Mail
Shares may be redeemed by sending a written request to: Tax-Free Obligations
Fund, P.O. Box 8602, Boston, Massachusetts 02266-8602. The written request
should state: Tax-Free Obligations Fund_Institutional Service Shares;
shareholder's name; the account number; and the share or dollar amount
requested. Sign the request exactly as the shares are registered.
Shareholders should call the Fund for assistance in redeeming by mail.
If share certificates have been issued, they must be properly endorsed and
should be sent by registered or certified mail with the written request.
Shareholders requesting a redemption of $50,000 or more, a redemption of any
amount to be sent to an address other than that on record with the Fund, or
a redemption payable other than to the shareholder of record must have their
signatures guaranteed by:
a trust company or commercial bank whose deposits are insured by the
Bank Insurance Fund which is administered by the Federal Deposit
Insurance Corporation ("FDIC");
a member firm of the New York, American, Boston, Midwest, or Pacific
Stock Exchanges;
a savings bank or savings and loan association whose deposits are
insured by the Savings Association Insurance Fund, which is
administered by the FDIC; or
any other "eligible guarantor institution," as defined in the
Securities Exchange Act of 1934.
The Fund does not accept signatures guaranteed by a notary public.
The Fund and its transfer agent have adopted standards for accepting
signature guarantees from the above institutions. The Fund may elect in the
future to limit eligible signature guarantors to institutions that are
members of the signature guarantee program. The Fund and its transfer agent
reserve the right to amend these standards at any time without notice.
Normally, a check for the proceeds is mailed within one business day, but in
no event more than seven days, after receipt of a proper written redemption
request. Dividends are paid up to and including the day that a redemption
request is processed.
Telephone Redemption
Shares may be redeemed by telephoning the Fund. If the redemption request is
received before 12:00 noon (Eastern time), the proceeds will be wired the
same day to the shareholder's account at a domestic commercial bank which is
a member of the Federal Reserve System, and those shares redeemed will not
be entitled to that day's dividend. A daily dividend will be paid on shares
redeemed if the redemption request is received after 12:00 noon (Eastern
time). However, the proceeds are not wired until the following business day.
An authorization form permitting the Fund to accept telephone requests must
first be completed. Authorization forms and information on this service are
available from Federated Securities Corp. Telephone redemption instructions
may be recorded.
In the event of drastic economic or market changes, a shareholder may
experience difficulty in redeeming by telephone. If such a case should
occur, another method of redemption, such as "By Mail," should be
considered. If at any time the Fund shall determine it necessary to
terminate or modify this method of redemption, shareholders would be
promptly notified.
If reasonable procedures are not followed by the Fund, it may be liable for
losses due to unauthorized or fraudulent telephone instructions.
Accounts with Low Balances
Due to the high cost of maintaining accounts with low balances, the Fund may
redeem shares in any account and pay the proceeds to the shareholder if the
account balance falls below a required minimum value of $25,000 or the
aggregate investment in Federated Funds falls below the required minimum of
$200,000,000 to be maintained from and after twelve months from account
opening, due to shareholder redemptions.
Before shares are redeemed to close an account, the shareholder is notified
in writing and allowed 30 days to purchase additional shares to meet the
minimum requirement.
Shareholder Information
Voting Rights
Each share of the Trust gives the shareholder one vote in Trustee elections
and other matters submitted to shareholders for vote. All shares of all
classes of each portfolio in the Trust have equal voting rights, except that
in matters affecting only a particular portfolio or class, only shares of
that portfolio or class are entitled to vote. As a Massachusetts business
trust, the Trust is not required to hold annual shareholder meetings.
Shareholder approval will be sought only for certain changes in the Trust's
or the Fund's operation and for the election of Trustees under certain
circumstances. As of April 28, 1994, Var & Co., St. Paul, Minnesota, owned
25.4% of the voting securities of the Fund, and First Union National Bank,
Charlotte, North Carolina owned 25.2% of the voting securities of the Fund,
and, therefore, may for certain purposes be deemed to control the Fund and
be able to affect the outcome of certain matters presented for a vote of
shareholders.
Trustees may be removed by the Trustees or by shareholders at a special
meeting. A special meeting of the shareholders for this purpose shall be
called by the Trustees upon the written request of shareholders owning at
least 10% of the outstanding shares of the Trust.
Massachusetts Partnership Law
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect
its shareholders, the Trust has filed legal documents with Massachusetts
that expressly disclaim the liability of its shareholders for acts or
obligations of the Trust. These documents require notice of this disclaimer
to be given in each agreement, obligation, or instrument the Trust or its
Trustees enter into or sign.
In the unlikely event a shareholder is held personally liable for the
Trust's obligations, the Trust is required by the Declaration of Trust to
use its property to protect or compensate the shareholder. On request, the
Trust will defend any claim made and pay any judgment against a shareholder
for any act or obligation of the Trust. Therefore, financial loss resulting
from liability as a shareholder will occur only if the Trust itself cannot
meet its obligations to indemnify shareholders and pay judgments against
them.
Tax Information
Federal Income Tax
The Fund will pay no federal income tax because it expects to meet
requirements of the Internal Revenue Code applicable to regulated investment
companies and to receive the special tax treatment afforded to such
companies.
The Fund will be treated as a single, separate entity for federal income tax
purposes so that income (including capital gains) and losses realized by the
Trust's other portfolios will not be combined for tax purposes with those
realized by the Fund.
Shareholders are not required to pay the federal regular income tax on any
dividends received from the Fund that represent net interest on tax-exempt
municipal bonds. However, under the Tax Reform Act of 1986, dividends
representing net interest earned on certain "private activity" bonds issued
after August 7, 1986, may be included in calculating the federal individual
alternative minimum tax or the federal alternative minimum tax for
corporations. The Fund may purchase all types of municipal bonds, including
private activity bonds.
The alternative minimum tax applies when it exceeds the regular tax for the
taxable year. Alternative minimum taxable income is equal to the regular
taxable income of the taxpayer increased by certain "tax preference" items
not included in regular taxable income and reduced by only a portion of the
deductions allowed in the calculation of the regular tax.
Dividends of the Fund representing net interest income earned on some
temporary investments and any realized net short-term gains are taxed as
ordinary income.
These tax consequences apply whether dividends are received in cash or as
additional shares.
Pennsylvania Corporate and Personal Property Taxes
In the opinion of Houston, Houston & Donnelly, counsel to the Fund:
the Fund is not subject to Pennsylvania corporate or personal property
taxes; and
Fund shares may be subject to personal property taxes imposed by
counties, municipalities, and school districts in Pennsylvania to the
extent that the portfolio securities in the Fund would be subject to
such taxes if owned directly by residents of those jurisdictions.
State and Local Taxes
Because interest received by Fund may not be exempt from all state and local
income taxes, shareholders may be required to pay state and local taxes on
dividends received from the Fund. Shareholders are urged to consult their
own tax advisers regarding the status of their accounts under state and
local tax laws.
Other Classes of Shares
Institutional Shares are sold at net asset value to accounts for which
financial institutions act in an agency or fiduciary capacity. Investments
in Institutional Shares are subject to a minimum initial investment of
$25,000. Institutional Shares are not sold pursuant to a 12b-1 Plan.
Financial institutions providing distribution or administrative services may
receive different compensation depending upon which class of shares of the
Fund is sold. The amount of dividends payable to shareholders of
Institutional Shares will exceed that payable to the shareholders of
Institutional Service Shares by the difference between class expenses and
any 12b-1 Plan expenses borne by Institutional Service Shares. The stated
advisory fee is the same for both classes of shares.
Performance Information
From time to time the Fund advertises its yield, effective yield and
tax-equivalent yield for Shares.
Yield represents the annualized rate of income earned on an investment over
a seven-day period. It is the annualized dividends earned during the period
on an investment shown as a percentage of the investment. The effective
yield is calculated similarly to the yield, but when annualized, the income
earned by an investment is assumed to be reinvested daily. The effective
yield will be slightly higher than the yield because of the compounding
effect of this assumed reinvestment. The tax-equivalent yield is calculated
similarly to the yield, but is adjusted to reflect the taxable yield that
would have to be earned to equal the Shares' tax exempt yield, assuming a
specific tax rate.
Advertisements and sales literature may also refer to total return. Total
return represents the change, over a specified period of time, in the value
of an investment in the Shares after reinvesting all income distributions.
It is calculated by dividing that change by the initial investment and is
expressed as a percentage.
The performance figures will be calculated separately for each class of
shares. Because each class of shares is subject to different expenses, the
yield, effective yield, and tax-equivalent yield of Institutional Shares
will exceed the yield, effective yield and tax-equivalent yield of
Institutional Service Shares for the same period.
From time to time, the Fund may advertise its performance using certain
financial publications and/or compare its performance to certain indices.
Tax-Free Obligations Fund
Financial Highlights
Institutional Shares
(For a share outstanding throughout each period)
Year Ended July 31,
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1993 1992 1991 1990
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.0251 0.0368 0.0501 0.0365
Less distributions
Dividends to shareholders from net
investment income (0.0251) (0.0368) (0.0501) (0.0365)
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total return* 2.54%% 3.73% 5.13% 3.70%(c)
Ratios/supplemental data
Net assets, end of period(000 omitted) $ 454,119 $ 308,855 $ 165,669 $ 145,552
Ratio of expenses to average net assets 0.20%(b) 0.20%(b) 0.20%(b) 0.20%(a)(b)
Ratio of net investment income to
average net assets 2.49%(b) 3.58%(b) 4.93%(b) 5.75%(a)(b)
</TABLE>
* Reflects operations for the period from December 12, 1989 (date of initial
public investment) to July 31, 1990.
(a)
Computed on an annualized basis.
(b)
For the fiscal years ended July 31, 1993, 1992, and 1991 and for the
period from December 12, 1989 (date of initial public investment) to July
31, 1990, the investment adviser voluntarily waived all or a portion of
its fee and/or reimbursed certain other operating expenses of the Fund.
Had the adviser not undertaken such action, the ratio of expenses and net
investment income would have been 0.34% and 2.35%, 0.37% and 3.41%, 0.46%
and 4.67%, and 0.41% and 5.54%, respectively.
(c)
Cumulative total return.
(See Notes to Financial Statements)
Addresses
Tax-Free Obligations Fund
Institutional Service Shares Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Investment Adviser
Federated Management Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Custodian
State Street Bank and Trust Company
P.O. Box 8602
Boston, Massachusetts 02266-8602
Transfer Agent and Dividend Disbursing Agent
Federated Services Company
P.O. Box 8602
Boston, Massachusetts 02266-8602
Legal Counsel
Houston, Houston and Donnelly 2510 Centre City Tower
Pittsburgh, Pennsylvania 15222
Legal Counsel
Dickstein, Shapiro and Morin 2101 L Street, N.W.
Washington, D.C. 20037
Independent Public Accountants
Arthur Andersen & Co. 2100 One PPG Place
Pittsburgh, Pennsylvania 15222
Tax-Free Obligations Fund
Institutional Service Shares
Prospectus
A diversified Portfolio of Money Market Obligations Trust,
an Open-End Management Investment Company
Prospectus dated July __, 1994
Federated Securities Corporation
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
Tax-Free Obligations Fund
(A PORTFOLIO OF Money Market Obligations Trust)
Institutional Shares
Institutional Service Shares
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information should be read with the
prospectus(es) of Tax-Free Obligations Fund (the "Fund") dated July __, 1994
and September 30, 1993. This Statement is not a prospectus. To receive a
copy of a prospectus, write or call the Trust.
Statement dated July __, 1994
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
Investment Policies 1
Characteristics of Municipal Securities.
1
Municipal Leases 1
Temporary Investments 1
Repurchase Agreements 2
Investment Risks 2
Investment Limitations 2
Selling Short and Buying on Margin 2
Issuing Senior Securities and Borrowing Money
2
Pledging Assets 2
Lending Cash or Securities 2
Investing in Commodities and Real Estate
2
Diversification of Investments 3
Concentration of Investments 3
Underwriting 3
Investing in Restricted Securities 3
Investing in Illiquid Securities 3
Investing in Securities of Other Investment Companies
3
Investing in New Issuers 3
Investing for Control 4
Investing in Issuers Whose Securities Are Owned by Officers of the Trust
4
Investing in Options 4
Investing in Minerals 4
Brokerage Transactions 4
Money Market Obligations Trust Management
4
The Funds 8
Share Ownership 8
Trustee Liability 8
Investment Advisory Services 8
Investment Adviser(s) 8
Advisory Fees 9
Fund Administration 9
Shareholder Services Plan 9
Distribution Plan 9
Determining Net Asset Value 10
Redemption in Kind 10
The Fund's Tax Status 10
Performance Information 11
Yield 11
Effective Yield 11
Tax -Equivalent Yield 11
Tax-Equivalency Table 11
Total Return 11
Performance Comparisons 11
Financial Statements 13
Appendix 14
Investment Policies
Unless indicated otherwise, the policies described below may be changed by
the Trustees without shareholder approval. Shareholders will be notified
before any material change in these policies becomes effective.
Characteristics of Municipal Securities.
When determining whether a municipal security presents minimal credit risks,
the investment adviser will consider the creditworthiness of: the issuer of
a municipal security, the issuer of a demand feature if the Fund has the
unconditional right to demand payment for the municipal security, or any
guarantor of payment by either of those issuers.
The Fund is not required to sell a municipal security if the security's
rating is reduced below the required minimum subsequent to the Fund's
purchase of the security. The investment adviser considers this event,
however, in its determination of whether the Fund should continue to hold
the security in its portfolio. If ratings made by Moody's Investors Service,
Inc. ("Moody's"), Standard & Poor's Corporation ("S&P") or Fitch Investors
Service, Inc. ("Fitch") change because of changes in those organizations or
in their rating systems, the Fund will try to use comparable ratings as
standards in accordance with the investment policies described in the Fund's
prospectus.
Municipal Leases
The Fund may purchase municipal securities in the form of participation
interests that represent an undivided proportional interest in lease
payments by a governmental or nonprofit entity. The lease payments and other
rights under the lease provide for and secure payments on the certificates.
Lease obligations may be limited by municipal charter or the nature of the
appropriation for the lease. Furthermore, a lease may provide that the
participants cannot accelerate lease obligations upon default. The
participants would only be able to enforce lease payments as they became
due. In the event of a default or failure of appropriation, unless the
participation interests are credit enhanced, it is unlikely that the
participants would be able to obtain an acceptable substitute source of
payment.
In determining the liquidity of municipal lease securities, the investment
adviser, under the authority delegated by the Board of Trustees, will base
its determination on the following factors: whether the lease can be
terminated by the lessee; the potential recovery, if any, from a sale of the
leased property upon termination of the lease; the lessee's general credit
strength (e.g., its debt, administrative, economic and financial
characteristics and prospects); the likelihood that the lessee will
discontinue appropriating funding for the leased property because the
property is no longer deemed essential to its operations (e.g., the
potential for an "event of non-appropriation"); and any credit enhancement
or legal recourse provided upon an event of non-appropriation or other
termination of the lease.
When-Issued And Delayed Delivery Transactions
These transactions are made to secure what is considered to be an
advantageous price or yield for the Fund. Settlement dates may be a month or
more after entering into these transactions, and the market values of the
securities purchased may vary from the purchase prices. No fees or other
expenses, other than normal transaction costs, are incurred. However, liquid
assets of the Fund sufficient to make payment for the securities to be
purchased are segregated on the Fund's records at the trade date. These
assets are marked to market daily and are maintained until the transaction
has been settled. The Fund does not intend to engage in when-issued and
delayed delivery transactions to an extent that would cause the segregation
of more than 20% of the total value of its assets.
The Fund may also sell municipal securities on a delayed delivery basis with
settlement taking place more than five days after the sale as a normal form
of portfolio transaction. It is the investment adviser's experience that it
is not unusual in the municipal securities market for settlement periods to
be slightly longer than this period.
Temporary Investments
The Fund may also invest in high quality, temporary investments from time to
time for temporary defensive purposes.
Repurchase Agreements
Certain securities in which the Fund invests may be purchased pursuant to
repurchase agreements. Repurchase agreements are arrangements in which
banks, brokers/dealers, and other recognized financial institutions sell
securities to the Fund and agree at the time of sale to repurchase them at a
mutually agreed upon time and price. To the extent that the seller does not
repurchase the securities from the Fund, the Fund could receive less than
the repurchase price on any sale of such securities. The Fund or its
custodian will take possession of the securities subject to repurchase
agreements, and these securities will be marked to market daily. In the
event that a defaulting seller filed for bankruptcy or became insolvent,
disposition of such securities by the Fund might be delayed pending court
action. The Fund believes that under the regular procedures normally in
effect for custody of the Fund's portfolio securities subject to repurchase
agreements, a court of competent jurisdiction would rule in favor of the
Fund and allow retention or disposition of such securities. The Fund will
only enter into repurchase agreements with banks and other recognized
financial institutions, such as broker/dealers, which are deemed by the
Fund's adviser to be creditworthy pursuant to guidelines established by the
Trustees.
Investment Risks
Litigation or legislation could affect the validity of certain municipal
securities or their tax-free interest. For example, litigation challenging
the validity of systems of financing public education has been initiated or
adjudicated in a number of states. The Fund will not investigate such
legislation or litigation unless it deems it necessary to do so. To the
extent that litigation or legislation has an adverse effect on the ratings
ascribed to a particular municipal security, there is some protection to the
Fund's shareholders from the Fund's policy of buying only high-rated
securities.
Investment Limitations
Selling Short and Buying on Margin
The Fund will not sell any securities short or purchase any securities on
margin but may obtain such short-term credits as are necessary for clearance
of transactions.
Issuing Senior Securities and Borrowing Money
The Fund will not issue senior securities except that the Fund may borrow
money in amounts up to one-third of the value of its total assets, including
the amounts borrowed.
The Fund will not borrow money for investment leverage, but rather as a
temporary, extraordinary, or emergency measure or to facilitate management
of the portfolio by enabling the Fund to meet redemption requests when the
liquidation of portfolio securities is deemed to be inconvenient or
disadvantageous. The Fund will not purchase any securities while borrowings
in excess of 5% of the value of its total assets are outstanding.
Pledging Assets
The Fund will not mortgage, pledge, or hypothecate any assets except to
secure permitted borrowings. In those cases, it may pledge assets having a
market value not exceeding the lesser of the dollar amounts borrowed or 15%
of the value of total assets of the Fund at the time of the pledge.
Lending Cash or Securities
The Fund will not lend any of its assets. This shall not prevent the Fund
from purchasing or holding bonds, debentures, notes, certificates of
indebtedness or other debt securities or engaging in other transactions
where permitted by the Fund's investment objective, policies, and
limitations or Declaration of Trust.
Investing in Commodities and Real Estate
The Fund will not purchase or sell commodities, commodity contracts, or
commodity futures contracts. The Fund will not purchase or sell real estate,
including limited partnership interests, although it may invest in
securities of issuers whose business involves the purchase or sale of real
estate or in securities which are secured by real estate or interests in
real estate.
Diversification of Investments
With respect to securities comprising 75% of the value of its total assets,
the Fund will not purchase securities of any one issuer (other than cash,
cash items, or securities issued or guaranteed by the government of the
United States or its agencies or instrumentalities and repurchase agreements
collateralized by such U.S. government securities) if as a result more than
5% of the value of its total assets would be invested in the securities of
that issuer.
Under this limitation, each governmental subdivision, including states and
the District of Columbia, territories, possessions of the United States, or
their political subdivisions, agencies, authorities, instrumentalities, or
similar entities, will be considered a separate issuer if its assets and
revenues are separate from those of the governmental body creating it and
the security is backed only by its own assets and revenues. If in the case
of an industrial development bond or governmental-issued security, a
governmental or other entity guarantees the security, such guarantee would
be considered a separate security issued by the guarantor as well as the
other issuer, subject to limited exclusions allowed by the Investment
Company Act of 1940.
Concentration of Investments
The Fund will not purchase securities if, as a result of such purchase, 25%
or more of the value of its total assets would be invested in any one
industry or in industrial development bonds or other securities, the
interest upon which is paid from revenues of similar type projects.
The Fund may invest, as temporary investments, 25% or more of the value of
its total assets in case or cash items, securities issued or guaranteed by
the U.S. government, its agencies or instrumentalities or instruments
secured by these money market instruments, such as repurchase agreements.
The Fund does not intend to purchase securities that would increase the
percentage of its assets invested in the securities of governmental
subdivisions located in any one state, territory, or U.S. possession to 25%
or more. However, the Fund may invest 25% or more of the value of its assets
in tax-exempt project notes guaranteed by the U.S. government, regardless of
the location of the issuing municipality.
If the value of Fund assets invested in the securities of a governmental
subdivision changes because of changing values, the Fund will not be
required to make any reduction in its holdings.
Underwriting
The Fund will not underwrite any issue of securities, except as it may be
deemed to be an underwriter under the Securities Act of 1933 in connection
with the sale of securities in accordance with its investment objective,
policies, and limitations.
Investing in Restricted Securities
The Fund will not invest more than 10% of the value of its net assets in
securities which are subject to legal or contractual restrictions on resale.
The above limitations cannot be changed without shareholder approval. The
following investment limitations, however, may be changed by Trustees
without shareholder approval. Shareholders will be notified before any
material change in these limitations becomes effective.
Investing in Illiquid Securities
The Fund will not invest more than 10% of the value of its net assets in
illiquid securities.
Investing in Securities of Other Investment Companies
The Fund will not purchase securities of other investment companies, except
as part of a merger, consolidation, or other acquisition.
Investing in New Issuers
The Fund will not invest more than 5% of the value of its total assets in
securities of issuers (including companies responsible for paying principal
and interest on industrial development bonds) which have records of less
than three years of continuous operations, including the operation of any
predecessor.
Investing for Control
The Fund will not invest in securities of a company for the purpose of
exercising control or management.
Investing in Issuers Whose Securities Are Owned by Officers of
the Trust
The Fund will not purchase or retain the securities of any issuer if the
Officers and Trustees of the Trust or its investment adviser owning
individually more than .50 of 1% of the issuer's securities together own
more than 5% of the issuer's securities.
Investing in Options
The Fund will not invest in puts, calls, straddles, spreads, or any
combination of them.
Investing in Minerals
The Fund will not purchase or sell interests in oil, gas, or other mineral
exploration or development programs or leases, although it may purchase the
securities of issuers which invest in or sponsor such programs.
For purposes of the above limitations, the Fund considers instruments issued
by a U.S. branch of a domestic bank or savings and loan having capital,
surplus, and undivided profits in excess of $100,000,000 at the time of
investment to be "cash items". Except with respect to borrowing money, if a
percentage limitation is adhered to at the time of investment, a later
increase or decrease in percentage resulting from any change in value or net
assets will not result in a violation of such limitation.
The Fund did not issued senior securities, pledge securities, invest in
illiquid securities, or engage in when-issued and delayed delivery
transactions in excess of 5% of the value of its net assets during the last
fiscal period and has not present intent to do so during the coming fiscal
year.
Brokerage Transactions
When selecting brokers and dealers to handle the purchase and sale of
portfolio instruments, the adviser looks for prompt execution of the order
at a favorable price. In working with dealers, the adviser will generally
use those who are recognized dealers in specific portfolio instruments,
except when a better price and execution of the order can be obtained
elsewhere. The adviser makes decisions on portfolio transactions and selects
brokers and dealers subject to guidelines established by the Board of
Trustees. The adviser may select brokers and dealers who offer brokerage and
research services. These services may be furnished directly to the Fund or
to the adviser and may include: advice as to the advisability of investing
in securities; security analysis and reports; economic studies; industry
studies; receipt of quotations for portfolio evaluations; and similar
services. Research services provided by brokers and dealers may be used by
the adviser or its affiliates in advising the Trust and other accounts. To
the extent that receipt of these services may supplant services for which
the adviser or its affiliates might otherwise have paid, it would tend to
reduce their expenses. The adviser and its affiliates exercise reasonable
business judgment in selecting brokers who offer brokerage and research
services to execute securities transactions. They determine in good faith
that commissions charged by such persons are reasonable in relationship to
the value of the brokerage and research services provided. During the fiscal
year(s) ended July 31, 1993, 1992 and 1991, the Trust paid no brokerage
commissions.
Although investment decisions for the Fund are made independently from those
of the other accounts managed by the adviser, investments of the type the
Fund may make may also be made by those other accounts. When the Fund and
one or more other accounts managed by the adviser are prepared to invest in,
or desire to dispose of, the same security, available investments or
opportunities for sales will be allocated in a manner believed by the
adviser to be equitable to each. In some cases, this procedure may adversely
affect the price paid or received by the Fund or the size of the position
obtained or disposed of by the Fund. In other cases, however, it is believed
that coordination and the ability to participate in volume transactions will
be to the benefit of the Fund.
Money Market Obligations Trust Management
Officers and Trustees. Officers and Trustees are listed with their
addresses, principal occupations, and present positions, including any
affiliation with Federated Management, Federated Investors, Federated
Securities Corp., Federated Administrative Services, Inc./Federated
Administrative Services, and the Funds (as defined below).
Positions with Principal Occupations
Name and Address the Trust During Past Five Years
John F. Donahue@* Chairman and Chairman and Trustee, Federated
Federated Investors Trustee Investors; Chairman and Trustee,
Tower Federated Advisers, Federated
Pittsburgh, PA Management, and Federated
Research; Director, AEtna Life
and Casualty Company; Chief
Executive Officer and Director,
Trustee, or Managing General
Partner of the Funds; formerly,
Director, The Standard Fire
Insurance Company. Mr. Donahue
is the father of J. Christopher
Donahue,
President and Trustee of the Trust.
John T. Conroy, Jr. Trustee President, Investment Properties
Wood/IPC Commercial Corporation; Senior Vice-President,
Department John R. Wood and Associates, Inc.,
John R. Wood and Realtors; President, Northgate
Associates, Inc., Realtors Village Development Corporation;
3255 Tamiami Trail North General Partner or Trustee in
Naples, FL private real estate ventures in
Southwest Florida; Director,
Trustee, or Managing General
Partner of the Funds; formerly,
President, Naples Property
Management, Inc.
William J. Copeland Trustee Director and Member of the
One PNC Plaza - 23rd Floor Executive Committee, Michael
Pittsburgh, PA Baker, Inc.; Director, Trustee,
or Managing General Partner of
the Funds; formerly, Vice
Chairman and Director, PNC
Bank, N.A., and PNC Bank Corp.
and Director, Ryan Homes, Inc.
J. Christopher Donahue* President and President and Trustee, Federated
Federated Investors Trustee Investors; Trustee; Federated
Tower Advisors, Federated
Pittsburgh, PA Management, and Federated
Research; President and Director,
Federated Administrative Services/
Federated Administrative Services,
Inc.; Trustee, Federated Services
Company; President or Vice
President of the Funds; Director,
Trustee, or Managing General
Partner of some of the Funds.
Mr. Donahue is the son of John F.
Donahue, Chairman and
Trustee of the Trust.
James E. Dowd Trustee Attorney-at-law; Director, The
571 Hayward Mill Road Emerging Germany Fund, Inc.;
Concord, MA Director, Trustee, or Managing
General Partner of the Funds;
formerly, Director, Blue Cross
of Massachusetts, Inc.
Lawrence D. Ellis, M.D. Trustee Hematologist, Oncologist, and
3471 Fifth Avenue Internist, Presbyterian and
Suite 1111 Montefiore Hospitals; Clinical
Pittsburgh, PA Professor of Medicine and
Trustee, University of
Pittsburgh; Director, Trustee,
or Managing General Partner of
the Funds.
Edward L. Flaherty, Jr.@ Trustee Attorney-at-law; Partner, Meyer
5916 Penn Mall and Flaherty; Director, Eat'N
Pittsburgh, PA Park Restaurants, Inc., and
Statewide Settlement Agency,
Inc.; Director, Trustee, or
Managing General Partner of
the Funds; formerly, Counsel,
Horizon Financial, F.A.,
Western Region.
Peter E. Madden Trustee Consultant; State Representative,
225 Franklin Street Commonwealth of Massachusetts;
Boston, MA Director, Trustee, or Managing
General Partner of the Funds;
formerly, President, State Street
Bank and Trust Company and
State Street Boston Corporation
and Trustee, Lahey Clinic
Foundation, Inc.
Gregor F. Meyer Trustee Attorney-at-law; Partner, Meyer
5916 Penn Mall and Flaherty; Chairman, Meritcare,
Pittsburgh, PA Inc.; Director, Eat'N Park
Restaurants, Inc.; Director, Trustee,
or Managing General Partner of the
Funds; formerly, Vice Chairman,
Horizon Financial, F.A.
Wesley W. Posvar Trustee Professor, Foreign Policy and
1202 Cathedral of Management Consultant; Trustee,
Learning Carnegie Endowment for
University of Pittsburgh International Peace, RAND
Pittsburgh, PA Corporation, Online Computer
Library Center, Inc., and U.S.
Space Foundation; Chairman,
Czecho Slovak Management
Center; Director, Trustee, or
Managing General Partner of the
Funds; President Emeritus,
University of Pittsburgh; formerly,
Chairman, National Advisory
Council for Environmental Policy
and Technology.
Marjorie P. Smuts Trustee Public relations/marketing
4905 Bayard Street consultant; Director, Trustee,
Pittsburgh, PA or Managing General Partner of
the Funds.
Richard B. Fisher Vice President Executive Vice President and
Federated Investors Trustee, Federated Investors;
Tower Chairman and Director,
Pittsburgh, PA Federated Securities Corp.;
President or Vice President of
the Funds; Director or Trustee
of some of the Funds.
Edward C. Gonzales Vice President Vice President, Treasurer, and
Federated Investors and Treasurer Trustee, Federated Investors; Vice
Tower President and Treasurer, Federated
Pittsburgh, PA Advisers, Federated Management,
and Federated Research; Executive
Vice President, Treasurer, and
Director, Federated Securities Corp.;
Trustee, Federated Services
Company; Chairman, Treasurer,
and Director, Federated
Administrative Services/Federated
Administrative Services, Inc.;
Trustee or Director of some of the
Funds; Vice President and
Treasurer of the Funds.
John W. McGonigle Vice President Vice President, Secretary, General
Federated Investors and Secretary Counsel, and Trustee, Federated
Tower Investors; Vice President, Secretary,
Pittsburgh, PA and Trustee, Federated Advisers,
Federated Management, and
Federated Research; Trustee,
Federated Services Company;
Executive Vice President, Secretary,
and Director, Federated
Administrative Services/Federated
Administrative Services, Inc.;
Director and Executive Vice
President, Federated Securities
Corp.; Vice President and Secretary
of the Funds.
John A. Staley, IV Vice President Vice President and Trustee,
Federated Investors Federated Investors; Executive Vice
Tower President, Federated Securities
Pittsburgh, PA Corp.; President and Trustee,
Federated Advisers, Federated
Management, and Federated
Research; Vice President of the
Funds; Director, Trustee, or
Managing General Partner of some
of the Funds; formerly, Vice
President, The Standard Fire
Insurance Company and President
of its Federated Research Division.
* This Trustee is deemed to be an "interested person" of the Trust as
defined in the Investment Company Act of 1940.
@ Member of the Trust's Executive Committee. The Executive Committee of the
Board of Trustees handles the responsibilities of the Board of Trustees
between meetings of the Board.
The Funds
"The Funds," and "Funds" mean the following investment companies: American
Leaders Fund, Inc.; Annuity Management Series; Automated Cash Management
Trust; Automated Government Money Trust; California Municipal Cash Trust;
Cash Trust Series II; Cash Trust Series, Inc.; DG Investor Series; Edward D.
Jones & Co. Daily Passport Cash Trust; Federated ARMs Fund; Federated
Exchange Fund, Ltd.; Federated GNMA Trust; Federated Government Trust;
Federated Growth Trust; Federated High Yield Trust; Federated Income
Securities Trust; Federated Income Trust; Federated Index Trust; Federated
Intermediate Government Trust; Federated Master Trust; Federated Municipal
Trust; Federated Short-Intermediate Government Trust; Federated Short-Term
U.S. Government Trust; Federated Stock Trust; Federated Tax-Free Trust;
Federated U.S. Government Bond Fund; First Priority Funds; Fixed Income
Securities, Inc.; Fortress Adjustable Rate U.S. Government Fund, Inc.;
Fortress Municipal Income Fund, Inc.; Fortress Utility Fund, Inc.; Fund for
U.S. Government Securities, Inc.; Government Income Securities, Inc.; High
Yield Cash Trust; Insight Institutional Series, Inc.; Insurance Management
Series; Intermediate Municipal Trust; International Series, Inc.; Investment
Series Funds, Inc.; Investment Series Trust; Liberty Equity Income Fund,
Inc.; Liberty High Income Bond Fund, Inc.; Liberty Municipal Securities
Fund, Inc.; Liberty U.S. Government Money Market Trust; Liberty Term Trust,
Inc. - 1999; Liberty Utility Fund, Inc.; Liquid Cash Trust; Managed Series
Trust; Mark Twain Funds; Money Market Management, Inc.; Money Market
Obligations Trust; Money Market Trust; Municipal Securities Income Trust;
New York Municipal Cash Trust; 111 Corcoran Funds; Peachtree Funds; The
Planters Funds; Portage Funds; RIMCO Monument Funds; The Shawmut Funds;
Short-Term Municipal Trust; Signet Select Funds; Star Funds; The Starburst
Funds; The Starburst Funds II; Stock and Bond Fund, Inc.; Sunburst Funds;
Targeted Duration Trust; Tax-Free Instruments Trust; Trademark Funds; Trust
for Financial Institutions; Trust For Government Cash Reserves; Trust for
Short-Term U.S. Government Securities; Trust for U.S. Treasury Obligations;
World Investment Series, Inc.
Share Ownership
Officers and Trustees own less than 1% of the Trust's outstanding shares.
As of April 28, 1994, the following shareholders of record owned 5% or more
of the outstanding Institutional Shares of the Fund: Boatmen's Trust
Company, St. Louis, MO owned approximately 10,774,422 shares (10.2%); First
New Hampshire Investment Services, Concord, NH owned approximately
40,362,222 shares ((5.8%); First Union National Bank, Charlotte, NC owned
approximately 175,084,184 shares (25.2%); Wachovia Bank of North Carolina,
Winston-Salem, NC owned approximately 45,689,215 shares (6.5); and Var &
Co., St. Paul, MN owned approximately 176,693,449 shares (25.4%).
As of April 28, 1994, there were no shareholders who owned 5% or more of the
outstanding Institutional Service Shares of the Fund.
Trustee Liability
The Declaration of Trust provides that the Trustees will not be liable for
errors of judgment or mistakes or fact or law. However, they are not
protected against any liability to which they would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of their office.
Investment Advisory Services
Investment Adviser(s)
The Tax-Free Obligations Fund's investment adviser is Federated Management.
It is a subsidiary of Federated Investors. All the voting securities of
Federated Investors are owned by a trust, the trustees of which are John F.
Donahue, his wife and his son, J. Christopher Donahue.
The adviser shall not be liable to Trust, the Fund, or any shareholder of
the Fund for any losses that may be sustained in the purchase, holding, or
sale of any security or for anything done or omitted by it, except acts or
omissions involving willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties imposed upon it by its contract with Trust.
Advisory Fees
For its advisory services, Federated Management receives an annual
investment advisory fee as described in the prospectus. For the fiscal years
ended July 3l, l993, l992 and l991, the Fund's adviser earned $820,734,
$469,718 and $295,082, respectively for services provided on behalf of
Institutional Shares, of which $582,656, $402,871, and $295,082 were
voluntarily waived because of undertakings to limit the Fund's expenses.
State Expense Limitations
The adviser has undertaken to comply with the expense limitations
established by certain states for investment companies whose shares are
registered for sale in those states. If the Fund's normal operating
expenses (including the investment advisory fee, but not including
brokerage commissions, interest, taxes, and extraordinary expenses) exceed
2-1/2% per year of the first $30 million of average net assets, 2% per year
of the next $70 million of average net assets, and 1-1/2% per year of the
remaining average net assets, the adviser will reimburse the Fund for its
expenses over the limitation.
If the Fund's monthly projected operating expenses exceed this limitation,
the investment advisory fee paid will be reduced by the amount of the
excess, subject to an annual adjustment. If the expense limitation is
exceeded, the amount to be reimbursed by the adviser will be limited, in
any single fiscal year, by the amount of the investment advisory fees.
This arrangement is not part of the advisory contract and may be amended or
rescinded in the future.
Fund Administration
Federated Administrative Services, a subsidiary of Federated Investors,
provides administrative personnel and services to the Trust for a fee as
described in the prospectus for each class of shares of the Fund. For the
fiscal years ended July 31, 1993, 1992, and 1991, Federated Administrative
Services, Inc., the Trust's former administrator, earned $284,326, $210,978,
and $214,524, respectively. John A. Staley, IV, an officer of the Trust and
Dr. Henry J. Gailliot, an officer of Federated Management, the adviser to
the Fund, each hold approximately l5% and 20%, respectively, of the
outstanding common stock of Commercial Data Services, Inc., a company which
provides computer processing services to Federated Administrative Services,
Inc., and Federated Administrative Services. For the fiscal years ended
December 31, 1993, 1992, and 1991, Federated Administrative Services, Inc.
paid approximately $161,547, $201,799 , and $170,529, respectively for
services provided by Commercial Data Services, Inc., to the Funds.
Shareholder Services Plan
With respect to Institutional Service Shares the Fund has adopted a
Shareholder Services Plan. This arrangement permits the payment of fees to
Federated Shareholder Services and, indirectly to financial institutions to
cause services to be provided to shareholders by a representative who has
knowledge of the shareholder's particular circumstances and goals. These
activities and services may include, but are not limited to, providing
office space, equipment, telephone facilities, and various clerical,
supervisory, computer, and other personnel as necessary or beneficial to
establish and maintain shareholder accounts and records; processing purchase
and redemption transactions and automatic investments of client account cash
balances; answering routine client inquiries; and assisting clients in
changing dividend options, account designation, and addresses.
Distribution Plan
With respect to Institutional Service Shares the Fund has adopted a Plan
pursuant to Rule 12b-1 which was promulgated by the Securities and Exchange
Commission pursuant to the Investment Company Act of 1940. The Plan permits
the payment of fees to brokers for distribution and administrative services
and to administrators for administrative services. The Plan is designed to
(i) stimulate brokers to provide distribution and administrative support
services to shareholders and (ii) stimulate administrators to render
administrative support services to shareholders. The administrative services
are provided by a representative who has knowledge of the shareholder's
particular circumstances and goals. By adopting the Plan, the Board of
Trustees expects that the Fund will be able to achieve a more predictable
flow of cash for investment purposes and to meet redemptions. This will
facilitate more efficient portfolio management and assist the Fund in
seeking to achieve its investment objectives. By identifying potential
investors whose needs are served by the Fund's objectives, and properly
servicing these accounts, it may be possible to curb sharp fluctuations in
rates of redemptions and sales. Other benefits may include: (1) an efficient
and effective administrative system; (2) a more efficient use of shareholder
assets by having them rapidly invested with a minimum of delay and
administrative detail; and (3) an efficient and reliable shareholder records
system and prompt responses to shareholder requests and inquiries concerning
their accounts.
Custodian and Portfolio Recordkeeper. State Street Bank and Trust Company,
Boston, Massachusetts is custodian for the securities and cash of the Fund.
Federated Services Company, Pittsburgh, Pennsylvania provides certain
accounting and recordkeeping services with respect to the Fund's portfolio
investments.
Determining Net Asset Value
The Trustees have decided that the best method for determining the value of
portfolio instruments is amortized cost. Under this method, portfolio
instruments are valued at the acquisition cost as adjusted for amortization
of premium or accumulation of discount rather than at current market value.
Accordingly, neither the amount of daily income nor the net asset value is
affected by any unrealized appreciation or depreciation of the portfolio. In
periods of declining interest rates, the indicated daily yield on shares of
the Fund computed by dividing the annualized daily income on the Fund's
portfolio by the net asset value computed as above may tend to be higher
than a similar computation made by using a method of valuation based upon
market prices and estimates. In periods of rising interest rates, the
opposite may be true.
The Fund's use of the amortized cost method of valuing portfolio instruments
depends on its compliance with certain conditions in Rule 2a-7 (the "Rule")
promulgated by the Securities and Exchange Commission under the Investment
Company Act of 1940. Under the Rule, the Trustees must establish procedures
reasonably designed to stabilize the net asset value per share, as computed
for purposes of distribution and redemption, at $1.00 per share, taking into
account current market conditions and the Fund's investment objective. The
procedures include monitoring the relationship between the amortized cost
value per share and the net asset value per share based upon available
indications of market value. The Trustees will decide what, if any, steps
should be taken if there is a difference of more than 0.5 of 1% between the
two values. The Trustees will take any steps they consider appropriate (such
as redemption in kind or shortening the average portfolio maturity) to
minimize any material dilution or other unfair results arising from
differences between the two methods of determining net asset value.
Redemption in Kind
The Fund is obligated to redeem shares solely in cash up to $250,000 or 1%
of the Fund's net asset value, whichever is less, for any one shareholder
within a 90-day period. Any redemption beyond this amount will also be in
cash unless the Trustees determine that further payments should be in kind.
In such cases, the Fund will pay all or a portion of the remainder of the
redemption in portfolio instruments valued in the same way as the Fund
determines net asset value. The portfolio instruments will be selected in a
manner that the Trustees deem fair and equitable. Redemption in kind is not
as liquid as a cash redemption. If redemption is made in kind, shareholders
who sell these securities could receive less than the redemption value and
could incur certain transaction costs.
The Fund's Tax Status
To qualify for the special tax treatment afforded to regulated investment
companies, the Fund must, among other requirements: derive at least 90% of
its gross income from dividends, interest, and gains from the sale of
securities; derive less than 30% of its gross income from the sale of
securities held less than three months; invest in securities within certain
statutory limits; and distribute to its shareholders at least 90% of its net
income earned during the year.
Performance Information
Performance depends upon such variables as: portfolio quality; average
portfolio maturity; type of instruments in which the portfolio is invested;
changes in interest rates; changes in expenses; and the relative amount of
cash flow. To the extent that financial institutions and broker/dealers
charge fees in connection with services provided in conjunction with an
investment in shares of the Fund, the performance will be reduced for those
shareholders paying those fees.
Yield
The Fund calculates its yield based upon the seven days ending on the day of
the calculation, called the "base period." This yield is computed by:
determining the net change in the value of a hypothetical account with a
balance of one share at the beginning of the base period, with the net
change excluding capital changes but including the value of any additional
shares purchased with dividends earned from the original one share and all
dividends declared on the original and any purchased shares; dividing the
net change in the account's value by the value of the account at the
beginning of the base period to determine the base period return; and
multiplying the base period return by 365/7.
Effective Yield
The Fund calculates its effective yield by compounding the unannualized base
period return by: adding 1 to the base period return; raising the sum to the
365/7th power; and subtracting 1 from the result.
Tax -Equivalent Yield
The tax-equivalent yield of the Fund is calculated similarly to the yield,
but is adjusted to reflect the taxable yield that the Fund would have had to
earn to equal its actual yield, assuming a ___% tax rate (the maximum
effective federal rate for individuals and assuming that income is 100%
exempt.
Tax-Equivalency Table
The Fund may also use a tax-equivalency table in advertising and sales
literature. The interest earned by the municipal bonds in the Fund's
portfolio generally remains free from federal regular income tax* and is
often free from state and local taxes as well.* As the table below
indicates, a "tax-exempt" investment is an attractive choice for investors,
particularly in times of narrow spreads between tax-free and taxable yields.
[Insert table]
Note: The maximum marginal tax rate for each bracket was used in calculating
the taxable yield equivalent. The chart above is for illustrative purposes
only. It is not an indicator of past or future performance of the Fund.
*Some portion of the Fund's income may be subject to the federal alternative
minimum tax and state and local taxes.
Total Return
Average annual total return is the average compounded rate of return for a
given period that would equate a $1,000 initial investment to the ending
redeemable value of that investment. The ending redeemable value is
compounded by multiplying the number of shares owned at the end of the
period by the net asset value per share at the end of the period. The number
of shares owned at the end of the period is based on the number of shares
purchased at the beginning of the period with $1,000, adjusted over the
period by any additional shares, assuming the monthly reinvestment of all
dividends and distributions.
Performance Comparisons
Investors may use financial publications and/or indices to obtain a more
complete view of the Fund's performance. When comparing performance,
investors should consider all relevant factors such as the composition of
any index used, prevailing market conditions, portfolio compositions of
other funds, and methods used to value portfolio securities and compute net
asset value. The financial publications and/or indices which the Fund uses
in advertising may include:
Lipper Analytical Services, Inc. ranks funds in various fund categories
based on total return, which assumes the reinvestment of all income
dividends and capital gains distributions, if any.
Donoghue's Money Fund Report publishes annualized yields of money market
funds weekly. Donoghue's Money Market Insight publication reports monthly and
12-month-to-date investment results for the same money funds.
Money, a monthly magazine, regularly
ranks money market funds in various
categories based on the latest
available seven-day effective yield.
Salomon 30-Day CD Index compares rate levels of 30-day certificates of
deposit from the top ten prime representative banks.
Salomon 30-Day Treasury Bill Index is a weekly quote of the most
representative yields for selected securities, issued by the U.S. Treasury,
maturing in 30 days.
Discount Corporation of New York 30-Day Federal Agencies, is a weekly quote
of the average daily offering price for selected federal agency issues
maturing in 30 days.
Financial Statements
The Financial Statements for the fiscal year ended July 30, 1993 are
incorporated herein by reference to the Fund's prospectus dated September
30, 1993 (File No. 33-31602). A copy of the prospectus may be obtained
without charge by contacting the Fund.
Appendix
STANDARD AND POOR'S CORPORATION CORPORATE BOND RATING DEFINITIONS
AAA_Debt rated AAA has the highest rating assigned by Standard & Poor's
Corporation. Capacity to pay interest and repay principal is extremely
strong. AA_Debt rated AA has a very strong capacity to pay interest and
repay principal and differs from the higher rated issues only in small
degree. A_Debt rated A has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse effect of
changes in circumstances and economic conditions than debt in higher rated
categories.
MOODY'S INVESTORS SERVICE, INC., CORPORATE BOND RATING DEFINITIONS
AAA_Bonds which are rated AAA are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues. AA_Bonds which are rated AA are judged to be of high quality by all
standards. Together with the AAA group, they comprise what are generally
known as high grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in AAA securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than in AAA securities. A_Bonds which are rated A possess many
favorable investment attributes and are to be considered as upper medium
grade obligations. Factors giving security to principal and interest are
considered adequate but elements may be present which suggest a
susceptibility to impairment sometime in the future.
STANDARD & POOR'S CORPORATION COMMERCIAL PAPER RATING DEFINITIONS
A-1 -- This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics are denoted with a plus (+) sign
designation.
A-2 -- Capacity for timely payment on issues with this designation is
strong. However, the relative degree of safety is not as high as for issues
designated "A-1."
MOODY'S INVESTORS SERVICE, INC. COMMERCIAL PAPER RATING DEFINITIONS
P-1 _ Issuers rated Prime-1 (or related supporting institutions) have a
superior capacity for repayment of short-term promissory obligations.
Prime-1 repayment capacity will normally be evidenced by the following
characteristics: conservative capitalization structure with moderate
reliance on debt and ample asset protection; broad margins in earning
coverage of fixed financial charges and high internal cash generation;
well-established access to a range of financial markets and assured sources
of alternate liquidity.
P-2 _ Issuers rated Prime-2 (or supporting institutions) have a strong
ability for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above, but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be
more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
FITCH INVESTORS SERVICE, INC. SHORT-TERM DEBT RATING DEFINITIONS
F-1+ _ Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1 _ Very Strong Credit Quality. Issues assigned this rating reflect an
assurance for timely payment only slightly less in degree than issues rated
"F-1+."
F-2 _ Good Credit Quality. Issues carrying this rating have a satisfactory
degree of assurance for timely payment, but the margin of safety is not as
great as the "F-1+" and "F-1" categories.
Treasury Obligations Fund
(A Portfolio of Money Market Obligations Trust)
Institutional Service Shares
Prospectus
The Institutional Service Shares of Treasury Obligations Fund (the "Fund")
offered by this prospectus represent interests in a diversified portfolio of
Money Market Obligations Trust (the "Trust"), an open-end management
investment company (a mutual fund). The Fund invests only in U.S. Treasury
securities only to achieve current income consistent with stability of
principal. Shares of the Fund are offered for sale as an investment vehicle
for large institutions, corporations and fiduciaries.
The shares offered by this prospectus are not deposits or obligations of any
bank, are not endorsed or guaranteed by any bank and are not insured or
guaranteed by the U.S. government, the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other government agency.
Investment in these shares involves investment risks including possible loss
of principal. The Fund attempts to maintain a stable net asset value of
$1.00 per share; there can be no assurance that the Fund will be able to do
so.
This prospectus contains the information you should read and know before you
invest in the Fund. Keep this prospectus for future reference.
The Fund has also filed a Statement of Additional Information dated July
___, 1994, with the Securities and Exchange Commission. The information
contained in the Statement of Additional Information is incorporated by
reference into this prospectus. You may request a copy of the Statement of
Additional Information free of charge by calling 1-800-235-4669. To obtain
other information, or make inquiries about the Fund, contact the Fund at the
address listed in the back of this prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
Prospectus dated July ___, 1994
Summary of Fund Expenses 1
General Information 2
Investment Information 2
Investment Objective 2
Investment Policies 2
Investment Limitations 3
Regulatory Compliance 3
Trust Information 3
Management of the Trust 3
Distribution of Shares 4
Administration of the Fund 5
Expenses of the Fund and Institutional Service Shares
5
Net Asset Value 6
Investing in the Fund 6
Share Purchases 6
Minimum Investment Required 7
Subaccounting Services 7
Certificates and Confirmations
7
Dividends 7
Capital Gains 7
Redeeming Shares 7
By Mail 8
Telephone Redemption 8
Accounts with Low Balances 9
Shareholder Information 9
Voting Rights 9
Massachusetts Partnership Law 9
Tax Information 10
Federal Income Tax 10
Pennsylvania Corporate and Personal Property Taxes
10
Other Classes of Shares 10
Performance Information 10
Financial Highlights 12
Addresses 13
Summary of Fund Expenses
Institutional Service Shares
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases (as a
percentage of offering price) None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price). None
Contingent Deferred Sales Charge (as a percentage of original
purchase price or redemption proceeds, as applicable) None
Redemption Fee (as a percentage of amount redeemed,
if applicable) . None
Exchange Fee None
Annual Institutional Service Shares Operating Expenses*
(As a percentage of projected average net assets)
Management Fee (after waiver) (1) 0.13%
12b-1 Fee.(2) 0.00%
Total Other Expenses 0.32%
Shareholder Servicing Fee . 0.25%
Total Institutional Service Shares Operating Expenses (3) 0.45%
(1) The estimated management fee has been reduced to reflect the anticipated
voluntary waiver of a portion of the management fee. The adviser can
terminate this voluntary waiver at any time at its sole discretion.
The maximum management fee is 0.20%.
(2) The Institutional Service Shares have no present intention of paying or
accruing the 12b-1 fee during the period ending July 31, 1994. If
the Institutional Service Shares were paying or accruing the 12b-1 fee,
the Class would be able to pay up to 0.25% of its average daily net
assets for the 12b-1 fee. See "Trust Information".
(3) The Total Institutional Service Shares Operating Expenses are
estimated to be 0.52% absent the anticipated voluntary waiver of a
portion of the management fee.
* Total Institutional Service Operating Expenses are estimated based
on average expenses expected to be incurred during the period ending
July 31, 1994. During the course of this period, expenses may be more or
less than the average amount shown.
The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder of Institutional Service
Shares of the Fund will bear, either directly or indirectly. For more
complete descriptions of the various costs and expenses, see "Investing in
the Fund" and "Trust Information." Wire-transferred redemptions of less than
$5,000 may be subject to additional fees.
EXAMPLE 1 year 3 years
You would pay the following expenses on a $1,000
investment assuming (1) 5% annual return and
(2) redemption at the end of each time period. $5 $14
The above example should not be considered a representation of past or future
expenses. Actual expenses may be greater or less than those shown. This
example is based on estimated data for the Fund's fiscal year ending
July 31, 1994.
The information set forth in the foregoing table and example relates only
to Institutional Service Shares of the Fund. The Fund also offers another
class of shares called Institutional Shares. Institutional Service Shares
and Institutional Shares are subject to certain of the same expenses;
however, Institutional Shares are not subject to a 12b-1 fee. See "Other
Classes of Shares."
General Information
The Trust was established as a Massachusetts business trust under a
Declaration of Trust dated October 3, 1988. The Declaration of Trust permits
the Trust to offer separate series of shares of beneficial interest
representing interests in separate portfolios of securities. The shares in
any one portfolio may be offered in separate classes. With respect to this
Fund, as of the date of this prospectus, the Trustees have established two
classes of shares known as Institutional Service Shares and Institutional
Shares. This prospectus relates only to Institutional Service Shares
("Shares") of the Fund, which are designed primarily for financial
institutions as a convenient means of accumulating an interest in a
professionally managed, diversified portfolio investing in short-term money
market securities. A minimum initial investment of $25,000 is required.
Eligibility for investment in the Trust is contingent upon an investor
accumulating and maintaining a minimum aggregate investment of $200,000,000
in Federated funds within a twelve-month period. For this purpose, 1) an
investor is defined as a financial institution or its collective customers,
including affiliate financial institutions and their collective customers,
or other institutions that are determined to qualify by Federated Securities
Corp., and 2) Federated funds are those mutual funds which are distributed
by Federated Securities Corp., or are advised by or administered by
investment advisers or administrators affiliated with Federated Securities
Corp. ("Federated Funds"). An investor's minimum investment will be
calculated by combining all accounts the investor maintains with the
Federated Funds, which includes the Trust.
The Fund attempts to stabilize the value of a share at $1.00. Shares are
currently sold and redeemed at that price.
Investment Information
Investment Objective
The investment objective of the Fund is current income consistent with
stability of principal. This investment objective cannot be changed without
shareholder approval. While there is no assurance that the Fund will achieve
its investment objective, it endeavors to do so by following the investment
policies described in this prospectus.
Investment Policies
The Fund pursues its investment objective by investing only in U.S. Treasury
securities maturing in 13 months or less. The average maturity of the
securities in the Fund's portfolio, computed on a dollar-weighted basis,
will be 90 days or less. Unless indicated otherwise, investment policies may
be changed by the Trustees without shareholder approval. Shareholders will
be notified before any material change in these policies becomes effective.
Acceptable Investments. The Fund invests only in U.S. Treasury securities,
which are fully guaranteed as to principal and interest by the United
States. They mature in 13 months or less from the date of acquisition unless
they are purchased under a repurchase agreement that provides for repurchase
by the seller within one year from the date of acquisition. The Fund may
also purchase these instruments on a when-issued or delayed delivery basis.
Repurchase Agreements. Certain securities in which the Fund invests may be
purchased pursuant to repurchase agreements. Repurchase agreements are
arrangements in which banks, brokers/dealers, and other recognized financial
institutions sell securities to the Fund and agree at the time of sale to
repurchase them at a mutually agreed upon time and price. To the extent that
the seller does not repurchase the securities from the Fund, the Fund could
receive less than the repurchase price on any sale of such securities.
When-Issued And Delayed Delivery Transactions. The Fund may purchase
securities on a when-issued or delayed delivery basis. These transactions
are arrangements in which the Fund purchases securities with payment and
delivery scheduled for a future time. The seller's failure to complete these
transactions may cause the Fund to miss a price or yield considered to be
advantageous.
Investment Limitations
The Fund will not borrow money or pledge securities except, under certain
circumstances, the Fund may borrow up to one-third of the value of its total
assets and pledge assets to secure such borrowings.
The above investment limitation cannot be changed without shareholder
approval. The following limitation, however, may be changed by the Trustees
without shareholder approval. Shareholders will be notified before any
material change in this limitation becomes effective.
The Fund will not invest more than 10% of its net assets in illiquid
securities, including repurchase agreements providing for settlement in more
than seven days after notice.
Regulatory Compliance
The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in
this prospectus and its Statement of Additional Information, in order to
comply with applicable laws and regulations, including the provisions of and
regulations under the Investment Company Act of 1940, as amended. In
particular, the Fund will comply with the various requirements of Rule 2a-7,
which regulates money market mutual funds. The Fund will determine the
effective maturity of its investments according to Rule 2a-7. The Fund may
change these operational policies to reflect changes in the laws and
regulations without the approval of its shareholders.
Trust Information
Management of the Trust
Board of Trustees. The Trust is managed by a Board of Trustees. The
Trustees are responsible for managing the Fund's business affairs and for
exercising all the Trust's powers except those reserved for the
shareholders. An Executive Committee of the Board of Trustees handles the
Board's responsibilities between meetings of the Board.
Investment Adviser. Investment decisions for the Fund are made by Federated
Management, the Fund's investment adviser, subject to direction by the
Trustees. The adviser continually conducts investment research and
supervision for the Fund and is responsible for the purchase and sale of
portfolio instruments.
Advisory Fees. The adviser receives an annual investment advisory fee
equal to .20 of 1% of the Fund's average daily net assets. The adviser
has undertaken to reimburse the Fund up to the amount of the advisory fee
for operating expenses in excess of limitations established by certain
states. The adviser also may voluntarily choose to waive a portion of its
fee or reimburse other expenses of the Fund, but reserves the right to
terminate such waiver or reimbursement at any time at its sole
discretion.
Adviser's Background. Federated Management, a Delaware business trust,
organized on April 11, 1989, is a registered investment adviser under the
Investment Advisers Act of 1940. It is a subsidiary of Federated
Investors. All of the Class A (voting) shares of Federated Investors are
owned by a trust, the trustees of which are John F. Donahue, Chairman and
Trustee of Federated Investors, Mr. Donahue's wife, and Mr. Donahue's
son, J. Christopher Donahue, who is President and Trustee of Federated
Investors.
Federated Management and other subsidiaries of Federated Investors serve
as investment advisers to a number of investment companies and private
accounts. Certain other subsidiaries also provide administrative services
to a number of investment companies. Total assets under management or
administration by these and other subsidiaries of Federated Investors are
approximately $70 billion. Federated Investors, which was founded in 1956
as Federated Investors, Inc., develops and manages mutual funds primarily
for the financial industry. Federated Investors' track record of
competitive performance and its disciplined, risk averse investment
philosophy serve approximately 3,500 client institutions nationwide.
Through these same client institutions, individual shareholders also have
access to this same level of investment expertise.
Distribution of Shares
Federated Securities Corp. is the principal distributor for Institutional
Service Shares of the Fund. It is a Pennsylvania corporation organized on
November 14, 1969, and is the principal distributor for a number of
investment companies. Federated Securities Corp. is a subsidiary of
Federated Investors.
Distribution and Shareholder Services Plans. Under a distribution plan
adopted in accordance with Investment Company Act Rule 12b-1 (the
"Distribution Plan"), the Fund will pay to the distributor an amount,
computed at an annual rate of .25 of 1% of the average daily net asset value
of the Institutional Service Shares to finance any activity which is
principally intended to result in the sale of shares subject to the
Distribution Plan. The distributor may select financial institutions such as
banks, fiduciaries, custodians for public funds, investment advisers, and
broker/dealers to provide sales support services as agents for their clients
or customers. In addition, the Fund has adopted a Shareholder Services Plan
(the "Services Plan") under which it will pay financial institutions an
amount not exceeding .25 of 1% of the average daily net asset value of the
Institutional Service Shares to provide administrative support services to
their customers who own shares of the Fund. From time to time and for such
periods as deemed appropriate, the amounts stated above may be reduced
voluntarily. Activities and services under these arrangements may include,
but are not limited to, providing advertising and marketing materials to
prospective shareholders, providing personal services to shareholders, and
maintaining shareholder accounts.
Financial institutions will receive fees based upon shares owned by their
clients or customers. The schedules of such fees and the basis upon which
such fees will be paid will be determined from time to time by the Fund or
the distributor, as appropriate.
The Distribution Plan is a compensation-type plan. As such, the Fund makes
no payments to the distributor except as described above. Therefore, the
Fund does not pay for unreimbursed expenses of the distributor, including
amounts expended by the distributor in excess of amounts received by it from
the Fund, interest, carrying or other financing charges in connection with
excess amounts expended, or the distributor's overhead expenses. However,
the distributor may be able to recover such amounts or may earn a profit
from future payments made by the Fund under the Distribution Plan.
Administration of the Fund
Administrative Services. Federated Administrative Services, a subsidiary of
Federated Investors, provides certain administrative personnel and services
(including certain legal and financial reporting services) necessary to
operate the Fund. Federated Administrative Services provides these at an
annual rate which relates to the average aggregate daily net assets of all
Federated Funds as specified below:
Maximum Administrative Average Aggregate Daily Net Assets
Fee of the Fund
.15 of 1% on the first $250 million
.125 of 1% on the next $250 million
.10 of 1% on the next $250 million
.075 of 1% on assets in excess of $750 million
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares.
Federated Administrative Services may choose voluntarily to waive a portion
of its fee.
Custodian. State Street Bank and Trust Company, Boston, Massachusetts is
custodian for the securities and cash of the Fund.
Transfer Agent and Dividend Disbursing Agent. Federated Services Company,
Boston, Massachusetts is transfer agent for the shares of, and dividend
disbursing agent for the Fund.
Legal Counsel. Legal counsel is provided by Houston, Houston and Donnelly,
Pittsburgh, Pennsylvania and Dickstein, Shapiro and Morin, Washington, D.C.
Independent Public Accountants. The independent public accountants for the
Fund are Arthur Andersen & Co., Pittsburgh, Pennsylvania.
Expenses of the Fund and Institutional Service Shares
Holders of Shares pay their allocable portion of Fund and Trust expenses.
The Trust expenses for which holders of Shares pay their allocable portion
include, but are not limited to: the cost of organizing the Trust and
continuing its existence; registering the Trust with federal and state
securities authorities; Trustees' fees; auditors' fees; the cost of meetings
of Trustees; legal fees of the Trust; association membership dues; and such
non-recurring and extraordinary items as may arise.
The Fund expenses for which holders of Shares pay their allocable portion
include, but are not limited to: registering the Fund and Shares of the
Fund; investment advisory services; taxes and commissions; custodian fees;
insurance premiums; auditors' fees; and such non-recurring and extraordinary
items as may arise.
At present, the only expenses allocated to the Shares as a class are
expenses under the Fund's Rule 12b-1 Plan and Shareholder Services Plan
which relate to the Shares. However, the Board of Trustees reserves the
right to allocate certain other expenses to holders of Shares as it deems
appropriate "Class Expenses." In any case, Class Expenses would be limited
to: transfer agent fees as identified by the transfer agent as attributable
to holders of Shares; printing and postage expenses related to preparing and
distributing materials such as shareholder reports, prospectuses and proxies
to current shareholders; registration fees paid to the Securities and
Exchange Commission and registration fees paid to state securities
commissions; expenses related to administrative personnel and services as
required to support holders of Shares; legal fees relating solely to Shares;
and Trustees' fees incurred as a result of issues relating solely to Shares.
Net Asset Value
The Fund attempts to stabilize the net asset value of Shares at $1.00 by
valuing the portfolio securities using the amortized cost method. The net
asset value per share is determined by subtracting liabilities attributable
to Shares from the value of Fund assets attributable to Shares, and dividing
the remainder by the number of Shares outstanding. The Fund cannot guarantee
that its net asset value will always remain at $1.00 per share.
The net asset value is determined at 12:00 noon, 3:00 p.m., and 4:00 p.m.
(Eastern time) Monday through Friday except on: (i) days on which there are
not sufficient changes in the value of the Fund's portfolio securities that
its net asset value might be materially affected; (ii) days during which no
shares are tendered for redemption and no orders to purchase shares are
received; or (iii) the following holidays: New Year's Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day,
and Christmas Day.
Investing in the Fund
Share Purchases
Shares are sold at their net asset value, without a sales charge, next
determined after an order is received, on days on which the New York Stock
Exchange and the Federal Reserve Wire System are open for business. Shares
may be purchased either by wire or mail. The Fund reserves the right to
reject any purchase request.
To make a purchase, open an account by calling Federated Securities Corp.
Information needed to establish the account will be taken by telephone.
By Wire. To purchase by Federal Reserve wire, call the Fund before 3:00
p.m., (Eastern time) to place an order. The order is considered received
immediately. Payment by federal funds must be received before 3:00 p.m.,
(Eastern time) that day. Federal funds should be wired as follows: State
Street Bank and Trust Company, Boston, Massachusetts; Attention: EDGEWIRE;
For Credit to: Treasury Obligations Fund_Institutional Service Shares: Fund
Number (this number can be found on the account statement or by contacting
the Fund); Group Number or Order Number; Nominee or Institution Name; and
ABA Number 011000028.
By Mail. To purchase by mail, send a check made payable to Treasury
Obligations Fund_Institutional Service Shares to: Treasury Obligations Fund,
P.O. Box 8602, Boston, Massachusetts 02266-8602. Orders by mail are
considered received when payment by check is converted into federal funds.
This is normally the next business day after the check is received.
Minimum Investment Required
The minimum initial investment is $25,000. Eligibility for investment in the
Trust is contingent upon an investor accumulating and maintaining a minimum
aggregate investment of $200,000,000 in Federated Funds within a
twelve-month period.
Subaccounting Services
Financial institutions are encouraged to open single master accounts.
However, certain financial institutions may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements.
The transfer agent charges a fee based on the level of subaccounting
services rendered. Financial institutions may charge or pass through
subaccounting fees as part of or in addition to normal trust or agency
account fees. They may also charge fees for other services provided which
may be related to the ownership of Fund shares. This prospectus should,
therefore, be read together with any agreement between the customer and the
financial institution with regard to the services provided, the fees charged
for those services and any restrictions and limitations imposed.
Certificates and Confirmations
As transfer agent for the Fund, Federated Services Company maintains a share
account for each shareholder. Share certificates are not issued unless
requested by contacting the Fund or Federated Services Company in writing.
Monthly confirmations are sent to report transactions such as all purchases
and redemptions as well as dividends paid during the month.
Dividends
Dividends are declared daily and paid monthly. Shares purchased by wire
before 3:00 p.m. (Eastern time) begin earning dividends that day. Shares
purchased by check begin earning dividends on the day after the check is
converted into federal funds. Dividends are automatically reinvested in
additional Shares unless cash payments are requested by contacting the Fund.
Capital Gains
Capital Gains, if any, could result in an increase in dividends. Capital
losses could result in a decrease in dividends. If, for some extraordinary
reason, the Fund realizes net long-term capital gains, it will distribute
them at least once every 12 months.
Redeeming Shares
Shares are redeemed at their net asset value next determined after the Fund
receives the redemption request. Redemptions will be made on days on which
the Fund computes its net asset value. Redemption requests must be received
in proper form and can be made as described below.
By Mail
Shares may be redeemed by sending a written request to: Treasury Obligations
Fund, P.O. Box 8602, Boston, Massachusetts 02266-8602. The written request
should state: Treasury Obligations Fund_Institutional Service Shares;
shareholder's name; the account number; and the share or dollar amount
requested. Sign the request exactly as the shares are registered.
Shareholders should call the Fund for assistance in redeeming by mail.
If share certificates have been issued, they must be properly endorsed and
should be sent by registered or certified mail with the written request.
Shareholders requesting a redemption of $50,000 or more, a redemption of any
amount to be sent to an address other than that on record with the Fund, or
a redemption payable other than to the shareholder of record must have their
signatures guaranteed by:
a trust company or commercial bank whose deposits are insured by the
Bank Insurance Fund which is administered by the Federal Deposit
Insurance Corporation ("FDIC");
a member firm of the New York, American, Boston, Midwest, or Pacific
Stock Exchanges;
a savings bank or savings and loan association whose deposits are
insured by the Savings Association Insurance Fund, which is
administered by the FDIC; or
any other "eligible guarantor institution," as defined in the
Securities Exchange Act of 1934.
The Fund does not accept signatures guaranteed by a notary public.
The Fund and its transfer agent have adopted standards for accepting
signature guarantees from the above institutions. The Fund may elect in the
future to limit eligible signature guarantors to institutions that are
members of the signature guarantee program. The Fund and its transfer agent
reserve the right to amend these standards at any time without notice.
Normally, a check for the proceeds is mailed within one business day, but in
no event more than seven days, after receipt of a proper written redemption
request. Dividends are paid up to and including the day that a redemption
request is processed.
Telephone Redemption
Shares may be redeemed by telephoning the Fund. If the redemption request is
received before 12:00 noon (Eastern time), the proceeds will be wired the
same day to the shareholder's account at a domestic commercial bank which is
a member of the Federal Reserve System, and those shares redeemed will not
be entitled to that day's dividend. A daily dividend will be paid on shares
redeemed if the redemption request is received after 12:00 noon (Eastern
time). However, the proceeds are not wired until the following business day.
Under limited circumstances, arrangements may be made with the distributor
for same-day payment of proceeds, without that day's dividend, for
redemption requests received before 3:00 p.m., Eastern time.
An authorization form permitting the Fund to accept telephone requests must
first be completed. Authorization forms and information on this service are
available from Federated Securities Corp. Telephone redemption instructions
may be recorded.
In the event of drastic economic or market changes, a shareholder may
experience difficulty in redeeming by telephone. If such a case should
occur, another method of redemption, such as "By Mail,_ should be
considered. If at any time the Fund shall determine it necessary to
terminate or modify this method of redemption, shareholders would be
promptly notified.
If reasonable procedures are not followed by the Fund, it may be liable for
losses due to unauthorized or fraudulent telephone instructions.
Accounts with Low Balances
Due to the high cost of maintaining accounts with low balances, the Fund may
redeem shares in any account and pay the proceeds to the shareholder if the
account balance falls below a required minimum value of $25,000 or the
aggregate investment in Federated Funds falls below the required minimum of
$200,000,000 to be maintained from and after twelve months from account
opening, due to shareholder redemptions.
Before shares are redeemed to close an account, the shareholder is notified
in writing and allowed 30 days to purchase additional shares to meet the
minimum requirement.
Shareholder Information
Voting Rights
Each share of the Trust gives the shareholder one vote in Trustee elections
and other matters submitted to shareholders for vote. All shares of all
classes of each portfolio in the Trust have equal voting rights, except that
in matters affecting only a particular portfolio or class, only shares of
that portfolio or class are entitled to vote. As a Massachusetts business
trust, the Trust is not required to hold annual shareholder meetings.
Shareholder approval will be sought only for certain changes in the Trust's
or the Fund's operation and for the election of Trustees under certain
circumstances.
Trustees may be removed by the Trustees or by shareholders at a special
meeting. A special meeting of the shareholders for this purpose shall be
called by the Trustees upon the written request of shareholders owning at
least 10% of the outstanding shares of the Trust.
Massachusetts Partnership Law
Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect
its shareholders, the Trust has filed legal documents with Massachusetts
that expressly disclaim the liability of its shareholders for acts or
obligations of the Trust. These documents require notice of this disclaimer
to be given in each agreement, obligation, or instrument the Trust or its
Trustees enter into or sign.
In the unlikely event a shareholder is held personally liable for the
Trust's obligations, the Trust is required by the Declaration of Trust to
use its property to protect or compensate the shareholder. On request, the
Trust will defend any claim made and pay any judgment against a shareholder
for any act or obligation of the Trust. Therefore, financial loss resulting
from liability as a shareholder will occur only if the Trust itself cannot
meet its obligations to indemnify shareholders and pay judgments against
them.
Tax Information
Federal Income Tax
The Fund will pay no federal income tax because it expects to meet
requirements of the Internal Revenue Code applicable to regulated investment
companies and to receive the special tax treatment afforded to such
companies.
The Fund will be treated as a single, separate entity for federal income tax
purposes so that income (including capital gains) and losses realized by the
Trust's other portfolios will not be combined for tax purposes with those
realized by the Fund.
Unless otherwise exempt, shareholders are required to pay federal income tax
on any dividends and other distributions received. This applies whether
dividends and distributions are received in cash or as additional shares.
State and Local Taxes. Shareholders are urged to consult their own tax
advisers regarding the status of their accounts under state and local tax
laws.
Pennsylvania Corporate and Personal Property Taxes
In the opinion of Houston, Houston & Donnelly, counsel to the Fund:
the Fund is not subject to Pennsylvania corporate or personal property
taxes; and
Fund shares may be subject to personal property taxes imposed by
counties, municipalities, and school districts in Pennsylvania to the
extent that the portfolio securities in the Fund would be subject to
such taxes if owned directly by residents of those jurisdictions.
Other Classes of Shares
Institutional Shares are sold at net asset value to accounts for which
financial institutions act in an agency or fiduciary capacity. Investments
in Institutional Shares are subject to a minimum initial investment of
$25,000. Institutional Shares are not sold pursuant to a 12b-1 Plan.
Financial institutions providing distribution or administrative services may
receive different compensation depending upon which class of shares of the
Fund is sold. The amount of dividends payable to shareholders of
Institutional Shares will exceed that payable to the shareholders of
Institutional Service Shares by the difference between class expenses and
any 12b-1 Plan expenses borne by Institutional Service Shares. The stated
advisory fee is the same for both classes of shares.
Performance Information
From time to time the Fund advertises its yield and effective yield for
Shares.
Yield represents the annualized rate of income earned on an investment over
a seven-day period. It is then annualized dividends earned during the period
on an investment shown as a percentage of the investment. The effective
yield is calculated similarly to the yield, but when annualized, the income
earned by an investment is assumed to be reinvested daily. The effective
yield will be slightly higher than the yield because of the compounding
effect of this assumed reinvestment.
Advertisements and sales literature may also refer to total return. Total
return represents the change, over a specified period of time, in the value
of an investment in the Shares after reinvesting all income distributions.
It is calculated by dividing that change by the initial investment and is
expressed as a percentage.
Performance figures will be calculated separately for each class of shares.
Because each class of shares is subject to different expenses, the
performance of Institutional Shares will exceed the yield and effective
yield of Institutional Service Shares for the same period.
From time to time, the Fund may advertise its performance using certain
financial publications and/or compare its performance to certain indices.
Treasury Obligations Fund
Financial Highlights
Institutional Shares
(For a share outstanding throughout each period)
Year Ended July 31,
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1993 1992 1991 1990
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.0310 0.0452 0.0688 0.0350
Less distributions
Dividends to shareholders from net
investment income (0.0310) (0.0452) (0.0688) (0.0350)
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total return* 3.15% 4.61% 7.11% 5.09%(c)
Ratios/supplemental data
Net assets, end of period(000 omitted) $ 2,532,482 $ 2,432,037 $ 1,678,880 $ 576,048
Ratio of expenses to average net assets 0.20%(b) 0.20%(b) 0.20%(b) 0.20%(a)(b)
Ratio of net investment income to average
net assets 3.11%(b) 4.49%(b) 6.65%(b) 8.16%(a)(b)
</TABLE>
* Reflects operations for the period from February 23, 1990 (date of
initial public investment) to July 31, 1990. For the period from the
start of business, November 16, 1989, to February 22, 1990, net
investment income aggregating $.014753 per share ($1,475) was distributed
to the Fund's adviser. Such distribution represented the net income of
the fund prior to the date of initial public investment, February 23,
1990.
(a) Computed on an annualized basis.
(b) For the fiscal years ended July 31, 1993, 1992,
and 1991 and for the period from the date of initial public investment,
February 23, 1990, to July 31, 1990, the investment adviser voluntarily
waived all or a portion of its fee. Had the adviser not undertaken such
action, the ratio of expenses and net investment income would have been
0.27% and 3.04%, 0.28% and 4.41%, 0.29% and 6.56%, and 0.35% and 8.01%,
respectively, on an annualized basis.
(c) Cumulative total return.
(See Notes to Financial Statements)
Addresses
Treasury Obligations Fund
Institutional Service Shares Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Distributor
Federated Securities Corp. Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Investment Adviser
Federated Management Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Custodian
State Street Bank and Trust Company
P.O. Box 8602
Boston, Massachusetts 02266-8602
Transfer Agent and Dividend Disbursing Agent
Federated Services Company P.O. Box 8602
Boston, Massachusetts 02266-8602
Legal Counsel
Houston, Houston and Donnelly 2510 Centre City Tower
Pittsburgh, Pennsylvania 15222
Legal Counsel
Dickstein, Shapiro and Morin 2101 L Street, N.W.
Washington, D.C. 20037
Independent Public Accountants
Arthur Andersen & Co. 2100 One PPG Place
Pittsburgh, Pennsylvania 15222
Treasury Obligations Fund
Institutional Service Shares
Prospectus
A diversified Portfolio of Money Market Obligations Trust,
an Open-End Management Investment Company
Prospectus dated July __, 1994
Federated Securities Corporation
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
Treasury Obligations Fund
(A PORTFOLIO OF Money Market Obligations Trust)
Institutional Shares
Institutional Service Shares
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information should be read with the
prospectus(es) of Treasury Obligations Fund (the "Fund") dated July __, 1994
and September 30, 1993. This Statement is not a prospectus. To receive a
copy of a prospectus, write or call the Trust.
Statement dated July __, 1994
FEDERATED SECURITIES CORP.
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
Investment Policies 1
When-Issued And Delayed Delivery Transactions
1
Repurchase Agreements 1
Investment Limitations 1
Selling Short and Buying on Margin
1
Issuing Senior Securities and Borrowing Money
1
Pledging Assets 1
Lending Cash or Securities 1
Investing in Commodities 2
Investing in Real Estate 2
Underwriting 2
Concentration of Investments 2
Diversification of Investments 2
Investing in Restricted Securities
2
Investing in Illiquid Securities
2
Investing in Securities of Other Investment Companies
2
Investing in New Issuers 2
Investing for Control 2
Investing in Issuers Whose Securities Are Owned by Officers of the Trust
2
Investing in Options 2
Investing in Minerals 2
Brokerage Transactions 3
Money Market Obligations Trust Management
3
The Funds 6
Share Ownership 7
Trustee Liability 7
Investment Advisory Services 7
Investment Adviser(s) 7
Advisory Fees 7
Fund Administration 8
Shareholder Services Plan 8
Distribution Plan 8
Determining Net Asset Value 9
Redemption in Kind 9
The Fund's Tax Status 9
Performance Information 9
Yield 9
Effective Yield 10
Total Return 10
Performance Comparisons 10
Financial Highlights 11
Investment Policies
Unless indicated otherwise, the policies described below may be changed by
the Trustees without shareholder approval. Shareholders will be notified
before any material change in these policies becomes effective.
When-Issued And Delayed Delivery Transactions
These transactions are made to secure what is considered to be an
advantageous price or yield for the Fund. Settlement dates may be a month or
more after entering into these transactions, and the market values of the
securities purchased may vary from the purchase prices. No fees or other
expenses, other than normal transaction costs, are incurred. However, liquid
assets of the Fund sufficient to make payment for the securities to be
purchased are segregated on the Fund's records at the trade date. These
assets are marked to market daily and are maintained until the transaction
has been settled. The Fund does not intend to engage in when-issued and
delayed delivery transactions to an extent that would cause the segregation
of more than 20% of the total value of its assets.
Repurchase Agreements
The Fund or its custodian will take possession of the securities subject to
repurchase agreements, and these securities will be marked to market daily.
In the event that a defaulting seller filed for bankruptcy or became
insolvent, disposition of such securities by the Fund might be delayed
pending court action. The Fund believes that under the regular procedures
normally in effect for custody of the Fund's portfolio securities subject to
repurchase agreements, a court of competent jurisdiction would rule in favor
of the Fund and allow retention or disposition of such securities. The Fund
will only enter into repurchase agreements with banks and other recognized
financial institutions, such as broker/dealers, which are deemed by the
Fund's adviser to be creditworthy pursuant to guidelines established by the
Trustees.
Investment Limitations
Selling Short and Buying on Margin
The Fund will not sell any securities short or purchase any securities on
margin but may obtain such short-term credits as are necessary for clearance
of transactions.
Issuing Senior Securities and Borrowing Money
The Fund will not issue senior securities except that the Fund may borrow
money in amounts up to one-third of the value of its total assets, including
the amounts borrowed.
The Fund will not borrow money for investment leverage, but rather as a
temporary, extraordinary, or emergency measure or to facilitate management
of the portfolio by enabling the Fund to meet redemption requests when the
liquidation of portfolio securities is deemed to be inconvenient or
disadvantageous. The Fund will not purchase any securities while borrowings
in excess of 5% of the value of its total assets are outstanding.
Pledging Assets
The Fund will not mortgage, pledge, or hypothecate any assets except as
necessary to secure permitted borrowings. In those case, it may pledge
assets having a market value not exceeding the lesser of the dollar amounts
borrowed or 15% of the value of total assets of the Fund at the time of the
pledge.
Lending Cash or Securities
The Fund will not lend any of its assets, except portfolio securities. This
shall not prevent the Fund from purchasing or holding bonds, debentures,
notes, certificates of indebtedness or other debt securities, entering into
repurchase agreements, or engaging in other transactions where permitted by
its investment objective, policies and limitations or Declaration of Trust.
The above limitations cannot be changed without shareholder approval. The
following investment limitations, however, may be changed by Trustees
without shareholder approval. Shareholders will be notified before any
material change in these limitations becomes effective.
Investing in Commodities
The Fund will not purchase or sell commodities, commodity contracts, or
commodity futures contracts.
Investing in Real Estate
The Fund will not purchase or sell real estate, including limited
partnership interests.
Underwriting
The Fund will not underwrite any issue of securities, except as it may be
deemed to be an underwriter under the Securities Act of 1933 in connection
with the sale of securities in accordance with its investment objective,
policies, and limitations.
Concentration of Investments
The Fund will not invest 25% or more of the value of its total assets in any
one industry, except that the Fund may invest 25% or more of the value of
its total assets in cash, cash items, or securities issued or guaranteed by
the government of the United States or its agencies, or instrumentalities
and repurchase agreement collateralized by such U.S. government securities.
Diversification of Investments
With respect to securities comprising 75% of the value of its total assets,
the Fund will not purchase securities of any one issuer (other than cash,
cash items, or securities issued or guaranteed by the government of the
United States or its agencies or instrumentalities and repurchase agreements
collateralized by such U.S. government securities) if as a result more than
5% of the value of its total assets would be invested in the securities of
that issuer, or if it would own more than 10% of the outstanding voting
securities of that issuer.
Investing in Restricted Securities
The Fund will not invest more than 15% of the value of its net assets in
illiquid securities, including repurchase agreements providing for
settlement more than seven days after notice.
Investing in Illiquid Securities
The Fund will not invest more than 10% of the value of its net assets in
illiquid securities.
Investing in Securities of Other Investment Companies
The Fund will not purchase securities of other investment companies, except
as part of a merger, consolidation, or other acquisition.
Investing in New Issuers
The Fund will not invest more than 5% of the value of its total assets in
securities of issuers which have records of less than three years of
continuous operations, including the operation of any predecessor.
Investing for Control
The Fund will not invest in securities of a company for the purpose of
exercising control or management.
Investing in Issuers Whose Securities Are Owned by Officers of
the Trust
The Fund will not purchase or retain the securities of any issuer if the
Officers and Trustees of the Trust or its investment adviser owning
individually more than .50 of 1% of the issuer's securities together own
more than 5% of the issuer's securities.
Investing in Options
The Fund will not invest in puts, calls, straddles, spreads, or any
combination of them.
Investing in Minerals
The Fund will not purchase or sell interests in oil, gas, or other mineral
exploration or development programs or leases, although it may purchase the
securities of issuers which invest in or sponsor such programs.
For purposes of the above limitations, the Fund considers instruments issued
by a U.S. branch of a domestic bank or savings and loan having capital,
surplus, and undivided profits in excess of $100,000,000 at the time of
investment to be "cash items." Except with respect to borrowing money, if a
percentage limitation is adhered to at the time of investment, a later
increase or decrease in percentage resulting from any change in value or net
assets will not result in a violation of such limitation.
The Fund did not issued senior securities, pledge securities, invest in
illiquid securities, or engage in when issued and delayed delivery
transactions in excess of 5% of the value of its net assets during the last
fiscal period and has not present intent to do so during the coming fiscal
year.
Brokerage Transactions
When selecting brokers and dealers to handle the purchase and sale of
portfolio instruments, the adviser looks for prompt execution of the order
at a favorable price. In working with dealers, the adviser will generally
use those who are recognized dealers in specific portfolio instruments,
except when a better price and execution of the order can be obtained
elsewhere. The adviser makes decisions on portfolio transactions and selects
brokers and dealers subject to guidelines established by the Board of
Trustees. The adviser may select brokers and dealers who offer brokerage and
research services. These services may be furnished directly to the Fund or
to the adviser and may include: advice as to the advisability of investing
in securities; security analysis and reports; economic studies; industry
studies; receipt of quotations for portfolio evaluations; and similar
services. Research services provided by brokers and dealers may be used by
the adviser or its affiliates in advising the Trust and other accounts. To
the extent that receipt of these services may supplant services for which
the adviser or its affiliates might otherwise have paid, it would tend to
reduce their expenses. The adviser and its affiliates exercise reasonable
business judgment in selecting brokers who offer brokerage and research
services to execute securities transactions. They determine in good faith
that commissions charged by such persons are reasonable in relationship to
the value of the brokerage and research services provided. During the fiscal
year(s) ended July 31, 1993, 1992 and 1991, the Trust paid no brokerage
commissions.
Although investment decisions for the Fund are made independently from those
of the other accounts managed by the adviser, investments of the type the
Fund may make may also be made by those other accounts. When the Fund and
one or more other accounts managed by the adviser are prepared to invest in,
or desire to dispose of, the same security, available investments or
opportunities for sales will be allocated in a manner believed by the
adviser to be equitable to each. In some cases, this procedure may adversely
affect the price paid or received by the Fund or the size of the position
obtained or disposed of by the Fund. In other cases, however, it is believed
that coordination and the ability to participate in volume transactions will
be to the benefit of the Fund.
Money Market Obligations Trust Management
Officers and Trustees. Officers and Trustees are listed with their
addresses, principal occupations, and present positions, including any
affiliation with Federated Management, Federated Investors, Federated
Securities Corp., Federated Administrative Services, Inc./Federated
Administrative Services, and the Funds (as defined below).
Positions with Principal Occupations
Name and Address the Trust During Past Five Years
John F. Donahue@* Chairman and Chairman and Trustee, Federated
Federated Investors Trustee Investors; Chairman and Trustee,
Tower Federated Advisers, Federated
Pittsburgh, PA Management, and Federated
Research; Director, AEtna Life
and Casualty Company; Chief
Executive Officer and Director,
Trustee, or Managing General
Partner of the Funds; formerly,
Director, The Standard Fire
Insurance Company. Mr. Donahue
is the father of J. Christopher
Donahue,
President and Trustee of the Trust.
John T. Conroy, Jr. Trustee President, Investment Properties
Wood/IPC Commercial Corporation; Senior Vice-President,
Department John R. Wood and Associates, Inc.,
John R. Wood and Realtors; President, Northgate
Associates, Inc., Realtors Village Development Corporation;
3255 Tamiami Trail North General Partner or Trustee in
Naples, FL private real estate ventures in
Southwest Florida; Director,
Trustee, or Managing General
Partner of the Funds; formerly,
President, Naples Property
Management, Inc.
William J. Copeland Trustee Director and Member of the
One PNC Plaza - 23rd Floor Executive Committee, Michael
Pittsburgh, PA Baker, Inc.; Director, Trustee,
or Managing General Partner of
the Funds; formerly, Vice
Chairman and Director, PNC
Bank, N.A., and PNC Bank Corp.
and Director, Ryan Homes, Inc.
J. Christopher Donahue* President and President and Trustee, Federated
Federated Investors Trustee Investors; Trustee; Federated
Tower Advisers, Federated
Pittsburgh, PA Management, and Federated
Pittsburgh, PA Research; President and Director,
Federated Administrative Services/
Federated Administrative Services,
Inc.; Trustee, Federated Services
Company; President or Vice
President of the Funds; Director,
Trustee, or Managing General
Partner of some of the Funds.
Mr. Donahue is the son of John F.
Donahue, Chairman and
Trustee of the Trust.
James E. Dowd Trustee Attorney-at-law; Director, The
571 Hayward Mill Road Emerging Germany Fund, Inc.;
Concord, MA Director, Trustee, or Managing
General Partner of the Funds;
formerly, Director, Blue Cross
of Massachusetts, Inc.
Lawrence D. Ellis, M.D. Trustee Hematologist, Oncologist, and
3471 Fifth Avenue Internist, Presbyterian and
Suite 1111 Montefiore Hospitals; Clinical
Pittsburgh, PA Professor of Medicine and
Trustee, University of
Pittsburgh; Director, Trustee,
or Managing General Partner of
the Funds.
Edward L. Flaherty, Jr.@ Trustee Attorney-at-law; Partner, Meyer
5916 Penn Mall and Flaherty; Director, Eat'N
Pittsburgh, PA Park Restaurants, Inc., and
Statewide Settlement Agency,
Inc.; Director, Trustee, or
Managing General Partner of
the Funds; formerly, Counsel,
Horizon Financial, F.A.,
Western Region.
Peter E. Madden Trustee Consultant; State Representative,
225 Franklin Street Commonwealth of Massachusetts;
Boston, MA Director, Trustee, or Managing
General Partner of the Funds;
formerly, President, State Street
Bank and Trust Company and
State Street Boston Corporation
and Trustee, Lahey Clinic
Foundation, Inc.
Gregor F. Meyer Trustee Attorney-at-law; Partner, Meyer
5916 Penn Mall and Flaherty; Chairman, Meritcare,
Pittsburgh, PA Inc.; Director, Eat'N Park
Restaurants, Inc.; Director, Trustee,
or Managing General Partner of the
Funds; formerly, Vice Chairman,
Horizon Financial, F.A.
Wesley W. Posvar Trustee Professor, Foreign Policy and
1202 Cathedral of Management Consultant; Trustee,
Learning Carnegie Endowment for
University of Pittsburgh International Peace, RAND
Pittsburgh, PA Corporation, Online Computer
Library Center, Inc., and U.S.
Space Foundation; Chairman,
Czecho Slovak Management
Center; Director, Trustee, or
Managing General Partner of the
Funds; President Emeritus,
University of Pittsburgh; formerly,
Chairman, National Advisory
Council for Environmental Policy
and Technology.
Marjorie P. Smuts Trustee Public relations/marketing
4905 Bayard Street consultant; Director, Trustee,
Pittsburgh, PA or Managing General Partner of
the Funds.
Richard B. Fisher Vice President Executive Vice President and
Federated Investors Trustee, Federated Investors;
Tower Chairman and Director,
Pittsburgh, PA Federated Securities Corp.;
President or Vice President of
the Funds; Director or Trustee
of some of the Funds.
Edward C. Gonzales Vice President Vice President, Treasurer, and
Federated Investors and Treasurer Trustee, Federated Investors; Vice
Tower President and Treasurer, Federated
Pittsburgh, PA Advisers, Federated Management,
and Federated Research; Executive
Vice President, Treasurer, and
Director, Federated Securities Corp.;
Trustee, Federated Services
Company; Chairman, Treasurer,
and Director, Federated
Administrative Services/Federated
Administrative Services, Inc.;
Trustee or Director of some of the
Funds; Vice President and
Treasurer of the Funds.
John W. McGonigle Vice President Vice President, Secretary, General
Federated Investors and Secretary Counsel, and Trustee, Federated
Tower Investors, Vice President, Secretary,
Pittsburgh, PA and Trustee, Federated Advisers,
Federated Management, and
Federated Research; Trustee,
Federated Services Company;
Executive Vice President, Secretary,
and Director, Federated
Administrative Services/Federated
Administrative Services, Inc.;
Director and Executive Vice
President, Federated Securities
Corp.; Vice President and Secretary
of the Funds.
John A. Staley, IV Vice President Vice President and Trustee,
Federated Investors Federated Investors; Executive Vice
Tower President, Federated Securities
Pittsburgh, PA Corp.; President and Trustee,
Federated Advisers, Federated
Management, and Federated
Research; Vice President of the
Funds; Director, Trustee, or
Managing General Partner of some
of the Funds; formerly, Vice
President, The Standard Fire
Insurance Company and President
of its Federated Research Division.
* This Trustee is deemed to be an "interested person" of the Trust as
defined in the Investment Company Act of 1940.
@ Member of the Trust's Executive Committee. The Executive Committee of the
Board of Trustees handles the responsibilities of the Board of Trustees
between meetings of the Board.
The Funds
"The Funds," and "Funds" mean the following investment companies: American
Leaders Fund, Inc.; Annuity Management Series; Automated Cash Management
Trust; Automated Government Money Trust; California Municipal Cash Trust;
Cash Trust Series II; Cash Trust Series, Inc.; DG Investor Series; Edward D.
Jones & Co. Daily Passport Cash Trust; Federated ARMs Fund; Federated
Exchange Fund, Ltd.; Federated GNMA Trust; Federated Government Trust;
Federated Growth Trust; Federated High Yield Trust; Federated Income
Securities Trust; Federated Income Trust; Federated Index Trust; Federated
Intermediate Government Trust; Federated Master Trust; Federated Municipal
Trust; Federated Short-Intermediate Government Trust; Federated Short-Term
U.S. Government Trust; Federated Stock Trust; Federated Tax-Free Trust;
Federated U.S. Government Bond Fund; First Priority Funds; Fixed Income
Securities, Inc.; Fortress Adjustable Rate U.S. Government Fund, Inc.;
Fortress Municipal Income Fund, Inc.; Fortress Utility Fund, Inc.; Fund for
U.S. Government Securities, Inc.; Government Income Securities, Inc.; High
Yield Cash Trust; Insight Institutional Series, Inc.; Insurance Management
Series; Intermediate Municipal Trust; International Series, Inc.; Investment
Series Funds, Inc.; Investment Series Trust; Liberty Equity Income Fund,
Inc.; Liberty High Income Bond Fund, Inc.; Liberty Municipal Securities
Fund, Inc.; Liberty U.S. Government Money Market Trust; Liberty Term Trust,
Inc. - 1999; Liberty Utility Fund, Inc.; Liquid Cash Trust; Managed Series
Trust; Mark Twain Funds; Money Market Management, Inc.; Money Market
Obligations Trust; Money Market Trust; Municipal Securities Income Trust;
New York Municipal Cash Trust; 111 Corcoran Funds; Peachtree Funds; The
Planters Funds; Portage Funds; RIMCO Monument Funds; The Shawmut Funds;
Short-Term Municipal Trust; Signet Select Funds; Star Funds; The Starburst
Funds; The Starburst Funds II; Stock and Bond Fund, Inc.; Sunburst Funds;
Targeted Duration Trust; Tax-Free Instruments Trust; Trademark Funds; Trust
for Financial Institutions; Trust For Government Cash Reserves; Trust for
Short-Term U.S. Government Securities; Trust for U.S. Treasury Obligations;
World Investment Series, Inc.
Share Ownership
Officers and Trustees own less than 1% of the Trust's outstanding shares.
As of April 28, 1994, the following shareholders of record owned 5% or more
of the outstanding Institutional Shares of the Fund: Firstier Bank NA,
Omaha, NE, owned approximately 277,597,295 (ll.9%) shares; Shawmut Bank,
N.A., Boston, MA, owned approximately 224,105,120 shares (9.6%) and
approximately 279,869,903 shares (12%); First Union National Bank,
Charlotte, NC, owned approximately 163,336,642 shares (7%); and Var & Co.,
St. Paul, MN, owned approximately 313,762,452 shares (13.4%) and
approximately 196,431,052 shares (8.4%).
As of April 28, 1994, there were no shareholders of record who owned 5% or
more of the outstanding Institutional Service Shares of the Fund.
Trustee Liability
The Declaration of Trust provides that the Trustees will not be liable for
errors of judgment or mistakes or fact or law. However, they are not
protected against any liability to which they would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of their office.
Investment Advisory Services
Investment Adviser(s)
The Treasury Obligations Fund's investment adviser is Federated Management.
It is a subsidiary of Federated Investors. All the voting securities of
Federated Investors are owned by a trust, the trustees of which are John F.
Donahue, his wife and his son, J. Christopher Donahue.
The adviser shall not be liable to Trust, the Fund, or any shareholder of
the Fund for any losses that may be sustained in the purchase, holding, or
sale of any security or for anything done or omitted by it, except acts or
omissions involving willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties imposed upon it by its contract with Trust.
Advisory Fees
For its advisory services, Federated Management receives an annual
investment advisory fee as described in the prospectus. For the fiscal years
ended July 3l, l993, l992 and l991, the Fund's adviser earned $4,563,447,
$4,375,739 and $1,740,856, respectively for services provided on behalf of
Institutional Shares, of which $1,647,164, $1,711,388 and $784,040,
respectively, were voluntarily waived because of undertakings to limit the
Fund's expenses.
State Expense Limitations
The adviser has undertaken to comply with the expense limitations
established by certain states for investment companies whose shares are
registered for sale in those states. If the Fund's normal operating
expenses (including the investment advisory fee, but not including
brokerage commissions, interest, taxes, and extraordinary expenses) exceed
2-1/2% per year of the first $30 million of average net assets, 2% per year
of the next $70 million of average net assets, and 1-1/2% per year of the
remaining average net assets, the adviser will reimburse the Fund for its
expenses over the limitation.
If the Fund's monthly projected operating expenses exceed this limitation,
the investment advisory fee paid will be reduced by the amount of the
excess, subject to an annual adjustment. If the expense limitation is
exceeded, the amount to be reimbursed by the adviser will be limited, in
any single fiscal year, by the amount of the investment advisory fees.
This arrangement is not part of the advisory contract and may be amended or
rescinded in the future.
Fund Administration
Federated Administrative Services, a subsidiary of Federated Investors,
provides administrative personnel and services to the Trust for a fee as
described in the prospectus for each class of shares of the Fund. For the
fiscal years ended July 31, 1993, 1992, and 1991, Federated Administrative
Services, Inc., the Trust's former administrator, earned $770,936, $660,557
and $445,387, respectively. John A. Staley, IV, an officer of the Trust and
Dr. Henry J. Gailliot, an officer of Federated Management, the adviser to
the Fund, each hold approximately l5% and 20%, respectively, of the
outstanding common stock of Commercial Data Services, Inc., a company which
provides computer processing services to Federated Administrative Services,
Inc., and Federated Administrative Services. For the fiscal years ended
December 31, 1993, 1992, and 1991, Federated Administrative Services, Inc.
paid approximately $161,547, $201,799 and $170,529, respectively for
services provided by Commercial Data Services, Inc., to the Funds.
Shareholder Services Plan
With respect to Institutional Service Shares the Fund has adopted a
Shareholder Services Plan. This arrangement permits the payment of fees to
Federated Shareholder Services and, indirectly to financial institutions to
cause services to be provided to shareholders by a representative who has
knowledge of the shareholder's particular circumstances and goals. These
activities and services may include, but are not limited to, providing
office space, equipment, telephone facilities, and various clerical,
supervisory, computer, and other personnel as necessary or beneficial to
establish and maintain shareholder accounts and records; processing purchase
and redemption transactions and automatic investments of client account cash
balances; answering routine client inquiries; and assisting clients in
changing dividend options, account designation, and addresses.
Distribution Plan
With respect to Institutional Service Shares the Fund has adopted a Plan
pursuant to Rule 12b-1 which was promulgated by the Securities and Exchange
Commission pursuant to the Investment Company Act of 1940. The Plan permits
the payment of fees to brokers for distribution and administrative services
and to administrators for administrative services. The Plan is designed to
(i) stimulate brokers to provide distribution and administrative support
services to shareholders and (ii) stimulate administrators to render
administrative support services to shareholders. The administrative services
are provided by a representative who has knowledge of the shareholder's
particular circumstances and goals. By adopting the Plan, the Board of
Trustees expects that the Fund will be able to achieve a more predictable
flow of cash for investment purposes and to meet redemptions. This will
facilitate more efficient portfolio management and assist the Fund in
seeking to achieve its investment objectives. By identifying potential
investors whose needs are served by the Fund's objectives, and properly
servicing these accounts, it may be possible to curb sharp fluctuations in
rates of redemptions and sales. Other benefits may include: (1) an efficient
and effective administrative system; (2) a more efficient use of shareholder
assets by having them rapidly invested with a minimum of delay and
administrative detail; and (3) an efficient and reliable shareholder records
system and prompt responses to shareholder requests and inquiries concerning
their accounts.
Custodian and Portfolio Recordkeeper. State Street Bank and Trust Company,
Boston, Massachusetts is custodian for the securities and cash of the Fund.
Federated Services Company, Pittsburgh, Pennsylvania provides certain
accounting and recordkeeping services with respect to the Fund's portfolio
investments.
Determining Net Asset Value
The Trustees have decided that the best method for determining the value of
portfolio instruments is amortized cost. Under this method, portfolio
instruments are valued at the acquisition cost as adjusted for amortization
of premium or accumulation of discount rather than at current market value.
Accordingly, neither the amount of daily income nor the net asset value is
affected by any unrealized appreciation or depreciation of the portfolio. In
periods of declining interest rates, the indicated daily yield on shares of
the Fund computed by dividing the annualized daily income on the Fund's
portfolio by the net asset value computed as above may tend to be higher
than a similar computation made by using a method of valuation based upon
market prices and estimates. In periods of rising interest rates, the
opposite may be true.
The Fund's use of the amortized cost method of valuing portfolio instruments
depends on its compliance with certain conditions in Rule 2a-7 (the "Rule")
promulgated by the Securities and Exchange Commission under the Investment
Company Act of 1940. Under the Rule, the Trustees must establish procedures
reasonably designed to stabilize the net asset value per share, as computed
for purposes of distribution and redemption, at $1.00 per share, taking into
account current market conditions and the Fund's investment objective. The
procedures include monitoring the relationship between the amortized cost
value per share and the net asset value per share based upon available
indications of market value. The Trustees will decide what, if any, steps
should be taken if there is a difference of more than 0.5 of 1% between the
two values. The Trustees will take any steps they consider appropriate (such
as redemption in kind or shortening the average portfolio maturity) to
minimize any material dilution or other unfair results arising from
differences between the two methods of determining net asset value.
Redemption in Kind
The Fund is obligated to redeem shares solely in cash up to $250,000 or 1%
of the Fund's net asset value, whichever is less, for any one shareholder
within a 90-day period. Any redemption beyond this amount will also be in
cash unless the Trustees determine that further payments should be in kind.
In such cases, the Fund will pay all or a portion of the remainder of the
redemption in portfolio instruments valued in the same way as the Fund
determines net asset value. The portfolio instruments will be selected in a
manner that the Trustees deem fair and equitable. Redemption in kind is not
as liquid as a cash redemption. If redemption is made in kind, shareholders
who sell these securities could receive less than the redemption value and
could incur certain transaction costs.
The Fund's Tax Status
To qualify for the special tax treatment afforded to regulated investment
companies, the Fund must, among other requirements: derive at least 90% of
its gross income from dividends, interest, and gains from the sale of
securities; derive less than 30% of its gross income from the sale of
securities held less than three months; invest in securities within certain
statutory limits; and distribute to its shareholders at least 90% of its net
income earned during the year.
Performance Information
Performance depends upon such variables as: portfolio quality; average
portfolio maturity; type of instruments in which the portfolio is invested;
changes in interest rates; changes in expenses; and the relative amount of
cash flow. To the extent that financial institutions and broker/dealers
charge fees in connection with services provided in conjunction with an
investment in shares of the Fund, the performance will be reduced for those
shareholders paying those fees.
Yield
The Fund calculates its yield based upon the seven days ending on the day of
the calculation, called the "base period." This yield is computed by:
determining the net change in the value of a hypothetical account with a
balance of one share at the beginning of the base period, with the net
change excluding capital changes but including the value of any additional
shares purchased with dividends earned from the original one share and all
dividends declared on the original and any purchased shares; dividing the
net change in the account's value by the value of the account at the
beginning of the base period to determine the base period return; and
multiplying the base period return by 365/7.
Effective Yield
The Fund calculates its effective yield by compounding the unannualized base
period return by: adding 1 to the base period return; raising the sum to the
365/7th power; and subtracting 1 from the result.
Total Return
Average annual total return is the average compounded rate of return for a
given period that would equate a $1,000 initial investment to the ending
redeemable value of that investment. The ending redeemable value is
compounded by multiplying the number of shares owned at the end of the
period by the net asset value per share at the end of the period. The number
of shares owned at the end of the period is based on the number of shares
purchased at the beginning of the period with $1,000, adjusted over the
period by any additional shares, assuming the monthly reinvestment of all
dividends and distributions.
Performance Comparisons
Investors may use financial publications and/or indices to obtain a more
complete view of the Fund's performance. When comparing performance,
investors should consider all relevant factors such as the composition of
any index used, prevailing market conditions, portfolio compositions of
other funds, and methods used to value portfolio securities and compute net
asset value. The financial publications and/or indices which the Fund uses
in advertising may include:
Lipper Analytical Services, Inc. ranks funds in various fund categories
based on total return, which assumes the reinvestment of all income
dividends and capital gains distributions, if any.
Donoghue's Money Fund Report publishes annualized yields of money market
funds weekly. Donoghue's Money Market Insight publication reports monthly and
12-month-to-date investment results for the same money funds.
Money, a monthly magazine, regularly
ranks money market funds in various
categories based on the latest
available seven-day effective yield.
Salomon 30-Day CD Index compares rate levels of 30-day certificates of
deposit from the top ten prime representative banks.
Salomon 30-Day Treasury Bill Index is a weekly quote of the most
representative yields for selected securities, issued by the U.S. Treasury,
maturing in 30 days.
Discount Corporation of New York 30-Day Federal Agencies, is a weekly quote
of the average daily offering price for selected federal agency issues
maturing in 30 days.
Financial Statements
The Financial Statements for the fiscal year ended July 30, 1993 are
incorporated herein by reference to the Fund's prospectus dated September
30, 1993 (File No. 33-31602). A copy of the prospectus may be obtained
without charge by contacting the Fund.
PART C. OTHER INFORMATION.
Item 24. Financial Statements and Exhibits:
(a) Financial Statements. (To be filed in Part A by amendment
for Institutional Service Shares of each Fund.) ( Financial
Statements of Institutional Shares of each Fund are
incorporated herein by reference to Registrant's
Post-Effective Amendment No. 6 on Form N-1A filed on
September 27, 1993. (File No. 33-31602).
(b) Exhibits:
(1) Copy of Declaration of Trust of the Registrant dated
October 3, 1988 (1);
(i) Amendment to the Declaration of Trust dated
October 3, 1989 (1);
(2) Copy of By-Laws of the Registrant (1);
(3) Not applicable;
(4) Copy of Specimen Certificate for Shares of Beneficial
Interest of the Registrant;+
(5) Copy of Investment Advisory Contract of the
Registrant (1);
(i) Copy of Exhibit G to Investment Advisory
Contract;+
(6) Copy of Distributor's Contract of the
Registrant;+
(7) Not applicable;
(8) Conformed copy of Custodian Agreement of the
Registrant (6);
(9) (i) Conformed copy of Transfer Agency
and Service Agreement of the Registrant
(6);
(ii) Conformed Copy of Fund Accounting Agreement
(6);
(10) Copy of Opinion and Consent of Counsel as
to legality of shares being registered (2);
(11) Conformed copy of Consent of the
Independent Public Accountants (6);
(12) Not applicable;
(13) Copy of Initial Capital Understanding (2);
(14) Not applicable;
(15) Not applicable;
(16) Schedule for Computation of Fund
Performance Data (3);
(17) Paper copy of Power of Attorney (5);
(18) Not Applicable.
+ All exhibits have been filed electronically.
1. Response is incorporated by reference to Registrant's Initial
Registration Statement on Form N-1A filed October 20, 1989. (File
No. 33-31602)
2. Response is incorporated by reference to Registrant's Pre-Effective
Amendment No. 1 on Form N-1A filed December 8, 1989.
(File No. 33-31602)
3. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 1 on Form N-1A filed June 25, 1990. (File No. 33-31602)
4. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 3 on Form N-1A filed September 26, 1991. (File
No. 33-31602)
5. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 5 on Form N-1A filed September 28, 1992. (File
No. 33-31602)
6. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 6 on Form N-1A filed September 27, 1993. (File
No. 33-31602)
Item 25. Persons Controlled by or Under Common Control with Registrant:
None
Item 26. Number of Holders of Securities:
Number of Record Holders
Title of Class as of April 27, 1994
Shares of Beneficial Interest
Government Obligations Fund
Institutional Shares 43
Institutional Service Shares 0
Prime Obligations Fund
Institutional Shares 118
Institutional Service Shares 0
Tax-Free Obligations Fund
InstitutionaL Shares 50
Institutional Service Shares 0
Treasury Obligations Fund
Institutional Shares 98
Institutional Service Shares 0
Item 27. Indemnification: (1)
Item 28. Business and Other Connections of Investment Adviser:
For a description of the other business of Federated Management,
the investment adviser, see the section entitled "Management of
Money Market Obligations Trust" in Part A. The affiliations with
the Registrant of four of the Trustees and two of the Officers of
the investment adviser and their business addresses are included
in Part B of this Registration Statement under "Money Market
Obligations Trust Management - Officers and Trustees." The
remaining Trustee of the investment adviser, his principal
occupation and business address is: Mark D. Olson (Partner,
Wilson, Halbrook & Bayard), 107 West Market Street, Georgetown,
Delaware 19947.
The remaining Officers of the investment adviser are: Mark L.
Mallon, Executive Vice President; Henry J. Gailliot, Senior Vice
President-Economist; Peter R. Anderson, William D. Dawson,
J. Thomas Madden, Gary J. Madich, and J. Alan Minteer, Senior Vice
Presidents; Albert H. Burchfield, IV, Jonathan C. Conley, Deborah
A. Cunningham, Mark E. Durbiano, Kathleen M. Foody-Malus, David C.
Francis, Thomas M. Franks, Edward C. Gonzales, Jeff A. Kozemchak,
John W. McGonigle, Gregory M. Melvin, Susan M. Nason, Mary Jo
Ochson, Robert J. Ostrowski, and Christopher H. Wiles, Vice
Presidents; Edward C. Gonzales, Treasurer; and John W. McGonigle,
Secretary. The business address of each of the Officers of the
investment adviser is Federated Investors Tower, Pittsburgh,
Pennsylvania 15222-3779. These individuals are also officers of
a majority of the investment advisers to the Funds listed in Part
B of this Registration Statement under "The Funds."
__________________
1. Response is incorporated by reference to Registrant's Initial
Registration Statement on Form N-1A filed October 20, 1989 (File
No. 33-31602)
Item 29. Principal Underwriters:
(a) Federated Securities Corp., the Distributor for shares of the
Registrant, also acts as principal underwriter for the
following open-end investment companies: A.T. Ohio Municipal
Money Fund; Alexander Hamilton Funds; American Leaders Fund,
Inc.; Annuity Management Series; Automated Cash Management
Trust; Automated Government Money Trust; BayFunds; The
Biltmore Funds; The Biltmore Municipal Funds; The Boulevard
Funds; California Municipal Cash Trust; Cambridge Series
Trust; Cash Trust Series, Inc.; Cash Trust Series II; DG
Investor Series; Edward D. Jones & Co. Daily Passport Cash
Trust; FT Series, Inc.; Federated ARMs Fund; Federated
Exchange Fund, Ltd.; Federated GNMA Trust; Federated
Government Trust; Federated Growth Trust; Federated High
Yield Trust; Federated Income Securities Trust; Federated
Income Trust; Federated Index Trust; Federated Intermediate
Government Trust; Federated Master Trust; Federated
Municipal Trust; Federated Short-Intermediate Government
Trust; Federated Short-Term U.S. Government Trust; Federated
Stock Trust; Federated Tax-Free Trust; Federated U.S.
Government Bond Fund; Financial Reserves Fund; First Priority
Funds; First Union Funds; Fixed Income Securities, Inc.;
Fortress Adjustable Rate U.S. Government Fund, Inc.; Fortress
Municipal Income Fund, Inc.; Fortress Utility Fund, Inc.;
Fountain Square Funds; Fund for U.S. Government Securities,
Inc.; Government Income Securities, Inc.; High Yield Cash
Trust; Independence One Mutual Funds; Insight Institutional
Series, Inc.; Insurance Management Series; Intermediate
Municipal Trust; Investment Series Funds, Inc.; Investment
Series Trust; Liberty Equity Income Fund, Inc.; Liberty High
Income Bond Fund, Inc.; Liberty Municipal Securities Fund,
Inc.; Liberty U.S. Government Money Market Trust; Liberty
Utility Fund, Inc.; Liquid Cash Trust; Managed Series Trust;
Mark Twain Funds; Marshall Funds, Inc.; Money Market
Management, Inc.; Money Market Obligations Trust; Money
Market Trust; The Monitor Funds; Municipal Securities Income
Trust; New York Municipal Cash Trust; 111 Corcoran Funds;
Peachtree Funds; The Planters Funds; Portage Funds; RIMCO
Monument Funds; The Shawmut Funds; Short-Term Municipal
Trust; Signet Select Funds; SouthTrust Vulcan Funds; Star
Funds; The Starburst Funds; The Starburst Funds II; Stock and
Bond Fund, Inc.; Sunburst Funds; Targeted Duration Trust;
Tax-Free Instruments Trust; Tower Mutual Funds; Trademark
Funds; Trust for Financial Institutions; Trust for Government
Cash Reserves; Trust for Short-Term U.S. Government
Securities; Trust for U.S. Treasury Obligations; Vision
Fiduciary Funds, Inc.; Vision Group of Funds, Inc.; and World
Investment Series, Inc.
Federated Securities Corp. also acts as principal underwriter
for the following closed-end investment company: Liberty
Term Trust, Inc.- 1999.
(b)
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Richard B. Fisher Director, Chairman, Chief Vice President
Federated Investors Tower Executive Officer, Chief
Pittsburgh, PA 15222-3779 Operating Officer, and
Asst. Treasurer, Federated
Securities Corp.
Edward C. Gonzales Director, Executive Vice Vice President
Federated Investors Tower President, and Treasurer, and Treasurer
Pittsburgh, PA 15222-3779 Federated Securities
Corp.
John W. McGonigle Director, Executive Vice Vice President and
Federated Investors Tower President, and Assistant Secretary
Pittsburgh, PA 15222-3779 Secretary, Federated
Securities Corp.
John A. Staley, IV Executive Vice President Vice President
Federated Investors Tower and Assistant Secretary,
Pittsburgh, PA 15222-3779 Federated Securities Corp.
John B. Fisher President-Institutional Sales, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James F. Getz President-Broker/Dealer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark R. Gensheimer Executive Vice President of --
Federated Investors Tower Bank/Trust
Pittsburgh, PA 15222-3779 Federated Securities Corp.
Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
H. Joseph Kennedy Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James R. Ball Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard W. Boyd Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Laura M. Deger Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David C. Glabicki Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard C. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Scott A. Hutton Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William J. Kerns Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William E. Kugler Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Dennis M. Laffey Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Francis J. Matten, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
J. Michael Miller Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
R. Jeffrey Niss Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael P. O'Brien Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Solon A. Person, IV Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Charles A. Robison Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas E. Territ Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Philip C. Hetzel Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Ernest L. Linane Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
S. Elliott Cohan Secretary, Federated Assistant
Federated Investors Tower Securities Corp. Secretary
Pittsburgh, PA 15222-3779
(c) Not applicable.
Item 30. Location of Accounts and Records: (4)
Item 31. Management Services: Not applicable.
Item 32. Undertakings:
Registrant hereby undertakes to comply with the provisions of
Section 16(c) of the 1940 Act with respect to removal of Trustees
and the calling of special shareholder meetings by shareholders.
________________
4. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 4 on Form N-1A filed December 17, 1991. (File
No. 33-31602)
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, MONEY MARKET OBLIGATIONS
TRUST, certifies that it meets all of the requirements for effectiveness
of this Amendment to its Registration Statement pursuant to Rule 485(a)
under the Securities Act of 1933 and has duly caused this Amendment to
its Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Pittsburgh
and Commonwealth of Pennsylvania, on the 6th day of May, 1994.
MONEY MARKET OBLIGATIONS TRUST
BY: /s/Jeanette Fisher-Garber
Jeanette Fisher-Garber, Assistant Secretary
Attorney in Fact for John F. Donahue
May 6, 1994
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to its Registration Statement has been signed below by the
following person in the capacity and on the date indicated:
NAME TITLE DATE
By: /s/Jeanette Fisher-Garber
Jeanette Fisher-Garber Attorney In Fact May 6, 1994
ASSISTANT SECRETARY For the Persons
Listed Below
NAME TITLE
John F. Donahue* Chairman and Trustee
(Chief Executive Officer)
J. Christopher Donahue* President and Trustee
Edward C. Gonzales* Vice President and Treasurer
(Principal Financial and
Accounting Officer)
John T. Conroy, Jr.* Trustee
William J. Copeland* Trustee
James E. Dowd* Trustee
Lawrence D. Ellis, M.D.* Trustee
Edward L. Flaherty, Jr.* Trustee
Peter E. Madden* Trustee
Gregor F. Meyer* Trustee
Wesley W. Posvar* Trustee
Marjorie P. Smuts* Trustee
* By Power of Attorney
Exhibit (4)
GOVERNMENT OBLIGATIONS FUND
INSTITUTIONAL SERVICE SHARES
Number
Shares
_____
_____
Account No. Alpha Code
See Reverse Side For
Certain Definitions
THIS IS TO CERTIFY THAT is
the owner of
CUSIP_____________
Fully Paid and Non-Assessable Shares of Beneficial Interest of GOVERNMENT
OBLIGATIONS FUND, INSTITUTIONAL SERVICE SHARES, a portfolio of MONEY MARKET
OBLIGATIONS TRUST hereafter called the Trust, transferable on the books of
the Trust by the owner in person or by duly authorized attorney upon
surrender of this certificate properly endorsed.
The shares represented hereby are issued and shall be held subject to
the provisions of the Declaration of Trust and By-Laws of the Trust and all
amendments thereto, all of which the holder by acceptance hereof assents.
This Certificate is not valid unless countersigned by the Transfer
Agent.
IN WITNESS WHEREOF, the Trust has caused this Certificate to be signed
in its name by its proper officers and to be sealed with its seal.
Dated: MONEY MARKET OBLIGATIONS TRUST
Corporate Seal
1988
Massachusetts
/s/ Edward C. Gonzales /s/ John F. Donahue
Treasurer Chairman
Countersigned:
Federated Services Company (Boston)
Transfer Agent
By:
Authorized Signature
The following abbreviations, when used in the inscription on the face of
this Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations;
TEN COM - as tenants in common UNIF GIFT MIN ACT-...Custodian...
TEN ENT - as tenants by the entireties (Cust) (Minors)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act.............................
in common (State)
Additional abbreviations may also be used though not in the above list.
For value received__________ hereby sell, assign, and transfer unto
Please insert social security or other
identifying number of assignee
______________________________________
_____________________________________________________________________________
(Please print or typewrite name and address, including zip code, of
assignee)
_____________________________________________________________________________
_____________________________________________________________________________
______________________________________________________________________
shares
of beneficial interest represented by the within Certificate, and do hereby
irrevocably constitute and appoint
__________________________________________
_____________________________________________________________________________
to transfer the said shares on the books of the within named Trust with full
power of substitution in the premises.
Dated______________________
NOTICE:______________________________
The signature to this assignment must
correspond with the name as written upon
the face of the certificate in every
particular, without alteration or
enlargement or any change whatever.
All persons dealing with Money Market Obligations Trust, a Massachusetts
business trust, must look solely to the Trust property for the enforcement
of any claim against the Trust, as the Trustees, officers, agents or
shareholders of the Trust assume no personal liability whatsoever for
obligations entered into on behalf of the Trust.
THIS SPACE MUST NOT BE COVERED IN ANY WAY
DOCUMENT DESCRIPTION - SPECIMEN STOCK CERTIFICATE
Page One
A. The Certificate is outlined by an (color) one-half inch border.
B. The number in the upper left-hand corner and the number of shares in
the upper right-hand corner are outlined by octagonal boxes.
C. The cusip number in the middle right-hand area of the page is boxed.
D. The Massachusetts corporate seal appears in the bottom middle of the
page.
Page Two
The social security or other identifying number of the assignee
appears in a box in the top-third upper-left area of the page.
Exhibit (4)
PRIME OBLIGATIONS FUND
INSTITUTIONAL SERVICE SHARES
Number
Shares
_____
_____
Account No. Alpha Code
See Reverse Side For
Certain Definitions
THIS IS TO CERTIFY THAT is
the owner of
CUSIP_____________
Fully Paid and Non-Assessable Shares of Beneficial Interest of PRIME
OBLIGATIONS FUND, INSTITUTIONAL SERVICE SHARES, a portfolio of MONEY MARKET
OBLIGATIONS TRUST hereafter called the Trust, transferable on the books of
the Trust by the owner in person or by duly authorized attorney upon
surrender of this certificate properly endorsed.
The shares represented hereby are issued and shall be held subject to
the provisions of the Declaration of Trust and By-Laws of the Trust and all
amendments thereto, all of which the holder by acceptance hereof assents.
This Certificate is not valid unless countersigned by the Transfer
Agent.
IN WITNESS WHEREOF, the Trust has caused this Certificate to be signed
in its name by its proper officers and to be sealed with its seal.
Dated: MONEY MARKET OBLIGATIONS TRUST
Corporate Seal
1988
Massachusetts
/s/ Edward C. Gonzales /s/ John F. Donahue
Treasurer Chairman
Countersigned:
Federated Services Company (Boston)
Transfer Agent
By:
Authorized Signature
The following abbreviations, when used in the inscription on the face of
this Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations;
TEN COM - as tenants in common UNIF GIFT MIN ACT-...Custodian...
TEN ENT - as tenants by the entireties (Cust) (Minors)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act.............................
in common (State)
Additional abbreviations may also be used though not in the above list.
For value received__________ hereby sell, assign, and transfer unto
Please insert social security or other
identifying number of assignee
______________________________________
_____________________________________________________________________________
(Please print or typewrite name and address, including zip code, of
assignee)
_____________________________________________________________________________
_____________________________________________________________________________
______________________________________________________________________
shares
of beneficial interest represented by the within Certificate, and do hereby
irrevocably constitute and appoint
__________________________________________
_____________________________________________________________________________
to transfer the said shares on the books of the within named Trust with full
power of substitution in the premises.
Dated______________________
NOTICE:______________________________
The signature to this assignment must
correspond with the name as written upon
the face of the certificate in every
particular, without alteration or
enlargement or any change whatever.
All persons dealing with Money Market Obligations Trust, a Massachusetts
business trust, must look solely to the Trust property for the enforcement
of any claim against the Trust, as the Trustees, officers, agents or
shareholders of the Trust assume no personal liability whatsoever for
obligations entered into on behalf of the Trust.
THIS SPACE MUST NOT BE COVERED IN ANY WAY
DOCUMENT DESCRIPTION - SPECIMEN STOCK CERTIFICATE
Page One
A. The Certificate is outlined by an (color) one-half inch border.
B. The number in the upper left-hand corner and the number of shares in
the upper right-hand corner are outlined by octagonal boxes.
C. The cusip number in the middle right-hand area of the page is boxed.
D. The Massachusetts corporate seal appears in the bottom middle of the
page.
Page Two
The social security or other identifying number of the assignee
appears in a box in the top-third upper-left area of the page.
Exhibit (4)
TAX-FREE OBLIGATIONS FUND
INSTITUTIONAL SERVICE SHARES
Number
Shares
_____
_____
Account No. Alpha Code
See Reverse Side For
Certain Definitions
THIS IS TO CERTIFY THAT is
the owner of
CUSIP_____________
Fully Paid and Non-Assessable Shares of Beneficial Interest of TAX-FREE
OBLIGATIONS FUND, INSTITUTIONAL SERVICE SHARES, a portfolio of MONEY MARKET
OBLIGATIONS TRUST hereafter called the Trust, transferable on the books of
the Trust by the owner in person or by duly authorized attorney upon
surrender of this certificate properly endorsed.
The shares represented hereby are issued and shall be held subject to
the provisions of the Declaration of Trust and By-Laws of the Trust and all
amendments thereto, all of which the holder by acceptance hereof assents.
This Certificate is not valid unless countersigned by the Transfer
Agent.
IN WITNESS WHEREOF, the Trust has caused this Certificate to be signed
in its name by its proper officers and to be sealed with its seal.
Dated: MONEY MARKET OBLIGATIONS TRUST
Corporate Seal
1988
Massachusetts
/s/ Edward C. Gonzales /s/ John F. Donahue
Treasurer Chairman
Countersigned:
Federated Services Company (Boston)
Transfer Agent
By:
Authorized Signature
The following abbreviations, when used in the inscription on the face of
this Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations;
TEN COM - as tenants in common UNIF GIFT MIN ACT-...Custodian...
TEN ENT - as tenants by the entireties (Cust) (Minors)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act.............................
in common (State)
Additional abbreviations may also be used though not in the above list.
For value received__________ hereby sell, assign, and transfer unto
Please insert social security or other
identifying number of assignee
______________________________________
_____________________________________________________________________________
(Please print or typewrite name and address, including zip code, of
assignee)
_____________________________________________________________________________
_____________________________________________________________________________
______________________________________________________________________
shares
of beneficial interest represented by the within Certificate, and do hereby
irrevocably constitute and appoint
__________________________________________
_____________________________________________________________________________
to transfer the said shares on the books of the within named Trust with full
power of substitution in the premises.
Dated______________________
NOTICE:______________________________
The signature to this assignment must
correspond with the name as written upon
the face of the certificate in every
particular, without alteration or
enlargement or any change whatever.
All persons dealing with Money Market Obligations Trust, a Massachusetts
business trust, must look solely to the Trust property for the enforcement
of any claim against the Trust, as the Trustees, officers, agents or
shareholders of the Trust assume no personal liability whatsoever for
obligations entered into on behalf of the Trust.
THIS SPACE MUST NOT BE COVERED IN ANY WAY
DOCUMENT DESCRIPTION - SPECIMEN STOCK CERTIFICATE
Page One
A. The Certificate is outlined by an (color) one-half inch border.
B. The number in the upper left-hand corner and the number of shares in
the upper right-hand corner are outlined by octagonal boxes.
C. The cusip number in the middle right-hand area of the page is boxed.
D. The Massachusetts corporate seal appears in the bottom middle of the
page.
Page Two
The social security or other identifying number of the assignee
appears in a box in the top-third upper-left area of the page.
Exhibit (4)
TREASURY OBLIGATIONS FUND
INSTITUTIONAL SERVICE SHARES
Number
Shares
_____
_____
Account No. Alpha Code
See Reverse Side For
Certain Definitions
THIS IS TO CERTIFY THAT is
the owner of
CUSIP_____________
Fully Paid and Non-Assessable Shares of Beneficial Interest of TREASURY
OBLIGATIONS FUND, INSTITUTIONAL SERVICE SHARES, a portfolio of MONEY MARKET
OBLIGATIONS TRUST hereafter called the Trust, transferable on the books of
the Trust by the owner in person or by duly authorized attorney upon
surrender of this certificate properly endorsed.
The shares represented hereby are issued and shall be held subject to
the provisions of the Declaration of Trust and By-Laws of the Trust and all
amendments thereto, all of which the holder by acceptance hereof assents.
This Certificate is not valid unless countersigned by the Transfer
Agent.
IN WITNESS WHEREOF, the Trust has caused this Certificate to be signed
in its name by its proper officers and to be sealed with its seal.
Dated: MONEY MARKET OBLIGATIONS TRUST
Corporate Seal
1988
Massachusetts
/s/ Edward C. Gonzales /s/ John F. Donahue
Treasurer Chairman
Countersigned:
Federated Services Company (Boston)
Transfer Agent
By:
Authorized Signature
The following abbreviations, when used in the inscription on the face of
this Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations;
TEN COM - as tenants in common UNIF GIFT MIN ACT-...Custodian...
TEN ENT - as tenants by the entireties (Cust) (Minors)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act.............................
in common (State)
Additional abbreviations may also be used though not in the above list.
For value received__________ hereby sell, assign, and transfer unto
Please insert social security or other
identifying number of assignee
______________________________________
_____________________________________________________________________________
(Please print or typewrite name and address, including zip code, of
assignee)
_____________________________________________________________________________
_____________________________________________________________________________
______________________________________________________________________
shares
of beneficial interest represented by the within Certificate, and do hereby
irrevocably constitute and appoint
__________________________________________
_____________________________________________________________________________
to transfer the said shares on the books of the within named Trust with full
power of substitution in the premises.
Dated______________________
NOTICE:______________________________
The signature to this assignment must
correspond with the name as written upon
the face of the certificate in every
particular, without alteration or
enlargement or any change whatever.
All persons dealing with Money Market Obligations Trust, a Massachusetts
business trust, must look solely to the Trust property for the enforcement
of any claim against the Trust, as the Trustees, officers, agents or
shareholders of the Trust assume no personal liability whatsoever for
obligations entered into on behalf of the Trust.
THIS SPACE MUST NOT BE COVERED IN ANY WAY
DOCUMENT DESCRIPTION - SPECIMEN STOCK CERTIFICATE
Page One
A. The Certificate is outlined by an (color) one-half inch border.
B. The number in the upper left-hand corner and the number of shares in
the upper right-hand corner are outlined by octagonal boxes.
C. The cusip number in the middle right-hand area of the page is boxed.
D. The Massachusetts corporate seal appears in the bottom middle of the
page.
Page Two
The social security or other identifying number of the assignee
appears in a box in the top-third upper-left area of the page.
Exhibit (6) on Form N-1
Exhibit (10) under 601/Reg. S-K
MONEY MARKET OBLIGATIONS TRUST
DISTRIBUTOR'S CONTRACT
AGREEMENT made this 1st day of March, 1994, by and between MONEY
MARKET OBLIGATIONS TRUST (the "Trust"), a Massachusetts business trust,
and FEDERATED SECURITIES CORP. ("FSC"), a Pennsylvania corporation.
In consideration of the mutual covenants hereinafter contained, it
is hereby agreed by and between the parties hereto as follows:
1. The Trust hereby appoints FSC as its agent to sell and
distribute shares of the Trust which may be offered in one or more
series (the "Funds") consisting of one or more classes (the "Classes")
of shares (the "Shares"), as described and set forth on one or more
exhibits to this Agreement, at the current offering price thereof as
described and set forth in the current Prospectuses of the Trust. FSC
hereby accepts such appointment and agrees to provide such other
services for the Trust, if any, and accept such compensation from the
Trust, if any, as set forth in the applicable exhibit to this Agreement.
2. The sale of any Shares may be suspended without prior notice
whenever in the judgment of the Trust it is in its best interest to do
so.
3. Neither FSC nor any other person is authorized by the Trust
to give any information or to make any representation relative to any
Shares other than those contained in the Registration Statement,
Prospectuses, or Statements of Additional Information ("SAIs") filed
with the Securities and Exchange Commission, as the same may be amended
from time to time, or in any supplemental information to said
Prospectuses or SAIs approved by the Trust. FSC agrees that any other
information or representations other than those specified above which it
or any dealer or other person who purchases Shares through FSC may make
in connection with the offer or sale of Shares, shall be made entirely
without liability on the part of the Trust. No person or dealer, other
than FSC, is authorized to act as agent for the Trust for any purpose.
FSC agrees that in offering or selling Shares as agent of the Trust, it
will, in all respects, duly conform to all applicable state and federal
laws and the rules and regulations of the National Association of
Securities Dealers, Inc., including its Rules of Fair Practice. FSC
will submit to the Trust copies of all sales literature before using the
same and will not use such sales literature if disapproved by the Trust.
4. This Agreement is effective with respect to each Class as of
the date of execution of the applicable exhibit and shall continue in
effect with respect to each Class presently set forth on an exhibit and
any subsequent Classes added pursuant to an exhibit during the initial
term of this Agreement for one year from the date set forth above, and
thereafter for successive periods of one year if such continuance is
approved at least annually by the Trustees of the Trust including a
majority of the members of the Board of Trustees of the Trust who are
not interested persons of the Trust and have no direct or indirect
financial interest in the operation of any Distribution Plan relating to
the Trust or in any related documents to such Plan (the "Disinterested
Trustees") cast in person at a meeting called for that purpose. If a
Class is added after the first annual approval by the Trustees as
described above, this Agreement will be effective as to that Class upon
execution of the applicable exhibit and will continue in effect until
the next annual approval of this Agreement by the Trustees and
thereafter for successive periods of one year, subject to approval as
described above.
5. This Agreement may be terminated with regard to a particular
Fund or Class at any time, without the payment of any penalty, by the
vote of a majority of the Disinterested Trustees or by a majority of the
outstanding voting securities of the particular Fund or Class on not
more than sixty (60) days' written notice to any other party to this
Agreement. This Agreement may be terminated with regard to a particular
Fund or Class by FSC on sixty (60) days' written notice to the Trust.
6. This Agreement may not be assigned by FSC and shall
automatically terminate in the event of an assignment by FSC as defined
in the Investment Company Act of 1940, as amended, provided, however,
that FSC may employ such other person, persons, corporation or
corporations as it shall determine in order to assist it in carrying out
its duties under this Agreement.
7. FSC shall not be liable to the Trust for anything done or
omitted by it, except acts or omissions involving willful misfeasance,
bad faith, gross negligence, or reckless disregard of the duties imposed
by this Agreement.
8. This Agreement may be amended at any time by mutual
agreement in writing of all the parties hereto, provided that such
amendment is approved by the Trustees of the Trust including a majority
of the Disinterested Trustees of the Trust cast in person at a meeting
called for that purpose.
9. This Agreement shall be construed in accordance with and
governed by the laws of the Commonwealth of Pennsylvania.
10. (a) Subject to the conditions set forth below, the Trust
agrees to indemnify and hold harmless FSC and each person, if any, who
controls FSC within the meaning of Section 15 of the Securities Act of
1933 and Section 20 of the Securities Act of 1934, as amended, against
any and all loss, liability, claim, damage and expense whatsoever
(including but not limited to any and all expenses whatsoever reasonably
incurred in investigating, preparing or defending against any
litigation, commenced or threatened, or any claim whatsoever) arising
out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement, any
Prospectuses or SAIs (as from time to time amended and supplemented) or
the omission or alleged omission therefrom of a material fact required
to be stated therein or necessary to make the statements therein not
misleading, unless such statement or omission was made in reliance upon
and in conformity with written information furnished to the Trust about
FSC by or on behalf of FSC expressly for use in the Registration
Statement, any Prospectuses and SAIs or any amendment or supplement
thereof.
If any action is brought against FSC or any
controlling person thereof with respect to which indemnity may be sought
against the Trust pursuant to the foregoing paragraph, FSC shall
promptly notify the Trust in writing of the institution of such action
and the Trust shall assume the defense of such action, including the
employment of counsel selected by the Trust and payment of expenses.
FSC or any such controlling person thereof shall have the right to
employ separate counsel in any such case, but the fees and expenses of
such counsel shall be at the expense of FSC or such controlling person
unless the employment of such counsel shall have been authorized in
writing by the Trust in connection with the defense of such action or
the Trust shall not have employed counsel to have charge of the defense
of such action, in any of which events such fees and expenses shall be
borne by the Trust. Anything in this paragraph to the contrary
notwithstanding, the Trust shall not be liable for any settlement of any
such claim of action effected without its written consent. The Trust
agrees promptly to notify FSC of the commencement of any litigation or
proceedings against the Trust or any of its officers or Trustees or
controlling persons in connection with the issue and sale of Shares or
in connection with the Registration Statement, Prospectuses, or SAIs.
(b) FSC agrees to indemnify and hold harmless the Trust,
each of its Trustees, each of its officers who have signed the
Registration Statement and each other person, if any, who controls the
Trust within the meaning of Section 15 of the Securities Act of 1933,
but only with respect to statements or omissions, if any, made in the
Registration Statement or any Prospectus, SAI, or any amendment or
supplement thereof in reliance upon, and in conformity with, information
furnished to the Trust about FSC by or on behalf of FSC expressly for
use in the Registration Statement or any Prospectus, SAI, or any
amendment or supplement thereof. In case any action shall be brought
against the Trust or any other person so indemnified based on the
Registration Statement or any Prospectus, SAI, or any amendment or
supplement thereof, and with respect to which indemnity may be sought
against FSC, FSC shall have the rights and duties given to the Trust,
and the Trust and each other person so indemnified shall have the rights
and duties given to FSC by the provisions of subsection (a) above.
(c) Nothing herein contained shall be deemed to
protect any person against liability to the Trust or its shareholders to
which such person would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of the
duties of such person or by reason of the reckless disregard by such
person of the obligations and duties of such person under this
Agreement.
(d) Insofar as indemnification for liabilities may
be permitted pursuant to Section 17 of the Investment Company Act of
1940, as amended, for Trustees, officers, FSC and controlling persons of
the Trust by the Trust pursuant to this Agreement, the Trust is aware of
the position of the Securities and Exchange Commission as set forth in
the Investment Company Act Release No. IC-11330. Therefore, the Trust
undertakes that in addition to complying with the applicable provisions
of this Agreement, in the absence of a final decision on the merits by a
court or other body before which the proceeding was brought, that an
indemnification payment will not be made unless in the absence of such a
decision, a reasonable determination based upon factual review has been
made (i) by a majority vote of a quorum of non-party Disinterested
Trustees, or (ii) by independent legal counsel in a written opinion that
the indemnitee was not liable for an act of willful misfeasance, bad
faith, gross negligence or reckless disregard of duties. The Trust
further undertakes that advancement of expenses incurred in the defense
of a proceeding (upon undertaking for repayment unless it is ultimately
determined that indemnification is appropriate) against an officer,
Trustee, FSC or controlling person of the Trust will not be made absent
the fulfillment of at least one of the following conditions: (i) the
indemnitee provides security for his undertaking; (ii) the Trust is
insured against losses arising by reason of any lawful advances; or
(iii) a majority of a quorum of non-party Disinterested Trustees or
independent legal counsel in a written opinion makes a factual
determination that there is reason to believe the indemnitee will be
entitled to indemnification.
11. FSC is hereby expressly put on notice of the limitation of
liability as set forth in Article XI of the Declaration of Trust and
agrees that the obligations assumed by the Trust pursuant to this
Agreement shall be limited in any case to the Trust and its assets and
FSC shall not seek satisfaction of any such obligation from the
shareholders of the Trust, the Trustees, officers, employees or agents
of the Trust, or any of them.
12. If at any time the Shares of any Fund are offered in two or
more Classes, FSC agrees to adopt compliance standards as to when a
class of shares may be sold to particular investors.
13. This Agreement will become binding on the parties hereto
upon the execution of the attached exhibits to the Agreement.
Exhibit A
to the
Distributor's Contract
MONEY MARKET OBLIGATIONS TRUST
Automated Cash Management Trust
Government Obligations Fund - Institutional Shares
Prime Obligations Fund - Institutional Shares
Tax-Free Obligations Fund - Institutional Shares
Treasury Obligations Fund - Institutional Shares
In consideration of the mutual covenants set forth in the
Distributor's Contract dated March 1, 1994 between Money Market
Obligations Trust and Federated Securities Corp., Money Market
Obligations Trust executes and delivers this Exhibit on behalf of the
Funds, and with respect to the separate Classes of Shares thereof, first
set forth in this Exhibit.
Witness the due execution hereof this _____ day of _______, 1994.
ATTEST: MONEY MARKET OBLIGATIONS TRUST
By:
Secretary
President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
By:
Secretary
President
(SEAL)
Exhibit B
to the
Distributor's Contract
MONEY MARKET OBLIGATIONS TRUST
Government Obligations Fund - Institutional Service Shares
Prime Obligations Fund - Institutional Service Shares
Tax-Free Obligations Fund - Institutional Service Shares
Treasury Obligations Fund - Institutional Service Shares
The following provisions are hereby incorporated and made part of
the Distributor's Contract dated the 1st day of March, 1994, between
Money Market Obligations Trust and Federated Securities Corp. with
respect to Classes of the Funds set forth above.
1. The Trust hereby appoints FSC to engage in activities
principally intended to result in the sale of shares of the above-listed
Classes (the "Shares"). Pursuant to this appointment, FSC is authorized
to select a group of brokers (the "Brokers") to sell Shares at the
current offering price thereof as described and set forth in the
respective prospectuses of the Trust, and to render administrative
support services to the Trust and its shareholders. In addition, FSC is
authorized to select a group of administrators ("Administrators") to
render administrative support services to the Trust and its
shareholders.
2. Administrative support services may include, but are not
limited to, the following functions: 1) account openings: the Broker
or Administrator communicates account openings via computer terminals
located on the Broker's or Administrator's premises; 2) account
closings: the Broker or Administrator communicates account closings via
computer terminals; 3) enter purchase transactions: purchase
transactions are entered through the Broker's or Administrator's own
personal computer or through the use of a toll-free telephone number; 4)
enter redemption transactions: Broker or Administrator enters
redemption transactions in the same manner as purchases; 5) account
maintenance: Broker or Administrator provides or arranges to provide
accounting support for all transactions. Broker or Administrator also
wires funds and receives funds for Trust share purchases and
redemptions, confirms and reconciles all transactions, reviews the
activity in the Trust's accounts, and provides training and supervision
of its personnel; 6) interest posting: Broker or Administrator posts
and reinvests dividends to the Trust's accounts; 7) prospectus and
shareholder reports: Broker or Administrator maintains and distributes
current copies of prospectuses and shareholder reports; 8)
advertisements: the Broker or Administrator continuously advertises the
availability of its services and products; 9) customer lists: the
Broker or Administrator continuously provides names of potential
customers; 10) design services: the Broker or Administrator
continuously designs material to send to customers and develops methods
of making such materials accessible to customers; and 11) consultation
services: the Broker or Administrator continuously provides information
about the product needs of customers.
3. During the term of this Agreement, the Trust will pay FSC
for services pursuant to this Agreement, a monthly fee computed at the
annual rate of up to 0.25% of the average aggregate net asset value of
the Institutional Service Shares of the Government Obligations Fund,
Prime Obligations Fund, Tax-Free Obligations Fund, and Treasury
Obligations Fund held during the month. For the month in which this
Agreement becomes effective or terminates, there shall be an appropriate
proration of any fee payable on the basis of the number of days that the
Agreement is in effect during the month.
4. FSC may from time-to-time and for such periods as it deems
appropriate reduce its compensation to the extent any Classes' expenses
exceed such lower expense limitation as FSC may, by notice to the Trust,
voluntarily declare to be effective.
5. FSC will enter into separate written agreements with various
firms to provide certain of the services set forth in Paragraph 1
herein. FSC, in its sole discretion, may pay Brokers and Administrators
a periodic fee in respect of Shares owned from time to time by their
clients or customers. The schedules of such fees and the basis upon
which such fees will be paid shall be determined from time to time by
FSC in its sole discretion.
6. FSC will prepare reports to the Board of Trustee of the
Trust on a quarterly basis showing amounts expended hereunder including
amounts paid to Brokers and Administrators and the purpose for such
payments.
In consideration of the mutual covenants set forth in the
Distributor's Contract dated March 1, 1994, between Money Market
Obligations Trust and Federated Securities Corp., Money Market
Obligations Trust executes and delivers this Exhibit on behalf of the
Funds, and with respect to the separate Classes of Shares thereof, first
set forth in this Exhibit.
Witness the due execution hereof this day of , 19 .
ATTEST: MONEY MARKET OBLIGATIONS TRUST
By:
Secretary
President
(SEAL)
ATTEST: FEDERATED SECURITIES CORP.
By:
Secretary
President
(SEAL)
Exhibit (5) on Form N-1A
Exhibit (10) under 601/Reg. S-K
EXHIBIT G
INVESTMENT ADVISORY CONTRACT
AUTOMATED CASH MANAGEMENT TRUST
For all services rendered by Adviser hereunder, the Trust shall pay
to Adviser and Adviser agrees to accept as full compensation for all
services rendered hereunder, an annual investment advisory fee equal to
0.50 of 1% of the average daily net assets of the Fund.
The fee shall be accrued daily at the rate of 1/365th of 0.50 of 1%
applied to the daily net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser daily.
Witness the due execution hereof this _____ day of __________,
1994.
Attest: FEDERATED MANAGEMENT
By:
Assistant Secretary Exec. Vice President
Attest: MONEY MARKET OBLIGATIONS TRUST
By:
Assistant Secretary
President
