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
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Pre-Effective Amendment No. ....................
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Post-Effective Amendment No. 39 .................... X
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
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Amendment No. 40 .................................... X
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MONEY MARKET OBLIGATIONS TRUST
(Exact Name of Registrant as Specified in Charter)
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7000
(Address of Principal Executive Offices)
(412) 288-1900
(Registrant's Telephone Number)
John W. McGonigle, Esquire
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
(Notices should be sent to the Agent for Service)
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b) X on FEBRUARY 29,2000 pursuant
to paragraph (b) 60 days after filing pursuant to paragraph (a)(i) on
_________________ pursuant to paragraph (a)(i) _ 75 days after filing pursuant
to paragraph (a)(ii) on _________________ pursuant to paragraph (a)(ii) of Rule
485
If appropriate, check the following box:
This post-effective amendment designates a new effective date for a previously
filed post-effective amendment.
Copies to: Matthew G. Maloney, Esquire
Dickstein Shapiro Morin & Oshinsky LLP
2101 L Street, N.W.
Washington, DC 20037
PROSPECTUS
FEDERATED SHORT-TERM
U.S. GOVERNMENT TRUST
A Portfolio of Money Market Obligations Trust
A money market mutual fund seeking high current income consistent with stability
of principal and liquidity by investing primarily in a portfolio of short-term
U.S. Treasury and government agency securities.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus. Any representation to the contrary is a criminal offense.
NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE
FEBRUARY 29, 2000
CONTENTS
Risk/Return Summary 1
What are the Fund's Fees and Expenses? 3
What are the Fund's Investment Strategies? 4
What are the Principal Securities in Which the
Fund Invests? 4
What are the Specific Risks of Investing in the Fund? 5
What Do Shares Cost? 5
How is the Fund Sold? 6
How to Purchase Shares 6
How to Redeem Shares 7
Account and Share Information 9
Who Manages the Fund? 10
Financial Information 10
Report of Ernst & Young LLP, Independent Auditors 21
Risk/Return Summary
WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
The Fund is a money market fund which seeks to maintain a stable net asset value
of $1.00 per share. The Fund's investment objective is high current income
consistent with stability of principal and liquidity. While there is no
assurance that the Fund will achieve its investment objective, it endeavors to
do so by following the strategies and policies described in this prospectus.
WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?
The Fund invests primarily in a portfolio of short-term U.S. Treasury and
government agency securities. These investments include repurchase agreements
collateralized fully by U.S. Treasury and government agency securities. The
average maturity of the Fund's portfolio will be 90 days or less.
WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?
All mutual funds take investment risks. Therefore, even though the Fund is a
money market fund that seeks to maintain a stable net asset value, it is
possible to lose money by investing in the Fund. 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.
RISK/RETURN BAR CHART AND TABLE
[Graphic]
Historically, the Fund has maintained a constant $1.00 net asset value per
share. The bar chart shows the variability of the Fund's total returns on a
calendar year-end basis.
The Fund's shares are not sold subject to a sales charge (load). The total
returns displayed above are based upon net asset value.
Within the period shown in the Chart, the Fund's highest quarterly return was
2.00% (quarter ended June 30, 1990). Its lowest quarterly return was 0.72%
(quarter ended June 30, 1993).
AVERAGE ANNUAL TOTAL RETURN TABLE
The following table represents the Fund's Average Annual Total Returns for the
calendar periods ended December 31, 1999.
<TABLE>
<CAPTION>
CALENDAR PERIOD FUND
<S> <C>
1 Year 4.77%
5 Years 5.20%
10 Years 5.05%
</TABLE>
The Fund's 7-Day Net Yield as of December 31, 1999 was 5.00%. You may call the
Fund at 1-800-341-7400 for the current 7-Day Net Yield.
Past performance is no guarantee of future results. This information provides
you with historical performance information so that you can analyze whether the
Fund's investment risks are balanced by its potential returns.
The Bar Chart and Performance Table reflect historical performance data for
Federated Short-Term U.S. Government Trust before its reorganization as a
portfolio of Money Market Obligations Trust on April 29, 1999.
What are the Fund's Fees and Expenses?
FEDERATED SHORT-TERM U.S. GOVERNMENT TRUST
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and
hold Shares of Federated Short-Term U.S. Government Trust.
<TABLE>
<CAPTION>
SHAREHOLDER
FEES
<S>
<C>
Fees Paid Directly From Your Investment Maximum Sales Charge (Load) Imposed on
Purchases (as a percentage of offering price) None Maximum Deferred Sales Charge
(Load) (as a percentage of original purchase price or redemption proceeds, as
applicable) None Maximum Sales Charge (Load) Imposed on Reinvested Dividends
(and other Distributions) (as a percentage of offering price) None Redemption
Fee (as a percentage of amount redeemed, if applicable) None Exchange Fee None
ANNUAL FUND OPERATING
EXPENSES (Before
Waivers)
1
Expenses That are Deducted
From Fund Assets (as a
percentage of average net
assets)
Management Fee 2
0.40%
Distribution (12b-1) Fee
None
Shareholder Services Fee 3
0.25%
Other Expenses
0.15%
Total Annual Fund
Operating Expenses 4
0.80%
1 Although not contractually obligated to do so, the adviser and shareholder
services provider waived certain amounts during the fiscal year ended December
31, 1999. These are shown below along with the net expenses the Fund actually
paid for the fiscal year ended December 31,1999.
Total Waivers of Fund
Expenses
0.34%
Total Actual Annual Fund
Operating Expenses (after
waivers)
0.46%
2 The adviser voluntarily waived a portion of the management fee. The adviser
can terminate this voluntary waiver at any time. The management fee paid by the
Fund (after the voluntary waiver) was 0.26% for the fiscal year ended December
31, 1999.
3 The shareholder services provider voluntarily waived a portion of the
shareholder services fee. The shareholder services provider can terminate this
voluntary waiver at any time. The shareholder services fee paid by the Fund
(after the voluntary waiver) was 0.05% for the fiscal year ended December 31,
1999.
4 For the fiscal year ended December 31, 1998, prior to the reorganization of
Federated Short-Term U.S. Government Trust (the Former Fund) as a portfolio of
Money Market Obligations Trust, the former fund had Total Annual Fund Operating
Expenses and Total Actual Annual Fund Operating Expenses (after waivers) of
0.79% and 0.46%, respectively.
</TABLE>
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your Shares at the end of those periods. The
Example also assumes that your investment has a 5% return each year and that the
Fund's operating expenses are BEFORE WAIVERS as shown in the table and remain
the same. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:
1 Year $ 82
3 Years $255
5 Years $444
10 Years $990
What are the Fund's Investment Strategies?
The Fund invests primarily in a portfolio of U.S. Treasury and government agency
securities maturing in 397 days or less. These investments include repurchase
agreements collateralized fully by U.S. Treasury and government agency
securities. The Fund's dollar-weighted average portfolio maturity will be 90
days or less.
The Fund's investment adviser (Adviser) targets a dollar-weighted average
portfolio maturity range based upon its interest rate outlook. The Adviser
formulates its interest rate outlook by analyzing a variety of factors, such as:
* current U.S. economic activity and the economic outlook;
* current short-term interest rates;
* the Federal Reserve Board's policies regarding short-term interest
rates; and
* the potential effects of foreign economic activity on U.S. short-term
interest rates.
The Adviser generally shortens the portfolio's dollar-weighted average maturity
when it expects interest rates to rise and extends the maturity when it expects
interest rates to fall. The Adviser selects securities used to shorten or extend
the portfolio's dollar-weighted average maturity by comparing the returns
currently offered by different investments to their historical and expected
returns.
What are the Principal Securities in Which the Fund Invests?
FIXED INCOME SECURITIES
Fixed income securities pay interest, dividends or distributions at a specified
rate. The rate may be a fixed percentage of the principal or adjusted
periodically. In addition, the issuer of a fixed income security must repay the
principal amount of the security, normally within a specified time. The
following describes the types of fixed income securities in which the Fund may
invest.
U.S. TREASURY SECURITIES
U.S. Treasury securities are direct obligations of the federal government
of the United States.
AGENCY SECURITIES
Agency securities are issued or guaranteed by a federal agency or other
government sponsored entity acting under federal authority (a "GSE"). The United
States supports some GSEs with its full faith and credit. Other GSEs receive
support through federal subsidies, loans or other benefits. A few GSEs have no
explicit financial support, but are regarded as having implied support because
the federal government sponsors their activities.
REPURCHASE AGREEMENTS
Repurchase agreements are transactions in which the Fund buys a security from a
dealer or bank and agrees to sell the security back at a mutually agreed upon
time and price. The repurchase price exceeds the sale price, reflecting the
Fund's return for the transaction. This return is unrelated to the interest rate
on the underlying security. The Fund will enter into repurchase agreements only
with banks and other recognized financial institutions, such as securities
dealers, deemed creditworthy by the Adviser.
Repurchase agreements are subject to credit risks.
What are the Specific Risks of Investing in the Fund?
INTEREST RATE RISK
Prices of fixed income securities rise and fall in response to changes in the
interest rate paid by similar securities. Generally, when interest rates rise,
prices of fixed income securities fall. However, market factors, such as the
demand for particular fixed income securities, may cause the price of certain
fixed income securities to fall while the prices of other securities rise or
remain unchanged.
Interest rate changes have a greater effect on the price of fixed income
securities with longer maturities. Money market funds try to minimize this risk
by purchasing short-term securities.
CREDIT RISK
Credit risk includes the possibility that a party to a transaction involving the
Fund will fail to meet its obligations. This could cause the Fund to lose the
benefit of the transaction or prevent the Fund from selling or buying other
securities to implement its investment strategy.
What Do Shares Cost?
You can purchase or redeem Shares any day the New York Stock Exchange (NYSE) is
open. The Fund attempts to stabilize the net asset value (NAV) of its Shares at
$1.00 by valuing the portfolio securities using the amortized cost method. The
Fund cannot guarantee that its NAV will always remain at $1.00 per Share. The
Fund does not charge a front-end sales load.
NAV is determined at 12:00 noon and 3:00 p.m. (Eastern time) and as of the end
of regular trading (normally 4:00 p.m. Eastern time) each day the NYSE is open.
The required minimum initial investment for Fund Shares is $25,000. There is no
required minimum subsequent investment amount.
An account may be opened with a smaller amount as long as the $25,000 minimum is
reached within 90 days. An institutional investor's minimum investment is
calculated by combining all accounts it maintains with the Fund. Accounts
established through investment professionals may be subject to a smaller minimum
investment amount. Keep in mind that investment professionals may charge you
fees for their services in connection with your Share transactions.
How is the Fund Sold?
The Fund's Distributor, Federated Securities Corp., markets the Shares
described in this prospectus to institutions acting in an agency or
fiduciary capacity or to individuals, directly or through
investment professionals.
The Distributor and its affiliates may pay out of their assets other
amounts (including items of material value) to investment professionals
for marketing and servicing Shares. The Distributor is a subsidiary of
Federated Investors, Inc. (Federated).
How to Purchase Shares
You may purchase Shares through an investment professional or directly from the
Fund. The Fund reserves the right to reject any request to purchase Shares.
THROUGH AN INVESTMENT PROFESSIONAL
* Establish an account with the investment professional; and
* Submit your purchase order to the investment professional before 3:00 p.m.
(Eastern time). You will receive that day's dividend if the investment
professional forwards the order to the Fund and the Fund receives payment by
3:00 p.m. (Eastern time). You will become the owner of Shares and receive
dividends when the Fund receives your payment.
Investment professionals should send payments according to the instructions in
the sections "By Wire" or "By Check."
DIRECTLY FROM THE FUND
* Establish your account with the Fund by submitting a completed New
Account Form; and
* Send your payment to the Fund by Federal Reserve wire or check.
You will become the owner of Shares after the Fund receives your wire or your
check. If your check does not clear, your purchase will be canceled and you
could be liable for any losses or fees incurred by the Fund or Federated
Shareholder Services Company, the Fund's transfer agent.
An institution may establish an account and place an order by calling the Fund
and will become a shareholder after the Fund receives the order.
BY WIRE
Send your wire to:
State Street Bank and Trust Company
Boston, MA
Dollar Amount of Wire
ABA Number 011000028
Attention: EDGEWIRE
Wire Order Number, Dealer Number or Group Number
Nominee/Institution Name
Fund Name and Number and Account Number
You cannot purchase Shares by wire on holidays when wire transfers are
restricted.
BY CHECK
Make your check payable to THE FEDERATED FUNDS, note your account number on the
check, and mail it to:
Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600
If you send your check by a PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE that
requires a street address, mail it to:
Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317
Payment should be made in U.S. dollars and drawn on a U.S. bank. The Fund
will not accept third-party checks (checks originally payable to someone
other than you or THE FEDERATED FUNDS).
Orders by mail are considered received when payment by check is converted into
federal funds (normally the business day after the check is received) and Shares
begin earning dividends the next day.
BY AUTOMATED CLEARING HOUSE (ACH)
Once you have opened an account, you may purchase additional Shares through a
depository institution that is an ACH member. This purchase option can be
established by completing the appropriate sections of the New Account Form.
How to Redeem Shares
You should redeem Shares:
* through an investment professional if you purchased Shares through an
investment professional; or
* directly from the Fund if you purchased Shares directly from the Fund.
THROUGH AN INVESTMENT PROFESSIONAL
Submit your redemption request to your investment professional by the end of
regular trading on the NYSE (normally 4:00 p.m. Eastern time). Investment
professionals are responsible for promptly submitting redemption requests and
providing proper written redemption instructions as outlined below.
DIRECTLY FROM THE FUND
BY TELEPHONE
You may redeem Shares by calling the Fund at 1-800-341-7400 once you have
completed the appropriate authorization form for telephone transactions.
If you call before 3:00 p.m. (Eastern time), your redemption will be wired to
you the same day. You will not receive that day's dividend.
If you call after 3:00 p.m. (Eastern time), your redemption will be wired to you
the following business day. You will receive that day's dividend.
BY MAIL
You may redeem Shares by mailing a written request to the Fund.
Your redemption request will be processed on the day the Fund receives your
written request in proper form. Dividends are paid up to and including the day
that a redemption request is processed.
Send requests by mail to:
Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600
Send requests by PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE to:
Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317
All requests must include:
* Fund Name and Share Class, account number and account registration;
* amount to be redeemed; and
* signatures of all shareholders exactly as registered.
Call your investment professional or the Fund if you need special instructions.
SIGNATURE GUARANTEES
Signatures must be guaranteed if:
* your redemption will be sent to an address other than the address of
record;
* your redemption will be sent to an address of record that was changed within
the last 30 days; or
* a redemption is payable to someone other than the shareholder(s) of
record.
A signature guarantee is designed to protect your account from fraud. Obtain a
signature guarantee from a bank or trust company, savings association, credit
union or broker, dealer, or securities exchange member. A NOTARY PUBLIC CANNOT
PROVIDE A SIGNATURE GUARANTEE.
PAYMENT METHODS FOR REDEMPTIONS
Your redemption proceeds will be mailed by check to your address of record. The
following payment options are available if you complete the appropriate section
of the New Account Form or an Account Service Options Form. These payment
options require a signature guarantee if they were not established when the
account was opened:
* an electronic transfer to your account at a financial institution that is
an ACH member; or
* wire payment to your account at a domestic commercial bank that is a Federal
Reserve System member.
REDEMPTION IN KIND
Although the Fund intends to pay Share redemptions in cash, it reserves the
right to pay the redemption price in whole or in part by a distribution of the
Fund's portfolio securities.
LIMITATIONS ON REDEMPTION PROCEEDS
Redemption proceeds normally are wired or mailed within one business day after
receiving a request in proper form. Payment may be delayed up to seven days:
* to allow your purchase to clear;
* during periods of market volatility; or
* when a shareholder's trade activity or amount adversely impacts the Fund's
ability to manage its assets.
You will not accrue interest or dividends on uncashed checks from the Fund if
those checks are undeliverable and returned to the Fund.
ADDITIONAL CONDITIONS
TELEPHONE TRANSACTIONS
The Fund will record your telephone instructions. If the Fund does not follow
reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.
SHARE CERTIFICATES
The Fund no longer issues share certificates. If you are redeeming Shares
represented by certificates previously issued by the Fund, you must return the
certificates with your written redemption request. For your protection, send
your certificates by registered or certified mail, but do not endorse them.
Account and Share Information
ACCOUNT ACTIVITY
You will receive periodic statements reporting all account activity, including
dividends and capital gains paid.
DIVIDENDS AND CAPITAL GAINS
The Fund declares any dividends daily and pays them monthly to shareholders. If
you purchase Shares by wire, you begin earning dividends on the day your wire is
received. If you purchase Shares by check, you begin earning dividends on the
business day after the Fund receives your check. In either case, you earn
dividends through the day your redemption request is received.
If you purchase Shares just before a Fund declares a dividend or capital gain
distribution, you will pay the full price for the Shares and then receive a
portion of the price back in the form of a taxable distribution, whether or not
you reinvest the distribution in Shares. Therefore, you should consider the tax
implications of purchasing Shares shortly before the Fund declares a dividend or
capital gain. Contact your investment professional or the Fund for information
concerning when dividends and capital gains will be paid.
The Fund does not expect to realize any capital gains or losses. If capital
gains or losses were to occur, they could result in an increase or decrease in
dividends. The Fund pays any capital gains at least annually. Your dividends and
capital gains distributions will be automatically reinvested in additional
Shares without a sales charge, unless you elect cash payments.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, non- retirement
accounts may be closed if redemptions cause the account balance to fall below
the minimum initial investment amount. Before an account is closed, you will be
notified and allowed 30 days to purchase additional Shares to meet the minimum.
TAX INFORMATION
The Fund sends an annual statement of your account activity to assist you in
completing your federal, state and local tax returns. Fund distributions of
dividends and capital gains are taxable to you whether paid in cash or
reinvested in the Fund. Dividends are taxable as ordinary income; capital gains
are taxable at different rates depending upon the length of time the Fund holds
its assets.
Fund distributions are expected to be primarily dividends. Redemptions are
taxable sales. Please consult your tax adviser regarding your federal, state and
local tax liability.
Who Manages the Fund?
The Board of Trustees governs the Fund. The Board selects and oversees the
Adviser, Federated Investment Management Company. The Adviser manages the Fund's
assets, including buying and selling portfolio securities. The Adviser's address
is Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA 15222-3779.
The Adviser and other subsidiaries of Federated advise approximately 176 mutual
funds and separate accounts, which totaled approximately $125 billion in assets
as of December 31, 1999. Federated was established in 1955 and is one of the
largest mutual fund investment managers in the United States with approximately
1,900 employees. More than 4,000 investment professionals make Federated Funds
available to their customers.
ADVISER FEES
The Adviser receives an annual investment adviser fee of 0.40% of the Fund's
average daily net assets. The Adviser may voluntarily waive a portion of its fee
or reimburse the Fund for certain operating expenses.
Financial Information
FINANCIAL HIGHLIGHTS
The following Financial Highlights will help you understand the Fund's financial
performance for its past five fiscal years. Some of the information is presented
on a per share basis. Total returns represent the rate an investor would have
earned (or lost) on an investment in the Fund, assuming reinvestment of any
dividends and capital gains.
This information for the fiscal year ended December 31, 1999 has been audited by
Ernst & Young LLP whose report, along with the Fund's audited financial
statements, is included in this prospectus. Previous fiscal years were audited
by other auditors.
Financial Highlights
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Report of Independent Auditors on page 21.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31 1999 1998 1997
1996 1995
<S> <C> <C> <C>
<C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $
1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.05 0.05 0.05
0.05 0.06
LESS
DISTRIBUTIONS
Distributions from net investment income (0.05) (0.05) (0.05)
(0.05) (0.06)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $
1.00 $ 1.00
TOTAL RETURN 1 4.77% 5.16% 5.24%
5.10% 5.72%
RATIOS TO AVERAGE NET ASSETS:
Expenses 0.46% 0.46% 0.46%
0.46% 0.46%
Net investment income 4.64% 5.04% 5.10%
4.99% 5.57%
Expense waiver/reimbursement 2 0.34% 0.33% 0.33%
0.33% 0.32%
SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $289,123 $350,019 $489,292
$609,589 $773,851
</TABLE>
1 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
2 This voluntary expense decrease is reflected in both the expense and the net
investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
Portfolio of Investments
DECEMBER 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
SHORT-TERM OBLIGATIONS-
64.3%
$ 3,000,000 1 Federal Farm Credit Bank
Floating Rate Note,
6.306%, 4/3/2000 $ 2,999,697
2,000,000 Federal Farm Credit Bank
Note, 5.400%, 7/3/2000 1,998,480
34,000,000 2 Federal Home Loan Bank
Discount Notes, 5.370% -
5.615%, 1/21/2000 -
3/1/2000 33,812,619
6,000,000 1 Federal Home Loan Bank
Floating Rate Notes,
5.839% - 6.263%,
1/18/2000 - 2/12/2000 5,997,504
22,050,000 Federal Home Loan Bank
Notes, 4.790% - 6.125%,
1/14/2000 - 10/27/2000 22,046,306
17,033,000 2 Federal Home Loan Mortgage
Corp. Discount Notes,
5.110% - 5.590%,
1/10/2000 - 8/4/2000 16,909,439
15,500,000 1 Federal Home Loan Mortgage
Corp. Floating Rate Notes,
5.593% - 6.291%, 1/18/2000
- 1/24/2000 15,496,418
26,500,000 2 Federal National Mortgage
Association Discount
Notes, 4.610% - 5.880%,
1/24/2000 - 6/22/2000 26,223,650
26,000,000 1 Federal National Mortgage
Association Floating Rate
Notes, 5.856% - 6.301%,
1/18/2000 - 3/23/2000 25,990,542
8,000,000 Federal National Mortgage
Association, 5.632%,
2/1/2000 7,961,200
9,500,000 Federal National Mortgage
Association Notes, 4.820%
- 5.180%, 1/28/2000 -
5/5/2000 9,498,411
16,000,000 1 Student Loan Marketing
Association Floating Rate
Notes, 5.720% - 6.131%,
1/3/2000 - 1/4/2000 15,995,261
1,000,000 Student Loan Marketing
Association Note, 6.045%,
11/3/2000 999,505
TOTAL SHORT-TERM
OBLIGATIONS 185,929,032
REPURCHASE AGREEMENTS-
35.5% 3
10,000,000 Bank of America Securities
LLC, 3.150%, dated
12/31/1999, due 1/3/2000 10,000,000
4,500,000 Barclays Capital, Inc.,
3.000%, dated 12/31/1999,
due 1/3/2000 4,500,000
4,000,000 4 Goldman Sachs Group, Inc.,
5.650%, dated 9/21/1999,
due 1/19/2000 4,000,000
9,000,000 4 Goldman Sachs Group, Inc.,
5.650%, dated 9/23/1999,
due 1/21/2000 9,000,000
5,000,000 Morgan Stanley Dean Witter
& Co., 3.500%, dated
12/31/1999, due 1/3/2000 5,000,000
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
REPURCHASE AGREEMENTS-
continued 3
$ 5,000,000 4 Morgan Stanley Dean Witter
& Co., 5.590%, dated
11/17/1999, due 1/18/2000 $ 5,000,000
55,000,000 Paine Webber Group, Inc.,
3.500%, dated 12/31/1999,
due 1/3/2000 55,000,000
10,000,000 Paribas Corp., 3.550%,
dated 12/31/1999, due
1/3/2000 10,000,000
TOTAL REPURCHASE
AGREEMENTS 102,500,000
TOTAL INVESTMENTS (AT
AMORTIZED COST) 5 $ 288,429,032
</TABLE>
1 Current rate and next reset date shown.
2 Each issue shows the rate of discount at the time of purchase.
3 The repurchase agreements are fully collateralized by U.S. Treasury and/or
government agency obligations based on market prices at the date of the
portfolio. The investments in the repurchase agreements are through
participation in joint accounts with other Federated funds.
4 Although final maturity falls beyond seven days, a liquidity feature is
included in each transaction to permit termination of the repurchase agreement
within seven days.
5 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($289,122,584) at December 31, 1999.
See Notes which are an integral part of the Financial Statements
Statement of Assets and Liabilities
DECEMBER 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS:
Investments in repurchase
agreements $ 102,500,000
Investments in securities 185,929,032
Total investments in
securities, at amortized
cost and value $ 288,429,032
Cash 152,003
Income receivable 1,118,451
Receivable for shares sold 388,219
TOTAL ASSETS 290,087,705
LIABILITIES:
Payable for shares
redeemed 55,928
Income distribution
payable 873,675
Accrued expenses 35,518
TOTAL LIABILITIES 965,121
Net assets for 289,122,584
shares outstanding $ 289,122,584
NET ASSET VALUE, OFFERING
PRICE AND REDEMPTION
PROCEEDS PER SHARE:
$289,122,584 / 289,122,584
shares outstanding $1.00
</TABLE>
See Notes which are an integral part of the Financial Statements
Statement of Operations
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 16,951,340
EXPENSES:
Investment adviser fee $ 1,329,591
Administrative personnel
and services fee 250,608
Custodian fees 29,949
Transfer and dividend
disbursing agent fees and
expenses 64,022
Directors'/Trustees' fees 17,251
Auditing fees 13,135
Legal fees 5,750
Portfolio accounting fees 81,140
Shareholder services fee 830,994
Share registration costs 25,992
Printing and postage 20,634
Insurance premiums 1,970
Miscellaneous 3,480
TOTAL EXPENSES 2,674,516
WAIVERS:
Waiver of investment
adviser fee $ (466,068)
Waiver of shareholder
services fee (664,795)
TOTAL WAIVERS (1,130,863)
Net expenses 1,543,653
Net investment income $ 15,407,687
</TABLE>
See Notes which are an integral part of the Financial Statements
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31 1999 1998
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income $ 15,407,687 $ 18,938,821
DISTRIBUTIONS TO
SHAREHOLDERS:
Distributions from net
investment income (15,407,687) (18,938,821)
SHARE TRANSACTIONS:
Proceeds from sale of
shares 1,064,635,667 1,340,144,670
Net asset value of shares
issued to shareholders in
payment of
distributions declared 4,662,901 5,415,142
Cost of shares redeemed (1,130,194,910) (1,484,833,055)
CHANGE IN NET ASSETS
RESULTING FROM SHARE
TRANSACTIONS (60,896,342) (139,273,243)
Change in net assets (60,896,342) (139,273,243)
NET ASSETS:
Beginning of period 350,018,926 489,292,169
End of period $ 289,122,584 $ 350,018,926
</TABLE>
See Notes which are an integral part of the Financial Statements
Notes to Financial Statements
DECEMBER 31, 1999
ORGANIZATION
Federated Short-Term U.S. Government Trust (the "Fund") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as an open-end,
management investment company. Effective April 29, 1999, the Fund became a
portfolio of the Money Market Obligations Trust (the "Trust"). The Trust
consists of 40 portfolios. The financial statements included herein are only
those of the Fund. The financial statements of the other portfolios are
presented separately. The assets of each portfolio are segregated and a
shareholder's interest is limited to the portfolio in which shares are held.
The investment objective of the Fund is high current income consistent with
stability of principal and liquidity.
SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATION
The Fund uses the amortized cost method to value its portfolio securities in
accordance with Rule 2a-7 under the Act.
REPURCHASE AGREEMENTS
It is the policy of the Fund to require the custodian bank to take possession,
to have legally segregated in the Federal Reserve Book Entry System, or to have
segregated within the custodian bank's vault, all securities held as collateral
under repurchase agreement transactions. Additionally, procedures have been
established by the Fund to monitor, on a daily basis, the market value of each
repurchase agreement's collateral to ensure that the value of collateral at
least equals the repurchase price to be paid under the repurchase agreement.
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 the guidelines and/or
standards reviewed or established by the Board of Trustees (the "Trustees").
Risks may arise from the potential inability of counterparties to honor the
terms of the repurchase agreement. Accordingly, the Fund could receive less than
the repurchase price on the sale of collateral securities. The Fund, along with
other affiliated investment companies, may utilize a joint trading account for
the purpose of entering into one or more repurchase agreements.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS
Interest income and expenses are accrued daily. Bond premium and discount, if
applicable, are amortized as required by the Internal Revenue Code, as amended
(the "Code"). Distributions to shareholders are recorded on the ex-dividend
date. Non-cash dividends included in dividend income, if any, are recorded at
fair value.
FEDERAL TAXES
It is the Fund's policy to comply with the provisions of the Code applicable to
regulated investment companies and to distribute to shareholders each year
substantially all of its income. Accordingly, no provision for federal tax is
necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
The Fund may engage in when-issued or delayed delivery transactions. The Fund
records when-issued securities on the trade date and maintains security
positions such that sufficient liquid assets will be available to make payment
for the securities purchased. Securities purchased on a when- issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date. Losses may occur on these transactions due to changes in market
conditions or the failure of counterparties to perform under the contract.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts of assets, liabilities, expenses and revenues reported in the
financial statements. Actual results could differ from those estimated.
OTHER
Investment transactions are accounted for on a trade date basis.
SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value). At
December 31, 1999, capital paid-in aggregated $289,122,584.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31 1999 1998
<S> <C> <C>
Shares sold 1,064,635,667 1,340,144,670
Shares issued to
shareholders in payment of
distributions declared 4,662,901 5,415,142
Shares redeemed (1,130,194,910) (1,484,833,055)
NET CHANGE RESULTING FROM
SHARE TRANSACTIONS (60,896,342) (139,273,243)
</TABLE>
INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISER FEE
Federated Investment Management Company, the Fund's investment adviser (the
"Adviser"), receives for its services an annual investment adviser fee equal to
0.40% of the Fund's average daily net assets. The Adviser may voluntarily choose
to waive any portion of its fee. The Adviser can modify or terminate this
voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE
Federated Services Company ("FServ"), under the Administrative Services
Agreement, provides the Fund with administrative personnel and services. The fee
paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the
average aggregate daily net assets of all funds advised by subsidiaries of
Federated Investors, Inc., subject to a $125,000 minimum per portfolio and
$30,000 per each additional class.
SHAREHOLDER SERVICES FEE
Under the terms of a Shareholder Services Agreement with Federated Shareholder
Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily
net assets of the Fund for the period. The fee paid to FSSC is used to finance
certain services for shareholders and to maintain shareholder accounts. FSSC may
voluntarily choose to waive any portion of its fee. FSSC can modify or terminate
this voluntary waiver at any time at its sole discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES
FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing
agent for the Fund. The fee paid to FSSC is based on the size, type and number
of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES
FServ maintains the Fund's accounting records for which it receives a fee. The
fee is based on the level of the Fund's average daily net assets for the period,
plus out-of-pocket expenses.
GENERAL
Certain of the Officers and Trustees of the Fund are Officers and Directors or
Trustees of the above companies.
CHANGE OF INDEPENDENT AUDITORS (UNAUDITED)
On May 19, 1999, the Trustees, upon the recommendation of its Audit Committee,
requested and subsequently accepted the resignation of Arthur Anderson LLP
("AA") as the Fund's independent auditors. AA's reports on the Fund's financial
statements for the fiscal years ended December 31, 1997 and December 31, 1998
contained no adverse opinion or disclaimer of opinion nor were they qualified or
modified as to uncertainty, audit scope or accounting principles. During the
Fund's fiscal years ended December 31, 1997 and December 31, 1998: (i) there
were no disagreements with AA on any matter of accounting principles or
practices, financial statement disclosure or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of AA, would have caused it
to make reference to the subject matter of the disagreements in connection with
its reports on the financial statements for such years; and (ii) there were no
reportable events of the kind described in Item 304(a)(1)(v) of Regulation S-K
under the Securities Exchange Act of 1934, as amended.
The Fund, by action of its Trustees, upon the recommendation of the Audit
Committee, has engaged Ernst & Young LLP ("E&Y") as the independent auditors to
audit the Fund's financial statements for the fiscal year ended December 31,
1999. During the Fund's fiscal years ended December 31, 1997 and December 31,
1998, neither the Fund nor anyone on its behalf has consulted E&Y on items which
(i) concerned the application of accounting principles to a specified
transaction, either completed or proposed, or the type of audit opinion that
might be rendered on the Fund's financial statements, or (ii) concerned the
subject of a disagreement (as defined in paragraph (a)(1)(iv) of Item 304 of
Regulation S-K) of reportable events (as described in paragraph (a)(1)(v) of
said Item 304).
Report of Ernst & Young LLP, Independent Auditors
TO THE BOARD OF TRUSTEES OF MONEY MARKET OBLIGATIONS TRUST AND
SHAREHOLDERS OF FEDERATED SHORT-TERM U.S. GOVERNMENT TRUST:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Federated Short-Term U.S. Government Trust (the
"Fund") (one of the portfolios constituting the Money Market Obligations Trust),
as of December 31, 1999, and the related statement of operations, statement of
changes in net assets and financial highlights for the year then ended. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit. The statement
of changes in net assets for the year ended December 31, 1998, and the financial
highlights for each of the four years then ended were audited by other auditors
whose report dated February 22, 1999 expressed an unqualified opinion on that
statement and those financial highlights.
We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of December 31, 1999, by correspondence with the custodian. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Federated Short-Term U.S. Government Trust portfolio of the Money Market
Obligations Trust at December 31, 1999, and the results of its operations, the
changes in its net assets, and the financial highlights for the year then ended,
in conformity with accounting principles generally accepted in the United
States.
[Graphic]
Boston, Massachusetts
February 16, 2000
Federated Short-Term U.S. Government Trust
A Portfolio of Money Market Obligations Trust
FEBRUARY 29, 2000
A Statement of Additional Information (SAI) dated February 29, 2000, is
incorporated by reference into this prospectus. Additional information about the
Fund and its investments is contained in the Fund's SAI and Semi- Annual Report
to shareholders as it becomes available. To obtain the SAI, Semi-Annual Report
and other information without charge, and make inquiries, call your investment
professional or the Fund at 1-800-341- 7400.
You can obtain information about the Fund (including the SAI) by writing to or
visiting the Public Reference Room in Washington, DC. You may also access fund
information from the EDGAR Database on the SEC's Internet site at
http://www.sec.gov. You can purchase copies of this information by contacting
the SEC by email at [email protected] or by writing to the SEC's Public
Reference Section, Washington, DC 20549-0102. Call 1-202-942- 8090 for
information on the Public Reference Room's operations and copying fees.
[Graphic]
Federated
Federated Short-Term U.S. Government Trust
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
WWW.FEDERATEDINVESTORS.COM
Federated Securities Corp., Distributor
Investment Company Act File No. 811-5950
Cusip 60934N765
8020102A (2/00)
[Graphic]
STATEMENT OF ADDITIONAL INFORMATION
Federated Short-Term U.S. Government Trust
A Portfolio of Money Market Obligations Trust
This Statement of Additional Information (SAI) is not a prospectus. Read this
SAI in conjunction with the prospectus for Federated Short-Term U.S. Government
Trust (Fund), dated February 29, 2000. Obtain the prospectus without charge by
calling 1-800-341-7400.
FEBRUARY 29, 2000
[Graphic]
Federated
World-Class Investment Manager
Federated Short-Term U.S. Government
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
WWW.FEDERATEDINVESTORS.COM
Federated Securities Corp., Distributor
8020102B (2/00)
[Graphic]
CONTENTS
How is the Fund Organized? 1
Securities in Which the Fund Invests 1
How is the Fund Sold? 4
Subaccounting Services 4
Redemption in Kind 5
Massachusetts Partnership Law 5
Account and Share Information 5
Tax Information 5
Who Manages and Provides Services to the Fund? 6
How Does the Fund Measure Performance? 9
Who is Federated Investors, Inc.? 10
Addresses 12
How is the Fund Organized?
The Fund is a diversified portfolio of Money Market Obligations Trust (Trust).
The Trust is an open-end, management investment company that was established
under the laws of the Commonwealth of Massachusetts on October 3, 1988. The
Trust may offer separate series of shares representing interests in separate
portfolios of securities. The Fund, which was established on February 2, 1987,
was reorganized as a portfolio of the Trust on April 29, 1999. The Fund's
investment adviser is Federated Investment Management Company.
Securities in Which the Fund Invests
In pursuing its investment strategy, the Fund may invest in the following
securities for any purpose that is consistent with its investment objective.
SECURITIES DESCRIPTIONS AND TECHNIQUES
FIXED INCOME SECURITIES
Fixed income securities pay interest, dividends or distributions at a specified
rate. The rate may be a fixed percentage of the principal or adjusted
periodically. In addition, the issuer of a fixed income security must repay the
principal amount of the security, normally within a specified time. Fixed income
securities provide more regular income than equity securities. However, the
returns on fixed income securities are limited and normally do not increase with
the issuer's earnings. This limits the potential appreciation of fixed income
securities as compared to equity securities.
A security's yield measures the annual income earned on a security as a
percentage of its price. A security's yield will increase or decrease depending
upon whether it costs less (a discount) or more (a premium) than the principal
amount. If the issuer may redeem the security before its scheduled maturity, the
price and yield on a discount or premium security may change based upon the
probability of an early redemption. Securities with higher risks generally have
higher yields.
U.S. TREASURY SECURITIES
U.S. Treasury securities are direct obligations of the federal government
of the United States. U.S. Treasury securities are generally regarded as
having the lowest credit risk.
AGENCY SECURITIES
Agency securities are issued or guaranteed by a federal agency or other
government sponsored entity acting under federal authority (a "GSE"). The United
States supports some GSEs with its full faith and credit. Other GSEs receive
support through federal subsidies, loans or other benefits. A few GSEs have no
explicit financial support, but are regarded as having implied support because
the federal government sponsors their activities. Agency securities are
generally regarded as having low credit risk, but not as low as Treasury
securities.
MORTGAGE BACKED SECURITIES
Mortgage backed securities represent interests in pools of mortgages. The
mortgages that comprise a pool normally have similar interest rates, maturities
and other terms. Mortgages may have fixed or adjustable interest rates.
Interests in pools of adjustable rate mortgages are known as ARMs.
ZERO COUPON SECURITIES
Zero coupon securities do not pay interest or principal until final maturity,
unlike debt securities that provide periodic payments of interest (referred to
as a coupon payment). Investors buy zero coupon securities at a price below the
amount payable at maturity. The difference between the purchase price and the
amount paid at maturity represents interest on the zero coupon security.
Investors must wait until maturity to receive interest and principal, which
increases the interest rate and credit risks of a zero coupon security.
There are many forms of zero coupon securities. Some are issued at a discount
and are referred to as zero coupon or capital appreciation bonds. Others are
created from interest bearing bonds by separating the right to receive the
bond's coupon payments from the right to receive the bond's principal due at
maturity, a process known as coupon stripping. Treasury STRIPs are the most
common forms of stripped zero coupon securities. In addition, some securities
give the issuer the option to deliver additional securities in place of cash
interest payments, thereby increasing the amount payable at maturity. These are
referred to as pay-in-kind, or PIK, securities.
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
The Fund may invest its assets in securities of other investment companies,
including the securities of affiliated money market funds, as an efficient means
of carrying out its investment policies and managing its uninvested cash.
SPECIAL TRANSACTIONS
REPURCHASE AGREEMENTS
Repurchase agreements are transactions in which the Fund buys a security from a
dealer or bank and agrees to sell the security back at a mutually agreed upon
time and price. The repurchase price exceeds the sale price, reflecting the
Fund's return on the transaction. This return is unrelated to the interest rate
on the underlying security. The Fund will enter into repurchase agreements only
with banks and other recognized financial institutions, such as securities
dealers, deemed creditworthy by the Adviser.
The Fund's custodian or subcustodian will take possession of the securities
subject to repurchase agreements. The Adviser or subcustodian will monitor the
value of the underlying security each day to ensure that the value of the
security always equals or exceeds the repurchase price.
Repurchase agreements are subject to credit risks.
REVERSE REPURCHASE AGREEMENTS
Reverse repurchase agreements are repurchase agreements in which the Fund is the
seller (rather than the buyer) of the securities, and agrees to repurchase them
at an agreed upon time and price. A reverse repurchase agreement may be viewed
as a type of borrowing by the Fund. Reverse repurchase agreements are subject to
credit risks. In addition, reverse repurchase agreements create leverage risk
because the Fund must repurchase the underlying security at a higher price,
regardless of the market value of the security at the time of repurchase.
DELAYED DELIVERY TRANSACTIONS
Delayed delivery transactions, including when-issued transactions, are
arrangements in which the Fund buys securities for a set price, with payment and
delivery of the securities scheduled for a future time. During the period
between purchase and settlement, no payment is made by the Fund to the issuer
and no interest accrues to the Fund. The Fund records the transaction when it
agrees to buy the securities and reflects their value in determining the price
of its shares. Settlement dates may be a month or more after entering into these
transactions so that the market values of the securities bought may vary from
the purchase prices. Therefore, delayed delivery transactions create interest
rate risks for the Fund. Delayed delivery transactions also involve credit risks
in the event of a counterparty default.
SECURITIES LENDING
The Fund may lend portfolio securities to borrowers that the Adviser deems
creditworthy. In return, the Fund receives cash or liquid securities from the
borrower as collateral. The borrower must furnish additional collateral if the
market value of the loaned securities increases. Also, the borrower must pay the
Fund the equivalent of any dividends or interest received on the loaned
securities.
The Fund will reinvest cash collateral in securities that qualify as an
acceptable investment for the Fund. However, the Fund must pay interest to the
borrower for the use of cash collateral.
Loans are subject to termination at the option of the Fund or the borrower. The
Fund will not have the right to vote on securities while they are on loan, but
it will terminate a loan in anticipation of any important vote. The Fund may pay
administrative and custodial fees in connection with a loan and may pay a
negotiated portion of the interest earned on the cash collateral to a securities
lending agent or broker.
Securities lending activities are subject to interest rate risks and credit
risks.
INTER-FUND BORROWING AND LENDING ARRANGEMENTS
The Securities and Exchange Commission (SEC) has granted an exemption that
permits the Fund and all other funds advised by subsidiaries of Federated
Investors, Inc. (Federated funds) to lend and borrow money for certain temporary
purposes directly to and from other Federated funds. Participation in this
inter-fund lending program is voluntary for both borrowing and lending funds,
and an inter-fund loan is only made if it benefits each participating fund.
Federated administers the program according to procedures approved by the Fund's
Board of Trustees (Board) and the Board monitors the operation of the program.
Any inter-fund loan must comply with certain conditions set out in the
exemption, which are designed to assure fairness and protect all participating
funds.
For example, inter-fund lending is permitted only (a) to meet shareholder
redemption requests, and (b) to meet commitments arising from "failed" trades.
All inter-fund loans must be repaid in seven days or less. The Fund's
participation in this program must be consistent with its investment policies
and limitations, and must meet certain percentage tests. Inter- fund loans may
be made only when the rate of interest to be charged is more attractive to the
lending fund than market-competitive rates on overnight repurchase agreements
(Repo Rate) and more attractive to the borrowing fund than the rate of interest
that would be charged by an unaffiliated bank for short-term borrowings (Bank
Loan Rate), as determined by the Board. The interest rate imposed on inter-fund
loans is the average of the Repo Rate and the Bank Loan Rate.
ASSET COVERAGE
In order to secure its obligations in connection with special transactions, the
Fund will either own the underlying securities or set aside readily marketable
securities with a value that equals or exceeds the Fund's obligations. Unless
the Fund has other readily marketable assets to set aside, it cannot trade
assets used to secure such obligations without terminating a special
transaction. This may cause the Fund to miss favorable trading opportunities or
to realize losses on special transactions.
INVESTMENT RISKS
There are many factors which may affect an investment in the Fund. The Fund's
principal risks are described in its prospectus. Additional risk factors are
outlined below.
CREDIT RISK
Credit risk is the possibility that an issuer will default (fails to repay
interest and principal when due). If an issuer defaults, the Fund may lose
money. Money market funds try to minimize this risk by purchasing higher quality
securities.
LEVERAGE RISK
Leverage risk is created when an investment exposes the Fund to a level of risk
that exceeds the amount invested. Changes in the value of such an investment
magnify the Fund's risk of loss and potential for gain.
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 may be necessary for clearance of
purchase and sales of securities.
ISSUING SENIOR SECURITIES
The Fund will not issue senior securities.
BORROWING MONEY
The Fund will not borrow money except as a temporary measure for extraordinary
or emergency purposes and then only in amounts not in excess of 5% of the value
of its total assets or in an amount up to one-third of the value of its total
assets, including the amount borrowed, in order to meet redemption requests
without immediately selling portfolio instruments. Any such borrowings would not
be collateralized.
PLEDGING ASSETS
The Fund will not pledge securities except that it may enter into reverse
repurchase agreements permitted by its investment objective and policies.
LENDING CASH OR SECURITIES
The Fund will not lend any assets, except portfolio securities up to one- third
of the value of its total assets. This shall not prevent the Fund from
purchasing or holding U.S. government securities, including repurchase
agreements, permitted by its investment objective and policies.
INVESTING IN COMMODITIES
The Fund may not purchase or sell physical commodities, provided that the Fund
may purchase securities of companies that deal in commodities. For purposes of
this restriction, investments in transactions involving futures contracts and
options, forward currency contracts, swap transactions and other financial
contracts that settle by payment of cash are not deemed to be investments in
commodities.
INVESTING IN REAL ESTATE
The Fund may not purchase or sell real estate, provided that this restriction
does not prevent the Fund from investing in issuers which invest, deal, or
otherwise engage in transactions in real estate or interests therein, or
investing in securities that are secured by real estate or interests therein.
The Fund may exercise its rights under agreements relating to such securities,
including the right to enforce security interests and to hold real estate
acquired by reason of such enforcement until that real estate can be liquidated
in an orderly manner.
UNDERWRITING
The Fund may not underwrite the securities of other issuers, except that the
Fund may engage in transactions involving the acquisition, disposition or resale
of its portfolio securities, under circumstances where it may be considered to
be an underwriter under the Securities Act of 1933.
THE ABOVE LIMITATIONS CANNOT BE CHANGED UNLESS AUTHORIZED BY THE BOARD AND BY
THE "VOTE OF A MAJORITY OF ITS OUTSTANDING VOTING SECURITIES," AS DEFINED BY THE
INVESTMENT COMPANY ACT OF 1940 (1940 ACT). THE FOLLOWING LIMITATIONS, HOWEVER,
MAY BE CHANGED BY THE BOARD WITHOUT SHAREHOLDER APPROVAL. SHAREHOLDERS WILL BE
NOTIFIED BEFORE ANY MATERIAL CHANGE IN THESE LIMITATIONS BECOMES EFFECTIVE.
CONCENTRATION OF INVESTMENTS
The Fund will not invest 25% or more of the value of its total assets in any one
industry. However, 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
agreements collateralized by such U.S. government securities. The U.S.
government is not considered to be an industry.
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 ILLIQUID SECURITIES
The Fund will not invest more than 10% of the value of its net assets in
illiquid securities including certain restricted securities not determined to be
liquid under criteria established by the Board and repurchase agreements
providing for settlement in more than seven days after notice.
INVESTING FOR CONTROL
The Fund will not invest in securities of a company for the purpose of
exercising control or management.
For purposes of the diversification limitation, the Fund considers certificates
of deposit and demand and time deposits issued by a U.S. branch of a domestic
bank or savings association 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.
REGULATORY COMPLIANCE
The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in the
prospectus and this SAI, in order to comply with applicable laws and
regulations, including the provisions of and regulations under the 1940 Act. In
particular, the Fund will comply with the various requirements of Rule 2a-7 (the
Rule), which regulates money market mutual funds. The Fund will determine the
effective maturity of its investments according to the Rule. The Fund may change
these operational policies to reflect changes in the laws and regulations
without the approval of its shareholders.
DETERMINING MARKET VALUE OF SECURITIES
The Board has 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 the Rule. Under the Rule,
the Board 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 Board 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 Board will take any steps it considers 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.
How is the Fund Sold?
Under the Distributor's Contract with the Fund, the Distributor (Federated
Securities Corp.) offers Shares on a continuous, best-efforts basis.
SHAREHOLDER SERVICES
The Fund may pay Federated Shareholder Services Company, a subsidiary of
Federated Investors, Inc. (Federated), for providing shareholder services and
maintaining shareholder accounts. Federated Shareholder Services Company may
select others to perform these services for their customers and may pay them
fees.
SUPPLEMENTAL PAYMENTS
Investment professionals may be paid fees out of the assets of the Distributor
and/or Federated Shareholder Services Company (but not out of Fund assets). The
Distributor and/or Federated Shareholder Services Company may be reimbursed by
the Adviser or its affiliates.
Investment professionals receive such fees for providing distribution-related or
shareholder services such as sponsoring sales, providing sales literature,
conducting training seminars for employees, and engineering sales-related
computer software programs and systems. Also, investment professionals may be
paid cash or promotional incentives, such as reimbursement of certain expenses
relating to attendance at informational meetings about the Fund or other special
events at recreational-type facilities, or items of material value. These
payments will be based upon the amount of Shares the investment professional
sells or may sell and/or upon the type and nature of sales or marketing support
furnished by the investment professional.
Subaccounting Services
Certain investment professionals may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements. The
transfer agent may charge a fee based on the level of subaccounting services
rendered. Investment professionals holding Shares in a fiduciary, agency,
custodial or similar capacity 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 that may be related to the ownership of Shares.
This information should, therefore, be read together with any agreement between
the customer and the investment professional about the services provided, the
fees charged for those services, and any restrictions and limitations imposed.
Redemption in Kind
Although the Fund intends to pay Share redemptions in cash, it reserves the
right, as described below, to pay the redemption price in whole or in part by a
distribution of the Fund's portfolio securities.
Because the Fund has elected to be governed by Rule 18f-1 under the 1940 Act,
the Fund is obligated to pay Share redemptions to any one shareholder in cash
only up to the lesser of $250,000 or 1% of the net assets represented by such
Share class during any 90-day period.
Any Share redemption payment greater than this amount will also be in cash
unless the Fund's Board determines that payment should be in kind. In such a
case, the Fund will pay all or a portion of the remainder of the redemption in
portfolio securities, valued in the same way as the Fund determines its NAV. The
portfolio securities will be selected in a manner that the Fund's Board deems
fair and equitable and, to the extent available, such securities will be readily
marketable.
Redemption in kind is not as liquid as a cash redemption. If redemption is made
in kind, shareholders receiving the portfolio securities and selling them before
their maturity could receive less than the redemption value of the securities
and could incur certain transaction costs.
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.
In the unlikely event a shareholder is held personally liable for the Trust
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.
Account and Share Information
VOTING RIGHTS
Each share of the Fund gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All Shares of the Fund have
equal voting rights.
As of February 1, 2000, the following shareholders owned of record,
beneficially, or both, 5% or more of outstanding Shares: ISTCO, Belleville,
Illinois, owned approximately 43,455,753.58 shares (15.79%); ONEDUN, Dundee,
Illinois, owned approximately 30,749,950.03 shares (11.17%).
Tax Information
FEDERAL INCOME TAX
The Fund intends to meet requirements of Subchapter M of the Internal Revenue
Code applicable to regulated investment companies. If these requirements are not
met, it will not receive special tax treatment and will pay federal income tax.
The Fund will be treated as a single, separate entity for federal income tax
purposes so that income earned and capital gains and losses realized by the
Trust's other portfolios will be separate from those realized by the Fund.
Who Manages and Provides Services to the Fund?
BOARD OF TRUSTEES
The Board is responsible for managing the Trust's business affairs and for
exercising all the Trust's powers except those reserved for the shareholders.
Information about each Board member is provided below and includes each
person's: name, address, birth date, present position(s) held with the Trust,
principal occupations for the past five years and positions held prior to the
past five years, total compensation received as a Trustee from the Trust for its
most recent fiscal year, and the total compensation received from the Federated
Fund Complex for the most recent calendar year. The Trust is comprised of 40
funds and the Federated Fund Complex is comprised of 43 investment companies,
whose investment advisers are affiliated with the Fund's Adviser.
As of February 1, 2000 the Fund's Board and Officers as a group owned less than
1% of the Fund's outstanding Shares.
<TABLE>
<CAPTION>
NAME
BIRTH DATE AGGREGATE
TOTAL COMPENSATION
ADDRESS PRINCIPAL OCCUPATIONS COMPENSATION
FROM TRUST
POSITION WITH TRUST FOR PAST FIVE YEARS FROM FUND
AND FUND COMPLEX
<S> <C> <C>
<C>
JOHN F. DONAHUE*+# Chief Executive Officer $0
$0 for the Trust and
Birth Date: July 28, 1924 and Director or Trustee of
43 other investment
Federated Investors Tower the Federated Fund
companies in the
1001 Liberty Avenue Complex; Chairman and
Fund Complex
Pittsburgh, PA Director,
Federated
CHAIRMAN AND TRUSTEE Investors, Inc.; Chairman,
Federated
Investment
Management Company,
Federated
Global
Investment
Management
Corp. and
Passport
Research, Ltd.; formerly:
Trustee,
Federated
Investment
Management
Company and Chairman
and
Director,
Federated
Investment Counseling.
THOMAS G. BIGLEY Director or Trustee of $753.36
$116,760.63 for the
Birth Date: February 3, 1934 the Federated Fund
Trust and 43 other
15 Old Timber Trail Complex; Director, Member
investment companies
Pittsburgh, PA of Executive Committee,
in the Fund Complex
TRUSTEE Children's Hospital
of
Pittsburgh; Director,
Robroy Industries, Inc.
(coated steel
conduits/
computer
storage
equipment); formerly:
Senior Partner, Ernst
&
Young LLP; Director,
MED
3000 Group, Inc.
(physician
practice
management); Director,
Member of
Executive
Committee, University
of
Pittsburgh.
JOHN T. CONROY, JR. Director or Trustee of the $828.81
$128,455.37 for the
Birth Date: June 23, 1937 Federated Fund Complex;
Trust and 43 other
Grubb & Ellis/Investment President, Investment
investment companies
Properties Corporation Properties Corporation;
in the Fund Complex
3201 Tamiami Trail North Senior Vice President,
Naples, FL John R. Wood
and
TRUSTEE Associates, Inc.,
Realtors; Partner
or
Trustee in private
real
estate ventures
in
Southwest Florida;
formerly: President,
Naples
Property
Management, Inc.
and
Northgate
Village
Development Corporation.
NICHOLAS P. CONSTANTAKIS Director or Trustee of the $65.68
$73,191.21 for the
Birth Date: September 3, 1939 Federated Fund Complex;
Trust and 37 other
175 Woodshire Drive Director, Michael Baker
investment companies
Pittsburgh, PA Corporation (engineering,
in the Fund Complex
TRUSTEE construction,
operations
and technical services);
formerly: Partner,
Andersen Worldwide SC.
JOHN F. CUNNINGHAM Director or Trustee of some $447.79
$93,190.48 for the
Birth Date: March 5, 1943 of the Federated Fund
Trust and 37 other
353 El Brillo Way Complex; Chairman,
investment companies
Palm Beach, FL President and Chief
in the Fund Complex
TRUSTEE Executive Officer,
Cunningham & Co., Inc.
(strategic
business
consulting);
Trustee
Associate, Boston College;
Director, Iperia Corp.
(communications/software);
formerly: Director,
Redgate Communications
and
EMC Corporation
(computer
storage systems).
Previous Positions:
Chairman of the Board
and
Chief Executive Officer,
Computer Consoles, Inc.;
President and
Chief
Operating Officer,
Wang
Laboratories; Director,
First National Bank
of
Boston; Director,
Apollo
Computer, Inc.
LAWRENCE D. ELLIS, M.D.* Director or Trustee of the $753.36
$116,760.63 for the
Birth Date: October 11, 1932 Federated Fund Complex;
Trust and 43 other
3471 Fifth Avenue Professor of Medicine,
investment companies
Suite 1111 University of Pittsburgh;
in the Fund Complex
Pittsburgh, PA Medical Director,
TRUSTEE University of
Pittsburgh
Medical Center - Downtown;
Hematologist,
Oncologist
and Internist,
University
of Pittsburgh
Medical
Center; Member,
National
Board of Trustees,
Leukemia Society
of
America.
PETER E. MADDEN Director or Trustee of the $630.11
$109,153.60 for the
Birth Date: March 16, 1942 Federated Fund Complex;
Trust and 43 other
One Royal Palm Way formerly: Representative,
investment companies
100 Royal Palm Way Commonwealth of
in the Fund Complex
Palm Beach, FL Massachusetts
General
TRUSTEE Court; President,
State
Street Bank and
Trust
Company and State
Street
Corporation.
Previous Positions:
Director, VISA USA and
VISA
International;
Chairman
and Director,
Massachusetts
Bankers
Association; Director,
Depository
Trust
Corporation; Director,
The
Boston Stock Exchange.
<CAPTION>
NAME
BIRTH DATE AGGREGATE
TOTAL COMPENSATION
ADDRESS PRINCIPAL OCCUPATIONS COMPENSATION
FROM TRUST
POSITION WITH TRUST FOR PAST FIVE YEARS FROM FUND
AND FUND COMPLEX
<S> <C> <C>
<C>
CHARLES F. MANSFIELD, JR. Director or Trustee of some $462.48
$102,573.91 for the
Birth Date: April 10, 1945 of the Federated Fund
Trust and 40 other
80 South Road Complex; Executive
investment companies
Westhampton Beach, NY Vice President, Legal and
in the Fund Complex
TRUSTEE External Affairs,
Dugan
Valva Contess, Inc.
(marketing,
communications,
technology
and consulting); formerly:
Management Consultant.
Previous Positions:
Chief
Executive Officer,
PBTC
International Bank;
Partner, Arthur Young
&
Company (now Ernst &
Young
LLP); Chief
Financial
Officer of Retail
Banking
Sector, Chase
Manhattan
Bank; Senior
Vice
President, Marine
Midland
Bank; Vice President,
Citibank;
Assistant
Professor of Banking
and
Finance, Frank G.
Zarb
School of Business,
Hofstra University.
JOHN E. MURRAY, JR., J.D., S.J.D. # Director or Trustee of $828.81
$128,455.37 for the
Birth Date: December 20, 1932 the Federated Fund
Trust and 43 other
President, Duquesne University Complex; President, Law
investment companies
Pittsburgh, PA Professor, Duquesne
in the Fund Complex
TRUSTEE University;
Consulting
Partner, Mollica & Murray;
Director, Michael
Baker
Corp. (engineering,
construction,
operations
and technical services).
Previous Positions:
Dean
and Professor of Law,
University of
Pittsburgh
School of Law; Dean
and
Professor of Law,
Villanova
University School of Law.
MARJORIE P. SMUTS Director or Trustee of the $753.36
$116,760.63 for the
Birth Date: June 21, 1935 Federated Fund Complex;
Trust and 43 other
4905 Bayard Street Public Relations/
investment companies
Pittsburgh, PA Marketing/Conference
in the Fund Complex
TRUSTEE Planning.
Previous Positions:
National Spokesperson,
Aluminum Company
of
America;
television
producer; business owner.
JOHN S. WALSH Director or Trustee of some $447.79
$94,536.85 for the
Birth Date: November 28, 1957 of the Federated Fund
Trust and 39 other
2007 Sherwood Drive Complex; President and
investment companies
Valparaiso, IN Director, Heat Wagon, Inc.
in the Fund Complex
TRUSTEE (manufacturer
of
construction
temporary
heaters); President
and
Director,
Manufacturers
Products, Inc.
(distributor of
portable
construction heaters);
President, Portable
Heater
Parts, a division
of
Manufacturers Products,
Inc.; Director, Walsh
&
Kelly, Inc. (heavy
highway
contractor); formerly:
Vice President, Walsh
&
Kelly, Inc.
J. CHRISTOPHER DONAHUE*+ President or Executive $0
$0 for the Trust and
Birth Date: April 11, 1949 Vice President of the
30 other investment
Federated Investors Tower Federated Fund Complex;
companies in the
1001 Liberty Avenue Director or Trustee of some
Fund Complex
Pittsburgh, PA of the Funds in
the
PRESIDENT AND TRUSTEE Federated Fund Complex;
President, Chief
Executive
Officer and Director,
Federated Investors, Inc.;
President, Chief
Executive
Officer and Trustee,
Federated
Investment
Management Company;
Trustee,
Federated
Investment Counseling;
President, Chief
Executive
Officer and Director,
Federated
Global
Investment
Management
Corp.; President and
Chief
Executive Officer,
Passport Research, Ltd.;
Trustee,
Federated
Shareholder
Services
Company; Director,
Federated
Services
Company; formerly:
President,
Federated
Investment Counseling.
EDWARD C. GONZALES President, Executive Vice $0
$0 for the Trust and
Birth Date: October 22, 1930 President and Treasurer of
42 other investment
Federated Investors Tower some of the Funds in the
companies in the
1001 Liberty Avenue Federated Fund Complex;
Fund Complex
Pittsburgh, PA Vice Chairman,
Federated
EXECUTIVE VICE PRESIDENT Investors, Inc.; Trustee,
Federated
Administrative
Services; formerly:
Trustee or Director of
some
of the Funds in
the
Federated Fund Complex;
CEO and Chairman,
Federated
Administrative
Services; Vice President,
Federated
Investment
Management Company,
Federated
Investment
Counseling,
Federated
Global
Investment
Management Corp.
and
Passport Research, Ltd.;
Director and
Executive
Vice President,
Federated
Securities Corp.;
Director,
Federated
Services Company; Trustee,
Federated
Shareholder
Services Company.
JOHN W. MCGONIGLE Executive Vice President $0
$0 for the Trust and
Birth Date: October 26, 1938 and Secretary of the
43 other investment
Federated Investors Tower Federated Fund Complex;
companies in the
1001 Liberty Avenue Executive Vice President,
Fund Complex
Pittsburgh, PA Secretary and Director,
EXECUTIVE VICE PRESIDENT Federated Investors, Inc.;
AND SECRETARY formerly: Trustee,
Federated
Investment
Management Company
and
Federated
Investment
Counseling; Director,
Federated
Global
Investment
Management
Corp, Federated
Services
Company and
Federated
Securities Corp.
RICHARD J. THOMAS Treasurer of the Federated $0
$0 for the Trust and
Birth Date: June 17, 1954 Fund Complex; Vice
43 other investment
Federated Investors Tower President-Funds Financial
companies in the
1001 Liberty Avenue Services Division,
Fund Complex
Pittsburgh, PA Federated Investors, Inc.;
TREASURER formerly:
various
management
positions
within Funds
Financial
Services Division
of
Federated Investors, Inc.
RICHARD B. FISHER President or Vice $0
$0 for the Trust and
Birth Date: May 17, 1923 President of some of the
41 other investment
Federated Investors Tower Funds in the Federated Fund
companies in the
1001 Liberty Avenue Complex; Vice Chairman,
Fund Complex
Pittsburgh, PA Federated Investors, Inc.;
VICE PRESIDENT Chairman,
Federated
Securities Corp.;
formerly: Director
or
Trustee of some of
the
Funds in the Federated
Fund
Complex,; Executive
Vice
President,
Federated
Investors, Inc.
and
Director and
Chief
Executive Officer,
Federated Securities Corp.
<CAPTION>
NAME
BIRTH DATE AGGREGATE
TOTAL COMPENSATION
ADDRESS PRINCIPAL OCCUPATIONS COMPENSATION
FROM TRUST
POSITION WITH TRUST FOR PAST FIVE YEARS FROM FUND
AND FUND COMPLEX
<S> <C> <C>
<C>
WILLIAM D. DAWSON, III Chief Investment Officer $0
$0 for the Trust and
Birth Date: March 3, 1949 of this Fund and various
27 other investment
Federated Investors Tower other Funds in the
companies in the
1001 Liberty Avenue Federated Fund Complex;
Fund Complex
Pittsburgh, PA Executive Vice President,
CHIEF INVESTMENT OFFICER Federated
Investment
Counseling,
Federated
Global
Investment
Management Corp.,
Federated
Investment
Management Company
and
Passport Research, Ltd.;
Registered Representative,
Federated
Securities
Corp.; Portfolio Manager,
Federated
Administrative
Services; Vice President,
Federated Investors, Inc.;
formerly: Executive
Vice
President and Senior
Vice
President,
Federated
Investment
Counseling
Institutional
Portfolio
Management
Services
Division; Senior
Vice
President,
Federated
Investment
Management
Company and
Passport
Research, Ltd.
DEBORAH A. CUNNINGHAM Deborah A. Cunningham is $0
$0 for the Trust and
Birth Date: September 15, 1959 Vice President of the 3
other investment
Federated Investors Tower Trust. Ms. Cunningham
companies in the
1001 Liberty Avenue joined Federated in 1981
Fund Complex
Pittsburgh, PA and has been a
Senior
VICE PRESIDENT Portfolio Manager and
a
Senior Vice President
of
the Fund's Adviser
since
1997. Ms.
Cunningham
served as a
Portfolio
Manager and a
Vice
President of the
Adviser
from 1993 through 1996.
Ms. Cunningham is
a
Chartered
Financial
Analyst and received
her
M.B.A. in Finance
from
Robert Morris College.
MARY JO OCHSON Ms. Ochson joined $0
$0 for the Trust and
Birth Date: September 12, 1953 Federated in 1982 and has 4
other investment
Federated Investors Tower been a Senior Portfolio
companies in the
1001 Liberty Avenue Manager and a Senior Vice
Fund Complex
Pittsburgh, PA President of the
Fund's
VICE PRESIDENT Adviser since 1996.
From
1988 through 1995,
Ms. Ochson served as
a
Portfolio Manager and
a
Vice President of
the
Fund's Adviser. Ms.
Ochson
is a Chartered
Financial
Analyst and received
her
M.B.A. in Finance from
the
University of Pittsburgh.
</TABLE>
* An asterisk denotes a Trustee who is deemed to be an interested person as
defined in the 1940 Act.
# A pound sign denotes a Member of the Board's Executive Committee, which
handles the Board's responsibilities between its meetings.
+ Mr. Donahue is the father of J. Christopher Donahue, President and
Trustee of the Trust.
INVESTMENT ADVISER
The Adviser conducts investment research and makes investment decisions for the
Fund.
The Adviser is a wholly owned subsidiary of Federated.
The Adviser shall not be liable to the Trust or any Fund shareholder 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 the Trust.
OTHER RELATED SERVICES
Affiliates of the Adviser may, from time to time, provide certain electronic
equipment and software to institutional customers in order to facilitate the
purchase of Fund Shares offered by the Distributor.
CODE OF ETHICS RESTRICTIONS ON PERSONAL TRADING
As required by SEC rules, the Fund, its Adviser, and its Distributor have
adopted codes of ethics. These codes govern securities trading activities of
investment personnel, Fund Trustees, and certain other employees. Although they
do permit these people to trade in securities, including those that the Fund
could buy, they also contain significant safeguards designed to protect the Fund
and its shareholders from abuses in this area, such as requirements to obtain
prior approval for, and to report, particular transactions.
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. 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. In selecting among firms believed to meet these
criteria, the Adviser may give consideration to those firms which have sold or
are selling Shares of the Fund and other funds distributed by the Distributor
and its affiliates. The Adviser makes decisions on portfolio transactions and
selects brokers and dealers subject to review by the Fund's Board.
Investment decisions for the Fund are made independently from those of other
accounts managed by the Adviser. When the Fund and one or more of those accounts
invests in, or disposes of, the same security, available investments or
opportunities for sales will be allocated among the Fund and the account(s) in a
manner believed by the Adviser to be equitable. While the coordination and
ability to participate in volume transactions may benefit the Fund, it is
possible that this procedure could adversely impact the price paid or received
and/or the position obtained or disposed of by the Fund.
ADMINISTRATOR
Federated Services Company, a subsidiary of Federated, provides administrative
personnel and services (including certain legal and financial reporting
services) necessary to operate the Fund. Federated Services Company provides
these at the following annual rate of the average aggregate daily net assets of
all Federated Funds as specified below:
<TABLE>
<CAPTION>
AVERAGE AGGREGATE
MAXIMUM DAILY NET ASSETS
ADMINISTRATIVE FEE OF THE FEDERATED FUNDS
<S> <C>
0.150 of 1% on the first $250 million
0.125 of 1% on the next $250 million
0.100 of 1% on the next $250 million
0.075 of 1% on assets in excess of $750 million
</TABLE>
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio. Federated Services Company may voluntarily waive a
portion of its fee and may reimburse the Fund for expenses.
Federated Services Company also provides certain accounting and recordkeeping
services with respect to the Fund's portfolio investments for a fee based on
Fund assets plus out-of-pocket expenses.
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, through its registered transfer agent subsidiary,
Federated Shareholder Services Company, maintains all necessary shareholder
records. The Fund pays the transfer agent a fee based on the size, type and
number of accounts and transactions made by shareholders.
INDEPENDENT AUDITORS
The independent auditors for the Fund, Ernst & Young LLP, plan and perform their
audit so that it may provide an opinion as to whether the Fund's financial
statements and financial highlights are free of material misstatement.
FEES PAID BY THE FUND FOR SERVICES
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31 1999 1998 1997
<S> <C> <C> <C>
Adviser Fee Earned $1,329,591 $1,502,252 $2,113,857
Adviser Fee Reduction 466,068 468,786 666,937
Administrative Fee 250,608 283,175 398,950
Shareholder Services Fee 166,199
</TABLE>
How Does the Fund Measure Performance?
The Fund may advertise Share performance by using the SEC's standard method for
calculating performance applicable to all mutual funds. The SEC also permits
this standard performance information to be accompanied by non- standard
performance information.
The performance of Shares depends upon such variables as: portfolio quality;
average portfolio maturity; type and value of portfolio securities; changes in
interest rates; changes or differences in the Fund's or any class of Shares'
expenses; and various other factors.
Share performance fluctuates on a daily basis largely because net earnings
fluctuate daily. Both net earnings and offering price per Share are factors in
the computation of yield and total return.
AVERAGE ANNUAL TOTAL RETURNS AND YIELD
Total returns are given for the one-year, five-year and ten-year periods ended
December 31, 1999.
Yield and Effective Yield are given for the 7-day period ended December 31,
1999.
<TABLE>
<CAPTION>
7-DAY PERIOD 1 YEAR 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Total Return 4.77% 5.20% 5.05%
Yield 5.00%
Effective Yield 5.12%
</TABLE>
TOTAL RETURN
Total return represents the change (expressed as a percentage) in the value of
Shares over a specific period of time, and includes the investment of income and
capital gains distributions.
The average annual total return for Shares 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
computed by multiplying the number of Shares owned at the end of the period by
the NAV 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, less any applicable sales charge, adjusted over the
period by any additional Shares, assuming the annual reinvestment of all
dividends and distributions.
YIELD AND EFFECTIVE YIELD
The yield of Shares is based upon the seven days ending on the day of the
calculation, called the "base period." This yield is calculated 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. The effective yield is calculated by compounding the unannualized
base-period return by: adding one to the base-period return, raising the sum to
the 365/7th power; and subtracting one from the result.
To the extent investment professionals and broker/dealers charge fees in
connection with services provided in conjunction with an investment in Shares,
the Share performance is lower for shareholders paying those fees.
PERFORMANCE COMPARISONS
Advertising and sales literature may include:
* references to ratings, rankings, and financial publications and/or
performance comparisons of Shares to certain indices;
* charts, graphs and illustrations using the Fund's returns, or returns in
general, that demonstrate investment concepts such as tax-deferred compounding,
dollar-cost averaging and systematic investment;
* discussions of economic, financial and political developments and their impact
on the securities market, including the portfolio manager's views on how such
developments could impact the Fund; and
* information about the mutual fund industry from sources such as the Investment
Company Institute.
The Fund may compare its performance, or performance for the types of securities
in which it invests, to a variety of other investments, including federally
insured bank products such as bank savings accounts, certificates of deposit,
and Treasury bills.
The Fund may quote information from reliable sources regarding individual
countries and regions, world stock exchanges, and economic and demographic
statistics.
You may use financial publications and/or indices to obtain a more complete view
of Share performance. When comparing performance, you should consider all
relevant factors such as the composition of the index used, prevailing market
conditions, portfolio compositions of other funds, and methods used to value
portfolio securities and compute offering price. The financial publications
and/or indices which the Fund uses in advertising may include:
LIPPER ANALYTICAL SERVICES, INC.
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.
IBC/DONOGHUE'S MONEY FUND REPORT
IBC/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
Money, a monthly magazine, regularly ranks money market funds in various
categories based on the latest available seven-day effective yield.
Who is Federated Investors, Inc.?
Federated is dedicated to meeting investor needs by making structured,
straightforward and consistent investment decisions. Federated investment
products have a history of competitive performance and have gained the
confidence of thousands of financial institutions and individual investors.
Federated's disciplined investment selection process is rooted in sound
methodologies backed by fundamental and technical research. At Federated,
success in investment management does not depend solely on the skill of a single
portfolio manager. It is a fusion of individual talents and state- of-the-art
industry tools and resources. Federated's investment process involves teams of
portfolio managers and analysts, and investment decisions are executed by
traders who are dedicated to specific market sectors and who handle trillions of
dollars in annual trading volume.
FEDERATED FUNDS OVERVIEW
MUNICIPAL FUNDS
In the municipal sector, as of December 31, 1999, Federated managed 12 bond
funds with approximately $2.0 billion in assets and 24 money market funds with
approximately $13.1 billion in total assets. In 1976, Federated introduced one
of the first municipal bond mutual funds in the industry and is now one of the
largest institutional buyers of municipal securities. The Funds may quote
statistics from organizations including The Tax Foundation and the National
Taxpayers Union regarding the tax obligations of Americans.
EQUITY FUNDS
In the equity sector, Federated has more than 29 years' experience. As of
December 31, 1999, Federated managed 53 equity funds totaling approximately
$18.3 billion in assets across growth, value, equity income, international,
index and sector (i.e. utility) styles. Federated's value-oriented management
style combines quantitative and qualitative analysis and features a structured,
computer-assisted composite modeling system that was developed in the 1970s.
CORPORATE BOND FUNDS
In the corporate bond sector, as of December 31, 1999, Federated managed 13
money market funds and 29 bond funds with assets approximating $35.7 billion and
$7.7 billion, respectively. Federated's corporate bond decision making-based on
intensive, diligent credit analysis-is backed by over 27 years of experience in
the corporate bond sector. In 1972, Federated introduced one of the first
high-yield bond funds in the industry. In 1983, Federated was one of the first
fund managers to participate in the asset backed securities market, a market
totaling more than $209 billion.
GOVERNMENT FUNDS
In the government sector, as of December 31, 1999, Federated managed 9 mortgage
backed, 11 government/agency and 16 government money market mutual funds, with
assets approximating $4.7 billion, $1.6 billion and $34.1 billion, respectively.
Federated trades approximately $450 million in U.S. government and mortgage
backed securities daily and places approximately $25 billion in repurchase
agreements each day. Federated introduced the first U.S. government fund to
invest in U.S. government bond securities in 1969. Federated has been a major
force in the short- and intermediate-term government markets since 1982 and
currently manages approximately $43.8 billion in government funds within these
maturity ranges.
MONEY MARKET FUNDS
In the money market sector, Federated gained prominence in the mutual fund
industry in 1974 with the creation of the first institutional money market fund.
Simultaneously, the company pioneered the use of the amortized cost method of
accounting for valuing shares of money market funds, a principal means used by
money managers today to value money market fund shares. Other innovations
include the first institutional tax-free money market fund. As of December 31,
1999, Federated managed more than $83.0 billion in assets across 54 money market
funds, including 16 government, 13 prime, 24 municipal and 1 euro-denominated
with assets approximating $34.1 billion, $35.7 billion, $13.1 billion and $115
million, respectively.
The Chief Investment Officers responsible for oversight of the various
investment sectors within Federated are: U.S. equity and high yield-
J. Thomas Madden; U.S. fixed income-William D. Dawson, III; and global
equities and fixed income-Henry A. Frantzen. The Chief Investment Officers
are Executive Vice Presidents of the Federated advisory companies.
MUTUAL FUND MARKET
Thirty-seven percent of American households are pursuing their financial goals
through mutual funds. These investors, as well as businesses and institutions,
have entrusted over $5 trillion to the more than 7,300 funds available,
according to the Investment Company Institute.
FEDERATED CLIENTS OVERVIEW
Federated distributes mutual funds through its subsidiaries for a variety of
investment purposes. Specific markets include:
INSTITUTIONAL CLIENTS
Federated meets the needs of approximately 1,160 institutional clients
nationwide by managing and servicing separate accounts and mutual funds for a
variety of purposes, including defined benefit and defined contribution
programs, cash management, and asset/liability management. Institutional clients
include corporations, pension funds, tax exempt entities,
foundations/endowments, insurance companies, and investment and financial
advisers. The marketing effort to these institutional clients is headed by John
B. Fisher, President, Institutional Sales Division, Federated Securities Corp.
BANK MARKETING
Other institutional clients include more than 1,600 banks and trust
organizations. Virtually all of the trust divisions of the top 100 bank holding
companies use Federated Funds in their clients' portfolios. The marketing effort
to trust clients is headed by Timothy C. Pillion, Senior Vice President, Bank
Marketing & Sales.
BROKER/DEALERS AND BANK BROKER/DEALER SUBSIDIARIES
Federated Funds are available to consumers through major brokerage firms
nationwide-we have over 2,200 broker/dealer and bank broker/dealer relationships
across the country-supported by more wholesalers than any other mutual fund
distributor. Federated's service to financial professionals and institutions has
earned it high ratings in several surveys performed by DALBAR, Inc. DALBAR is
recognized as the industry benchmark for service quality measurement. The
marketing effort to these firms is headed by James F. Getz, President,
Broker/Dealer Sales Division, Federated Securities Corp.
Addresses
FEDERATED SHORT-TERM U.S. GOVERNMENT TRUST
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
DISTRIBUTOR
Federated Securities Corp.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
INVESTMENT ADVISER
Federated Investment Management Company
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
CUSTODIAN
State Street Bank and Trust Company
P.O. Box 8600
Boston, MA 02266-8600
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600
INDEPENDENT AUDITORS
Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116-5072
PROSPECTUS
Money Market Management
A Portfolio of Money Market Obligations Trust
A money market mutual fund seeking current income consistent with stability of
principal by investing primarily in a portfolio of short-term, high- quality
fixed income securities issued by banks, corporations and the U.S. government.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not
approved or disapproved these securities or passed upon the adequacy of this
prospectus. Any representation to the contrary is a criminal offense.
NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE
FEBRUARY 29, 2000
CONTENTS
Risk/Return Summary 1
What are the Fund's Fees and Expenses? 3
What are the Fund's Investment Strategies? 4
What are the Principal Securities in Which the
Fund Invests? 4
What are the Specific Risks of Investing in the Fund? 6
What Do Shares Cost? 6
How is the Fund Sold? 7
How to Purchase Shares 8
How to Redeem and Exchange Shares 9
Account and Share Information 12
Who Manages the Fund? 12
Financial Information 13
Report of Ernst & Young LLP, Independent Auditors 25
Risk/Return Summary
WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
The Fund is a money market fund that seeks to maintain a stable net asset value
of $1.00 per share. The Fund's investment objective is current income consistent
with stability of principal. While there is no assurance that the Fund will
achieve its investment objective, it endeavors to do so by following the
strategies and policies described in this prospectus.
WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?
The Fund invests primarily in a portfolio of short-term, high-quality fixed
income securities issued by banks, corporations and the U.S. government. The
Fund will have a dollar-weighted average portfolio maturity of 90 days or less.
WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?
All mutual funds take investment risks. Therefore, even though the Fund is a
money market fund that seeks to maintain a stable net asset value, it is
possible to lose money by investing in the Fund.
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.
RISK/RETURN BAR CHART AND TABLE
The Bar Chart and Performance table below reflect historical performance data
for Money Market Management, Inc. (the "Former Fund") prior to its
reorganization into the Fund, which is a newly created portfolio of Money Market
Obligations Trust (the "Trust"). On the date of the reorganization, February 1,
2000, the Former Fund was dissolved and its net assets (inclusive of liabilities
recorded on the Former Fund's records) were transferred into the Fund.
[Graphic]
Historically, the Former Fund has maintained a constant $1.00 net asset value
per share. The bar chart shows the variability of the Former Fund's total
returns on a calendar year-end basis.
The Former Fund's shares were not sold subject to a sales charge (load). The
total returns displayed above are based upon net asset value.
Within the period shown in the Chart, the Former Fund's highest quarterly return
was 1.89% (quarter ended June 30, 1990). Its lowest quarterly return was 0.53%
(quarter ended June 30, 1993).
AVERAGE ANNUAL TOTAL RETURN TABLE
The following table represents the Former Fund's Average Annual Total Returns
for the calendar periods ended December 31, 1999.
<TABLE>
<CAPTION>
CALENDAR PERIOD FUND
<S> <C>
1 Year 4.23%
5 Years 4.65%
10 Years 4.46%
</TABLE>
The Former Fund's 7-Day Net Yield as of December 31, 1999 was 4.59%.
You may call the Fund at 1-800-341-7400 for the current 7-Day Net Yield.
Past performance does not necessarily predict future performance. This
information provides you with historical performance information so that you can
analyze whether the Fund's investment risks are balanced by its potential
returns.
What are the Fund's Fees and Expenses?
MONEY MARKET MANAGEMENT
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
the Shares of the Fund.
<TABLE>
<CAPTION>
SHAREHOLDER
FEES
<S>
<C>
Fees Paid Directly From Your Investment Maximum Sales Charge (Load) Imposed on
Purchases (as a percentage of offering price) None Maximum Deferred Sales Charge
(Load) (as a percentage of original purchase price or redemption proceeds, as
applicable) None Maximum Sales Charge (Load) Imposed on Reinvested Dividends
(and other Distributions) (as a percentage of offering price) None Redemption
Fee (as a percentage of amount redeemed, if applicable) None Exchange Fee None
ANNUAL FUND OPERATING
EXPENSES (Before
Waivers)
1
Expenses That are Deducted From Fund Assets (as percentage of average net
assets) Management Fee 2 0.50% Distribution (12b-1) Fee None Shareholder
Services Fee 3 0.25% Other Expenses 0.54% Total Annual Fund Operating Expenses 4
1.29% 1 Although not contractually obligated to do so, the adviser and
shareholder services provider expect to waive certain amounts during the fiscal
year ending December 31, 2000. These are shown below along with the net expenses
the Fund expects to actually pay for the fiscal year ending December 31, 2000.
Total Waivers of Fund
Expenses
0.18%
Total Actual Annual Fund
Operating Expenses (after
waivers)
1.11%
2 The adviser expects to voluntarily waive a portion of its management fee. The
adviser can terminate this anticipated voluntary waiver at any time. The
management fee paid by the Fund (after the anticipated voluntary waiver) is
expected to be 0.45% for the fiscal year ending December 31, 2000. 3 The
shareholder services provider expects to voluntarily waive a portion of its
shareholder services fee. The shareholder services provider can terminate this
expected voluntary waiver at any time. The shareholder services fee paid by the
Fund (after the anticipated voluntary waiver) is expected to be 0.12% for the
fiscal year ending December 31, 2000.
4 For the fiscal year ended December 31, 1999, prior to the reorganization of
the Former Fund as a portfolio of the Trust, the Total Annual Fund Operating
Expenses and Total Actual Annual Fund Operating Expenses were 1.32% and 1.12%,
respectively.
</TABLE>
EXAMPLE
This Example is intended to help you compare the cost of investing in the Fund's
Shares with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund's Shares for the time
periods indicated and then redeem all of your Shares at the end of those
periods. Expenses assuming no redemption are also shown. The Example also
assumes that your investment has a 5% return each year and that the Fund's
Shares operating expenses are BEFORE WAIVERS as shown in the table and remain
the same. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:
<TABLE>
<CAPTION>
<S> <C>
1 Year $ 131
3 Years $ 409
5 Years $ 708
10 Years $ 1,556
</TABLE>
What are the Fund's Investment Strategies?
The Fund invests primarily in a portfolio of short-term, high-quality fixed
income securities, issued by banks, corporations and the U.S. government,
maturing in 397 days or less. The Fund will have a dollar-weighted average
portfolio maturity of 90 days or less. The Fund's investment adviser (Adviser)
actively manages the Fund's portfolio, seeking to limit the credit risk taken by
the Fund and to select investments with enhanced yields.
The Adviser performs a fundamental credit analysis to develop an approved list
of issuers and securities that meet the Adviser's standard for minimal credit
risk. The Adviser monitors the credit risks of all portfolio securities on an
ongoing basis by reviewing periodic financial data and ratings of nationally
recognized statistical rating organizations (NRSROs).
The Adviser targets an average portfolio maturity based upon its interest rate
outlook. The Adviser formulates its interest rate outlook by analyzing a variety
of factors such as current and expected U.S. economic growth; current and
expected interest rates and inflation; and the Federal Reserve's monetrary
policy. The Adviser structures the portfolio by investing primarily in variable
rate demand instruments and commercial paper. The Adviser generally shortens the
portfolio's maturity when it expects interest rates to rise and extends the
maturity when it expects interest rates to fall. This strategy seeks to enhance
the returns from favorable interest rate changes and reduce the effect of
unfavorable changes.
What are the Principal Securities in Which the Fund Invests?
FIXED INCOME SECURITIES
Fixed income securities pay interest, dividends or distributions at a specified
rate. The rate may be a fixed percentage of the principal or adjusted
periodically. In addition, the issuer of a fixed income security must repay the
principal amount of the security, normally within a specified time. The
following describes the types of fixed income securities in which the Fund may
invest.
CORPORATE DEBT SECURITIES
Corporate debt securities are fixed income securities issued by businesses.
Notes, bonds, debentures and commercial paper are the most prevalent types of
corporate debt securities. The Fund may also purchase interests in bank loans to
companies.
COMMERCIAL PAPER
Commercial paper is an issuer's obligation with a maturity of less than nine
months. Companies typically issue commercial paper to pay for current
expenditures. Most issuers constantly reissue their commercial paper and use the
proceeds (or bank loans) to repay maturing paper. If the issuer cannot continue
to obtain liquidity in this fashion, its commercial paper may default.
DEMAND INSTRUMENTS
Demand instruments are corporate debt securities that the issuer must repay upon
demand. Other demand instruments require a third party, such as a dealer or
bank, to repurchase the security for its face value upon demand. The Fund treats
demand instruments as short-term securities, even though their stated maturity
may extend beyond one year.
BANK INSTRUMENTS
Bank instruments are unsecured interest bearing deposits with banks. Bank
instruments include bank accounts, time deposits, certificates of deposit
and banker's acceptances. Yankee instruments are denominated in
U.S. dollars and issued by U.S. branches of foreign banks. Eurodollar
instruments are denominated in U.S. dollars and issued by non-
U.S. branches of U.S. or foreign banks.
ASSET BACKED SECURITIES
Asset backed securities are payable from pools of obligations other than
mortgages. Most asset backed securities involve consumer or commercial debts
with maturities of less than ten years. However, almost any type of fixed income
assets (including other fixed income securities) may be used to create an asset
backed security. Asset backed securities may take the form of commercial paper,
notes or pass through certificates.
CREDIT ENHANCEMENT
Credit enhancement consists of an arrangement in which a company agrees to pay
amounts due on a fixed income security if the issuer defaults. In some cases the
company providing credit enhancement makes all payments directly to the security
holders and receives reimbursement from the issuer. Normally, the credit
enhancer has greater financial resources and liquidity than the issuer. For this
reason, the Adviser usually evaluates the credit risk of a fixed income security
based solely upon its credit enhancement.
REPURCHASE AGREEMENTS
Repurchase agreements are transactions in which the Fund buys a security from a
dealer or bank and agrees to sell the security back at a mutually agreed upon
time and price. The repurchase price exceeds the sale price, reflecting the
Fund's return on the transaction. This return is unrelated to the interest rate
on the underlying security. The Fund will enter into repurchase agreements only
with banks and other recognized financial institutions, such as securities
dealers, deemed creditworthy by the Adviser.
Repurchase agreements are subject to credit risks.
INVESTMENT RATINGS
The securities in which the Fund invests will be rated in one of the two highest
short-term rating categories by one or more NRSROs or be of comparable quality
to securities having such ratings.
What are the Specific Risks of Investing in the Fund?
CREDIT RISKS
Credit risk is the possibility that an issuer will default on a security by
failing to pay interest or principal when due. If an issuer defaults, the Fund
will lose money. Money market funds try to minimize this risk by purchasing
higher quality securities.
Many fixed income securities receive credit ratings from NRSROs such as Standard
& Poor's and Moody's Investors Services. These NRSROs assign ratings to
securities by assessing the likelihood of issuer default. Lower credit ratings
correspond to higher credit risk. If a security has not received a rating, the
Fund must rely entirely upon the Adviser's credit assessment.
Credit risk includes the possibility that a party to a transaction involving the
Fund will fail to meet its obligations. This could cause the Fund to lose the
benefit of the transaction or prevent the Fund from selling or buying other
securities to implement its investment strategy.
INTEREST RATE RISKS
Prices of fixed income securities rise and fall in response to changes in the
interest rate paid by similar securities. Generally, when interest rates rise,
prices of fixed income securities fall. However, market factors, such as the
demand for particular fixed income securities, may cause the price of certain
fixed income securities to fall while the prices of other securities rise or
remain unchanged.
Interest rate changes have a greater effect on the price of fixed income
securities with longer maturities. Money market funds try to minimize this risk
by purchasing short-term securities.
SECTOR RISKS
A substantial portion of the Fund's portfolio may be comprised of securities
credit enhanced by banks or companies with similar characteristics. As a result,
the Fund will be more susceptible to any economic, business, political or other
developments which generally affect these entities.
What Do Shares Cost?
You can purchase, redeem or exchange Shares any day the New York Stock Exchange
(NYSE) is open. The Fund attempts to stabilize the net asset value (NAV) of its
Shares at $1.00 by valuing the portfolio securities using the amortized cost
method. The Fund cannot guarantee that its NAV will always remain at $1.00 per
Share. The Fund does not charge a front-end sales charge. NAV is determined at
12:00 noon (Eastern time) and as of the end of regular trading (normally 4:00
p.m. Eastern time) each day the NYSE is open.
The required minimum initial investment for Fund Shares is $1,500. The required
minimum subsequent investment amount is $100. The minimum initial and subsequent
investment amounts for retirement plans are $250 and $100, respectively.
An institutional investor's minimum investment is calculated by combining all
accounts it maintains with the Fund. Accounts established through investment
professionals may be subject to a smaller minimum investment amount. Keep in
mind that investment professionals may charge you fees for their services in
connection with your Share transactions.
SALES CHARGE WHEN YOU REDEEM
Your redemption proceeds may be reduced by a sales charge, commonly referred to
as a contingent deferred sales charge (CDSC).
A CDSC will be imposed only in certain instances in which the Fund Shares being
redeemed were acquired in exchange for Class F Shares of certain Federated
Funds. (See "Exchange Privileges"). If Fund Shares were acquired in exchange for
Class F Shares of certain Federated Funds, a redemption of Fund Shares within
four years of the initial Class F Share purchase will be subject to a CDSC of
1%.
YOU WILL NOT BE CHARGED A CDSC WHEN REDEEMING SHARES:
* purchased with reinvested dividends or capital gains;
* purchased within 120 days of redeeming Shares of an equal or lesser
amount;
* that you exchanged into the same class of another Federated Fund if the shares
were held for the applicable CDSC holding period (other than a money market
fund);
* purchased through investment professionals who did not receive advanced
sales payments;
* if, after you purchase Shares, you become disabled as defined by the IRS;
* if the Fund redeems your Shares and closes
your account for not meeting the minimum balance requirement;
* if your redemption is a required retirement plan distribution; or
* upon the death of the last surviving shareholder of the account.
TO KEEP THE SALES CHARGE AS LOW AS POSSIBLE, THE FUND REDEEMS YOUR SHARES IN
THIS ORDER:
* Shares that are not subject to a CDSC; and
* Shares held the longest (to determine the number of years your Shares have
been held, include the time you held shares of other Federated Funds that have
been exchanged for Shares of this Fund).
The CDSC is then calculated using the share price at the time of purchase or
redemption, whichever is lower.
How is the Fund Sold?
The Fund's Distributor, Federated Securities Corp., markets the Shares described
in this prospectus to investors with temporary cash balances and investors with
cash reserves, or to individuals, directly or through investment professionals.
The Distributor and its affiliates may pay out of their assets other
amounts (including items of material value) to investment professionals
for marketing and servicing Shares. The Distributor is a subsidiary of
Federated Investors, Inc. (Federated).
How to Purchase Shares
You may purchase Shares through an investment professional, directly from the
Fund, or through an exchange from the Class F Shares of certain Federated Funds.
The Fund reserves the right to reject any request to purchase or exchange
Shares.
THROUGH AN INVESTMENT PROFESSIONAL
* Establish an account with the investment professional; and
* Submit your purchase order to the investment professional before 3:00 p.m.
(Eastern time). You will receive that day's dividend if the investment
professional forwards the order to the Fund and the Fund receives payment by
3:00 p.m. (Eastern time). You will become the owner of Shares and receive
dividends when the Fund receives your payment.
Investment professionals should send payments according to the instructions in
the sections "By Wire" or "By Check."
DIRECTLY FROM THE FUND
* Establish your account with the Fund by submitting a completed New
Account Form; and
* Send your payment to the Fund by Federal Reserve wire or check.
You will become the owner of Shares after the Fund receives your wire or your
check. If your check does not clear, your purchase will be canceled and you
could be liable for any losses or fees incurred by the Fund or Federated
Shareholder Services Company, the Fund's transfer agent.
An institution may establish an account and place an order by calling the Fund
and will become a shareholder after the Fund receives the order.
BY WIRE
Send your wire to:
State Street Bank and Trust Company
Boston, MA
Dollar Amount of Wire
ABA Number 011000028
Attention: EDGEWIRE
Wire Order Number, Dealer Number or Group Number
Nominee/Institution Name
Fund Name and Number and Account Number
You cannot purchase Shares by wire on holidays when wire transfers are
restricted.
BY CHECK
Make your check payable to THE FEDERATED FUNDS, note your account number on the
check, and mail it to:
Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600
If you send your check by a PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE that
requires a street address, mail it to:
Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317
Payment should be made in U.S. dollars and drawn on a U.S. bank. The Fund will
not accept third-party checks (checks originally payable to someone other than
you or The Federated Funds). Orders by mail are considered received when payment
by check is converted into federal funds (normally the business day after the
check is received) and Shares begin earning dividends the next day.
BY INVEST-BY-PHONE
Once you establish an account, you may use the Fund's Invest-By-Phone privilege
for future Share purchases if you have an account with a bank that is an
Automated Clearinghouse member. To apply, call the Fund for an authorization
form. You may use Invest-By-Phone to purchase Shares approximately two weeks
from the date you file the form with Federated Shareholder Services Company.
BY DIRECT DEPOSIT
You may complete an application with Federated Shareholder Services Company to
have your Social Security, Railroad Retirement, VA Compensation or Pension,
Civil Service Retirement and certain other retirement payments invested directly
into the Fund. The application must be filed with Federated Shareholder Services
Company before direct deposit may begin. Allow 60 to 90 days for the application
to be processed.
THROUGH AN EXCHANGE
You may purchase Shares through an exchange from the Class F Shares of certain
Federated Funds. You must meet the minimum initial investment requirement for
purchasing Shares and both accounts must have identical registrations.
BY SYSTEMATIC INVESTMENT PROGRAM
Once you have opened an account, you may automatically purchase additional
Shares on a regular basis by completing the Systematic Investment Program (SIP)
section of the New Account Form or by contacting the Fund or your investment
professional. The minimum investment amount for SIPs is $50.
BY AUTOMATED CLEARING HOUSE (ACH)
Once you have opened an account, you may purchase additional Shares through a
depository institution that is an ACH member. This purchase option can be
established by completing the appropriate sections of the New Account Form.
RETIREMENT INVESTMENTS
You may purchase Shares as retirement investments (such as qualified plans and
IRAs or transfer or rollover of assets). Call your investment professional or
the Fund for information on retirement investments. We suggest that you discuss
retirement investments with your tax adviser. You may be subject to an annual
IRA account fee.
How to Redeem and Exchange Shares
You should redeem or exchange Shares:
* through an investment professional if you purchased Shares through an
investment professional; or
* directly from the Fund if you purchased Shares directly from the Fund.
THROUGH AN INVESTMENT PROFESSIONAL
Submit your redemption or exchange request to your investment professional by
the end of regular trading on the NYSE (normally 4:00 p.m. Eastern time).
Investment professionals are responsible for promptly submitting redemption
requests and providing proper written redemption instructions as outlined below.
DIRECTLY FROM THE FUND
BY TELEPHONE
You may redeem or exchange Shares by calling
the Fund at 1-800-341-7400 once you have completed the appropriate authorization
form for telephone transactions.
If you call before 3:00 p.m. (Eastern time), your redemption will be wired to
you the same day. You will not receive that day's dividend.
If you call after 3:00 p.m. (Eastern time), your redemption will be wired to you
the following business day. You will receive that day's dividend.
BY MAIL
You may redeem or exchange Shares by mailing a written request to the Fund.
Your redemption request will be processed on the day the Fund receives your
written request in proper form. Dividends are paid up to and including the day
that a redemption request is processed.
Send requests by mail to:
Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600
Send requests by PRIVATE COURIER OR OVERNIGHT DELIVERY SERVICE to:
Federated Shareholder Services Company
1099 Hingham Street
Rockland, MA 02370-3317
All requests must include:
* Fund Name and Share Class, account number and account registration;
* amount to be redeemed or exchanged;
* signatures of all shareholders exactly as registered; and
* IF EXCHANGING, the Fund Name and Share Class, account number and account
registration into which you are exchanging.
Call your investment professional or the Fund if you need special instructions.
SIGNATURE GUARANTEES
Signatures must be guaranteed if:
* your redemption will be sent to an address other than the address of
record;
* your redemption will be sent to an address of record that was changed
within the last 30 days;
* a redemption is payable to someone other than the shareholder(s) of
record; or
* IF EXCHANGING (TRANSFERRING) into another fund with a different shareholder
registration.
A signature guarantee is designed to protect your account from fraud. Obtain a
signature guarantee from a bank or trust company, savings association, credit
union, broker, dealer, or securities exchange member. A NOTARY PUBLIC CANNOT
PROVIDE A SIGNATURE GUARANTEE.
PAYMENT METHODS FOR REDEMPTIONS
Your redemption proceeds will be mailed by check to your address of record. The
following payment options are available if you complete the appropriate section
of the New Account Form or an Account Service Options Form. These payment
options require a signature guarantee if they were not established when the
account was opened:
* an electronic transfer to your account at a financial institution that is
an ACH member; or
* wire payment to your account at a domestic commercial bank that is a Federal
Reserve System member.
REDEMPTION IN KIND
Although the Fund intends to pay Share redemptions in cash, it reserves the
right to pay the redemption price in whole or in part by a distribution of the
Fund's portfolio securities.
LIMITATIONS ON REDEMPTION PROCEEDS
Redemption proceeds normally are wired or mailed within one business day after
receiving a request in proper form. Payment may be delayed up to seven days:
* to allow your purchase to clear;
* during periods of market volatility; or
* when a shareholder's trade activity or amount adversely impacts the Fund's
ability to manage its assets.
You will not accrue interest or dividends on uncashed checks from the Fund if
those checks are undeliverable and returned to the Fund.
REDEMPTIONS FROM RETIREMENT ACCOUNTS
In the absence of your specific instructions, 10% of the value of your
redemption from a retirement account in the Fund may be withheld for taxes. This
withholding only applies to certain types of retirement accounts.
EXCHANGE PRIVILEGE
You may exchange Shares of the Fund into Class F Shares of certain Federated
Funds. To do this, you must:
* ensure that the account registrations are identical;
* meet any minimum initial investment requirements; and
* receive a prospectus for the fund into which you wish to exchange.
An exchange is treated as a redemption and a subsequent purchase, and is a
taxable transaction.
The Fund may modify or terminate the exchange privilege at any time. The Fund's
management or investment adviser may determine from the amount, frequency and
pattern of exchanges that a shareholder is engaged in excessive trading that is
detrimental to the Fund and other shareholders. If this occurs, the Fund may
terminate the availability of exchanges to that shareholder and may bar that
shareholder from purchasing other Federated Funds.
SYSTEMATIC WITHDRAWAL/ EXCHANGE PROGRAM
You may automatically redeem or exchange Shares in a minimum amount of $100 on a
regular basis. Complete the appropriate section of the New Account Form or an
Account Service Options Form or contact your investment professional or the
Fund. Your account value must meet the minimum initial investment amount at the
time the program is established. This program may reduce, and eventually
deplete, your account. Payments should not be considered yield or income.
CHECKWRITING
You may request a checking account to redeem your Fund Shares. Your account will
continue to receive the daily dividend declared on the Shares to be redeemed
until the check is presented for payment.
ADDITIONAL CONDITIONS
TELEPHONE TRANSACTIONS
The Fund will record your telephone instructions. If the Fund does not follow
reasonable procedures, it may be liable for losses due to unauthorized or
fraudulent telephone instructions.
SHARE CERTIFICATES
The Fund no longer issues share certificates. If you are redeeming or exchanging
Shares represented by certificates previously issued by the Fund, you must
return the certificates with your written redemption or exchange request. For
your protection, send your certificates by registered or certified mail, but do
not endorse them.
Account and Share Information
ACCOUNT ACTIVITY
You will receive periodic statements reporting all account activity, including
systematic transactions, dividends and capital gains paid.
DIVIDENDS AND CAPITAL GAINS
The Fund declares any dividends daily and pays them monthly to shareholders. If
you purchase Shares by wire, you begin earning dividends on the day your wire is
received. If you purchase Shares by check, you begin earning dividends on the
business day after the Fund receives your check. In either case, you earn
dividends through the day your redemption request is received.
The Fund does not expect to realize any capital gains or losses. If capital
gains or losses were to occur, they could result in an increase or decrease in
dividends. The Fund pays any capital gains at least annually. Your dividends and
capital gains distributions will be automatically reinvested in additional
Shares without a sales charge, unless you elect cash payments.
ACCOUNTS WITH LOW BALANCES
Due to the high cost of maintaining accounts with low balances, non- retirement
accounts may be closed if redemptions or exchanges cause the account balance to
fall below the minimum initial investment amount. Before an account is closed,
you will be notified and allowed 30 days to purchase additional Shares to meet
the minimum.
TAX INFORMATION
The Fund sends an annual statement of your account activity to assist you in
completing your federal, state and local tax returns. Fund distributions of
dividends and capital gains are taxable to you whether paid in cash or
reinvested in the Fund. Dividends are taxable as ordinary income; capital gains
are taxable at different rates depending upon the length of time the Fund holds
its assets.
Fund distributions are expected to be primarily dividends. Redemptions and
exchanges are taxable sales. Please consult your tax adviser regarding your
federal, state and local tax liability.
Who Manages the Fund?
The Board of Trustees governs the Fund. The Board selects and oversees the
Adviser, Federated Investment Management Company. The Adviser manages the Fund's
assets, including buying and selling portfolio securities. The Adviser's address
is Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA 15222-3779.
The Adviser and other subsidiaries of Federated advise approximately 176 mutual
funds and separate accounts, which total approximately $125 billion in assets as
of December 31, 1999. Federated was established in 1955 and is one of the
largest mutual fund investment managers in the United States with approximately
1,900 employees. More than 4,000 investment professionals make Federated Funds
available to their customers.
ADVISORY FEES
The Adviser receives an annual investment advisory fee based on the Fund's
average net assets as shown in the chart below. The Adviser may voluntarily
waive a portion of its fee or reimburse the Fund for certain operating expenses.
<TABLE>
<CAPTION>
ADVISORY FEES
AS PERCENTAGE OF
AVERAGE DAILY AVERAGE DAILY
NET ASSETS NET ASSETS
<S> <C>
First $500 million 0.500 of 1%
Second $500 million 0.475 of 1%
Third $500 million 0.450 of 1%
Fourth $500 million 0.425 of 1%
Over $2 billion 0.400 of 1%
</TABLE>
Financial Information
FINANCIAL HIGHLIGHTS
The following Financial Highlights will help you understand the Fund's financial
performance for its past five fiscal years. Some of the information is presented
on a per share basis. Total returns represent the rate an investor would have
earned (or lost) on an investment in the Fund, assuming reinvestment of any
dividends and capital gains.
This information for the fiscal year ended December 31, 1999 has been audited by
Ernst & Young LLP whose report, along with the Fund's audited financial
statements, is included in this prospectus. Previous fiscal years were audited
by other auditors.
Financial Highlights
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31 1999 1998
1997 1996 1995
<S> <C> <C>
<C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $
1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.04 0.05
0.05 0.05 0.05
LESS DISTRIBUTIONS:
Distributions from net investment income (0.04) (0.05)
(0.05) (0.05) (0.05)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $
1.00 $ 1.00 $ 1.00
TOTAL RETURN 1 4.23% 4.64%
4.69% 4.56 5.13%
RATIOS TO AVERAGE NET ASSETS:
Expenses 1.12% 1.11%
1.10% 1.06% 1.08%
Net investment income 4.15% 4.54%
4.58% 4.46% 4.99%
Expense waiver/reimbursement 2 0.20% 0.18%
0.15% 0.13% 0.15%
SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $76,851 $83,460
$81,309 $87,381 $101,390
</TABLE>
1 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
2 This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
Portfolio of Investments
DECEMBER 31, 1999
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
CERTIFICATES OF DEPOSIT-
8.5%
BANKING-8.5%
$ 1,000,000 Bank of Montreal, 5.25%,
5/12/2000 $ 999,826
1,000,000 Barclays Bank of Canada,
(Guaranteed by Barclays
Bank PLC, London), 5.02%,
1/13/2000 999,990
2,500,000 Commerzbank AG, Frankfurt,
5.25%, 3/9/2000 2,499,921
2,000,000 UBS AG, 5.30%, 3/10/2000 1,999,279
TOTAL CERTIFICATES OF
DEPOSIT 6,499,016
COMMERCIAL PAPER-29.6% 1
AEROSPACE/AUTO-1.3%
1,000,000 Johnson Controls, Inc.,
6.02%, 1/26/2000 995,868
BANKING-10.6%
2,000,000 Barclays U.S. Funding
Corp., (Guaranteed by
Barclays Bank PLC,
London), 10.01%, 1/3/2000 1,998,889
1,000,000 Cregem North America,
Inc., (Guaranteed by
Credit Communal de
Belgique, Brussels),
5.89%, 4/17/2000 982,910
1,000,000 Den Danske Corp., Inc.,
(Guaranteed by Den Danske
Bank A/S), 6.01%,
5/31/2000 975,546
3,245,000 Greenwich Funding Corp.,
5.94% - 5.99%, 2/15/2000 -
2/25/2000 3,217,162
1,000,000 Wood Street Funding Corp.,
6.06%, 1/28/2000 995,500
TOTAL 8,170,007
CHEMICALS-1.3%
741,000 IMC Global, Inc., 6.38%,
2/15/2000 735,165
254,000 Rohm & Haas Co., 6.27%,
1/12/2000 253,521
TOTAL 988,686
FINANCE - AUTOMOTIVE-1.3%
142,316 Honda Auto Lease Trust,
1999-A, Class A1, 5.45%,
8/15/2000 142,316
373,712 Toyota Auto Receivables,
1999-A Owner Trust, Class
1, 5.37%, 8/11/2000 373,712
500,000 General Motors Acceptance
Corp., 5.54%, 1/31/2000 497,767
TOTAL 1,013,795
FINANCE - COMMERCIAL-3.2%
1,000,000 Asset Securitization
Cooperative Corp., 5.94%,
2/22/2000 991,550
1,000,000 Corporate Asset Funding
Co., Inc., 6.00%,
2/28/2000 990,559
500,000 Sigma Finance, Inc.,
(Guaranteed by Sigma
Finance Corp.), 5.95%,
2/18/2000 496,153
TOTAL 2,478,262
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
COMMERCIAL PAPER-continued
1
FINANCE - EQUIPMENT-0.3%
$ 263,264 Copelco Capital Funding
LLC, 1999-B, Class A-1,
5.94%, 10/18/2000 $ 263,264
FINANCE - RETAIL-0.7%
500,000 Commoloco, Inc.,
(Guaranteed by American
General Finance Corp.),
5.60%, 1/26/2000 498,111
INDUSTRIAL PRODUCTS-0.9%
675,000 Praxair, Inc., 6.35%,
2/1/2000 671,361
INSURANCE-8.3%
415,000 CNA Financial Corp.,
6.63%, 2/15/2000 411,602
2,000,000 CXC, Inc., 5.98%, 2/2/2000 1,989,493
1,000,000 Marsh USA Inc., 5.76%,
2/18/2000 992,560
3,000,000 Sheffield Receivables
Corp., 5.97% - 6.02%,
2/11/2000 2,979,728
TOTAL 6,373,383
MACHINERY, EQUIPMENT,
AUTO-0.7%
500,000 Eaton Corp., 5.71%,
1/27/2000 497,996
TRANSPORTATION-1.0%
800,000 FDX Corp., 6.45%, 1/5/2000 799,436
TOTAL COMMERCIAL PAPER 22,750,169
LOAN PARTICIPATION-0.6%
ELECTRICAL EQUIPMENT-0.6%
500,000 Mt. Vernon Phenol Plant
Partnership, (Guaranteed
by General Electric Co.),
6.12%, 5/17/2000 500,000
MUNICIPAL-1.7%
MUNICIPAL-1.7%
1,300,000 Bergen County, NJ
Improvement Authority,
Bergen Regional Medical
Center Project, Series
1999-A, (Guaranteed by
Bergen County, NJ
Improvement Authority),
5.33%, 3/16/2000 1,300,000
NOTES - VARIABLE-25.3% 2
BANKING-14.5%
1,990,000 4 C's LLC, Series 1998,
(KeyBank, N.A. LOC),
6.75%, 1/6/2000 1,990,000
3,000,000 American Health Care
Centers, Inc., Series
1998, (FirstMerit Bank,
N.A. LOC), 6.88%, 1/6/2000 3,000,000
1,000,000 Bond Holding LP,
(SouthTrust Bank of
Alabama, Birmingham LOC),
5.92%, 1/7/2000 1,000,000
1,000,000 Comerica Bank, 6.47%,
1/1/2000 999,495
2,000,000 3 Liquid Asset Backed
Securities Trust, Series
1996-3, Sr. Notes,
(Westdeutsche Landesbank
Girozentrale Swap
Agreement), 6.47%,
1/18/2000 2,000,000
299,611 3 Liquid Asset Backed
Securities Trust, Series
1997-3, Sr. Notes,
(Insured by AMBAC), 6.15%,
3/28/2000 299,611
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
NOTES - VARIABLE-continued
2
BANKING-CONTINUED
$ 875,000 North Center Properties,
(Huntington National Bank,
Columbus, OH LOC), 6.43%,
1/6/2000 $ 875,000
1,000,000 Sandridge Food Corp.,
(Bank One, Ohio, N.A. LOC),
6.65%, 1/6/2000 1,000,000
TOTAL 11,164,106
BROKERAGE-3.1%
1,200,000 Morgan Stanley, Dean
Witter & Co., 5.13%,
2/4/2000 1,200,000
1,200,000 Morgan Stanley, Dean
Witter & Co., 5.18%,
2/4/2000 1,200,000
TOTAL 2,400,000
FINANCE - AUTOMOTIVE-1.6%
1,200,000 General Motors Acceptance
Corp., 5.13%, 3/7/2000 1,200,000
FINANCE - COMMERCIAL-2.6% 1,000,000 Sigma Finance, Inc.,
(Guaranteed by Sigma
Finance Corp.), 5.13%,
1/3/2000 1,000,000
1,000,000 Sigma Finance, Inc.,
(Guaranteed by Sigma
Finance Corp.), 6.26%,
1/3/2000 1,000,000
TOTAL 2,000,000
FINANCE - RETAIL-1.3%
1,000,000 American Financial
Services Insurance Premium
Receivables Trust, Series
1994-A, 6.88%, 1/6/2000 1,000,000
HOMEBUILDING-0.9%
700,000 Centex Corp., 6.70%,
1/27/2000 700,000
INSURANCE-1.3%
1,000,000 First AllAmerica Financial
Life Insurance Co., 6.31%,
2/3/2000 1,000,000
TOTAL NOTES - VARIABLE 19,464,106
SHORT-TERM NOTES-11.6%
BANKING-2.6%
2,000,000 Bank One, Chicago,
Illinois, N.A., 6.07%-
6.14%, 10/10/2000 1,999,260
BROKERAGE-2.6%
2,000,000 Goldman Sachs Group, Inc.,
6.00%-6.51%, 3/29/2000 2,000,000
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
SHORT-TERM NOTES-continued
FINANCE - COMMERCIAL-6.4%
$ 3,900,000 Beta Finance, Inc.,
(Guaranteed by Beta
Finance Corp.), 5.03% -
6.00%,
2/4/2000 - 8/14/2000 $ 3,900,000
1,000,000 Sigma Finance, Inc.,
(Guaranteed by Sigma
Finance Corp.), 6.36%,
10/26/2000 1,001,035
TOTAL 4,901,035
TOTAL SHORT-TERM NOTES 8,900,295
U.S. TREASURY-0.6%
TREASURY SECURITIES-0.6%
500,000 United States Treasury
Bill, 4.73%, 1/6/2000 499,672
REPURCHASE AGREEMENTS-
20.6% 4
3,800,000 Bank of America Securities
LLC, 3.15%, dated
12/31/1999, due 1/3/2000 3,800,000
3,000,000 Bear, Stearns and Co.,
3.40%, dated 12/31/1999,
due 1/3/2000 3,000,000
3,000,000 Paribas Corp., 3.40%,
dated 12/31/1999, due
1/3/2000 3,000,000
3,000,000 Warburg Dillon Reed LLC,
3.10%, dated 12/31/1999,
due 1/3/2000 3,000,000
3,000,000 Warburg Dillon Reed LLC,
3.50%, dated 12/31/1999,
due 1/3/2000 3,000,000
TOTAL REPURCHASE
AGREEMENTS 15,800,000
TOTAL INVESTMENTS (AT
AMORTIZED COST) 5 $ 75,713,258
</TABLE>
1 Each issue shows the rate of discount at the time of purchase.
2 Floating rate note with current rate and next reset date shown.
3 Denotes a restricted security which is subject to restrictions on resale under
federal securities laws. These securities have been deemed liquid based upon
criteria approved by the fund's Board of Trustees. At December 31,1999, these
securities amounted to $299,611 which is represents 0.39% of net assets.
4 The repurchase agreements are fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio. The
investments in the repurchase agreements are through participation in joint
accounts with other Federated Funds.
5 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($76,851,306) at December 31, 1999.
The following acronyms are used throughout this portfolio:
AMBAC -American Municipal Bond Assurance Corporation
FSA -Financial Security Assurance
LOC -Letter of Credit
See Notes which are an integral part of the Financial Statements
Statement of Assets and Liabilities
DECEMBER 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS:
Total investments in
securities, at amortized
cost and value $ 75,713,258
Income receivable 649,412
Receivable for shares sold 710,511
TOTAL ASSETS 77,073,181
LIABILITIES:
Payable for shares
redeemed $ 114,480
Income distribution
payable 16,454
Payable to bank 81,409
Accrued expenses 9,532
TOTAL LIABILITIES 221,875
Net assets for 76,851,306
shares outstanding $ 76,851,306
NET ASSET VALUE, OFFERING
PRICE AND REDEMPTION
PROCEEDS PER SHARE:
$76,851,306 / 76,851,306
shares outstanding $1.00
</TABLE>
See Notes which are an integral part of the Financial Statements
Statement of Operations
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 4,218,598
EXPENSES:
Investment adviser fee $ 399,978
Administrative personnel
and services fee 125,000
Custodian fees 14,848
Transfer and dividend
disbursing agent fees and
expenses 169,590
Directors'/Trustees' fees 11,767
Auditing fees 14,100
Legal fees 5,830
Portfolio accounting fees 41,932
Shareholder services fee 199,989
Share registration costs 19,691
Printing and postage 41,070
Insurance premiums 5,583
Miscellaneous 8,943
TOTAL EXPENSES 1,058,321
WAIVERS:
Waiver of investment
adviser fee $ (55,809)
Waiver of shareholder
services fee (103,994)
TOTAL WAIVERS (159,803)
Net expenses 898,518
Net investment income $ 3,320,080
</TABLE>
See Notes which are an integral part of the Financial Statements
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31 1999 1998
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income $ 3,320,080 $ 3,739,695
DISTRIBUTIONS TO
SHAREHOLDERS:
Distributions from net
investment income (3,320,080) (3,739,695)
SHARE TRANSACTIONS:
Proceeds from sale of
shares 151,126,645 130,155,078
Net asset value of shares
issued to shareholders in
payment of
distributions declared 3,085,353 3,457,846
Cost of shares redeemed (160,820,672) (131,462,423)
CHANGE IN NET ASSETS
RESULTING FROM SHARE
TRANSACTIONS (6,608,674) 2,150,501
Change in net assets (6,608,674) 2,150,501
NET ASSETS:
Beginning of period 83,459,980 81,309,479
End of period $ 76,851,306 $ 83,459,980
</TABLE>
See Notes which are an integral part of the Financial Statements
Notes to Financial Statements
DECEMBER 31, 1999
ORGANIZATION
Money Market Management, Inc. (the "Company") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as an open-end management
investment company. Effective February 1, 2000, Money Market Management (the
"Fund") became a portfolio of Money Market Obligations Trust (the "Trust"). The
Trust consists of 40 portfolios. The financial statements included herein are
only those of the Fund. The financial statements of the other portfolios are
presented separately. The assets of each portfolio are segregated and a
shareholder's interest is limited to the portfolio in which shares are held. The
investment objective of the Fund is to achieve current income consistent with
stability of principal.
SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant account policies consistently followed
by the Fund in the preparation of its financial statements. These policies are
in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS
The Fund uses the amortized cost method to value their portfolio securities in
accordance with Rule 2a-7 under the Act.
REPURCHASE AGREEMENTS
It is the policy of the Fund to require the custodian bank to take possession,
to have legally segregated in the Federal Reserve Book Entry System, or to have
segregated within the custodian bank's vault, all securities held as collateral
under repurchase agreement transactions. Additionally, procedures have been
established by the Fund to monitor, on a daily basis, the market value of each
repurchase agreement's collateral to ensure that the value of collateral at
least equals the repurchase price to be paid under the repurchase agreement
transaction.
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 the guidelines and/or
standards reviewed or established by the Board of Trustees (the "Trustees").
Risks may arise from the potential inability of counterparties to honor the
terms of the repurchase agreement. Accordingly, the Fund could receive less than
the repurchase price on the sale of collateral securities. The Fund, along with
other affiliated investment companies, may utilize a joint trading account for
the purpose of entering into one or more repurchase agreements.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS
Interest income and expenses are accrued daily. Bond premium and discount, if
applicable, are amortized as required by the Internal Revenue Code, as amended
(the "Code"). Distributions to shareholders are recorded on the ex- dividend
date. Non-cash dividends included in dividend income, if any, are recorded at
fair value.
FEDERAL TAXES
It is the Fund's policy to comply with the provisions of the Code applicable to
regulated investment companies and to distribute to shareholders each year
substantially all of their income. Accordingly, no provision for federal tax is
necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
The Fund may engage in when-issued or delayed delivery transactions. The Fund
records when-issued securities on the trade date and maintain security positions
such that sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when- issued or delayed delivery
basis are marked to market daily and begin earning interest on the settlement
date. Losses may occur on these transactions due to changes in market conditions
or the failure of counterparties to perform under the contract.
RESTRICTED SECURITIES
Restricted securities are securities that may only be resold upon registration
under federal securities laws or in transactions exempt from such registration.
Many restricted securities may be resold in the secondary market in transactions
exempt from registration. In some cases, the restricted securities may be resold
without registration upon exercise of a demand feature. Such restricted
securities may be determined to be liquid under criteria established by the
Trustees. The Fund will not incur any registration costs upon such resales.
Restricted securities are valued at amortized cost in accordance with Rule 2a-7
under the Act.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts of assets, liabilities, expenses and revenues reported in the
financial statements. Actual results could differ from those estimated.
OTHER
Investment transactions are accounted for on a trade date basis.
CAPITAL STOCK
At December 31, 1999, there were 50,000,000,000 shares of $0.001 par value
capital stocked authorized. Capital paid-in aggregated $76,851,306.
Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31 1999 1998
<S> <C> <C>
Shares Sold 151,126,645 130,155,078
Shares issued to
shareholders in payment of
distributions declared 3,085,353 3,457,846
Shares redeemed (160,820,672) (131,462,423)
NET CHANGE RESULTING FROM
SHARE TRANSACTIONS (6,608,674) 2,150,501
</TABLE>
INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE
Federated Investment Management Company, the Fund's investment adviser (the
"Adviser"), receives for its services an annual investment advisory fee based on
the average daily net assets of the Fund as follows: 0.500% on the first $500
million, 0.475% on the next $500 million, 0.450% on the next $500 million,
0.425% on the next $500 million, and 0.400% thereafter. The Adviser may
voluntarily choose to waive any portion of its fee and/or reimburse certain
operating expenses of the Funds. The Adviser can modify or terminate this
voluntary waiver and/or reimbursement at any time at its sole discretion.
ADMINISTRATIVE FEE
Federated Services Company ("FServ"), under the Administrative Services
Agreement, provides the Fund with administrative personnel and services. The fee
paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the
average aggregate daily net assets of all funds advised by the subsidiaries of
Federated Investors, Inc., subject to a $125,000 minimum per portfolio and
$30,000 per each additional class.
SHAREHOLDER SERVICES FEE
Under the terms of a Shareholder Services Agreement with Federated Shareholder
Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily
net assets of the Fund for the period. The fee paid to FSSC is used to finance
certain services for shareholders and to maintain shareholder accounts. FSSC may
voluntarily choose to waive any portion of its fee. FSSC can modify or terminate
this voluntary waiver at any time at its sole discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES
FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing
agent for the Fund. The fee paid to FSSC is based on the size, type, and number
of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES
FServ maintains the Fund's accounting records for which it receives a fee. The
fee is based on the level of the Fund's average daily net assets for the period,
plus out-of-pocket expenses.
GENERAL
Certain of the Officers and Trustees of the Fund are Officers and Directors or
Trustees of the above companies.
CHANGE OF INDEPENDENT AUDITORS (UNAUDITED)
On May 19, 1999, the Trustees, upon the recommendation of its Audit Committee,
requested and subsequently accepted the resignation of Deloitte & Touche LLP
("D&T") as the Fund's independent auditors. D&T's reports on the Fund's
financial statements for the fiscal years ended December 31, 1997 and December
31, 1998 contained no adverse opinion or disclaimer of opinion nor were they
qualified or modified as to uncertainty, audit scope or accounting principles.
During the Fund's fiscal years ended December 31, 1997 and December 31, 1998:
(i) there were no disagreements with D&T on any matter of accounting principles
or practices, financial statement disclosure or auditing scope or procedure,
which disagreements, if not resolved to the satisfaction of D&T, would have
caused it to make reference to the subject matter of the disagreements in
connection with its reports on the financial statements for such years; and (ii)
there were no reportable events of the kind described in Item 304(a)(1)(v) of
Regulation S-K under the Securities Act of 1934, as amended.
The Fund, by action of its Trustees, upon the recommendation of the Audit
Committee, has engaged Ernst & Young LLP ("E&Y") as the independent auditors to
audit the Fund's financial statements for the fiscal year ended December 31,
1999. During the Fund's fiscal years ended December 31, 1997 and December 31,
1998, neither the Fund nor anyone on its behalf has consulted E&Y on items which
(1) concerned the application of accounting principles to a specified
transaction, either completed or proposed, or the type of audit opinion that
might be rendered on the Fund's financial statements, or (ii) concerned the
subject of a disagreement (as defined in paragraph (a)(1)(iv) of Item 304 of
Regulation S-K) of reportable events (as described in paragraph (a)(1)(v) of
said Item 304).
Report of Ernst & Young LLP, Independent Auditors
TO THE BOARD OF TRUSTEES OF MONEY MARKET OBLIGATIONS TRUST AND
SHAREHOLDERS OF MONEY MARKET MANAGEMENT:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Money Market Management (the "Fund") (one of
the portfolios constituting the Money Market Obligations Trust) as of December
31, 1999, and the related statement of operations, statement of changes in net
assets, and financial highlights for the year then ended. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audit. The statement of changes
in net assets for the year ended December 31, 1998, and the financial highlights
for each of the four years then ended were audited by other auditors whose
report dated February 12, 1999 expressed an unqualified opinion on that
statement and those financial highlights.
We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of the securities
owned as of December 31, 1999, by correspondence with the custodian. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Money Market Management portfolio of the Money Market Obligations Trust at
December 31, 1999, and the results of its operations, the changes in its net
assets, and the financial highlights for the year then ended, in conformity with
accounting principles generally accepted in the United States.
[Graphic]
Boston, Massachusetts
February 16, 2000
[Graphic]
Federated
World-Class Investment Manager
PROSPECTUS
Money Market Management
A Portfolio of Money Market Obligations Trust
FEBRUARY 29, 2000
A Statement of Additional Information (SAI) dated February 29, 2000, is
incorporated by reference into this prospectus. Additional information about the
Fund's investments is contained in the Fund's SAI and Semi-Annual Report to
shareholders as they become available. To obtain the SAI, the Semi-Annual Report
and other information without charge, and make inquiries, call your investment
professional or the Fund at 1-800-341- 7400.
You can obtain information about the Fund (including the SAI) by writing to or
visiting the Public Reference Room in Washington, DC. You may also access fund
information from the EDGAR Database on the SEC's Internet site at
http://www.sec.gov. You can purchase copies of this information by contacting
the SEC by email at [email protected] or by writing to the SEC's Public
Reference Section, Washington, DC 20549-0102. Call 1-202-942- 8090 for
information on the Public Reference Room's operations and copying fees.
[Graphic]
Federated
Money Market Management
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
WWW.FEDERATEDINVESTORS.COM
Federated Securities Corp., Distributor
Investment Company Act File No. 811-5950
Cusip 60934N211
8012811A (2/00)
[Graphic]
STATEMENT OF ADDITIONAL INFORMATION
Money Market Management
A Portfolio of Money Market Obligations Trust
This Statement of Additional Information (SAI) is not a prospectus. Read this
SAI in conjunction with the prospectus for Money Market Management (Fund), dated
February 29, 2000. Obtain the prospectus without charge by calling
1-800-341-7400.
FEBRUARY 29, 2000
[Graphic]
Federated
World-Class Investment Manager
Money Market Management
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
WWW.FEDERATEDINVESTORS.COM
Federated Securities Corp., Distributor
8012811B (2/00)
[Graphic]
CONTENTS
How is the Fund Organized? 1
Securities in Which the Fund Invests 1
What Do Shares Cost? 5
How is the Fund Sold? 5
Exchanging Securities for Shares 6
Subaccounting Services 6
Redemption in Kind 6
Massachusetts Partnership Law 6
Account and Share Information 6
Tax Information 6
Who Manages and Provides Services to the Fund? 7
How Does the Fund Measure Performance? 10
Who is Federated Investors, Inc.? 11
Addresses 13
How is the Fund Organized?
The Fund is a diversified portfolio of Money Market Obligations Trust (Trust).
The Trust is an open-end, management investment company that was established
under the laws of the Commonwealth of Massachusetts on October 3, 1988. The
Trust may offer separate series of shares representing interests in separate
portfolios of securities. The Fund was established under the laws of the State
of Maryland on October 30, 1973. The Fund was reorganized as a Massachusetts
business trust on June 29, 1982, and then re-established as a Maryland
corporation under Articles of Incorporation dated August 19, 1992. The Fund was
reorganized as a portfolio of the Trust on February 1, 2000. The Fund's
investment adviser is Federated Investment Management Company (Adviser).
Securities in Which the Fund Invests
The Fund's principal securities are described in the prospectus. Additional
securities, and further details regarding the principal securities, are set
forth below. In pursuing its investment strategy, the Fund may invest in such
securities for any purpose that is consistent with its investment objective.
SECURITIES DESCRIPTIONS AND TECHNIQUES
FIXED INCOME SECURITIES
Fixed income securities pay interest, dividends or distributions at a specified
rate. The rate may be a fixed percentage of the principal or adjusted
periodically. In addition, the issuer of a fixed income security must repay the
principal amount of the security, normally within a specified time. Fixed income
securities provide more regular income than equity securities. However, the
returns on fixed income securities are limited and normally do not increase with
the issuer's earnings. This limits the potential appreciation of fixed income
securities as compared to equity securities.
A security's yield measures the annual income earned on a security as a
percentage of its price. A security's yield will increase or decrease depending
upon whether it costs less (a discount) or more (a premium) than the principal
amount. If the issuer may redeem the security before its scheduled maturity, the
price and yield on a discount or premium security may change based upon the
probability of an early redemption. Securities with higher risks generally have
higher yields.
The following describes the types of fixed income securities in which the Fund
may invest.
U.S. TREASURY SECURITIES
U.S. Treasury securities are direct obligations of the federal government
of the United States. U.S. Treasury securities are generally regarded as
having the lowest credit risks.
AGENCY SECURITIES
Agency securities are issued or guaranteed by a federal agency or other
government sponsored entity acting under federal authority (a GSE). The United
States supports some GSEs with its full faith and credit. Other GSEs receive
support through federal subsidies, loans or other benefits. A few GSEs have no
explicit financial support, but are regarded as having implied support because
the federal government sponsors their activities. Agency securities are
generally regarded as having low credit risks, but not as low as treasury
securities.
CORPORATE DEBT SECURITIES
Corporate debt securities are fixed income securities issued by businesses.
Notes, bonds, debentures and commercial paper are the most prevalent types of
corporate debt securities. The Fund may also purchase interests in bank loans to
companies. The credit risks of corporate debt securities vary widely among
issuers.
COMMERCIAL PAPER
Commercial paper is an issuer's obligation with a maturity of less than nine
months. Companies typically issue commercial paper to pay for current
expenditures. Most issuers constantly reissue their commercial paper and use the
proceeds (or bank loans) to repay maturing paper. If the issuer cannot continue
to obtain liquidity in this fashion, its commercial paper may default.
DEMAND INSTRUMENTS
Demand instruments are corporate debt securities that the issuer must repay upon
demand. Other demand instruments require a third party, such as a dealer or
bank, to repurchase the security for its face value upon demand. The Fund treats
demand instruments as short-term securities, even though their stated maturity
may extend beyond one year.
MUNICIPAL SECURITIES
Municipal securities are issued by states, counties, cities and other political
subdivisions and authorities. Although many municipal securities are exempt from
federal income tax, the Fund may invest in taxable municipal securities.
ASSET BACKED SECURITIES
Asset backed securities are payable from pools of obligations other than
mortgages. Most asset backed securities involve consumer or commercial debts
with maturities of less than ten years. However, almost any type of fixed income
assets (including other fixed income securities) may be used to create an asset
backed security. Asset backed securities may take the form of commercial paper,
notes, or pass through certificates. Asset backed securities have prepayment
risks.
ZERO COUPON SECURITIES
Zero coupon securities do not pay interest or principal until final maturity
unlike debt securities that provide periodic payments of interest (referred to
as a coupon payment). Investors buy zero coupon securities at a price below the
amount payable at maturity. The difference between the purchase price and the
amount paid at maturity represents interest on the zero coupon security.
Investors must wait until maturity to receive interest and principal, which
increases the interest rate and credit risks of a zero coupon security.
BANK INSTRUMENTS
Bank instruments are unsecured interest-bearing deposits with banks. Bank
instruments include bank accounts, time deposits, certificates of deposit
and banker's acceptances. Yankee instruments are denominated in U.S
dollars and issued by U.S. branches of foreign banks. Eurodollar
instruments are denominated in U.S. dollars and issued by non-
U.S. branches of U.S. or foreign banks.
INSURANCE CONTRACTS
Insurance contracts include guaranteed investment contracts, funding agreements
and annuities. The Fund treats these contracts as fixed income securities.
CREDIT ENHANCEMENT
Common types of credit enhancement include guarantees, letters of credit, bond
insurance and surety bonds. Credit enhancement also includes arrangements where
securities or other liquid assets secure payment of a fixed income security. If
a default occurs, these assets may be sold and the proceeds paid to the
security's holders. Either form of credit enhancement reduces credit risks by
providing another source of payment for a fixed income security.
FOREIGN SECURITIES
Foreign securities are securities of issuers based outside the United States.
The Fund considers an issuer to be based outside the United States if:
* it is organized under the laws of, or has a principal office located in,
another country;
* the principal trading market for its securities is in another country; or
* it (or its subsidiaries) derived in its most current fiscal year at least 50%
of its total assets, capitalization, gross revenue or profit from goods
produced, services performed, or sales made in another country.
Along with the risks normally associated with domestic securities of the same
type, foreign securities are subject to risks of foreign investing.
SPECIAL TRANSACTIONS
REPURCHASE AGREEMENTS
Repurchase agreements are transactions in which the Fund buys a security from a
dealer or bank and agrees to sell the security back at a mutually agreed upon
time and price. The repurchase price exceeds the sale price, reflecting the
Fund's return on the transaction. This return is unrelated to the interest rate
on the underlying security. The Fund will enter into repurchase agreements only
with banks and other recognized financial institutions, such as securities
dealers, deemed creditworthy by the Adviser.
The Fund's custodian or subcustodian will take possession of the securities
subject to repurchase agreements. The Adviser or subcustodian will monitor the
value of the underlying security each day to ensure that the value of the
security always equals or exceeds the repurchase price.
Repurchase agreements are subject to credit risks.
REVERSE REPURCHASE AGREEMENTS
Reverse repurchase agreements are repurchase agreements in which the Fund is the
seller (rather than the buyer) of the securities, and agrees to repurchase them
at an agreed upon time and price. A reverse repurchase agreement may be viewed
as a type of borrowing by the Fund. Reverse repurchase agreements are subject to
credit risks. In addition, reverse repurchase agreements create leverage risks
because the Fund must repurchase the underlying security at a higher price,
regardless of the market value of the security at the time of repurchase.
DELAYED DELIVERY TRANSACTIONS
Delayed delivery transactions, including when issued transactions, are
arrangements in which the Fund buys securities for a set price, with payment and
delivery of the securities scheduled for a future time. During the period
between purchase and settlement, no payment is made by the Fund to the issuer
and no interest accrues to the Fund. The Fund records the transaction when it
agrees to buy the securities and reflects their value in determining the price
of its shares. Settlement dates may be a month or more after entering into these
transactions so that the market values of the securities bought may vary from
the purchase prices. Therefore, delayed delivery transactions create interest
rate risks for the Fund. Delayed delivery transactions also involve credit risks
in the event of a counterparty default.
INTER-FUND BORROWING AND LENDING ARRANGEMENTS
The Securities and Exchange Commission (SEC) has granted an exemption that
permits the Fund and all other funds advised by subsidiaries of Federated
Investors, Inc. (Federated funds) to lend and borrow money for certain temporary
purposes directly to and from other Federated funds. Participation in this
inter-fund lending program is voluntary for both borrowing and lending funds,
and an inter-fund loan is only made if it benefits each participating fund.
Federated Investors, Inc. (Federated) administers the program according to
procedures approved by the Fund's Board of Trustees (Board), and the Board
monitors the operation of the program. Any inter-fund loan must comply with
certain conditions set out in the exemption, which are designed to assure
fairness and protect all participating funds.
For example, inter-fund lending is permitted only (a) to meet shareholder
redemption requests, and (b) to meet commitments arising from "failed" trades.
All inter-fund loans must be repaid in seven days or less. The Fund's
participation in this program must be consistent with its investment policies
and limitations, and must meet certain percentage tests. Inter- fund loans may
be made only when the rate of interest to be charged is more attractive to the
lending fund than market-competitive rates on overnight repurchase agreements
(the Repo Rate) and more attractive to the borrowing fund than the rate of
interest that would be charged by an unaffiliated bank for short-term borrowings
(the Bank Loan Rate), as determined by the Board. The interest rate imposed on
inter-fund loans is the average of the Repo Rate and the Bank Loan Rate.
SECURITIES LENDING
The Fund may lend portfolio securities to borrowers that the Adviser deems
creditworthy. In return, the Fund receives cash or liquid securities from the
borrower as collateral. The borrower must furnish additional collateral if the
market value of the loaned securities increases. Also, the borrower must pay the
Fund the equivalent of any dividends or interest received on the loaned
securities.
The Fund will reinvest cash collateral in securities that qualify as an
acceptable investment for the Fund. However, the Fund must pay interest to the
borrower for the use of cash collateral.
Loans are subject to termination at the option of the Fund or the borrower. The
Fund will not have the right to vote on securities while they are on loan, but
it will terminate a loan in anticipation of any important vote. The Fund may pay
administrative and custodial fees in connection with a loan and may pay a
negotiated portion of the interest earned on the cash collateral to a securities
lending agent or broker. Securities lending activities are subject to market
risks and credit risks. These transactions create leverage risks.
ASSET COVERAGE
In order to secure its obligations in connection with special transactions, the
Fund will either own the underlying assets or set aside readily marketable
securities with a value that equals or exceeds the Fund's obligations. Unless
the Fund has other readily marketable assets to set aside, it cannot trade
assets used to secure such obligations without terminating a special
transaction. This may cause the Fund to miss favorable trading opportunities or
to realize losses on special transactions.
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
The Fund may invest its assets in securities of other investment companies,
including the securities of affiliated money market funds, as an efficient means
of carrying out its investment policies and managing its uninvested cash.
INVESTMENT RATINGS
A nationally recognized statistical ratings organization's two highest rating
categories are determined without regard for sub-categories and gradations. For
example, securities rated A-1+, A-1 or A-2 by Standard & Poor's, Prime-1, or
Prime-2 by Moody's Investors Service(Moody's), or F-1 (+ or -) or F-2 (+ or -)
by Fitch IBCA, Inc. are all considered rated in one of the two highest
short-term rating categories. The Fund will follow applicable regulations in
determining whether a security rated by more than one nationally recognized
statistical ratings organization can be treated as being in one of the two
highest short-term rating categories; currently, such securities must be rated
by two nationally recognized statistical ratings organizations in one of their
two highest rating categories. See "Regulatory Compliance."
INVESTMENT RISKS
There are many factors which may affect an investment in the Fund. The Fund's
principal risks are described in its prospectus. Additional risk factors are
outlined below.
CREDIT RISKS
Fixed income securities generally compensate for greater credit risk by paying
interest at a higher rate. The difference between the yield of a security and
the yield of a U.S. Treasury security with a comparable maturity (the spread)
measures the additional interest paid for risk. Spreads may increase generally
in response to adverse economic or market conditions. A security's spread may
also increase if the security's rating is lowered, or the security is perceived
to have an increased credit risk. An increase in the spread will cause the price
of the security to decline.
LEVERAGE RISKS
Leverage risk is created when an investment exposes the Fund to a level of risk
that exceeds the amount invested. Changes in the value of such an investment
magnify the Fund's risk of loss and potential for gain.
RISKS OF FOREIGN INVESTING
Foreign securities pose additional risks because foreign economic or political
conditions may be less favorable than those of the United States. Securities in
foreign markets may also be subject to taxation policies that reduce returns for
U.S. investors.
PREPAYMENT RISKS
Unlike traditional fixed income securities, which pay a fixed rate of interest
until maturity (when the entire principal amount is due), payments on asset
backed securities include both interest and a partial payment of principal.
Partial payment of principal may be comprised of scheduled principal payments as
well as unscheduled payments from voluntary prepayment, refinancing, or
foreclosure of the underlying loans. If the Fund receives unscheduled
prepayments, it may have to reinvest the proceeds in other fixed income
securities with lower interest rates, higher credit risks or other less
favorable characteristics.
FUNDAMENTAL INVESTMENT OBJECTIVE
The Fund's investment objective is to achieve current income consistent with
stability of principal. The investment objective may not be changed by the Board
without shareholder approval.
INVESTMENT LIMITATIONS
DIVERSIFICATION
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; 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; and securities of other investment companies)
if, as a result, more than 5% of the value of its total assets would be invested
in securities of that issuer, or the Fund would own more than 10% of the
outstanding voting securities of that issuer.
BORROWING MONEY AND ISSUING SENIOR SECURITIES
The Fund may borrow money, directly or indirectly, and issue senior securities
to the maximum extent permitted under the Investment Company Act of 1940, as
amended (1940 Act).
INVESTING IN REAL ESTATE
The Fund may not purchase or sell real estate, provided that this restriction
does not prevent the Fund from investing in issuers which invest, deal, or
otherwise engage in transactions in real estate or interests therein, or
investing in securities that are secured by real estate or interests therein.
The Fund may exercise its rights under agreements relating to such securities,
including the right to enforce security interests and to hold real estate
acquired by reason of such enforcement until that real estate can be liquidated
in an orderly manner.
INVESTING IN COMMODITIES
The Fund may not purchase or sell physical commodities, provided that the Fund
may purchase securities of companies that deal in commodities.
UNDERWRITING SECURITIES
The Fund may not underwrite the securities of other issuers, except that the
Fund may engage in transactions involving the acquisition, disposition or resale
of its portfolio securities, under circumstances where it may be considered to
be an underwriter under the Securities Act of 1933.
LENDING
The Fund may not make loans, provided that this restriction does not prevent the
Fund from purchasing debt obligations, entering into repurchase agreements,
lending its assets to broker/dealers or institutional investors and investing in
loans, including assignments and participation interests.
CONCENTRATION
The Fund will not make investments that will result in the concentration of its
investments in the securities of issuers primarily engaged in the same industry.
Government securities, municipal securities and bank instruments will not be
deemed to constitute an industry. In addition, investments in bank instruments,
and investments in certain industrial development bonds funded by activities in
a single industry, will be deemed to constitute investment in an industry,
except when held for temporary defensive purposes. The investment of more than
25% of the value of the Fund's total assets in any one industry will constitute
"concentration."
THE ABOVE LIMITATIONS CANNOT BE CHANGED UNLESS AUTHORIZED BY THE BOARD AND BY
THE "VOTE OF A MAJORITY OF ITS OUTSTANDING VOTING SECURITIES," AS DEFINED BY THE
1940 ACT. THE FOLLOWING LIMITATIONS, HOWEVER, MAY BE CHANGED BY THE BOARD
WITHOUT SHAREHOLDER APPROVAL. SHAREHOLDERS WILL BE NOTIFIED BEFORE ANY MATERIAL
CHANGE IN THESE LIMITATIONS BECOMES EFFECTIVE.
BUYING ON MARGIN
The Fund will not purchase securities on margin, provided that the Fund may
obtain short-term credits necessary for the clearance of purchases and sales of
securities.
PLEDGING ASSETS
The Fund will not mortgage, pledge or hypothecate any of its assets, provided
that this shall not apply to the transfer of securities in connection with any
permissible borrowing or to collateral arrangements in connection with
permissible activities.
INVESTING IN ILLIQUID SECURITIES
The Fund will not purchase securities for which there is no readily available
market, or enter into repurchase agreements or purchase time deposits maturing
in more than seven days, if immediately after and as a result, the value of such
securities would exceed, in the aggregate, 10% of the Fund's net assets.
INVESTING IN RESTRICTED SECURITIES
The Fund may invest in securities subject to restrictions or resale under
federal securities laws.
For purposes of the diversification limitation, the Fund considers certificates
of deposit and demand and time deposits issued by a U.S. branch of a domestic
bank or savings association 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.
For purposes of the concentration limitation: (a) utility companies will be
divided according to their services, for example, gas, gas transmission,
electric and telephone will each be considered a separate industry; (b)
financial service companies will be classified according to the end users of
their services, for example, automobile finance, bank finance and diversified
finance will each be considered a separate industry; and (c) asset-backed
securities will be classified according to the underlying assets securing such
securities. To conform to the current view of the SEC that only domestic bank
instruments may be excluded from industry concentration limitations, the Fund
will not exclude foreign bank instruments from industry concentration limits as
long as the policy of the SEC remains in effect.
REGULATORY COMPLIANCE
The Fund may follow non-fundamental operational policies that are more
restrictive than its fundamental investment limitations, as set forth in the
prospectus and this SAI, in order to comply with applicable laws and
regulations, including the provisions of and regulations under the 1940 Act. In
particular, the Fund will comply with the various requirements of Rule 2a-7 (the
Rule), which regulates money market mutual funds. The Fund will determine the
effective maturity of its investments according to the Rule. The Fund may change
these operational policies to reflect changes in the laws and regulations
without the approval of its shareholders.
DETERMINING MARKET VALUE OF SECURITIES
The Board has 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 (NAV) 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 NAV 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 the Rule. Under the Rule,
the Board must establish procedures reasonably designed to stabilize the NAV 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 NAV per Share based upon available
indications of market value. The Board 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 Board will take any steps it considers 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 NAV.
What Do Shares Cost?
REDUCING OR ELIMINATING THE CONTINGENT DEFERRED SALES CHARGE
These reductions or eliminations are offered because: no sales commissions have
been advanced to the investment professional selling Shares; the shareholder has
already paid a Contingent Deferred Sales Charge (CDSC); or nominal sales efforts
are associated with the original purchase of Shares.
Upon notification to the Distributor or the Fund's transfer agent, no CDSC will
be imposed on redemptions:
* following the death or post-purchase disability, as defined in Section
72(m)(7) of the Internal Revenue Code of 1986, of the last surviving
shareholder; or
* representing minimum required distributions from an Individual Retirement
Account or other retirement plan to a shareholder who has attained the age of
70-1/2.
How is the Fund Sold?
Under the Distributor's Contract with the Fund, the Distributor (Federated
Securities Corp.) offers Shares on a continuous, best-efforts basis.
SHAREHOLDER SERVICES
The Fund may pay Federated Shareholder Services Company, a subsidiary of
Federated, for providing shareholder services and maintaining shareholder
accounts. Federated Shareholder Services Company may select others to perform
these services for their customers and may pay them fees.
SUPPLEMENTAL PAYMENTS
Investment professionals may be paid fees out of the assets of the Distributor
and/or Federated Shareholder Services Company (but not out of Fund assets). The
Distributor and/or Federated Shareholder Services Company may be reimbursed by
the Adviser or its affiliates.
Investment professionals receive such fees for providing distribution-related or
shareholder services such as sponsoring sales, providing sales literature,
conducting training seminars for employees, and engineering sales-related
computer software programs and systems. Also, investment professionals may be
paid cash or promotional incentives, such as reimbursement of certain expenses
relating to attendance at informational meetings about the Fund or other special
events at recreational-type facilities, or items of material value. These
payments will be based upon the amount of Shares the investment professional
sells or may sell and/or upon the type and nature of sales or marketing support
furnished by the investment professional.
Exchanging Securities for Shares
You may contact the Distributor to request a purchase of Shares in exchange for
securities you own. The Fund reserves the right to determine whether to accept
your securities and the minimum market value to accept. The Fund will value your
securities in the same manner as it values its assets. This exchange is treated
as a sale of your securities for federal tax purposes.
Subaccounting Services
Certain investment professionals may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements. The
transfer agent may charge a fee based on the level of subaccounting services
rendered. Investment professionals holding Shares in a fiduciary, agency,
custodial or similar capacity 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 that may be related to the ownership of Shares.
This information should, therefore, be read together with any agreement between
the customer and the investment professional about the services provided, the
fees charged for those services, and any restrictions and limitations imposed.
Redemption in Kind
Although the Fund intends to pay Share redemptions in cash, it reserves the
right, as described below, to pay the redemption price in whole or in part by a
distribution of the Fund's portfolio securities.
Because the Fund has elected to be governed by Rule 18f-1 under the 1940 Act,
the Fund is obligated to pay Share redemptions to any one shareholder in cash
only up to the lesser of $250,000 or 1% of the net assets represented by such
Share class during any 90-day period.
Any Share redemption payment greater than this amount will also be in cash
unless the Fund's Board determines that payment should be in kind. In such a
case, the Fund will pay all or a portion of the remainder of the redemption in
portfolio securities, valued in the same way as the Fund determines its NAV. The
portfolio securities will be selected in a manner that the Fund's Board deems
fair and equitable and, to the extent available, such securities will be readily
marketable.
Redemption in kind is not as liquid as a cash redemption. If redemption is made
in kind, shareholders receiving the portfolio securities and selling them before
their maturity could receive less than the redemption value of the securities
and could incur certain transaction costs.
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.
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.
Account and Share Information
VOTING RIGHTS
Each Share of the Fund gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote.
All Shares of the Trust have equal voting rights, except that in matters
affecting only a particular fund or class, only shares of that fund or class are
entitled to vote.
Trustees may be removed by the Board or by shareholders at a special meeting. A
special meeting of shareholders will be called by the Board upon the written
request of shareholders who own at least 10% of the Trust's outstanding shares
of all series entitled to vote.
As of February 3, 2000, there were no shareholders who owned of record,
beneficially, or both, 5% or more of outstanding Shares.
Tax Information
FEDERAL INCOME TAX
The Fund intends to meet requirements of Subchapter M of the Internal Revenue
Code applicable to regulated investment companies. If these requirements are not
met, it will not receive special tax treatment and will pay federal income tax.
The Fund will be treated as a single, separate entity for federal income tax
purposes so that income earned and capital gains and losses realized by the
Trust's other portfolios will be separate from those realized by the Fund.
Who Manages and Provides Services to the Fund?
BOARD OF TRUSTEES
The Board is responsible for managing the Trust's business affairs and for
exercising all the Trust's powers except those reserved for the shareholders.
Information about each Board member is provided below and includes each
person's: name, address, birth date, present position(s) held with the Trust,
principal occupations for the past five years and positions held prior to the
past five years, total compensation received as a Trustee from the Trust for its
most recent fiscal year, and the total compensation received from the Federated
Fund Complex for the most recent calendar year. The Trust is comprised of 40
funds. The Federated Fund Complex is comprised of 43 investment companies, whose
investment advisers are affiliated with the Fund's Adviser.
As of February 3, 2000, the Fund's Board and Officers as a group owned less than
1% of the Fund's outstanding shares.
<TABLE>
<CAPTION>
NAME
TOTAL
BIRTH DATE AGGREGATE
COMPENSATION
ADDRESS PRINCIPAL OCCUPATIONS COMPENSATION FROM
TRUST AND
POSITION WITH TRUST FOR PAST FIVE YEARS FROM FUND FUND
COMPLEX
<S> <C> <C>
<C>
JOHN F. DONAHUE*#+ Chief Executive Officer $0 $0 for
the Trust and 43
Birth Date: July 28, 1924 and Director or Trustee of other
investment
Federated Investors Tower the Federated Fund companies
in the
1001 Liberty Avenue Complex; Chairman and Fund
Complex
Pittsburgh, PA Director,
Federated
CHAIRMAN AND TRUSTEE Investors, Inc.; Chairman,
Federated
Investment
Management Company,
Federated
Global
Investment
Management
Corp. and
Passport
Research, Ltd.; formerly:
Trustee,
Federated
Investment
Management
Company and Chairman
and
Director,
Federated
Investment Counseling.
THOMAS G. BIGLEY Director or Trustee of $1,050.59
$116,760.63 for the Trust
Birth Date: February 3, the Federated Fund and 43
other investment
1934 Complex; Director, Member companies
in the Fund
15 Old Timber Trail of Executive Committee,
Complex
Pittsburgh, PA Children's Hospital
of
TRUSTEE Pittsburgh; Director,
Robroy Industries, Inc.
(coated steel
conduits/
computer
storage
equipment); formerly:
Senior Partner, Ernst
&
Young LLP; Director,
MED
3000 Group, Inc.
(physician
practice
management); Director,
Member of
Executive
Committee, University
of
Pittsburgh.
JOHN T. CONROY, JR. Director or Trustee of the $1,155.81
$128,455.37 for the Trust
Birth Date: June 23, 1937 Federated Fund Complex; and 43
other investment
Grubb & Ellis/Investment President, Investment companies
in the Fund
Properties Corporation Properties Corporation;
Complex
3201 Tamiami Trail North Senior Vice President,
Naples, FL John R. Wood
and
TRUSTEE Associates, Inc.,
Realtors; Partner
or
Trustee in private
real
estate ventures
in
Southwest Florida;
formerly: President,
Naples
Property
Management, Inc.
and
Northgate
Village
Development Corporation.
NICHOLAS P. CONSTANTAKIS Director or Trustee of the $1,050.59
$73,191.21 for the
Birth Date: September 3, Federated Fund Complex; Trust
and 37 other
1939 Director, Michael Baker
investment companies in
175 Woodshire Drive Corporation (engineering, the Fund
Complex
Pittsburgh, PA construction,
operations
TRUSTEE and technical services);
formerly: Partner,
Andersen Worldwide SC.
JOHN F. CUNNINGHAM Director or Trustee of $1,050.59
$93,190.48 for the
Birth Date: March 5, 1943 some of the Federated Fund Trust and
37 other
353 El Brillo Way Complex; Chairman,
investment companies in
Palm Beach, FL President and Chief the Fund
Complex
TRUSTEE Executive Officer,
Cunningham & Co., Inc.
(strategic
business
consulting);
Trustee
Associate, Boston College;
Director, Iperia Corp.
(communications/software);
formerly: Director,
Redgate Communications
and
EMC Corporation
(computer
storage systems).
Previous Positions:
Chairman of the Board
and
Chief Executive Officer,
Computer Consoles, Inc.;
President and
Chief
Operating Officer,
Wang
Laboratories; Director,
First National Bank
of
Boston; Director,
Apollo
Computer, Inc.
J. CHRISTOPHER DONAHUE+ President or Executive $0 $0 for
the Trust and 30
Birth Date: April 11, 1949 Vice President of the other
investment companies
Federated Investors Tower Federated Fund Complex; in
the
1001 Liberty Avenue Director or Trustee of some Fund
Complex
Pittsburgh, PA of the Funds in
the
PRESIDENT AND TRUSTEE Federated Fund Complex;
President, Chief
Executive
Officer and Director,
Federated Investors, Inc.;
President, Chief
Executive
Officer and Trustee,
Federated
Investment
Management Company;
Trustee,
Federated
Investment Counseling;
President, Chief
Executive
Officer and Director,
Federated
Global
Investment
Management
Corp.; President and
Chief
Executive Officer,
Passport Research, Ltd.;
Trustee,
Federated
Shareholder
Services
Company; Director,
Federated
Services
Company; formerly:
President,
Federated
Investment Counseling.
LAWRENCE D. ELLIS, M.D.* Director or Trustee of the $1,050.59
$116,760.63 for the Trust
Birth Date: October 11, Federated Fund Complex; and 43
other investment
1932 Professor of Medicine, companies
in the Fund
3471 Fifth Avenue University of Pittsburgh;
Complex
Suite 1111 Medical Director,
Pittsburgh, PA University of
Pittsburgh
TRUSTEE Medical Center - Downtown;
Hematologist,
Oncologist
and Internist,
University
of Pittsburgh
Medical
Center; Member,
National
Board of Trustees,
Leukemia Society
of
America.
<CAPTION>
NAME
TOTAL
BIRTH DATE AGGREGATE
COMPENSATION
ADDRESS PRINCIPAL OCCUPATIONS COMPENSATION FROM
TRUST AND
POSITION WITH TRUST FOR PAST FIVE YEARS FROM FUND FUND
COMPLEX
<S> <C> <C>
<C>
PETER E. MADDEN Director or Trustee of the $983.04
$109,153.60 for the Trust
Birth Date: March 16, 1942 Federated Fund Complex; and 43
other investment
One Royal Palm Way formerly: Representative, companies
in the Fund
100 Royal Palm Way Commonwealth of
Complex
Palm Beach, FL Massachusetts
General
TRUSTEE Court; President,
State
Street Bank and
Trust
Company and
State
Street Corporation.
Previous Positions:
Director, VISA USA and
VISA
International;
Chairman
and Director,
Massachusetts
Bankers
Association; Director,
Depository
Trust
Corporation; Director,
The
Boston Stock Exchange.
CHARLES F. MANSFIELD, JR. President of some of the $1,103.25
$102,573.91 for the Trust
Birth Date: April 10, 1945 Funds in the Federated Fund and 40
other investment
80 South Road Complex; Staff member, companies
in the Fund
Westhampton Beach, NY Federated Securities
Complex
TRUSTEE Corp.; formerly:
Trustee
or Director of some of
the
Funds in the Federated
Fund
Complex;
JOHN E. MURRAY, JR., J.D., Director or Trustee of $1,155.81
$128,455.37 for the Trust
S.J.D.# the Federated Fund and 43
other investment
Birth Date: December 20, Complex; President, Law companies
in the Fund
1932 Professor, Duquesne
Complex
President, Duquesne University;
Consulting
University Partner, Mollica & Murray;
Pittsburgh, PA Director, Michael
Baker
TRUSTEE Corp. (engineering,
construction,
operations
and technical services).
Previous Positions:
Dean
and Professor of Law,
University of
Pittsburgh
School of Law; Dean
and
Professor of Law,
Villanova
University
School of Law.
MARJORIE P. SMUTS Director or Trustee of the $1,050.59
$116,760.63 for the Trust
Birth Date: June 21, 1935 Federated Fund Complex; and 43
other investment
4905 Bayard Street Public Relations/ companies
in the Fund
Pittsburgh, PA Marketing/Conference
Complex
TRUSTEE Planning.
Previous Positions:
National Spokesperson,
Aluminum Company
of
America;
television
producer; business owner.
JOHN S. WALSH Director or Trustee of some $1,050.59
$94,536.85 for the Trust
Birth Date: November 28, of the Federated Fund and 39
other investment
1957 Complex; President and companies
in the Fund
2007 Sherwood Drive Director, Heat Wagon, Inc. C
omplex
Valparaiso, IN (manufacturer
of
TRUSTEE construction
temporary
heaters); President
and
Director,
Manufacturers
Products, Inc.
(distributor of
portable
construction heaters);
President, Portable
Heater
Parts, a division
of
Manufacturers Products,
Inc.; Director, Walsh
&
Kelly, Inc. (heavy
highway
contractor); formerly:
Vice President, Walsh
&
Kelly, Inc.
EDWARD C. GONZALES President, Executive Vice $0 $0 for
the Trust and 42
Birth Date: October 22, President and Treasurer of other
investment company
1930 some of the Funds in the in
the
Federated Investors Tower Federated Fund Complex; Fund
Complex
1001 Liberty Avenue Vice Chairman,
Federated
Pittsburgh, PA Investors, Inc.; Trustee,
EXECUTIVE VICE PRESIDENT Federated
Administrative
Services; formerly:
Trustee or Director of
some
of the Funds in
the
Federated Fund Complex;
CEO and Chairman,
Federated
Administrative
Services; Vice President,
Federated
Investment
Management Company,
Federated
Investment
Counseling,
Federated
Global
Investment
Management Corp.
and
Passport Research, Ltd.;
Director and
Executive
Vice President,
Federated
Securities Corp.;
Director,
Federated
Services Company; Trustee,
Federated
Shareholder
Services Company.
JOHN W. MCGONIGLE Executive Vice President $0 $0 for
the Trust and 43
Birth Date: October 26, and Secretary of the other
investment companies
1938 Federated Fund Complex; in
the
Federated Investors Tower Executive Vice President, Fund
Complex
1001 Liberty Avenue Secretary and Director,
Pittsburgh, PA Federated Investors, Inc.;
EXECUTIVE VICE PRESIDENT formerly: Trustee,
AND SECRETARY Federated
Investment
Management Company
and
Federated
Investment
Counseling; Director,
Federated
Global
Investment
Management
Corp, Federated
Services
Company and
Federated
Securities Corp.
RICHARD J. THOMAS Treasurer of the Federated $0 $0 for
the Trust and 43
Birth Date: June 17, 1954 Fund Complex; Vice other
investment companies
Federated Investors Tower President - Funds in
the
1001 Liberty Avenue Financial Services Fund
Complex
Pittsburgh, PA Division,
Federated
TREASURER Investors, Inc.; formerly:
various
management
positions within
Funds
Financial
Services
Division of
Federated
Investors, Inc.
RICHARD B. FISHER President or Vice $0 $0 for
the Trust and 41
Birth Date: May 17, 1923 President of some of the other
investment companies
Federated Investors Tower Funds in the Federated Fund in
the
1001 Liberty Avenue Complex; Vice Chairman, Fund
Complex
Pittsburgh, PA Federated Investors, Inc.;
VICE PRESIDENT Chairman,
Federated
Securities Corp.;
formerly: Director
or
Trustee of some of
the
Funds in the Federated
Fund
Complex,; Executive
Vice
President,
Federated
Investors, Inc.
and
Director and
Chief
Executive Officer,
Federated Securities Corp.
<CAPTION>
NAME
TOTAL
BIRTH DATE AGGREGATE
COMPENSATION
ADDRESS PRINCIPAL OCCUPATIONS COMPENSATION FROM
TRUST AND
POSITION WITH TRUST FOR PAST FIVE YEARS FROM FUND FUND
COMPLEX
<S> <C> <C>
<C>
WILLIAM D. DAWSON, III Chief Investment Officer $0 $0 for
the Trust and 42
Birth Date: March 3, 1949 of this Fund and various other
investment companies
Federated Investors Tower other Funds in the in
the
1001 Liberty Avenue Federated Fund Complex; Fund
Complex
Pittsburgh, PA Executive Vice President,
CHIEF INVESTMENT OFFICER Federated
Investment
Counseling,
Federated
Global
Investment
Management Corp.,
Federated
Investment
Management Company
and
Passport Research, Ltd.;
Registered Representative,
Federated
Securities
Corp.; Portfolio Manager,
Federated
Administrative
Services; Vice President,
Federated Investors, Inc.;
formerly: Executive
Vice
President and Senior
Vice
President,
Federated
Investment
Counseling
Institutional
Portfolio
Management
Services
Division; Senior
Vice
President,
Federated
Investment
Management
Company and
Passport
Research, Ltd.
DEBORAH A. CUNNINGHAM Deborah A. Cunningham is $0 $0 for
the Trust and 6
Birth Date: September 15, Vice President of the other
investment
1959 Trust. Ms. Cunningham companies
in the
Federated Investors Tower joined Federated in 1981 Fund
Complex
1001 Liberty Avenue and has been a
Senior
Pittsburgh, PA Portfolio Manager and
a
VICE PRESIDENT Senior Vice President
of
the Fund's Adviser
since
1997. Ms.
Cunningham
served as a
Portfolio
Manager and a
Vice
President of the
Fund's
Adviser from 1993
through
1996. Ms. Cunningham is
a
Chartered
Financial
Analyst and received
her
M.B.A. in Finance
from
Robert Morris College.
MARY JO OCHSON Mary Jo Ochson is Vice $0 $0 for
the Trust and 7
Birth Date: September 12, President of the Trust. other
investment
1953 Ms. Ochson joined companies
in the
Federated Investors Tower Federated in 1982 and has Fund
Complex
1001 Liberty Avenue been a Senior
Portfolio
Pittsburgh, PA Manager and a Senior
Vice
VICE PRESIDENT President of the
Fund's
Adviser since 1996.
From
1988 through 1995,
Ms. Ochson served as
a
Portfolio Manager and
a
Vice President of
the
Fund's Adviser. Ms.
Ochson
is a Chartered
Financial
Analyst and received
her
M.B.A. in Finance from
the
University of Pittsburgh.
</TABLE>
* An asterisk denotes a Trustee who is deemed to be an interested person as
defined in the 1940 Act.
# A pound sign denotes a Member of the Board's Executive Committee, which
handles the Board's responsibilities between its meetings.
+ Mr. Donahue is the father of J. Christopher Donahue, President and
Trustee of the Trust.
INVESTMENT ADVISER
The Adviser conducts investment research and makes investment decisions for the
Fund. The Adviser is a wholly owned subsidiary of Federated. The Adviser shall
not be liable to the Trust or any Fund shareholder 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 the Trust.
OTHER RELATED SERVICES
Affiliates of the Adviser may, from time to time, provide certain electronic
equipment and software to institutional customers in order to facilitate the
purchase of Fund Shares offered by the Distributor.
CODE OF ETHICS RESTRICTIONS ON PERSONAL TRADING
As required by SEC rules, the Fund, its Adviser, and its Distributor have
adopted codes of ethics. These codes govern securities trading activities of
investment personnel, Fund Trustees, and certain other employees. Although they
do permit these people to trade in securities, including those that the Fund
could buy, they also contain significant safeguards designed to protect the Fund
and its shareholders from abuses in this area, such as requirements to obtain
prior approval for, and to report, particular transactions.
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. 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 may select brokers and dealers
based on whether they also offer research services (as described below). In
selecting among firms believed to meet these criteria, the Adviser may give
consideration to those firms which have sold or are selling Shares of the Fund
and other funds distributed by the Distributor and its affiliates. The Adviser
makes decisions on portfolio transactions and selects brokers and dealers
subject to review by the Fund's Board.
Investment decisions for the Fund are made independently from those of other
accounts managed by the Adviser. When the Fund and one or more of those accounts
invests in, or disposes of, the same security, available investments or
opportunities for sales will be allocated among the Fund and the account(s) in a
manner believed by the Adviser to be equitable. While the coordination and
ability to participate in volume transactions may benefit the Fund, it is
possible that this procedure could adversely impact the price paid or received
and/or the position obtained or disposed of by the Fund.
ADMINISTRATOR
Federated Services Company, a subsidiary of Federated, provides administrative
personnel and services (including certain legal and financial reporting
services) necessary to operate the Fund. Federated Services Company provides
these at the following annual Funds as specified below:
<TABLE>
<CAPTION>
MAXIMUM AVERAGE AGGREGATE DAILY
ADMINISTRATIVE FEE NET ASSETS OF THE FEDERATED FUNDS
<S> <C>
0.150 of 1% on the first $250 million
0.125 of 1% on the next $250 million
0.100 of 1% on the next $250 million
0.075 of 1% on assets in excess of $750 million
</TABLE>
The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio. Federated Services Company may voluntarily waive a
portion of its fee and may reimburse the Fund for expenses.
Federated Services Company also provides certain accounting and recordkeeping
services with respect to the Fund's portfolio investments for a fee based on
Fund assets plus out-of-pocket expenses.
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, through its registered transfer agent subsidiary,
Federated Shareholder Services Company, maintains all necessary shareholder
records. The Fund pays the transfer agent a fee based on the size, type and
number of accounts and transactions made by shareholders.
INDEPENDENT AUDITORS
The independent auditor for the Fund, Ernst & Young LLP, plans and performs its
audit so that it may provide an opinion as to whether the Fund's financial
statements and financial highlights are free of material misstatement.
FEES PAID BY THE FUND FOR SERVICES
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31 1999 1998 1997
<S> <C> <C> <C>
Advisory Fee Earned $399,978 $413,312 $433,191
Advisory Fee Reduction 55,809 42,698 14,375
Brokerage Commissions 0 0 0
Administrative Fee 125,000 125,000 125,002
SHAREHOLDER SERVICES FEE 199,989 98,937 N/A
</TABLE>
For the fiscal years ended December 31, 1999, 1998 and 1997, fees paid by the
Fund for services are prior to the Fund's reorganization as a portfolio of the
Trust on February 1, 2000.
How Does the Fund Measure Performance?
The Fund may advertise Share performance by using the SEC's standard method for
calculating performance applicable to all mutual funds. The SEC also permits
this standard performance information to be accompanied by non- standard
performance information.
Share performance reflects the effect of non-recurring charges, such as maximum
sales charges, which, if excluded, would increase the total return and yield.
The performance of Shares depends upon such variables as: portfolio quality;
average portfolio maturity; type and value of portfolio securities; changes in
interest rates; changes or differences in the Fund's or any class of Shares'
expenses; and various other factors.
Share performance fluctuates on a daily basis largely because net earnings
fluctuate daily. Both net earnings and offering price per Share are factors in
the computation of yield and total return.
AVERAGE ANNUAL TOTAL RETURNS AND YIELD
Total returns are given for the one-year, five-year and ten-year periods ended
December 31, 1999.
Yield and Effective Yield given for the 7-day period ended December 31, 1999.
Performance of the Fund shown is prior to its reorganization as a portfolio of
the Trust on February 1, 2000.
<TABLE>
<CAPTION>
7-DAY PERIOD 1 YEAR 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Total Return N/A 4.23% 4.65% 4.46%
Yield 4.59% N/A N/A N/A
Effective Yield 4.70% N/A N/A N/A
</TABLE>
TOTAL RETURN
Total return represents the change (expressed as a percentage) in the value of
Shares over a specific period of time, and includes the investment of income and
capital gains distributions.
The average annual total return for Shares 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
computed 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, less any applicable sales charge, adjusted
over the period by any additional Shares, assuming the annual reinvestment of
all dividends and distributions.
YIELD AND EFFECTIVE YIELD
The yield of Shares is based upon the seven days ending on the day of the
calculation, called the "base period." This yield is calculated 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. The effective yield is calculated by compounding the unannualized
base-period return by: adding one to the base-period return, raising the sum to
the 365/7th power; and subtracting one from the result.
To the extent investment professionals and broker/dealers charge fees in
connection with services provided in conjunction with an investment in Shares,
the Share performance is lower for shareholders paying those fees.
PERFORMANCE COMPARISONS
Advertising and sales literature may include:
* references to ratings, rankings, and financial publications and/or
performance comparisons of Shares to certain indices;
* charts, graphs and illustrations using the Fund's returns, or returns in
general, that demonstrate investment concepts such as tax-deferred compounding,
dollar-cost averaging and systematic investment;
* discussions of economic, financial and political developments and their impact
on the securities market, including the portfolio manager's views on how such
developments could impact the Fund; and
* information about the mutual fund industry from sources such as the Investment
Company Institute.
The Fund may compare its performance, or performance for the types of securities
in which it invests, to a variety of other investments, including federally
insured bank products such as bank savings accounts, certificates of deposit,
and Treasury bills.
The Fund may quote information from reliable sources regarding individual
countries and regions, world stock exchanges, and economic and demographic
statistics.
You may use financial publications and/or indices to obtain a more complete view
of Share performance. When comparing performance, you should consider all
relevant factors such as the composition of the index used, prevailing market
conditions, portfolio compositions of other funds, and methods used to value
portfolio securities and compute offering price. The financial publications
and/or indices which the Fund uses in advertising may include:
LIPPER ANALYTICAL SERVICES, INC.
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.
IBC/DONOGHUE'S MONEY FUND REPORT
IBC/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
Money, a monthly magazine, regularly ranks money market funds in various
categories based on the latest available seven-day effective yield.
BANK RATE MONITOR(C) NATIONAL INDEX
Bank Rate Monitor, (C) 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.
Who is Federated Investors, Inc.?
Federated is dedicated to meeting investor needs by making structured,
straightforward and consistent investment decisions. Federated investment
products have a history of competitive performance and have gained the
confidence of thousands of financial institutions and individual investors.
Federated's disciplined investment selection process is rooted in sound
methodologies backed by fundamental and technical research. At Federated,
success in investment management does not depend solely on the skill of a single
portfolio manager. It is a fusion of individual talents and state- of-the-art
industry tools and resources. Federated's investment process involves teams of
portfolio managers and analysts, and investment decisions are executed by
traders who are dedicated to specific market sectors and who handle trillions of
dollars in annual trading volume.
FEDERATED FUNDS OVERVIEW
MUNICIPAL FUNDS
In the municipal sector, as of December 31, 1999, Federated managed 12 bond
funds with approximately $2.0 billion in assets and 24 money market funds with
approximately $13.1 billion in total assets. In 1976, Federated introduced one
of the first municipal bond mutual funds in the industry and is now one of the
largest institutional buyers of municipal securities. The funds may quote
statistics from organizations including The Tax Foundation and the National
Taxpayers Union regarding the tax obligations of Americans.
EQUITY FUNDS
In the equity sector, Federated has more than 29 years' experience. As of
December 31, 1999, Federated managed 53 equity funds totaling approximately
$18.3 billion in assets across growth, value, equity income, international,
index and sector (i.e. utility) styles. Federated's value- oriented management
style combines quantitative and qualitative analysis and features a structured,
computer-assisted composite modeling system that was developed in the 1970s.
CORPORATE BOND FUNDS
In the corporate bond sector, as of December 31, 1999, Federated managed 13
money market funds and 29 bond funds with assets approximating $35.7 billion and
$7.7 billion, respectively. Federated's corporate bond decision making-based on
intensive, diligent credit analysis-backed by over 27 years of experience in the
corporate bond sector. In 1972, Federated introduced one of the first high-yield
bond funds in the industry. In 1983, Federated was one of the first fund
managers to participate in the asset backed securities market, a market totaling
more than $209 billion.
GOVERNMENT FUNDS
In the government sector, as of December 31, 1999, Federated managed 9 mortgage
backed, 11 government/agency and 16 government money market mutual funds, with
assets approximating $4.7 billion, $1.6 billion and $34.1 billion, respectively.
Federated trades approximately $450 million in U.S. government and mortgage
backed securities daily and places approximately $25 billion in repurchase
agreements each day. Federated introduced the first U.S. government fund to
invest in U.S. government bond securities in 1969. Federated has been a major
force in the short- and intermediate-term government markets since 1982 and
currently manages approximately $43.8 billion in government funds within these
maturity ranges.
MONEY MARKET FUNDS
In the money market sector, Federated gained prominence in the mutual fund
industry in 1974 with the creation of the first institutional money market fund.
Simultaneously, the company pioneered the use of the amortized cost method of
accounting for valuing shares of money market funds, a principal means used by
money managers today to value money market fund shares. Other innovations
include the first institutional tax-free money market fund. As of December 31,
1999, Federated managed more than $83.0 billion in assets across 54 money market
funds, including 16 government, 13 prime and 24 municipal and 1 euro-denominated
with assets approximating $34.1 billion, $35.7 billion, $13.1 billion and $115
million respectively.
The Chief Investment Officers responsible for oversight of the various
investment sectors within Federated are: U.S. equity and high yield-
J. Thomas Madden; U.S. fixed income-William D. Dawson, III; and global
equities and fixed income-Henry A. Frantzen. The Chief Investment Officers
are Executive Vice Presidents of the Federated advisory companies.
MUTUAL FUND MARKET
Thirty-seven percent of American households are pursuing their financial goals
through mutual funds. These investors, as well as businesses and institutions,
have entrusted over $5 trillion to the more than 7,300 funds available,
according to the Investment Company Institute.
FEDERATED CLIENTS OVERVIEW
Federated distributes mutual funds through its subsidiaries for a variety of
investment purposes. Specific markets include:
INSTITUTIONAL CLIENTS
Federated meets the needs of approximately 1,160 institutional clients
nationwide by managing and servicing separate accounts and mutual funds for a
variety of purposes, including defined benefit and defined contribution
programs, cash management, and asset/liability management. Institutional clients
include corporations, pension funds, tax exempt entities,
foundations/endowments, insurance companies, and investment and financial
advisers. The marketing effort to these institutional clients is headed by John
B. Fisher, President, Institutional Sales Division, Federated Securities Corp.
BANK MARKETING
Other institutional clients include more than 1,600 banks and trust
organizations. Virtually all of the trust divisions of the top 100 bank holding
companies use Federated Funds in their clients' portfolios. The marketing effort
to trust clients is headed by Timothy C. Pillion, Senior Vice President, Bank
Marketing & Sales.
BROKER/DEALERS AND BANK BROKER/DEALER SUBSIDIARIES
Federated Funds are available to consumers through major brokerage firms
nationwide-we have over 2,200 broker/dealer and bank broker/dealer relationships
across the country-supported by more wholesalers than any other mutual fund
distributor. Federated's service to financial professionals and institutions has
earned it high ratings in several surveys performed by DALBAR, Inc. DALBAR is
recognized as the industry benchmark for service quality measurement. The
marketing effort to these firms is headed by James F. Getz, President,
Broker/Dealer Sales Division, Federated Securities Corp.
Addresses
MONEY MARKET MANAGEMENT
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
DISTRIBUTOR
Federated Securities Corp.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
INVESTMENT ADVISER
Federated Investment Management Company
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
CUSTODIAN
State Street Bank and Trust Company
P.O. Box 8600
Boston, MA 02266-8600
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
Federated Shareholder Services Company
P.O. Box 8600
Boston, MA 02266-8600
INDEPENDENT AUDITORS
Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116
PART C. OTHER INFORMATION.
Item 23 EXHIBITS:
--------
(a) (i) ...........Conformed copy of Declaration of Trust of the
Registrant; (12)
(ii) ..............Conformed copy of Amendment No. 1 to the
Declaration of Trust of the Registrant; (12)
(iii) Conformed copy of Amendment No. 2 to the Declaration of
Trust of the Registrant; (17)
(iv) ..............Conformed copy of Amendment No. 3 to the
Declaration of Trust of the Registrant; (17)
(v) ..............Conformed copy of Amendment No. 4 to the
Declaration of Trust of the Registrant; (17)
(vi) ..............Conformed copy of Amendment No. 5 to the
Declaration of Trust of the Registrant; (17)
(vii) Conformed copy of Amendment No. 6 to the Declaration of
Trust of the Registrant; (17)
(viii) Conformed copy of Amendment No. 8 to the Declaration of
Trust of the Registrant; (10)
(ix) ..............Conformed copy of Amendment No. 9 to the
Declaration of Trust of the Registrant; (15)
(x) ..............Conformed copy of Amendment No. 10 to the
Declaration of Trust of the Registrant; (16)
(xi) ..............Conformed copy of Amendment No. 11 to the
Declaration of Trust of the Registrant; (21)
(xii) Conformed copy of Amendment No. 12 to the Declaration
of Trust of the Registrant; (21)
(xiii) Conformed copy of Amendment No. 13 to the
Declaration of Trust of the Registrant; (23)
(xiv) Declaration of Trust of the Registrant; (23)
(xv) ..............Conformed copy of Amendment No. 14 to the
Declaration of Trust of the Registrant; +
(b) (i) ..............Copy of By-Laws of the Registrant; (12)
(ii) ..............Copy of Amendment No. 1 to By-Laws of the
...........Registrant; (17)
(iii) Copy of Amendment No. 2 to By-Laws of the Registrant;
(17)
(iv) ...........Copy of Amendment No. 3 to By-Laws of the
Registrant; (17)
(v) ...........Copy of Amendment No. 4 to By-Laws of the
Registrant; (17)
(c) ...........See Appendix.
- -----------------------------------------------------------------------------
+ All exhibits filed electronically.
(d) (i) ...........Conformed copy of Investment Advisory Contract
of the Registrant; (12)
(ii) ..............Conformed copy of Exhibit A to the Investment
Advisory Contract of the Registrant; (12)
(iii) Conformed copy of Exhibit B to the Investment Advisory
Contract of the Registrant; (12)
(iv) ..............Conformed copy of Exhibit D to the Investment
Advisory Contract of the Registrant; (12)
(v) ..............Conformed copy of Exhibit E to the Investment
Advisory Contract of the Registrant; (12)
(vi) ..............Conformed copy of Exhibit G to the Investment
Advisory Contract of the Registrant; (12)
(vii) Conformed copy of Exhibit H to the Investment Advisory
Contract of the Registrant; (21)
(viii) Conformed copy of Exhibit I to the Investment Advisory
Contract of the Registrant; (21)
(ix) ..............Conformed copy of Exhibit J to the Investment
Advisory Contract of the Registrant; (21)
(x) ..............Conformed copy of Exhibit K to the Investment
Advisory Contract of the Registrant; (21)
(xi) ..............Conformed copy of Exhibit L to the Investment
Advisory Contract of the Registrant; (21)
(xii) Conformed copy of Exhibit M to the Investment Advisory
Contract of the Registrant; (21)
(xiii) Conformed copy of Exhibit N to the Investment Advisory
Contract of the Registrant; (21)
(xiv) Conformed copy of Exhibit O to the Investment Advisory
Contract of the Registrant; (21)
(xv) ..............Conformed copy of Exhibit P to the Investment
Advisory Contract of the Registrant; (21)
(xvi) Conformed copy of Exhibit Q to the Investment Advisory
Contract of the Registrant; (21)
(xvii) Conformed copy of Exhibit R to the Investment Advisory
Contract of the Registrant; (21)
(xviii) Conformed copy of Exhibit S to the Investment Advisory
Contract of the Registrant; (23)
(e) (i) Conformed copy of Distributor's Contract of the
Registrant; (7)
(ii) ..............Conformed copy of Exhibit A to the
Distributor's Contract of the Registrant; (21)
(iii) Conformed copy of Exhibit C to the Distributor's Contract
of the Registrant; (21)
(iv) ...........Conformed copy of Exhibit D to the Distributor's
Contract of the Registrant; (15)
(v) Conformed copy of Exhibit F to the Distributor's
Contract of the
Registrant; (16)
(vi) Conformed copy of Exhibit G to the
Distributor's Contract of the
Registrant; (21)
(vii) Conformed copy of Exhibit H to the Distributor's Contract
of the Registrant; (21)
(viii) Conformed copy of Exhibit I to the Distributor's Contract
of the Registrant; (21)
(ix) Conformed copy of Exhibit J to the Distributor's
Contract of the Registrant; (23)
(x) Conformed copy of Distributor's Contract of the
Registrant (Liberty U.S. Government Money Market Trust -
Class B Shares); (23)
(xi) ..............The Registrant hereby incorporates the
conformed copy of the specimen Mutual Funds Sales and
Service Agreement; Mutual Funds
Service Agreement; and Plan Trustee/ Mutual Funds Service
Agreement from Item 24(b)(6) of the Cash Trust Series II
Registration Statement on Form N-1A filed with the
Commission on July 24, 1995.
(File Nos. 33-38550 and 811-6269).
(f) ................... Not applicable;
(g) (i) ..............Conformed copy of Custodian Agreement of the
Registrant; (8)
(ii) Conformed copy of Custodian Fee Schedule;
(17)
(h) (i) ..............Conformed copy of Amended and Restated Agreement
for Fund Accounting Services, Administrative Services,
Transfer Agency Services and Custody Services Procurement;
(21)
(ii) ..............Conformed copy of Amended and Restated
Shareholder Services Agreement of the Registrant; (21)
(iii) ..............Conformed copy of Principal Shareholder
Services Agreement (Liberty U.S. Government Money Market
Trust - Class B Shares); (23)
(iv) ..............Conformed copy of Shareholder Services
Agreement (Liberty U.S. Government Money Market Trust - Class
B Shares); (23)
(v) ..............Conformed copy of Shareholder Services
Agreement (Massachusetts Municipal Cash Trust - Boston 1784
Fund Shares); (24)
(vi) ..............The responses described in Item 23(e)(xi) are
hereby incorporated by reference.
(vii) ..............The Registrant hereby incorporates by reference
the conformed copy of the Shareholder Services Sub-Contract
between Fidelity and Federated Shareholder Services from Item
24(b)(9)(iii) of the Federated GNMA Trust Registration
Statement on Form N-1A, filed with the Commission on March
25, 1996 (File Nos. 2-75670 and 811-3375).
(i) Conformed copy of Opinion and Consent of Counsel as
to legality of shares being registered; (12) (j) (i)
Conformed copy of Consent of Arthur Andersen LLP for:
(a) Automated Cash Management Trust; (22)
(b) Government Obligations Fund; (23)
(c) Government Obligations Tax-Managed
Fund; (23)
(d) Prime Obligations Fund; (23)
(e) Tax-Free Obligations Fund; (23)
(f) Treasury Obligations Fund; (23)
(ii) Conformed copy of Consent of Ernst & Young LLP for:
(a) Automated Government Cash Reserves; (21)
(b) Automated Treasury Cash Reserves; (21)
(c) Municipal Obligations Fund; (23)
(d) Prime Cash Obligations Fund; (23)
(e) Prime Value Obligations Fund; (23)
(f) U.S. Treasury Cash Reserves; (21)
(g) Trust for U.S. Treasury Obligations; (22)
(h) All state specific municipal portfolios of Money Market
Obligations Trust, formerly, Federated Municipal Trust. (25)
(i) Federated Short-Term U.S. Government
Trust +
(j) Money Market Management +
(iii) Conformed copy of Consent of Deloitte &
Touche LLP for:
(a) Automated Government Money Trust; (22)
(b) Liquid Cash Trust; (20)
(c) Money Market Trust; (25)
(d) Federated Master Trust; (25)
(e) Federated Tax-Free Trust; (25)
(f) Trust for Government Cash Reserves (25);
(g) Trust for Short-Term U.S. Government
Obligations. (25)
(k) Not applicable;
(l) Conformed copy of Initial Capital Understanding;
(12)
(m) (i) Conformed copy of Distribution Plan of the
Registrant; (16)
(ii) Conformed copy of Exhibit A to the Distribution
Plan of the Registrant; (16)
(iii) Conformed copy of Exhibit B to the Distribution
Plan of the Registrant; (21)
(iv) The responses described in Item 23(e)(xi) are hereby
incorporated by reference.
(n) The Registrant hereby incorporates the
conformed copy of the specimen Multiple Class Plan from
Item 24(b)(18) of the World Investment Series, Inc.
Registration Statement on Form N-1A, filed with the
Commission on January 26, 1996. (File Nos. 33-52149 and
811-07141).
(o) (i) Conformed copy of Power of Attorney of the
Registrant; (23)
(ii) Conformed copy of Power of Attorney of
Chief Investment Officer of the Registrant;
(23)
(iii) Conformed copy of Power of Attorney of
Treasurer of the Registrant; (18)
(iv) Conformed copy of Power of Attorney of Trustee
of the Registrant; (23)
(v) Conformed copy of Power of Attorney of Trustee of
the Registrant; (23)
(vi) Conformed copy of Power of Attorney of Trustee
of the Registrant; (23)
(vii) Copy of Power of Attorney of Trustee of
Trustee of the Registrant; +
(p) Copy of Code of Ethics for Access
Persons; +
Item 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND:
-----------------------------------------------------------
None
Item 25. INDEMNIFICATION: (1)
---------------
1. Response is incorporated by reference to Registrant's Initial Registration
Statement on Form N-1A filed October 20, 1989. (File Nos. 33-31602 and
811-5950).
7. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 7 on Form N-1A filed May 6, 1994. (File Nos. 33-31602 and
811-5950).
8. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 8 on Form N-1A filed June 1, 1994. (File Nos. 33-31602 and
811-5950).
10. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 12 on Form N-1A filed February 21, 1995. (File Nos. 33-31602
and 811-5950).
12. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 16 on Form N-1A filed September 29, 1995. (File Nos. 33-31602
and 811-5950).
15. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 20 on Form N-1A filed September 23, 1996. (File Nos. 33-31602
and 811-5950).
16. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 22 on Form N-1A filed September 23, 1997. (File Nos. 33-31602
and 811-5950).
17. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 24 on Form N-1A filed September 28, 1998. (File Nos. 33-31602
and 811-5950).
18. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 25 on Form N-1A filed February 12, 1999. (File Nos. 33-31602
and 811-5950).
20. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 28 on Form N-1A filed May 25, 1999. (File Nos. 33-31602 and
811-5950).
21. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 33 on Form N-1A filed August 27, 1999. (File Nos. 33-31602
and 811-5950).
22. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 35 on Form N-1A filed September 28, 1999. (File Nos. 33-31602
and 811-5950).
23. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 36 on Form N-1A filed October 29, 1999. (File Nos. 33-31602
and 811-5950).
24. Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 37 on Form N-1A filed November 17, 1999. (File Nos. 33-31602
and 811-5950).
Item 26. Business and Other Connections of Investment Adviser:
For a description of the other business of the investment adviser, see the
section entitled "Who Manages the Fund? in Part A. The affiliations with the
Registrant of four of the Trustees and one of the Officers of the investment
adviser are included in Part B of this Registration Statement under "Who Manages
and Provides Services to the Fund?" The remaining Trustees of the investment
adviser and, in parentheses, their principal occupations are: Thomas R. Donahue,
(Chief Financial Officer, Federated Investors, Inc.), 1001 Liberty Avenue,
Pittsburgh, PA, 15222-3779 and Mark D. Olson (Partner, Wilson, Halbrook &
Bayard), 107 W. Market Street, Georgetown, Delaware 19947.
The remaining Officers of the investment adviser are:
Executive Vice Presidents: William D. Dawson, III
Henry A. Frantzen
J. Thomas Madden
Senior Vice Presidents: Joseph M. Balestrino
David A. Briggs
Jonathan C. Conley
Deborah A. Cunningham
Michael P. Donnelly
Linda A. Duessel
Mark E. Durbiano
James E. Grefenstette
Jeffrey A. Kozemchak
Sandra L. McInerney
Susan M. Nason
Mary Jo Ochson
Robert J. Ostrowski
Bernard A. Picchi
Peter Vutz
Vice Presidents: Todd A. Abraham
J. Scott Albrecht
Arthur J. Barry
Randall S. Bauer
G. Andrew Bonnewell
Micheal W. Casey
Robert E. Cauley
Alexandre de Bethmann
Anthony Delserone, Jr.
Donald T. Ellenberger
Eamonn G. Folan
Kathleen M. Foody-Malus
Thomas M. Franks
Marc Halperin
John W. Harris
Patricia L. Heagy
Susan R. Hill
William R. Jamison
Constantine J. Kartsonas
Robert M. Kowit
Richard J. Lazarchic
Steven J. Lehman
Marian R. Marinack
Christopher Matyszewski
William M. Painter
Jeffrey A. Petro
Keith J. Sabol
Frank Semack
Aash M. Shah
Michael W. Sirianni, Jr.
Christopher Smith
Edward J. Tiedge
Leonardo A. Vila
Paige M. Wilhelm
Lori A. Wolff
George B. Wright
Assistant Vice
Presidents: Catherine A. Arendas
Arminda Aviles
Nancy J. Belz
James R. Crea, Jr.
Karol M. Krummie
Lee R. Cunningham, II
James H. Davis, II
Paul S. Drotch
Salvatore A. Esposito
Donna M. Fabiano
Gary E. Falwell
John T. Gentry
Nikola A. Ivanov
Nathan H. Kehm
John C. Kerber
Grant K. McKay
Natalie F. Metz
Thomas Mitchell
Joseph M. Natoli
Trent Nevills
Bob Nolte
Mary Kay Pavuk
John Quartarolo
Rae Ann Rice
Roberto Sanchez-Dahl, Sr.
Sarath Sathkumara
James W. Schaub
John Sidawi
Matthew K. Stapen
Diane R. Startari
Diane Tolby
Timothy G. Trebilcock
Leonarda A. Vila
Steven J. Wagner
Secretary: G. Andrew Bonnewell
Treasurer: Thomas R. Donahue
Assistant Secretaries: C. Grant Anderson
Karen M. Brownlee
Leslie K. Ross
Assistant Treasurer: Denis McAuley, III
The business address of each of the Officers of the investment adviser is
Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, Pennsylvania
15222-3779. These individuals are also officers of a majority of the investment
advisers to the investment companies in the Federated Fund Complex described in
Part B of this Registration Statement.
Item 27. PRINCIPAL UNDERWRITERS:
----------------------
(a) Federated Securities Corp. the Distributor for shares of the Registrant,
acts as principal underwriter for the following open-end investment
companies, including the registrant:
Cash Trust Series II; Cash Trust Series, Inc.; CCB Funds; Edward D. Jones & Co.
Daily Passport Cash Trust; Federated Adjustable Rate U.S. Government Fund, Inc.;
Federated American Leaders Fund, Inc.; Federated ARMs Fund; Federated Core
Trust; Federated Equity Funds; Federated Equity Income Fund, Inc.; Federated
Fixed Income Securities, Inc.;
Federated Fund for U.S. Government Securities, Inc.; Federated GNMA Trust;
Federated Government Income Securities, Inc.; Federated High Income Bond Fund,
Inc.; Federated High Yield Trust; Federated Income Securities Trust; Federated
Income Trust; Federated Index Trust; Federated Institutional Trust; Federated
Insurance Series; Federated Investment Series Funds, Inc.; Federated Managed
Allocation Portfolios; Federated Municipal Opportunities Fund, Inc.; Federated
Municipal Securities Fund, Inc.; Federated Municipal Securities Income Trust;
Federated Short-Term Municipal Trust; Federated Stock and Bond Fund, Inc.;
Federated Stock Trust; Federated Tax-Free Trust; Federated Total Return Series,
Inc.; Federated U.S. Government Bond Fund; Federated U.S. Government Securities
Fund: 1-3 Years; Federated U.S. Government Securities Fund: 2-5 Years; Federated
U.S. Government Securities Fund: 5-10 Years; Federated Utility Fund, Inc.;
FirstMerit Funds; Hibernia Funds; Independence One Mutual Funds; Intermediate
Municipal Trust; International Series, Inc.; Marshall Funds, Inc.; Money Market
Obligations Trust; Regions Funds; RIGGS Funds; SouthTrust Funds;
Tax-Free Instruments Trust; The Wachovia Funds; The Wachovia Municipal Funds;
Vision Group of Funds, Inc.; and World Investment Series, Inc.
(b)
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT
Richard B. Fisher Chairman, Vice President
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Arthur L. Cherry Director,
Federated Investors Tower Federated Securities Corp. --
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
John B. Fisher President-Institutional Sales --
Federated Investors Tower and Director,
1001 Liberty Avenue Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas R. Donahue Director, Assistant Secretary --
Federated Investors Tower and Treasurer,
1001 Liberty Avenue Federated Securities Corp.
Pittsburgh, PA 15222-3779
James F. Getz President-Broker/Dealer and --
Federated Investors Tower Director,
1001 Liberty Avenue Federated Securities Corp.
Pittsburgh, PA 15222-3779
David M. Taylor Executive Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Richard W. Boyd Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Laura M. Deger Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT
Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Solon A. Person, IV Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT
Ronald M. Petnuch Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Thomas E. Territ Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Ernest G. Anderson Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Teresa M. Antoszyk Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
John B. Bohnet Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Matthew W. Brown Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
David J. Callahan Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT
Mark Carroll Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Steven R. Cohen Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
R. Leonard Corton, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Kevin J. Crenny Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Daniel T. Culbertson Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
G. Michael Cullen Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Marc C. Danile Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT
Robert J. Deuberry Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
William C. Doyle Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Mark A. Gessner Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
John K. Goettlicher Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Craig S. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
G. Tad Gullickson Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Dayna C. Haferkamp Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT
Bruce E. Hastings Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
James E. Hickey Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Charlene H. Jennings Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
H. Joseph Kennedy Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Michael W. Koenig Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Dennis M. Laffey Vice President,
Federated Investors Tower Federated Securities Corp. --
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Christopher A. Layton Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Michael H. Liss Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Michael R. Manning Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Amy Michalisyn Vice President,
Federated Investors Tower Federated Securities Corp. --
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT
Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Richard C. Mihm Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Alec H. Neilly Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Thomas A. Peter III Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Richard A. Recker Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
John Rogers Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Brian S. Ronayne Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT
Thomas S. Schinabeck Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Larry Sebbens Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Edward J. Segura Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Edward L. Smith Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
John A. Staley Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Colin B. Starks Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Paul A. Uhlman Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT
Miles J. Wallace Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Edward J. Wojnarowski Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Michael P. Wolff Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Robert W. Bauman Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Edward R. Bozek Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Beth C. Dell Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Donald C. Edwards Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
David L. Immonen Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
BUSINESS ADDRESS WITH DISTRIBUTOR WITH REGISTRANT
John T. Glickson Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Ernest L. Linane Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Renee L. Martin Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Kirk A. Montgomery Secretary, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Timothy S. Johnson Assistant Secretary, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Timothy S. Johnson Secretary, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Victor R. Siclari Assistant Secretary, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Denis McAuley III Assistant Treasurer, --
Federated Investors Tower Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
(c) Not applicable
Item 28. LOCATION OF ACCOUNTS AND RECORDS:
--------------------------------
All accounts and records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and Rules 31a-1 through 31a-3 promulgated
thereunder are maintained at one of the following locations:
Registrant Federated Investors Tower
...1001 Liberty Avenue
...Pittsburgh, PA 15222-3779
(Notices should be sent to the Agent for Service at the above address)
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
Federated Shareholder P.O. Box 8600
Services Company Boston, MA 02266-8600
("Transfer Agent and Dividend
Disbursing Agent")
Federated Services Company Federated Investors Tower
("Administrator") 1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Federated Investment Federated Investors Tower
Management Company 1001 Liberty Avenue
("Adviser") Pittsburgh, PA 15222-3779
State Street Bank and P.O. Box 8600
Trust Company Boston, MA 02266-8600
("Custodian")
Item 29. MANAGEMENT SERVICES: Not applicable.
-------------------
Item 30. UNDERTAKINGS:
------------
Registrant hereby undertakes to comply with the provisions of Section
16(c) of the 1940 Act with respect to the removal of Trustees and the calling of
special shareholder meetings by shareholders.
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(b) 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, thereto duly
authorized, in the City of Pittsburgh and Commonwealth of Pennsylvania, on the
25th day of February, 2000.
MONEY MARKET OBLIGATIONS TRUST
......BY: /s/ Leslie K. Ross
......Leslie K. Ross, Assistant Secretary
......Attorney in Fact for John F. Donahue
......February 25, 2000
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:
NAMETITLE DATE
--------- ----
...... By:/s/
Leslie K. Ross Attorney In Fact February 25, 2000 Leslie K. Ross
For the Persons
ASSISTANT SECRETARY Listed Below
NAME ...... TITLE
---- -----
John F. Donahue* Chairman and Trustee
(Chief Executive Officer)
J. Christopher Donahue* President and Trustee
Richard J. Thomas* Treasurer(Principal Financial and
Accounting Officer)
William D. Dawson, III* Chief Investment Officer
Thomas G. Bigley* Trustee
John T. Conroy, Jr.* Trustee
Nicholas P. Constantakis* Trustee
John F. Cunningham* Trustee
Lawrence D. Ellis, M.D.* Trustee
Peter E. Madden* Trustee
Charles F. Mansfield, Jr.* Trustee
John E. Murray, Jr., J.D., S.J.D.* Trustee
Marjorie P. Smuts* Trustee
John S. Walsh* Trustee
*By Power of Attorney
APPENDIX
Copy of Specimen Certificate for Shares of Beneficial Interest of:
(i) Alabama Municipal Cash Trust; (Response is incorporated by reference to
Post-Effective Amendment No. 21 on Form N-1A filed on December 29, 1993.
File Nos. 33-31259 and 811-5911).
(ii) Arizona Municipal Cash Trust; (Response is incorporated by reference to
Post-Effective Amendment No. 46 on Form N-1A filed on March 16, 1998. File
Nos. 33-31259 and 811-5911).
(iii)Automated Cash Management Trust - Institutional Service Shares and Cash II
Shares; (Response is incorporated by reference to Post-Effective Amendment
No. 8 on Form N-1A filed June 1, 1994. File Nos. 33-31602 and 811-5950).
(iv) Automated Government Money Trust; (Response is incorporated by reference to
Initial Registration Statement on Form N-1 filed on May 28, 1982. File Nos.
2-77822 and 811-3475).
(v) California Municipal Cash Trust - Institutional Shares and Institutional
Service Shares; (Response is incorporated by reference to Post-Effective
Amendment No. 45 on Form N-1A filed on December 19, 1997. File Nos.
33-31259 and 811-5911).
(vi) Connecticut Municipal Cash Trust; (Response is incorporated by reference to
Pre-Effective Amendment No. 1 on Form N-1A filed on October 31, 1989. File
Nos. 33-31259 and 811-5911).
(vii)Federated Master Trust; (Response is incorporated by reference to
Post-Effective Amendment No. 39 on Form N-1A filed January 23, 1996. File
Nos. 2-60111 and 811-2784).
(viii) Federated Short-Term U.S. Government Trust; (Response is incorporated by
reference to Post-Effective Amendment No. 1 on Form N-1A filed October 22,
1987. File Nos. 33-12322 and 811-5035).
(ix) Federated Tax-Free Trust; (Response is incorporated by reference to Initial
Registration Statement on Form S-5 filed December 27, 1978. File Nos.
2-63343 and 811-2891).
(x) Florida Municipal Cash Trust; (Response is incorporated by reference to
Post-Effective Amendment No. 30 on Form N-1A filed on September 19, 1994.
File Nos. 33-31259 and 811-5911).
(xi) Georgia Municipal Cash Trust; (Response is incorporated by reference to
Post-Effective Amendment No. 36 on Form N-1A filed on May 31, 1995. File
Nos. 33-31259 and 811-5911).
(xii)Liberty U.S. Government Money Market Trust; (Response is incorporated by
reference to Post-Effective Amendment No. 35 on Form N-1A filed April 25,
1996. File Nos. 2-65447 and 811-2956).
(xiii) Liquid Cash Trust; (Response is incorporated by reference to
Pre-Effective Amendment No. 3 on Form N-1A filed December 8, 1980. File
Nos. 2-67655 and 811-3057).
(xiv)Maryland Municipal Cash Trust; (Response is incorporated by reference to
Post-Effective Amendment No. 22 on Form N-1A filed on March 2, 1994. File
Nos. 33-31259 and 811-5911).
(xv) Massachusetts Municipal Cash Trust - Institutional Service Shares and
BayFunds Shares; (Response is incorporated by reference to Post-Effective
Amendment No. 21 on Form N-1A filed on December 29, 1993. File Nos.
33-31259 and 811-5911).
(xvi)Michigan Municipal Cash Trust - Institutional Shares and Institutional
Service Shares; (Response is incorporated by reference to Post-Effective
Amendment No. 45 on Form N-1A filed on December 19, 1997. File Nos.
33-31259 and 811-5911).
(xvii) Minnesota Municipal Cash Trust - Institutional Shares and Cash Series
Shares; (Response is incorporated by reference to Post-Effective Amendment
No. 21 on Form N-1A filed on December 29, 1993. File Nos. 33-31259 and
811-5911).
(xviii) New Jersey Municipal Cash Trust - Institutional Shares and Institutional
Service Shares; (Response is incorporated by reference to Post-Effective
Amendment No. 21 on Form N-1A filed on December 29, 1993. File Nos.
33-31259 and 811-5911).
(xix)North Carolina Municipal Cash Trust; (Response is incorporated by
reference to Post-Effective Amendment No. 21 on Form N-1A filed on December
29, 1993. File Nos. 33-31259 and 811-5911).
(xx) Ohio Municipal Cash Trust - Institutional Shares and Institutional Service
Shares; (Response is incorporated by reference to Post-Effective Amendment
No. 45 on Form N-1A filed on December 19, 1997. File Nos. 33-31259 and
811-5911).
(xxi)Ohio Municipal Cash Trust - Cash II Shares; (Response is incorporated by
reference to Post-Effective Amendment No. 21 on Form N-1A filed on December
29, 1993. File Nos. 33-31259 and 811-5911).
(xxii) Pennsylvania Municipal Cash Trust - Institutional Shares; (Response is
incorporated by reference to Post-Effective Amendment No. 35 on Form N-1A
filed on May 19,1995. File Nos. 33-31259 and 811-5911).
(xxiii) Pennsylvania Municipal Cash Trust - Institutional Service Shares and
Cash Series Shares; (Response is incorporated by reference to
Post-Effective Amendment No. 21 on Form N-1A filed on December 29, 1993.
File Nos. 33-31259 and 811-5911).
(xxiv) Tennessee Municipal Cash Trust - Institutional Shares and Institutional
Service Shares; (Response is incorporated by reference to Post-Effective
Amendment No. 42 on Form N-1A filed on February 29,1996. File Nos. 33-31259
and 811-5911).
(xxv)Treasury Obligations Fund - Institutional Capital Shares; (Response is
incorporated by reference to Post-Effective Amendment No. 22 on Form N-1A
filed September 23, 1997. File Nos. 33-31602 and 811-5950).
(xxvi) Trust for Government Cash Reserves; (Response is incorporated by
reference to Pre-Effective Amendment No. 1 on Form N-1A filed March 23,
1989. File Nos. 33-27178 and 811-5772).
(xxvii) Trust for Short-Term U.S. Government Securities; (Response is
incorporated by reference to Post-Effective Amendment No. 53 on Form N-1A
filed January 23, 1995. File Nos. 2-54929 and 811-2602).
(xxviii) Trust for U.S. Treasury Obligations; (Response is incorporated by
reference to Post-Effective Amendment No. 27 on Form N-1A filed November
27, 1994. (File Nos. 2-49591 and 811-2430).
(xxix) Virginia Municipal Cash Trust - Institutional Shares and Institutional
Service Shares; (Response is incorporated by reference to Post-Effective
Amendment No. 21 on Form N-1A filed on December 29, 1993. File Nos.
33-31259 and 811-5911).
Exhibit (a)(xv) under Form N-1A
Exhibit 3(i) under Item 601/Reg. S-K
MONEY MARKET OBLIGATIONS TRUST
Amendment No. 14
DECLARATION OF TRUST
dated October 3, 1988
This Declaration of Trust is amended as follows:
Strike the first paragraph of Section 5 of Article III from the
Declaration of Trust and substitute in its place the following:
"SECTION 5. ESTABLISHMENT AND DESIGNATION OF SERIES OR CLASS."
--------------------------------------------------------------
Without limiting the authority of the Trustees set forth herein, to
establish and designate any additional series or class or to modify the rights
or preferences of any existing series or class, the series and classes have been
established and designated as:
Alabama Municipal Cash Trust
Arizona Municipal Cash Trust
Institutional Service Shares
Automated Cash Management Trust
Cash II Shares
Institutional Service Shares
Automated Government Cash Reserves
Automated Government Money Trust
Automated Treasury Cash Reserves
California Municipal Cash Trust
Institutional Service Shares
Institutional Shares
Connecticut Municipal Cash Trust
Institutional Service Shares
Federated Master Trust
Federated Short-Term U.S. Government Trust
Federated Tax-Free Trust
Florida Municipal Cash Trust
Cash II Shares
Institutional Shares
Georgia Municipal Cash Trust
Government Obligations Fund
Institutional Shares
Institutional Service Shares
Government Obligations Tax Managed Fund
Institutional Shares
Institutional Service Shares
Liberty U.S. Government Money Market Trust
Class A Shares
Class B Shares
Liquid Cash Trust
Maryland Municipal Cash Trust
Massachusetts Municipal Cash Trust
Boston 1784 Funds Shares
Institutional Service Shares
Michigan Municipal Cash Trust
Institutional Service Shares
Institutional Shares
Minnesota Municipal Cash Trust
Cash Series Shares
Institutional Shares
Money Market Management
Money Market Trust
Municipal Obligations Fund
Institutional Capital Shares
Institutional Service Shares
Institutional Shares
New Jersey Municipal Cash Trust
Institutional Service Shares
Institutional Shares
New York Municipal Cash Trust
Cash II Shares
Institutional Service Shares
North Carolina Municipal Cash Trust
Ohio Municipal Cash Trust
Cash II Shares
Institutional Service Shares
Institutional Shares
Pennsylvania Municipal Cash Trust
Cash Series Shares
Institutional Service Shares
Institutional Shares
Prime Cash Obligations Fund
Institutional Capital Shares
Institutional Service Shares
Institutional Shares
Prime Obligations Fund
Institutional Shares
Institutional Service Shares
Prime Value Obligations Fund
Institutional Capital Shares
Institutional Service Shares
Institutional Shares
Tax-Free Instruments Trust
Institutional Service Shares
Investment Shares
Tax-Free Obligations Fund
Institutional Shares
Institutional Service Shares
Tennessee Municipal Cash Trust
Institutional Service Shares
Institutional Shares
Treasury Obligations Fund
Institutional Shares
Institutional Service Shares
Institutional Capital Shares
Trust for Government Cash Reserves
Trust for Short-Term U.S. Government Securities
Trust for U.S. Treasury Obligations
U.S. Treasury Cash Reserves
Institutional Service Shares
Institutional Shares
Virginia Municipal Cash Trust
Institutional Service Shares
Institutional Shares
The establishment and designation of any series or class of shares in
addition to those established and designated above shall be effective upon the
execution by a majority of the then Trustees, without the need for Shareholder
approval, of an amendment tot his Declaration of Trust, taking the form of a
complete restatement or otherwise, setting forth such establishment and
designation and the relative rights and preferences of any such series or class,
or as otherwise provided in such instrument.
The undersigned hereby certify that the above-stated Amendment is a true
and correct Amendment to the Declaration of Trust, as adopted by the Board of
Trustees on the 19th day of May, 1999.
WITNESS the due execution hereof this 16th day of November, 1999.
/S/ JOHN F. DONAHUE /S/ PETER E. MADDEN
- ------------------------------ -------------------
John F. Donahue Peter E. Madden
/S/ THOMAS G. BIGLEY /S/ CHARLES F. MANSFIELD, JR.
- ------------------------------ -----------------------------
Thomas G. Bigley Charles F. Mansfield, Jr.
/S/ JOHN T. CONROY, JR. /S/ JOHN E. MURRAY, JR.
- ------------------------------ -----------------------
John T. Conroy, Jr. John E. Murray, Jr.
/S/ JOHN F. CUNNINGHAM /S/ MARJORIE P. SMUTS
- ------------------------------ ---------------------
John F. Cunningham Marjorie P. Smuts
/S/ LAWRENCE D. ELLIS, M.D. /S/ JOHN S. WALSH
- ------------------------------ -----------------
Lawrence D. Ellis, M.D. John S. Walsh
Exhibit (j) under Form N-1A
Exhibit 23 under Item 601/Reg. S-K
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the references to our firm under the captions "Financial
Highlights" in the Prospectuses and "Independent Auditors" in the Statements of
Additional Information, and to the use of our reports dated February 16, 2000,
in Post-Effective Amendment Number 39 to the Registration Statement (Form N-1A
No. 33-31602) of the Money Market Obligations Trust dated February 29, 2000.
...... ERNST & YOUNG LLP
Boston, Massachusetts
February 24, 2000
Exhibit(o) under Form N-1A
Exhibit(24) under Item 601/Reg.S-K
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
the Secretary and Assistant Secretary of Money Market Obligations Trust and each
of them, their true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for them and in their names, place and stead, in
any and all capacities, to sign any and all documents to be filed with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, the
Securities Exchange Act of 1934 and the Investment Company Act of 1940, by means
of the Securities and Exchange Commission's electronic disclosure system known
as EDGAR; and to file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
sign and perform each and every act and thing requisite and necessary to be done
in connection therewith, as fully to all intents and purposes as each of them
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
SIGNATURES TITLE DATE
- ---------- ----- ----
/S/ JOHN F. DONAHUE Chairman and Trustee February 10, 2000
- -------------------
John F. Donahue (Chief Executive Officer)
/S/ J. CHRISTOPHER DONAHUE President and Trustee February 10, 2000
- --------------------------
J. Christopher Donahue
/S/ RICHARD J. THOMAS Treasurer February 10, 2000
- ---------------------
Richard J. Thomas (Principal Financial and
Accounting Officer)
/S/ THOMAS G. BIGLEY Trustee February 10, 2000
- --------------------
Thomas G. Bigley
/S/ JOHN T. CONROY, JR. Trustee February 10, 2000
- ------------------------
John T. Conroy, Jr.
/S/ LAWRENCE D. ELLIS, M.D. Trustee February 10, 2000
- ---------------------------
Lawrence D. Ellis, M.D.
SIGNATURES TITLE DATE
- ---------- ----- ----
/S/ PETER E. MADDEN Trustee February 10, 2000
- -------------------
Peter E. Madden
/S/ JOHN E. MURRAY, JR. Trustee February 10, 2000
- ------------------------
John E. Murray, Jr.
/S/ MARJORIE P. SMUTS Trustee February 10, 2000
- ---------------------
Marjorie P. Smuts
Sworn to and subscribed before me this 16th day of FEBRUARY , 2000
----------
/S/ JANICE L. BERGER
Janice L. Berger
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
the Secretary and Assistant Secretary of Money Market Obligations Trust and each
of them, their true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for them and in their names, place and stead, in
any and all capacities, to sign any and all documents to be filed with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, the
Securities Exchange Act of 1934 and the Investment Company Act of 1940, by means
of the Securities and Exchange Commission's electronic disclosure system known
as EDGAR; and to file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
sign and perform each and every act and thing requisite and necessary to be done
in connection therewith, as fully to all intents and purposes as each of them
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
SIGNATURES TITLE DATE
- ---------- ----- ----
/S/ WILLIAM D. DAWSON, III Chief Investment Officer February 10, 2000
- --------------------------
William D. Dawson, III
Sworn to and subscribed before me this 16th day of FEBRUARY , 2000
----------
/S/ JANICE L. BERGER
Janice L. Berger
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
the Secretary and Assistant Secretary of Money Market Obligations Trust and each
of them, their true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for them and in their names, place and stead, in
any and all capacities, to sign any and all documents to be filed with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, the
Securities Exchange Act of 1934 and the Investment Company Act of 1940, by means
of the Securities and Exchange Commission's electronic disclosure system known
as EDGAR; and to file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
sign and perform each and every act and thing requisite and necessary to be done
in connection therewith, as fully to all intents and purposes as each of them
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
SIGNATURES TITLE DATE
- ---------- ----- ----
/S/ NICHOLAS P. CONSTANTAKIS Trustee February 10, 2000
- ----------------------------
Nicholas P. Constantakis
Sworn to and subscribed before me this 16th day of FEBRUARY , 2000
----------
/S/ JANICE L. BERGER
Janice L. Berger
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
the Secretary and Assistant Secretary of Money Market Obligations Trust and each
of them, their true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for them and in their names, place and stead, in
any and all capacities, to sign any and all documents to be filed with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, the
Securities Exchange Act of 1934 and the Investment Company Act of 1940, by means
of the Securities and Exchange Commission's electronic disclosure system known
as EDGAR; and to file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
sign and perform each and every act and thing requisite and necessary to be done
in connection therewith, as fully to all intents and purposes as each of them
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
SIGNATURES TITLE DATE
- ---------- ----- ----
/S/ CHARLES F. MANSFIELD, JR. Trustee February 10, 2000
- -----------------------------
Charles F. Mansfield, Jr.
Sworn to and subscribed before me this 16th day of FEBRUARY , 2000
----------
/S/ JANICE L. BERGER
Janice L. Berger
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
the Secretary and Assistant Secretary of Money Market Obligations Trust and each
of them, their true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for them and in their names, place and stead, in
any and all capacities, to sign any and all documents to be filed with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, the
Securities Exchange Act of 1934 and the Investment Company Act of 1940, by means
of the Securities and Exchange Commission's electronic disclosure system known
as EDGAR; and to file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
sign and perform each and every act and thing requisite and necessary to be done
in connection therewith, as fully to all intents and purposes as each of them
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
SIGNATURES TITLE DATE
- ---------- ----- ----
/S/ JOHN S. WALSH Trustee February 10, 2000
- -----------------
John S.Walsh
Sworn to and subscribed before me this 16th day of FEBRUARY , 2000
----------
/S/ JANICE L. BERGER
Janice L. Berger
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
the Secretary and Assistant Secretary of Money Market Obligations Trust and each
of them, their true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for them and in their names, place and stead, in
any and all capacities, to sign any and all documents to be filed with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, the
Securities Exchange Act of 1934 and the Investment Company Act of 1940, by means
of the Securities and Exchange Commission's electronic disclosure system known
as EDGAR; and to file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
sign and perform each and every act and thing requisite and necessary to be done
in connection therewith, as fully to all intents and purposes as each of them
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
SIGNATURES TITLE DATE
- ---------- ----- ----
/S/ JOHN F. CUNNINGHAM Trustee February 10, 2000
- ----------------------
John F. Cunningham
Sworn to and subscribed before me this 16th day of FEBRUARY , 2000
----------
/S/ JANICE L. BERGER
Janice L. Berger
Exhibit (p) under Form N-1A
Exhibit 99 under Item 601/Reg.S-K
CODE OF ETHICS FOR ACCESS PERSONS
TABLE OF CONTENTS
SECTION PAGE
1. General Fiduciary Principles 2
2. Definitions 2
3. Exempt Transactions 4
4. Prohibited Transactions and Activities 4
5. Pre-clearance Requirement and Exempted 5
Transactions
6. Prohibition on the Receipt of Gifts 7
7. REPORTING REQUIREMENTS 8
----------------------
Initial Reporting Requirements 8
Quarterly Reporting Requirements 8
Annual Reporting Requirements 9
Exemption for Disinterested Directors 10
8. Sanctions 10
Procedures for Prior Approval of Personal 11
Securities Transactions by Access Persons
o Preclearing Foreign Securities 12
Procedures for the Reporting and Review of 18
Personal Transaction Activity
CODE OF ETHICS REGARDING PERSONAL SECURITIES TRADING
Pursuant to rule 17j-1 under the Investment Company Act of 1940, this Code of
Ethics has been adopted on behalf of the Adviser, the Underwriters, and each
investment company that is both advised and distributed by an Adviser and an
Underwriter.*
I. GENERAL FIDUCIARY PRINCIPLES
A. Each Access Person:
1. must place the Funds' interests ahead of the Access Person's personal
interests;
2. must avoid conflicts or apparent conflicts of interest with the Funds; and
3. must conduct his or her personal transactions in a manner which neither
interferes with Fund portfolio transactions nor otherwise
takes unfair or inappropriate advantage of the Access Person's
relationship to the Fund.
The failure to recommend or purchase a Covered Security for
the Fund may be considered a violation of this Code.
B. Every Access Person must adhere to these general fiduciary
principles, as well as comply with the specific provisions and
Associated Procedures of this Code. TECHNICAL COMPLIANCE WITH THE
TERMS OF THIS CODE AND THE ASSOCIATED PROCEDURES MAY NOT BE
SUFFICIENT WHERE THE TRANSACTIONS UNDERTAKEN BY AN ACCESS PERSON
SHOW A PATTERN OF ABUSE OF THE ACCESS PERSON'S FIDUCIARY DUTY.
II. DEFINITIONS
A. The "1940 Act" means the Investment Company Act of 1940, as amended.
B. "Access Person" means any director, trustee, officer, managing
general partner, general partner, or Advisory Person of a Fund, of
the Underwriter, and of the Adviser and all family members
permanently residing in the same household. (If non-family members
also reside in the household, the Access Person must either declare
that the Access Person has no influence on the investment decisions
of the other party or the Access Person must report the party as an
Access Person.).
C. "Adviser" means any registered investment adviser that is an affiliate or
subsidiary of Federated Investors, Inc.
D. "Advisory Person" means (i) any employee of the Underwriter, of the Adviser
or of any company in a control relationship to the Underwriter (which would
include any operating company that is an affiliate or a subsidiary of
Federated Investors, Inc.), who, in connection with the employee's regular
functions or duties, makes, participates in, or obtains information
regarding the purchases or sales of a Covered Security by the Fund, or
whose functions relate to the making of any recommendations with respect to
such purchases or sales; and (ii) any natural person in a control
relationship to the Fund who obtains information concerning recommendations
made to the Fund with regard to the purchase or sale of a Covered Security.
E. "Associated Procedures" means those policies, procedures and/or
statements that have been adopted by the Underwriter, the Adviser or
the Fund, and which are designed to supplement this Code and its
provisions.
F. "Beneficial ownership" will be attributed to an Access Person in all
instances where the Access Person (i) possesses the ability to purchase or
sell the Covered Securities (or the ability to direct the disposition of
the Covered Securities); (ii) possesses voting power (including the power
to vote or to direct the voting) over such Covered Securities; or (iii)
receives any benefits substantially equivalent to those of ownership.
Beneficial ownership shall be interpreted in the same manner as it would be
in determining whether a person is subject to the provisions of Section
16a-1(a)(2) of the Securities Exchange Act of 1934, and the rules and
regulations thereunder, except that the determination of direct or indirect
beneficial ownership shall apply to all Covered Securities which an Access
Person has or acquires.
G. "Control" shall have the same meaning as that set forth in Section 2(a)(9)
of the 1940 Act.
H. Except as provided in this definition, "Covered Security" shall include any
Security, including without limitation: equity and debt securities;
derivative securities, including options on and warrants to purchase equity
or debt securities; shares of closed-end investment companies; investments
in unit investment trusts; and Related Securities. "Related Securities" are
instruments and securities that are related to, but not the same as, a
Covered Security. For example, a Related Security may be convertible into a
Covered Security, or give its holder the right to purchase the Covered
Security. For purposes of reporting, "Covered Security" shall include
futures, swaps and other derivative contracts.
"Covered Security" shall not include: direct obligations of the
Government of the United States (regardless of their maturities);
bankers' acceptances; bank certificates of deposit; commercial
paper; high quality short-term debt instruments, including
repurchase agreements; and shares of registered open-end investment
companies.
I. "Disinterested director" means a director, trustee, or managing
general partner of the Fund who is not an "interested person" of the
Fund within the meaning of Section 2(a)(19) of the 1940 Act.
J. "Fund" means each investment company registered under the 1940 Act
(and any series or portfolios of such company) and any other account
advised by an Adviser.
K. "Initial Public Offering" means an offering of securities registered
under the Securities Act of 1933, the issuer of which, immediately
before the registration, was not subject to the reporting
requirements of sections 13 or 15(d) of the Securities Exchange Act
of 1934.
L. "Investment Personnel" include: Access Persons with direct
responsibility and authority to make investment decisions affecting
the Fund (such as portfolio managers and chief investment officers);
Access Persons who provide information and advice to such portfolio
managers (such as securities analysts); and Access Persons who
assist in executing investment decisions for the Fund (such as
traders).
M. "Private Placement" or "limited offering" means an offering that is
exempt from registration under Section 4(2) or Section 4(6) of the
Securities Act of 1933 or pursuant to rule 504, rule 505 or rule 506
under the Securities Act of 1933.
N. "Purchase or sale of a Covered Security" includes, INTER ALIA, the
writing of an option, future or other derivative contract to
purchase or sell a Covered Security.
O. "Security" shall have the meaning set forth in Section 2(a)(36) of the 1940
Act.
P. "Underwriter" means Federated Securities Corp. and Edgewood Services, Inc.
III. EXEMPT TRANSACTIONS
The prohibitions or requirements of Section 4 and Section 5 of this Code
shall not apply to:
A. Purchases or sale of the following Securities:
1. direct obligations of the Government of the United States (regardless of
their maturities). This exemption does not apply to indirect obligations of
the U.S. Government, including FNMAs, GNMAs or FHLMCs.
2. bankers' acceptances;
3. bank certificates of deposit;
4. commercial paper;
5. high quality short-term debt instruments, including repurchase
agreements; and
6. shares of registered open-end investment companies.
B. Purchases or sales effected in any account over which the Access Person has
no direct or indirect influence or control.
IV. PROHIBITED TRANSACTIONS AND ACTIVITIES
A. Every Access Person is prohibited from acquiring any Security
distributed in an initial public offering; however, subject to
provisions of this Code and its Associated Procedures, an Access
Person may acquire the security in the secondary market.
B. Every Access Person is prohibited from acquiring any Security in a private
placement or other limited offering, without the express prior approval of
the Compliance Department. In instances where an Investment Personnel,
after receiving prior approval, acquires a Security in a private placement,
the Investment Personnel has an affirmative obligation to disclose this
investment to the Chief Investment Officer (or his designee) if the
Investment Personnel participates in any subsequent consideration of any
potential investment by the Fund in the issuer of that Security. Following
a purchase by an Investment Personnel in an approved personal transaction,
any purchase by the Fund of Securities issued by the same company (other
than secondary market purchases of publicly traded Securities) will be
subject to an independent review by the Compliance Department.
C. Every Access Person is prohibited from executing a personal
transaction in any Covered Security on a day during which the Fund
has a pending "buy" or "sell" order for that Covered Security, until
the Fund's orders are either executed or withdrawn.
All Investment Personnel are prohibited from purchasing or selling any
Covered Security within seven (7) calendar days AFTER the Fund
purchases or sells the same Covered Security. Members of an
Investment Personnel group, as defined by the Compliance Department,
are prohibited from purchasing or selling any Covered Security
within seven (7) days BEFORE any Fund advised by that group
purchases or sells the same Covered Security.
D. Every Access Person is prohibited from profiting in the purchase and
sale, or sale and purchase, of the same (or equivalent) Covered
Security within 60 calendar days. For purposes of this prohibition,
each personal transaction in the Covered Security will begin a new
60 calendar day period. As an illustration, if an Access Person
purchases 1000 shares of Omega Corporation on June 1st, 500 shares
on July 1st, and 250 shares on August 1st, the profit from the sale
of the 1000 shares purchased on June 1st is prohibited for any
transaction prior to October 1st (i.e., 60 calendar days following
August 1st). In circumstances where a personal transaction in a
Covered Security within the proscribed period is involuntary (for
example, due to unforeseen corporate activity, such as a merger),
the Access Person must notify the Compliance Department.
In circumstances where an Access Person can document personal
exigencies, the Chief Compliance Officer may grant an exemption from
the prohibition of profiting in the purchase and sale, or sale and
purchase, of the same (or equivalent) Covered Security within 60
calendar days. Such an exemption is wholly within the discretion of
the Chief Compliance Officer, and any request for such an exemption
will be evaluated on the basis of the facts of the particular
situation.
E. All Investment Personnel are prohibited from serving on the boards of
directors of any issuer of a Covered Security, absent express prior
authorization from the Compliance Department. Authorization to serve on the
board of such a company may be granted in instances where Compliance
Department determines that such board service would be consistent with the
interests of the Investment Company and its shareholders. If prior approval
to serve as a director of a company is granted, Investment Personnel have
an affirmative duty to recuse themselves from participating in any
deliberations by the Fund regarding possible investments in the securities
issued by the company on whose board the Investment Personnel sit. (This
shall not limit or restrict service on the Board of Federated Investors,
Inc.)
F. Every Access Person is prohibited from purchasing or selling,
directly or indirectly, any Covered Security in which he or she has,
or by reason of such transaction acquires, a direct or indirect
beneficial ownership interest and which he or she knows, or should
have known, at the time of such purchase or sale:
1. is being considered for purchase or sale by the Fund; or
2. is being purchased or sold by the Fund.
G. Every Access Person is prohibited, in connection with the purchase or sale,
directly or indirectly, by the Access Person of a Security Held or to be
Acquired by the Fund:
1. from employing any device, scheme or artifice to defraud the Fund;
2. from making any untrue statement of a material fact to the
Fund or omit to state a material fact necessary in order to
make the statements made to the Fund, in light of the
circumstances under which they are made, not misleading;
3. from engaging in any act, practice or course of business that operates or
would operate as a fraud or deceit on the Fund; or
4. from engaging in any manipulative practice with respect to the Fund.
Examples of this would include causing the Fund to purchase a
Covered Security owned by the Access Person for the purpose of
supporting or driving up the price of the Covered Security, and
causing the Fund to refrain from selling a Covered Security in an
attempt to protect the value of the Access Person's investment, such
as an outstanding option. One test which will be applied in
determining whether this prohibition has been violated will be to
review the Covered Securities transactions of Access Persons for
patterns. However, it is important to note that a violation could
result from a single transaction if the circumstances warranted a
finding that the provisions of Section 1 of this Code have been
violated.
H. Notwithstanding the other restrictions of this Code to which
Disinterested directors are subject, subparagraphs (a) through (d)
of this Section 4 shall not apply to Disinterested directors.
V. PRE-CLEARANCE REQUIREMENT AND EXEMPTED TRANSACTIONS
A. Every Access Person is prohibited from executing a personal transaction in
any Covered Security (including transactions in pension or profit-sharing
plans in which the Access Person has a beneficial interest), without
express prior approval of the Compliance Department, in accordance with the
Associated Procedures governing pre-clearance. A purchase or sale of
Covered Securities not otherwise approved pursuant to the Associated
Procedures may, upon request made prior to the personal transaction,
nevertheless receive the approval of the Compliance Department if such
purchase or sale would be: only remotely potentially harmful to the Fund;
very unlikely to affect a highly institutional market; or clearly not
related economically to the securities to be purchased, sold or held by the
Fund. Notwithstanding the receipt of express prior approval, any purchases
or sales by any Access Person undertaken in reliance on this provision
remain subject to the prohibitions enumerated in Section 4 of this Code.
B. The pre-clearance requirement in Section 5(a) SHALL NOT apply to:
1. Purchases or sales which are non-volitional on the part of
either the Access Person or the Fund, subject to the
provisions of Section 4 (g) of this Code.
2. Purchases which are either made solely with the dividend
proceeds received in a dividend reinvestment plan; or part of
an automatic payroll deduction plan, whereby an employee
purchases securities issued by an employer.
3. Purchases effected upon the exercise of rights issued by an
issuer PRO RATA to all holders of a class of its Covered
Securities, to the extent such rights were acquired from such
issuer, and any sales of such rights so acquired.
4. Purchases and sales of a Security that represents an interest in certain
indices as determined by the Compliance Department.
5. Transactions in a Covered Security which involve the giving of gifts or
charitable donations.
6. Purchases and sales of Covered Securities executed by a person
deemed to be an Access Person SOLELY by reason of his position
as an Officer and/or Director or Trustee of the Fund. This
exemption does not apply to those persons who are Officers
and/or Directors of an Underwriter or Adviser.
C. Notwithstanding the other restrictions of this Code to which Disinterested
directors are subject, Section 5 shall not apply to Disinterested
directors.
VI. PROHIBITION ON THE RECEIPT OF GIFTS
Every Access Person is prohibited from receiving any gift, favor,
preferential treatment, valuable consideration, or other thing of more
than a DE MINIMIS value in any year from any person or entity from, to or
through whom the Fund purchases or sells Securities, or an issuer of
Securities. For purposes of this Code, "DE MINIMIS value" is equal to $100
or less. This prohibition shall not apply to:
1. salaries, wages, fees or other compensation paid, or expenses paid or
reimbursed, in the usual scope of an Access Person's employment
responsibilities for the Access Person's employer;
2. the acceptance of meals, refreshments or entertainment of reasonable value
in the course of a meeting or other occasion, the purpose of which is to
hold bona fide business discussions;
3. the acceptance of advertising or promotional material of nominal value,
such as pens, pencils, note pads, key chains, calendars and similar items;
4. the acceptance of gifts, meals, refreshments, or entertainment of
reasonable value that are related to commonly recognized events or
occasions, such as a promotion, new job, Christmas, or other recognized
holiday; or
5. the acceptance of awards, from an employer to an employee, for recognition
of service and accomplishment.
VII. REPORTING
Every Access Person is required to submit reports of transactions in Covered
Securities to the Compliance Department as indicated below. Any such
report may contain a statement that the report shall not be construed as
an admission by the person making such report that he or she has any
direct or indirect beneficial ownership in the Covered Security to which
the report relates.
INITIAL REPORTING REQUIREMENTS
A. Within 10 calendar days of commencement of employment as an Access Person,
the Access Person will provide a list including:
1. the title, number of shares and principal amount of each Covered Security
in which the Access Person had any direct or indirect beneficial ownership
when the person became an Access Person;
2. the name of any broker, dealer or bank maintaining an account in which any
Security was held for the direct or indirect benefit of
the Access Person as of the date of employment as an
Access Person; and
3. the date the report is submitted to the Compliance Department.
B. Every Access Person is required to direct his broker to forward to
the Chief Compliance Officer (or his designee), on a timely basis,
duplicate copies of both confirmations of all personal transactions
in Covered Securities effected for any account in which such Access
Person has any direct or indirect beneficial ownership interest and
periodic statements relating to any such account.
QUARTERLY REPORTING REQUIREMENTS
C. Every Access Person shall report the information described in
Section 7(d) of this Code with respect to transactions in any
Covered Security (other than those personal transactions in
Securities exempted under Section 3 of this Code) in which such
Access Person has, or by reason of such transaction acquires, any
direct or indirect beneficial ownership.
D. Every report shall be made not later than 10 calendar days after the
end of the calendar quarter in which the transaction to which the
report relates was effected, shall be dated and signed by the Access
Person submitting the report, and shall contain the following
information:
1. the date of the transaction, the title and the number of shares, the
principal amount, the interest rate and maturity date, if applicable of
each Covered Security involved;
2. the nature of the transaction (i.e., purchase, sale or any other type of
acquisition or disposition);
3. the price at which the transaction was effected;
4. the name of the broker, dealer or bank through whom the
transaction was effected; and
5. if there were no personal transactions in any Covered Security during the
period, either a statement to that effect or the word "None" (or some
similar designation).
E. Every Access Person shall report any new account established with a
broker, dealer or bank in which any Security was transacted or held
for the direct or indirect benefit of the Access Person during the
quarter. The report shall include the name of the entity with whom
the account was established and the date on which it was
established.
ANNUAL REPORTING REQUIREMENTS
F. Every Access Person, on an annual basis or upon request of the
Compliance Department, will be required to furnish a list including
the following information (which information must be current as of a
date no more than 30 days before the report is submitted) within 10
calendar days of the request:
1. the title, number of shares and principal amount of each Covered Security
in which the Access Person had any direct or indirect beneficial ownership;
2. the name of any broker, dealer or bank maintaining an account in which any
Covered Security was held for the direct or indirect
benefit of the Access Person; and
3. the date the report is submitted to the Compliance Department.
G. In addition, every Access Person is required, on an annual basis, to
certify that they have received, read, and understand the provisions of
this Code and its Associated Procedures, and that they recognize that they
are subject to its provisions. Such certification shall also include a
statement that the Access Person has complied with the requirements of this
Code and its Associated Procedures and that the Access Person has disclosed
or reported all personal transactions in Securities that are required to be
disclosed or reported pursuant to the requirements of this Code.
EXEMPTION FOR DISINTERESTED DIRECTORS
H. A Disinterested director is exempt from the "initial reporting
requirements" and "annual reporting requirements" contained in Section 7.
I. A Disinterested director shall be exempt from the "quarterly reporting
requirements" contained in Section 7, so long as at the time of the
personal transaction in the Covered Security, the Disinterested director
neither knew, nor, in the ordinary course of fulfilling his official duties
as a director of the Fund, should have known that during the 15-day period
immediately preceding or after the date of the transaction in the Covered
Security by the Disinterested director the Covered Security was purchased
or sold by the Fund, or considered for purchase or sale.
VIII. SANCTIONS
A. Upon discovering a violation of this Code or its Associated
Procedures, the Compliance Department may take such actions or
impose such sanctions, if any, as it deems appropriate, including,
but not limited to:,
1. a letter of censure;
2. suspension;
3. a fine;
4. the unwinding of trades;
5. the disgorging of profits; or
6. the termination of the employment of the violator.
(In instances where the violation is committed by a member of
the Access Person's household, any sanction would be imposed on the
Access Person.)
B. The filing of any false, incomplete or untimely reports, as required by
Section 7 of this Code, may be considered a violation of this Code.
C. All material violations of this Code and any sanctions imposed with
respect thereto shall be reported to the Board of Directors of the
Fund at least annually.
PROCEDURES FOR PRIOR APPROVAL OF PERSONAL SECURITIES TRANSACTIONS BY ACCESS
PERSONS
PROCESS
PRECLEARANCE APPROVAL USING TRADECOMPLY
A. An Access Person (defined to include all members of the Access Person's
household) who wishes to effect a personal securities transaction, whether
a purchase, sale, or other disposition, must preclear the Covered Security
in TradeCOMPLY prior to engaging in the transaction. [Because TradeComply
does not include securities being contemplated for purchase by the
Federated Global Management portfolio managers, Access Persons executing
transactions in foreign securities must complete additional preclearance
steps. See "Preclearing Foreign Securities".]
B. When trading options, the Access Person must preclear the underlying
security before entering into the option contract.
C. Based on established criteria, TradeCOMPLY determines whether the
contemplated transaction should be permitted. The primary criteria
applied is whether the Covered Security is on the Federated Equity
Watch List (which is updated weekly in TradeCOMPLY) or Open Order
lists, or whether the Covered Security was traded by any of the
Federated advised funds (fund trade information is updated nightly
in TradeCOMPLY).
D. Approval is either granted or denied immediately in TradeCOMPLY.
E. If approval is denied, the Access Person is given a specific reason
for the denial. The contemplated personal transaction in that
Covered Security is prohibited until prior approval is subsequently
granted upon request in TradeCOMPLY.
F. If approval is granted, the Access Person is free to effect the
personal transaction in that Covered Security DURING THAT TRADING
DAY ONLY. In this regard, open orders for more than one trading day
(good till cancel) must be approved daily in TradeCOMPLY to comply
with the Code.
G. All trade requests and their dispositions are maintained in
TradeCOMPLY and reviewed by the Compliance Department in conjunction
with other information provided by Access Persons in accordance with
the Code.
H. The Compliance Department reviews all exceptions generated on
TradeComply due to a fund trade occurring after preclearance
approval has been granted. The Compliance Department determines the
appropriate action to be taken to resolve each exception.
PRECLEARING FOREIGN SECURITIES
I. All access persons wishing to execute a personal trade in a foreign
security must first preclear the security in TradeComply. TradeComply will
approve or deny the preclearance request based on its knowledge of any fund
activity in the security as well as the access person's trading
restrictions as defined by their assigned compliance group. If the
preclearance request in TradeComply is denied (Red Light), then the
personal trade may not be executed. If, however, the preclearance request
in TradeComply is approved (Green Light or Yellow Light), then the access
person MUST OBTAIN A SECOND PRECLEARANCE APPROVAL from the Federated Global
trading desk prior to executing the personal trade.
J. The Head Trader or Senior Vice President in the New York office will
be responsible for granting or denying approval to the SECOND
preclearance request. If approval is granted, then the personal
trade may be executed by the access person. If, however, approval is
denied then the personal trade may not be executed (even though the
first approval was granted in TradeComply.)
K. If approval is granted, the following "Personal Transaction
Notification" form must be completed so that the Head Trader can
maintain a record of all preclearance requests.
L. The Head Trader sends a copy of any completed forms, whether approval was
granted or denied, to the Compliance Department.
If extraordinary circumstances exist, an appeal may be directed to
the Chief Compliance Officer Brian Bouda at (412) 288-8634. Appeals are
solely within the discretion of the Chief Compliance Officer.
TRANSACTIONS COVERED AND EXEMPTIONS
These procedures apply to Access Persons' personal transactions in "Covered
Security" as defined in Section 2 of the Code. A Covered Security
includes: equity and debt securities; options and warrants to purchase
equity or debt securities; shares of closed-end investment companies; and
investments in unit investment trusts.
These procedures do NOT apply to contemplated transactions in the following
instruments:
A. direct obligations of the Government of the United States (regardless of
their maturities). This exemption does not apply to indirect obligations of
the U.S. Government, including FNMAs, GNMAs or FHLMCs.);
B. bankers' acceptances;
C. bank certificates of deposit;
D. commercial paper;
E. high quality short-term debt instruments, including repurchase
agreements; and
F. shares of registered open-end investment companies;
In addition, these procedures do NOT apply to the following transactions:
G. Purchases or sales effected in any account over which the Access Person has
no direct or indirect influence or control;
H. Purchases or sales which are non-volitional on the part of either the
Access
Person or the Fund, subject to the provisions of the Code;
I. Purchases which are either: made solely with the dividend proceeds received
in a dividend reinvestment plan; or part of an automatic payroll deduction
plan, whereby an employee purchases securities issued by an employer; and
J. Purchases effected upon the exercise of rights issued by an issuer
PRO RATA to all holders of a class of its Securities, to the extent
such rights were acquired from such issuer, and any sales of such
rights so acquired.
K. Purchases and sales of a Security that represents an interest in certain
indices as determined by the Compliance Department.
L. Transactions in a Covered Security which involve the giving of gifts or
charitable donations.
M. Purchases and sales of Covered Securities executed by a person
deemed to be an Access Person SOLELY by reason of his position as an
Officer and/or Director or Trustee of the Fund. This exemption does
not apply to those persons who are Officers and/or Directors of an
Underwriter or Adviser.
SANCTIONS
Failure to comply with the preclearance process may result in any of the
following sanctions being imposed as deemed appropriate by the Compliance
Department:
1. a letter of censure;
2. suspension;
3. a fine;
4. the unwinding of trades;
5. the disgorging of profits; or
6. the termination of the employment of the violator.
B. (In instances where the violation is committed by a member of the Access
Person's household, any sanction would be imposed on the Access Person.)
PERSONAL TRANSACTION NOTIFICATION
I, intend to buy/sell shares of for my personal account or an account for which
I have discretion. I am aware of no conflict this transaction may pose with any
mutual fund managed by Federated Investors or Federated Global Research.
Signed by:
Date:
Acknowledged by:
(Head Trader or Sr. VP)
Date
Broker-Dealer Name
Address
RE: Your Name
Brokerage Account Number: 1234-5678
Dear Sir/Madam:
As a(n) [employee] [relative residing in the household of an employee]
of Federated Investors, I am subject to certain requirements
applicable to my personal securities transactions, in accordance
with the Codes of Ethics adopted by the various investment
companies, investment advisers and broker/dealers affiliated with
Federated Investors. These requirements also assist Federated
Investors in carrying out its responsibilities under the Insider
Trading and Security Fraud Enforcement Act of 1988. Among these
requirements is my obligation to provide to Federated Investors
duplicate brokerage confirmations and account statements.
Therefore, I hereby request that you provide duplicate confirmations and
account statements with respect to securities in which I have any
beneficial ownership or interest, including securities held in
street name or in house, family, joint or partnership accounts.
These duplicate account memoranda should occur with respect to all
transactions including, but not limited to, those involving options,
warrants, shares of closed end investment companies and futures
contracts. Please forward this information to:
Brian P. Bouda
Chief Compliance Officer
Federated Investors, Inc.
Federated Investors Tower
Pittsburgh, PA 15222-3779
Any questions concerning these matters can be directed to Lisa Ling at
(412) 288-6399. Your serious attention to this matter is greatly
appreciated.
Sincerely,
PROCEDURES FOR THE REPORTING AND REVIEW OF PERSONAL TRANSACTION ACTIVITY
INITIAL REPORTING PROCESS
I. A member of the Compliance Department meets with each new Access Person
and reviews the Code of Ethics, the Insider Trading Policy and the
procedures for preclearing personal securities transactions through
TradeCOMPLY.
II. The Access Person is required to complete the "Certification and
Acknowledgment Form" to acknowledge his/her understanding of the Code of
Ethics and return it to the designated Compliance Assistant within 10
calendar days.
III. In addition, the Access Person is required to complete the "Personal
Security Portfolio Form" which includes the following information:
A. the title, number of shares and principal amount of each Covered Security
in which the Access Person had any direct or indirect beneficial ownership
when the person became an Access Person;
B. the name and address of any broker, dealer or bank with whom the Access
Person maintained an account in which any Covered Security was held for the
direct or indirect benefit of the Access Person as of the date of
employment as an Access Person; and
C. the date the report is submitted to the Compliance Department
IV. A separate form must be completed for the Access Person and all household
members as defined in Section 2(c) of the Code. The signed form(s) must be
returned to the Compliance Department within 10 calendar days.
V. A member of the Compliance Department inputs current portfolio holdings
information into TradeCOMPLY as "initial" holdings.
VI. The Compliance Department notifies each broker, dealer or bank that
duplicate confirmations and statements for the Access Person and household
members, if applicable, must be sent to Brian P. Bouda, Chief Compliance
Officer, effective immediately.
QUARTERLY REPORTING PROCESS
I. On the first business day after each calendar quarter end, the Compliance
Assistant sends an e-mail to each Access Person giving step-by-step
instructions on how to complete the quarterly reporting requirements using
TRADECOMPLY.
II. Within 10 calendar days of the quarter end, the Access Person is required
to:
A. review for accuracy all Covered Security transactions recorded during the
previous calendar quarter in all personal and household member accounts;
B. review all open account information, including names of brokers, banks and
dealers, addresses and account numbers;
C. notify the Compliance Department of any new accounts established with
brokers, banks or dealers during the quarter and the date the account was
established;
D. resolve any discrepancies with the Compliance Department;
E. record an electronic signature on TradeCOMPLY.
III. Covered Security transactions executed by any Access Person during the
calendar quarter are reviewed by Lisa Ling, Compliance Officer,
periodically throughout the quarter using the Compliance Monitor function
in TradeCOMPLY.
IV. The Compliance Department issues memos to each Access Person if any
transactions he or she has executed during the quarter have been deemed to
be either exceptions to or violations of the Code's requirements.
V. Based on the activity and the responses to the memos, the Compliance
Department may impose any of the sanctions identified in Section 8.
ANNUAL REPORTING PROCESS
I. At least annually, the Compliance Department requires that each Access
Person read the Code and certify and acknowledge his/her understanding of
the Code and its requirements.
II. This re-certification is required to be completed within 10 calendar days
of the request. The Compliance Department monitors compliance with this
requirement through the electronic signatures on TradeCOMPLY.
III. At the same time, the Compliance Department provides each Access Person
with a current list of securities held in the Access Person's account(s)
on TradeComply.
IV. Within 10 calendar days of the request, the Access Person is required to:
A. review for accuracy all securities held in all personal and household
member accounts, including the title, number of shares and principal amount
of each Covered Security in which the Access Person had any direct or
indirect beneficial ownership;
B. review all open account information, including names of brokers, banks and
dealers, addresses and account numbers;
C. notify the Compliance Department of any new accounts established with
brokers, banks or dealers;
D. resolve any discrepancies with the Compliance Department;
E. record an electronic signature on TradeCOMPLY.
REPORTING TO THE BOARD OF DIRECTORS
I. Each quarter, the Compliance Department reports any violations of the Code
to the Board of Directors. Violations of the Code include:
A. failure to preclear a transaction;
B. failure to complete the initial, quarterly or annual reporting requirements
timely, regardless of whether the Access Person executed any transactions;
C. recognition of a profit on the sale of a security held less than 60 days;
D. failure to comply with the receipt of gifts requirements; and
E. any trends or patterns of personal securities trading which are deemed by
the Compliance Department to be violations of the Code.
II. The Compliance Department provides the Board with the name of the Access
Person; the type of violation; the details of the transaction(s); and the
types of sanctions imposed, if any.
RECORDKEEPING REQUIREMENTS
The Compliance Department maintains the following books and records in
TradeComply for a period no less than 6 calendar years:
A. a copy of the Code of Ethics;
B. a record of any violation of the Code of Ethics and any action taken as a
result of the violation;
C. a copy of each report made by an Access Person, including initial,
quarterly and annual reporting;
D. a record of all Access Persons (current and for the past five years);
E. a record of persons responsible for reviewing reports; and
F. a copy of any supporting documentation used in making decisions regarding
action taken by the Compliance Department with respect to personal
securities trading.
