1940 Act File No. 811-06071
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. ..........
Post-Effective Amendment No. ................
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 22 .............................. X
BT INSTITUTIONAL FUNDS
(Exact Name of Registrant as Specified in Charter)
Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779
(Address of Principal Executive Offices)
(412) 288-1900
(Registrant's Telephone Number)
Jay S. Neuman, Esq. Copies to: Burton M. Leibert, Esq.
Federated Investors Tower Willkie Farr & Gallagher
Pittsburgh, Pennsylvania 15222-3779 One Citicorp Center
(Name and Address of Agent for Service) 153 East 53rd Street
New York, New York 10022
CROSS-REFERENCE SHEET
This Amendment to the Registration Statement of the BT Institutional
Funds, relates only to Institutional Daily Assets Fund. Institutional Cash
Management Fund, Institutional Treasury Money Fund, Institutional NY Tax
Free Money Fund, Institutional Tax Free Money Fund, Equity 500 Index Fund,
Institutional Cash Reserves Fund, and Institutional Liquid Assets Fund are
each a series of shares of the Registrant and are each offered by separate
Prospectuses included in Post-Effective Amendment No. 17 to the
Registrant's Registration Statement. This Amendment does not relate to,
amend or otherwise affect any of the separate Prospectuses contained in
Post-Effective Amendment No. 17 and, therefore, pursuant to Rule 485(d)
under the Securities Act of 1933, as amended (the "1933 Act"), does not
affect the effectiveness of such Post-Effective Amendments.
PART A. INFORMATION REQUIRED IN A PROSPECTUS.
Prospectus Heading
(Rule 404(c) Cross Reference)
Responses to Items 1-3 and 5A have been omitted pursuant to paragraph 4 of
Instruction F of the General Instructions to Form N-1A
Item 4. General Description of
Registrant..............Investment Objective and Policies; Risk
Factors.
Item 5. Management of the Fund...Management of the Fund and Trust.
Item 6. Capital Stock and Other
Securities..............Taxation and Distributions; Management
of the Fund and Trust--Organization of
the Trust.
Item 7. Purchase of Securities Being
Offered.................Net Asset Value; Purchase and Redemption
of Shares.
Item 8. Redemption or Repurchase.Purchase and Redemption of Shares.
Item 9. Legal Proceedings........None.
PART B. INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION.
Item 10. Cover Page...............Cover Page.
Item 11. Table of Contents........Table of Contents.
Item 12. General Information and
History.................General Information and History;
Organization of the Trust.
Item 13. Investment Objectives and
Policies................Investment Objective and Policies;
Investment Restrictions.
Item 14. Management of the Fund...Management of the Trust; Trustee
Compensation Table.
Item 15. Control Persons and Principal
Holders of Securities...
Item 16. Investment Advisory and Other
Services................Investment Adviser; Administrator;
Custodian and Transfer Agent.
Item 17. Brokerage Allocation.....Not Applicable.
Item 18. Capital Stock and Other
Securities..............Not Applicable.
Item 19. Purchase, Redemption and
Pricing of Securities Being
Offered.................Net Asset Value; Purchase and Redemption
Information.
Item 20. Tax Status...............Taxes.
Item 21. Underwriters.............Not applicable.
Item 22. Calculation of Performance
Data....................Performance Information.
Item 23. Financial Statements.....Statement of Assets and Liabilities.
BT INSTITUTIONAL FUNDS
Prospective
Investor Copy #
====================================================
CONFIDENTIAL PRIVATE OFFERING MEMORANDUM
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October 16, 1996
INSTITUTIONAL DAILY ASSETS FUND
BANKERS TRUST COMPANY
INVESTMENT ADVISER AND ADMINISTRATOR
EDGEWOOD SERVICES, INC.
PLACEMENT AGENT
CLEARING OPERATIONS
P.O. BOX 897
PITTSBURGH, PA 15230-0897
DO NOT COPY OR CIRCULATE. <PAGE>
October 16, 1996
CONFIDENTIAL PRIVATE OFFERING MEMORANDUM
BT INSTITUTIONAL FUNDS - INSTITUTIONAL DAILY ASSETS FUND
The Institutional Daily Assets Fund (the "Fund") seeks a high level of
current income consistent with liquidity and the preservation of capital
through investment in high-quality money market instruments. The Fund is a
registered investment company under the Investment Company Act of 1940, as
amended (the "1940 Act") and is a diversified series of BT Institutional
Funds, a Massachusetts business trust (the "Trust"). Bankers Trust Company
serves as the Fund's investment adviser. The Fund is a management
investment company commonly known as a money market fund.
Please read this Confidential Private Offering Memorandum (the
"Memorandum") carefully before investing and retain it for future
reference. It contains important information about the Fund that investors
should know before investing.
A Confidential Statement of Additional Information with respect to the Fund
("SAI") with the same date has been filed with the Securities and Exchange
Commission, and is incorporated herein by reference. A copy of the SAI is
available without charge by calling the Fund at (212) 250-6934.
Three copies of a Subscription Agreement for use in subscribing to purchase
shares of the Fund accompany delivery of this Memorandum. In order to
purchase shares of the Fund, a prospective investor must satisfactorily
complete, execute and deliver each copy of the Subscription Agreement to
Bankers Trust Company, 130 Liberty Street, New York, New York 10006.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, BANKERS TRUST COMPANY OR ANY OTHER BANKING OR DEPOSITORY
INSTITUTION, AND
THE SHARES ARE NOT FEDERALLY GUARANTEED OR INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE U.S. GOVERNMENT, THE FEDERAL RESERVE BOARD OR
ANY OTHER AGENCY. THE FUND INTENDS TO MAINTAIN A CONSTANT $1.00 PER SHARE
NET ASSET VALUE, ALTHOUGH THERE CAN BE NO ASSURANCE THAT IT WILL BE ABLE TO
DO SO.
THE SECURITIES DESCRIBED HEREIN ARE OFFERED PURSUANT TO AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
AND HAVE NOT BEEN REGISTERED WITH OR APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY OTHER REGULATORY AUTHORITY OF ANY
JURISDICTION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
SHARES OF THE FUND ARE BEING OFFERED FOR INVESTMENT ONLY TO INVESTORS WHO
QUALIFY AS BOTH (1) "ACCREDITED INVESTORS" AS DEFINED UNDER REGULATION D
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND (2) INSTITUTIONAL
INVESTORS. SHARES OF THE FUND ARE NOT BEING OFFERED TO INDIVIDUALS OR TO
ENTITIES ORGANIZED FOR THE PURPOSE OF INVESTING ON BEHALF OF INDIVIDUALS.
BANKERS TRUST COMPANY
Investment Adviser and Administrator
<PAGE>
INVESTORS WILL BE REQUIRED TO REPRESENT THAT THEY MEET CERTAIN FINANCIAL
REQUIREMENTS AND THAT THEY ARE FAMILIAR WITH AND UNDERSTAND THE TERMS,
RISKS AND MERITS OF AN INVESTMENT IN THE FUND.
NO RESALE OF SHARES MAY BE MADE UNLESS THE SHARES ARE SUBSEQUENTLY
REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION FROM SUCH REGISTRATION
IS AVAILABLE.
THIS CONFIDENTIAL PRIVATE OFFERING MEMORANDUM HAS BEEN PREPARED ON A
CONFIDENTIAL BASIS SOLELY FOR THE INFORMATION OF THE RECIPIENT AND MAY NOT
BE REPRODUCED, PROVIDED TO OTHERS OR USED FOR ANY OTHER PURPOSE.
NO PERSON HAS BEEN AUTHORIZED TO MAKE REPRESENTATIONS OR GIVE ANY
INFORMATION WITH RESPECT OF THE SHARES, EXCEPT THE INFORMATION CONTAINED
HEREIN OR IN THE TRUST'S REGISTRATION STATEMENT FILED UNDER THE 1940 ACT.
FOR NEW HAMPSHIRE RESIDENTS
NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A
LICENSE HAS BEEN FILED WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A
SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF
NEW HAMPSHIRE CONSTITUTES A FINDING BY THE ATTORNEY GENERAL OR THE
SECRETARY OF STATE THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE,
COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN
EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR TRANSACTION MEANS
THAT THE ATTORNEY GENERAL HAS PASSED IN ANY WAY UPON THE MERITS OR
QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON,
SECURITY, OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO
ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT, ANY REPRESENTATION
INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.
FOR GEORGIA INVESTORS
THESE SECURITIES HAVE BEEN ISSUED OR SOLD IN RELIANCE ON PARAGRAPH (13) OF
CODE SECTION 10-5-9 OF THE `GEORGIA SECURITIES ACT OF 1973,' AND MAY NOT BE
SOLD OR TRANSFERRED EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER SUCH ACT
OR PURSUANT TO AN EFFECTIVE REGISTRATION UNDER SUCH ACT.
2
<PAGE>
FOR FLORIDA INVESTORS
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE FLORIDA SECURITIES AND
INVESTOR PROTECTION ACT.
IF SALES ARE MADE TO FIVE (5) OR MORE INVESTORS IN FLORIDA, ANY FLORIDA
INVESTOR MAY, AT THE INVESTOR'S OPTION, VOID ANY PURCHASE HEREUNDER WITHIN
A PERIOD OF THREE (3) DAYS AFTER THE INVESTOR (A) FIRST TENDERS OR PAYS TO
THE ISSUER, AN AGENT OF THE ISSUER OR AN ESCROW AGENT THE CONSIDERATION
REQUIRED HEREUNDER OR (B) DELIVERS ITS EXECUTED SUBSCRIPTION AGREEMENT,
WHICHEVER OCCURS LATER. TO ACCOMPLISH THIS, IT IS SUFFICIENT FOR A FLORIDA
INVESTOR TO SEND A LETTER OR TELEGRAM TO THE ISSUER WITHIN SUCH THREE (3)
DAY PERIOD, STATING THAT THE INVESTOR IS VOIDING AND RESCINDING THE
PURCHASE. IF AN INVESTOR SENDS A LETTER, IT IS PRUDENT TO DO SO BY
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO INSURE THAT THE LETTER IS
RECEIVED AND TO EVIDENCE THE TIME OF MAILING.
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TABLE OF
- -
CONTENTS
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<TABLE>
<CAPTION>
PAGE <S> <C>
Summary of Fund Expenses 4
Fund Financial Highlights 4
Investment Objective and Policies 5
Risk Factors 10
Net Asset Value 10
Purchase and Redemption of Shares 11
Taxation and Distributions 12
Performance Information and Reports 13
Management of the Fund and Trust 14
</TABLE>
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3
<PAGE>
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SUMMARY OF FUND
- - -
EXPENSES
-----------------------------------------------------
The following table provides (i) a summary of expenses relating to
purchases and sales of shares of Institutional Daily Assets Fund (the
"Fund") and the estimated aggregate annual operating expenses of the Fund,
as a percentage of average net assets of the Fund and (ii) an example
illustrating the dollar cost of such expenses on a $1,000 investment in the
Fund. -------------------------------------------------------------------
<TABLE>
<S>
<C>
ANNUAL OPERATING EXPENSES
(as a percentage of the average daily net assets of the Fund)
...........................................................................
............. Investment advisory fee
0.10%
Distribution (Rule 12b-1) Fee
None
Other expenses (after reimbursements or waivers)
0.02
...........................................................................
............. Total operating expenses (after reimbursements or waivers)
0.12%
...........................................................................
............. </TABLE>
<TABLE>
<CAPTION>
EXAMPLE 1
year 3 years
<S> <C>
<C>
...........................................................................
............... You would pay the following expenses on a $1,000
investment,
assuming: (1) 5% annual return and (2) redemption at the end of
each time period $1
$4
</TABLE>
- -------------------------------------------------------------------
The expense table and the example above show the estimated costs and
expenses that an investor will bear directly or indirectly as a shareholder
of the Fund. The expense table and the example reflect a voluntary
undertaking by Bankers Trust Company ("Bankers Trust") to waive or
reimburse expenses such that the total operating expenses will not exceed
0.12% of the Fund's average net assets annually. THE EXAMPLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES AND ACTUAL EXPENSES, PRIOR TO THE APPLICATION OF BANKERS
TRUST'S WAIVER OR REIMBURSEMENT OF SUCH EXPENSES, MAY BE GREATER OR LESS
THAN THOSE SHOWN. Moreover, while each example assumes a 5% annual return,
actual performance will vary and may result in a return greater or less
than 5%.
Shares of the Fund are sold by Edgewood Services, Inc. ("Edgewood") as the
Fund's placement agent (the "Placement Agent") primarily to institutional
customers of Bankers Trust that participate in Bankers Trust's securities
lending program.
For more information with respect to the expenses of the Fund see
"Management of the Fund and Trust" herein.
FUND FINANCIAL
- -
HIGHLIGHTS The Fund
-----------------------------------------------------
will have a fiscal year-end of June 30. As this is the Fund's first fiscal
year, financial information with respect to the Fund is not available at
this time.
4
<PAGE>
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INVESTMENT OBJECTIVE AND
- - -
POLICIES The Fund seeks a high
--------------------------------------------
level of current income consistent with liquidity and the preservation of
capital through investment in high-quality money market instruments. The
Fund offers investors a convenient means of investing cash collateral
received in connection with securities lending transactions in a
diversified portfolio of short-term money market instruments.
There can be no assurance that the investment objective of the Fund will be
achieved. The Fund's investment objective is not a fundamental policy and
may be changed upon 30 days written notice to, but without the approval of,
the Fund's shareholders. If there is a change in the Fund's investment
objective, the Fund's shareholders should consider whether the Fund remains
an appropriate investment in light of their then-current needs.
The following is a discussion of the various investments and investment
policies
of the Fund. Additional information about the investment policies of the
Fund appears in the Confidential Statement of Additional Information
("SAI") of the Fund.
The Fund will attempt to achieve its investment objective by investing in
the following money market instruments:
OBLIGATIONS OF BANKS AND OTHER FINANCIAL INSTITUTIONS. The Fund may invest
in U.S. dollar-denominated fixed rate or variable rate obligations of U.S.
or foreign financial institutions, including banks, which are rated in the
highest short-term rating category by any two nationally recognized
statistical rating organizations ("NRSROs") (or one NRSRO if that NRSRO is
the only such NRSRO which rates such obligations) or, if not so rated, are
believed by Bankers Trust, acting under the supervision of the Board of
Trustees of the Fund, to be of comparable quality. Financial institution
obligations in which the Fund may invest include, but are not limited to,
certificates of deposit, bankers' acceptances, bank time deposits,
commercial paper and other U.S. dollar-denominated instruments issued or
supported by the credit of U.S. or foreign financial institutions,
including banks. If Bankers Trust, acting under the supervision of the
Board of Trustees of the Fund, deems the instruments to present minimal
credit risk, the Fund may invest in obligations of foreign banks or foreign
branches and subsidiaries of U.S. and foreign financial institutions,
including banks. Investments in these obligations may entail risks that are
different from those of investments in obligations of U.S. financial
institutions, including banks, because of differences in political,
regulatory and economic systems and conditions. These risks include future
political and economic developments, currency blockage, the possible
imposition of withholding taxes on interest payments, differing reserve
requirements, reporting and recordkeeping requirements and accounting
standards, possible seizure or nationalization of deposits, difficulty or
inability of pursuing legal remedies and obtaining judgments in foreign
courts, possible establishment of exchange controls or the adoption of
other foreign governmental restrictions that might affect adversely the
payment of principal and interest on financial institution obligations.
Under normal market
5
<PAGE>
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conditions, the Fund will invest more than 25% of its assets in the bank
and other financial institution obligations described above. The Fund's
concentration of its investments in the obligations of banks and other
financial institutions will cause the Fund to be subject to the risks
peculiar to these industries to a greater extent than if its investments
were not so concentrated.
COMMERCIAL PAPER. The Fund may invest in fixed rate or variable rate
commercial paper, including variable rate master demand notes, issued by
U.S. or foreign corporations or financial institutions. Commercial paper
when purchased by the Fund must be rated in the highest short-term rating
category by any two NRSROs (or one NRSRO if that NRSRO is the only such
NRSRO which rates such security) or, if not so rated, must be believed by
Bankers Trust, acting under the supervision of the Board of Trustees of the
Fund, to be of comparable quality. Any commercial paper issued by a foreign
corporation and purchased by the Fund must be U.S. dollar-denominated and
must not be subject to foreign withholding tax at the time of purchase.
Investing in foreign commercial paper generally involves risks similar to
those described above relating to obligations of foreign banks or foreign
branches and subsidiaries of U.S. and foreign banks.
Variable rate master demand notes are unsecured instruments that permit the
indebtedness thereunder to vary and provide for periodic adjustments in the
interest rate. Because variable rate master demand notes are direct lending
arrangements between the Fund and the issuer, they are not ordinarily
traded. Although no active secondary market may exist for these notes, the
Fund will purchase only those notes under which it may demand and receive
payment of principal and accrued interest daily or may resell the note to a
third party. While the notes are not typically rated by credit rating
agencies, issuers of variable rate master demand notes must satisfy Bankers
Trust, acting under the
supervision of the Board of Trustees of the Fund, that the same criteria as
set forth above for issuers of commercial paper are met. In the event an
issuer of a variable rate master demand note defaulted on its payment
obligation, the Fund might be unable to dispose of the note because of the
absence of a secondary market and could, for this or other reasons, suffer
a loss to the extent of the default. The face maturities of variable rate
notes may exceed 397 days. (See "Quality and Maturity of the Fund's
Securities" herein.)
U.S. GOVERNMENT OBLIGATIONS. The Fund may invest in obligations issued or
guaranteed by the U.S. Treasury or by agencies or instrumentalities of the
U.S. Government ("U.S. Government Obligations"). Obligations of certain
agencies and instrumentalities of the U.S. Government, such as short-term
obligations of the Government National Mortgage Association, are supported
by the "full faith and credit" of the U.S. Government; others, such as
those of the Export-Import Bank of the U.S., are supported by the right of
the issuer to borrow from the U.S. Treasury; others, such as those of the
Federal National Mortgage Association, are supported by the discretionary
authority of the U.S. Government to purchase the agency's
6
<PAGE>
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obligations; and still others, such as those of the Student Loan Marketing
Association, are supported only by the credit of the instrumentality. No
assurance can be given that the U.S. Government would provide financial
support to U.S. Government-sponsored instrumentalities if it is not
obligated to do so by law.
OTHER DEBT OBLIGATIONS. The Fund may invest in deposits, bonds, notes and
debentures of issuers that at the time of purchase have outstanding short-
term obligations meeting the above short-term rating requirements, or if
there are no such short-term ratings, are determined by Bankers Trust,
acting under the supervision of the Board of Trustees of the Fund, to be of
comparable quality and are rated in the top two highest long-term rating
categories by two NRSROs (or one NRSRO if that NRSRO is the only such NRSRO
which rates the security).
ASSET-BACKED SECURITIES. The Fund may also invest in securities generally
referred to as asset-backed securities, which directly or indirectly
represent a participation interest in, or are secured by and payable from,
a stream of payments generated by particular assets such as motor vehicle
or credit card receivables. Asset-backed securities provide periodic
payments that generally consist of both interest and principal payments.
Consequently, the life of an asset-backed security varies with the
prepayment and loss experience of the underlying assets.
REPURCHASE AGREEMENTS. The Fund may engage in repurchase agreement
transactions with banks and governmental securities dealers approved by the
Fund's Board of Trustees. Under the terms of a typical repurchase
agreement, the Fund would acquire U.S. Government Obligations of any
remaining maturity for a relatively short period (usually not more than one
week), subject to an obligation of the seller to repurchase, and the Fund
to resell, the obligation at an agreed price and time, thereby determining
the yield during the Fund's holding period. This arrangement results in a
fixed rate of return that is not subject to market fluctuations during the
Fund's holding period. The value of the underlying securities will be at
least equal at all times to the total amount of the repurchase obligations,
including interest. The Fund bears a risk of loss in the event that the
other party to a repurchase agreement defaults on its obligations and the
Fund is delayed in or prevented from exercising its rights to dispose of
the collateral securities, including the risk of a possible decline in the
value of the underlying securities during the period in which the Fund
seeks to assert these rights. Bankers Trust, acting under the supervision
of the Board of Trustees of the Fund, reviews the creditworthiness of those
banks and dealers with which the Fund enters into repurchase agreements and
monitors on an ongoing basis the value of the securities subject to
repurchase agreements to ensure that it is maintained at the required
level.
REVERSE REPURCHASE AGREEMENTS. The Fund may enter into reverse repurchase
agreements. In a reverse repurchase agreement the Fund agrees to sell
portfolio securities to financial institutions such as banks and broker-
dealers and to repurchase them at a mutually agreed date and price. At the
time the Fund enters into a reverse repurchase agreement it will earmark
cash, U.S. Government
7
<PAGE>
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Obligations or other high grade, liquid debt instruments having a value
equal to the repurchase price, including accrued interest. Reverse
repurchase agreements involve the risk that the market value of the
securities sold by the Fund may decline below the repurchase price of the
securities. Reverse repurchase agreements are considered to be borrowings
by the Fund for purposes of the limitations described in "Additional
Investment Limitations" below and in the Fund's SAI. The Fund may only
enter into reverse repurchase agreements for temporary purposes to satisfy
redemptions and not for leverage.
WHEN-ISSUED AND DELAYED-DELIVERY SECURITIES. To secure prices deemed
advantageous at a particular time, the Fund may purchase securities on a
when-issued or delayed-delivery basis, in which case delivery of the
securities occurs beyond the normal settlement period; payment for or
delivery of the securities would be made prior to the reciprocal delivery
or payment by the other party to the transaction. The Fund will enter into
when-issued or delayed-delivery transactions for the purpose of acquiring
securities and not for the purpose of leverage. When-issued securities
purchased by the Fund may include securities purchased on a "when, as and
if issued" basis under which the issuance of the securities depends on the
occurrence of a subsequent event.
Securities purchased on a when-issued or delayed-delivery basis may expose
the Fund to risk because the securities may experience fluctuations in
value prior to their actual delivery. The Fund does not accrue income with
respect to a when-issued or delayed-delivery security prior to its stated
delivery date. Purchasing securities on a when-issued or delayed-delivery
basis can involve the additional risk that the yield available in the
market when the delivery takes place may be higher than that obtained in
the transaction itself. Upon purchasing a security on a when-issued or
delayed-delivery basis, the Fund will earmark cash, U.S. Government
Obligations or other high grade liquid debt instruments in an amount at
least equal to the when-issued or delayed-delivery commitment.
INVESTMENT IN OTHER INVESTMENT COMPANIES. In accordance with applicable
law, the Fund may invest its assets in other money market funds with
comparable investment objectives. In general, the Fund may not (1) purchase
more than 3% of any other money market fund's voting stock; (2) invest more
than 5% of its assets in any single money market fund; and (3) invest more
that 10% of its assets in other money market funds.
ILLIQUID SECURITIES. The Fund may not invest more than 10% of its net
assets in securities which are illiquid or otherwise not readily marketable
(such securities may include securities which are subject to legal or
contractual restrictions on resale and repurchase agreements with
maturities over seven days). If a security becomes illiquid after purchase
by the Fund, the Fund will normally sell the security as soon as is
reasonable practicable unless to do so would not be in the best interests
of shareholders.
8
<PAGE>
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QUALITY AND MATURITY OF THE FUND'S SECURITIES
The Fund will maintain a dollar-weighted average maturity of 90 days or
less. All securities in which the Fund invests will have or be deemed to
have remaining maturities of 397 days or less on the date of their
purchase, will be denominated in U.S. dollars and will have been granted
the required ratings
established herein by two NRSROs (or one NRSRO if that NRSRO is the only
such NRSRO which provides such ratings), or if not so rated, are believed
by Bankers Trust, under the supervision of the Fund's Board of Trustees, to
be of comparable quality. Currently, there are six rating agencies which
have been designated by the SEC as an NRSRO. These organizations and their
highest short-term rating category (which also may be modified by a "+")
are: Duff and Phelps Credit Rating Co., D-1; Fitch Investors Services, LP,
F-1; Moody's Investors Service Inc., Prime-1; Standard & Poor's Rating
Services, a Division of the McGraw Hill Companies, Inc., A-1; IBCA Ltd. and
IBCA Inc., A-1; Thomson BankWatch, Inc., TBW-1. A description of all short
and long-term ratings is provided in the Appendix to the SAI. Bankers
Trust, acting under the supervision of and procedures adopted by the Fund's
Board of Trustees, will also determine that all securities purchased by the
Fund present minimal credit risks. Bankers Trust will cause the Fund to
dispose of any security as soon as practicable if the security is no longer
of the requisite quality, unless such action would not be in the best
interest of the Fund. High-quality, short-term instruments may result in a
lower yield than instruments with a lower quality or longer term.
ADDITIONAL INVESTMENT LIMITATIONS
The Fund may not invest more than 25% of its total assets in the securities
of issuers in any single industry (excluding U.S. Government Obligations
and repurchase agreements collateralized by U.S. Government Obligations),
except that, under normal market conditions, more than 25% of the total
assets of the Fund will be invested in obligations of banks and other
financial institutions. As an operating policy, the Fund may not invest
more than 5% of its total assets in the obligations of any one issuer
except: (1) as may be permitted by Rule 2a-7 under the 1940 Act; and (2)
for U.S. Government Obligations and repurchase agreements collateralized by
U.S. Government obligations, which may be purchased without limitation. The
Fund is also authorized to borrow for temporary purposes to meet
redemptions, including entering into reverse repurchase transactions, in an
amount up to 10% of its total assets and to pledge its assets to the same
extent in connection with these borrowings. At the time of an investment,
the Fund's aggregate holdings of repurchase agreements having a remaining
maturity of more than seven calendar days (or which may not be terminated
within seven calendar days upon notice by the Fund), time deposits having
remaining maturities of more than seven calendar days and other illiquid
securities will not exceed 10% of the Fund's net assets. If changes in the
liquidity of certain securities cause the Fund to exceed such 10% limit,
the Fund will take steps to bring the aggregate amount of its illiquid
securities back below 10% of its net assets as soon as practicable,
9
<PAGE>
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unless such action would not be in the best interest of the Fund. The
Fund's limitations on investment in a single industry and on borrowing may
not be changed without the approval of the shareholders of the Fund. All
other investment policies and limitations described in this Memorandum may
be changed by a vote of the Fund's Board of Trustees.
The SAI contains further information on the Fund's investment restrictions.
RISK
-
FACTORS
-------------------------------------------------------------------
The Fund is designed as a cash management vehicle for institutional
investors seeking high current income approximating money market rates
while remaining liquid with a stable share price. The Fund adheres to the
following practices which enable it to attempt to maintain a $1.00 share
price: limiting average dollar-weighted maturity of the securities held by
the Fund to 90 days or less; buying securities with remaining maturities of
397 days or less as determined under Rule 2a-7 under the 1940 Act; and
buying only high-quality securities with minimal credit risks. The Fund
cannot guarantee a $1.00 share price, but these practices help to minimize
any price fluctuations that might result from rising or declining interest
rates. While the Fund invests in high-quality money market securities,
investors should be aware that an investment in the Fund is not without
risk. All money market instruments, including U.S. Government
Obligations, can change in value when interest rates or an issuer's
creditworthiness changes.
It is expected that money used to purchase Fund shares will be comprised
primarily of cash collateral which the Fund's institutional investors
receive in connection with their participation in Bankers Trust's
securities lending program. The amount of such collateral is subject to
periodic fluctuation, and accordingly the Fund may experience large
purchases and redemptions over a relatively short time period which may
impact the Fund's ability to optimize cash management. To assist the Fund
in remaining fully invested, pursuant to its request the Fund has received
an order from the Securities and Exchange Commission ("SEC") granting the
Fund and Bankers Trust permission to jointly enter into repurchase
agreements and other investments with non-affiliated banks, broker-dealers
or other issuers with respect to amounts to be received on any day. Such
investments will be apportioned between the Fund and Bankers Trust in such
a manner as to maximize the investment of cash by the Fund.
NET ASSET
- -
VALUE On
---------------------------------------------------------------
each day on which the Fund is open (each such day being a "Valuation Day"),
the net asset value per share of the Fund is calculated at 5:30 p.m., New
York time. The Fund is currently open on each day, Monday through Friday,
except (a) January 1st, Martin Luther King, Jr.'s Birthday (the third
Monday in January), Presidents' Day (the third Monday in February),
Memorial Day (the last Monday in May), July 4th, Labor Day (the first
Monday in September), Columbus Day (the
10
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second Monday in October), Veteran's Day (November 11th), Thanksgiving Day
(the last Thursday in November) and December 25th; and (b) the preceding
Friday or the subsequent Monday when one of the calendar determined
holidays falls on a Saturday or Sunday, respectively.
The net asset value per share of the Fund is computed by dividing the value
of the Fund's assets, less all liabilities, by the total number of its
shares outstanding. The Fund's net asset value per share will normally be
$1.00.
The Fund values its portfolio securities by using the amortized cost method
of valuation. This method involves valuing each security held by the Fund
at its cost at the time of its purchase and thereafter assuming a constant
amortization to maturity of any discount or premium. Accordingly,
immaterial fluctuations in the market value of the securities held by the
Fund will not be reflected in the Fund's net asset value. All cash
receivables and current payments are valued at face value. Other assets are
valued at fair value as determined in good faith by the Fund's Board of
Trustees.
PURCHASE AND REDEMPTION OF
- - - -
SHARES
-------------------------------------------
PURCHASE OF SHARES
The Fund accepts purchase orders for shares of the Fund at the net asset
value per share of the Fund next determined on each Valuation Day. See "Net
Asset Value" above. There is no sales charge on the purchase of shares.
There is no minimum required initial investment amount. Shares of the Fund
may be purchased in only those states where they may be lawfully sold. The
Fund and Edgewood reserve the right to reject any purchase order.
Investors in the Fund must qualify as both (1) "Accreditied Investors" as
defined under Regulation D of the Securities Act of 1933, as amended and
(2) institutional investors.
Purchase orders for shares of the Fund will receive, on any Valuation Day,
the net asset value next determined following receipt by Bankers Trust, as
the Fund's transfer agent (the "Transfer Agent"), of such order. If a
purchase order
is transmitted to the Transfer Agent prior to 5:30 p.m., New York time, and
if payment in the form of federal funds is received on that day by Bankers
Trust, as the Fund's custodian (the "Custodian"), the shareholder will be
invested as of that day and will accrue the dividend declared on that day.
It is anticipated that the majority of investors in the Fund will issue
standing orders, effective on or before 5:30 p.m. of each day on which the
Fund is open, to invest in the Fund cash collateral received in connection
with securities lending transactions. Shares must be purchased in
accordance with procedures established by Bankers Trust and the Placement
Agent in connection with customers' accounts.
11
<PAGE>
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Certificates for shares will not be issued. Each shareholder's account will
be maintained by the Transfer Agent. The Transfer Agent may subcontract
with other service providers to perform certain services.
REDEMPTION OF SHARES
Shareholders may redeem shares at the net asset value per share next
determined on each Valuation Day. It is anticipated that the majority of
investors in the Fund will issue standing orders to Bankers Trust to redeem
shares of the Fund as necessary in connection with such investors'
participation in Bankers Trust's securities lending program. Redemption
requests for shares of the Fund transmitted to the Transfer Agent prior to
5:30 p.m., New York time, on each Valuation Day will be redeemed on that
day at the net asset value per share next determined, and the redemption
proceeds normally will be delivered to the shareholder's account on that
day; no dividend will accrue on the day of redemption. Payments for
redemptions will in any event be made within seven calendar days following
receipt of the request. Within the first five Valuation Days of each month,
the Fund pays dividends for the preceding month. Dividends will not be
reinvested in the Fund. Redemption orders are processed without charge by
the Fund.
TAXATION AND
- -
DISTRIBUTIONS The Trust
----------------------------------------------------
intends for the Fund to qualify annually and to elect to be treated as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended (the "Code").
Provided that the Fund continues to qualify as a regulated investment
company, the Fund will not be subject to U.S. Federal income tax on its
investment company taxable income and net capital gains (the excess of net
long-term capital gains over net short-term capital losses), if any, that
it distributes to shareholders. The Fund intends to distribute to its
shareholders, at least annually, substantially all of its investment
company taxable income and net capital gains, and therefore does not
anticipate incurring a Federal income tax liability.
The Fund determines its net income and realized capital gains, if any, on
each Valuation Day at 5:30 p.m. The Fund declares dividends from its net
income on each Valuation Day and pays dividends in cash for the preceding
month within the first five Valuation Days of each month. The Fund reserves
the right to include realized short-term gains, if any, in such daily
dividends. Distributions of the Fund's realized long-term capital gains, if
any, and any undistributed net realized short-term capital gains are
normally declared and paid annually in cash at the end of the fiscal year
in which they were earned to the extent they are not offset by any capital
loss carryforwards.
Dividends paid out of the Fund's investment company taxable income will be
taxable to a U.S. shareholder as ordinary income, provided that such
shareholder is not a tax-exempt entity. Distributions of net capital gains,
if any, designated as
12
<PAGE>
- -------------------------------------------------------------------
capital gain dividends are taxable as long-term capital gains, regardless
of how long the shareholder has held the Fund's shares, and are not
eligible for the dividends-received deduction applicable to corporations.
Shareholders should consult their own tax adviser concerning the
application of federal, state and local taxes to the distributions they
receive from the Fund.
The Trust is organized as a Massachusetts business trust and, under current
law, neither the Trust nor the Fund is liable for any income or franchise
tax in the Commonwealth of Massachusetts, provided that the Fund continues
to qualify as a regulated investment company under Subchapter M of the
Code.
PERFORMANCE INFORMATION AND
- - -
REPORTS
------------------------------------------
From time to time, the Fund may report its "current yield" and/or
"effective yield" to investors. The Fund will not publicly advertise its
performance, nor make its performance figures available to reporting
services. All yield figures are based on historical earnings and are not
intended to indicate future performance. The "current yield" of the Fund
refers to the income generated by an investment in the Fund over a seven-
day period (which period will be stated in the report). This income is then
"annualized;" that is, the amount of income generated by the investment
during that week is assumed to be generated each week over a 52-week period
and is shown as a percentage of the investment. The "effective yield" is
calculated similarly but, when annualized, the income earned by an
investment in the Fund is assumed to be reinvested. The "effective yield"
will be slightly higher than the "current yield" because of the compounding
effect of this assumed reinvestment.
Yield is a function of the quality, composition and maturity of the
securities held by the Fund and operating expenses of the Fund. In
particular, the Fund's yield will rise and fall with short-term interest
rates, which can change frequently and sharply. In periods of rising
interest rates, the yield of the Fund will tend to be somewhat lower than
prevailing market rates, and in periods of declining interest rates, the
yield will tend to be somewhat higher. In addition, when interest rates are
rising, the inflow of net new money to the Fund from the continuous sale of
its shares will likely be invested by the Fund in instruments producing
higher yields than the balance of the Fund's securities, thereby increasing
the current yield of the Fund. In periods of falling interest rates, the
opposite can be expected to occur. Accordingly, yields will fluctuate and
do not necessarily indicate future results. While yield information may be
useful in reviewing the performance of the Fund, it may not provide a basis
for comparison with bank deposits, other fixed rate investments, or other
investment companies that may use a different method of calculating yield.
From time to time reports to shareholders may compare the yield of the Fund
to that of other mutual funds with similar investment objectives or to that
of a particular index. The yield of the Fund might be compared with, for
example, the
13
<PAGE>
- -------------------------------------------------------------------
IBC/Donoghue's Taxable First Tier Institutional Only Money Fund Average,
which is an average compiled by IBC/Donoghue's Money Fund Report, a widely
recognized, independent publication that monitors the performance of money
market mutual funds. Similarly, the yield of the Fund might be compared
with rankings prepared by Micropal Limited and/or Lipper Analytical
Services, Inc., which are widely recognized, independent services that
monitor the investment performance of mutual funds. The yield of the Fund
might also be compared with the average yield reported by the Bank Rate
Monitor for money market deposit accounts offered by the 50 leading banks
and thrift institutions in the top five standard metropolitan areas.
Shareholders may make inquiries regarding the Fund's performance by
contacting the Fund at (212) 250-6934.
Shareholders will receive financial reports semi-annually that include the
Fund's financial statements, including a listing of investment securities
held by the Fund at those dates. Annual reports are audited by independent
accountants.
MANAGEMENT OF THE FUND AND
- - - - -
TRUST
-------------------------------------------
BOARD OF TRUSTEES
The affairs of the Fund and Trust are managed under the supervision of the
Trust's Board of Trustees (referred to herein as the "Fund's Board of
Trustees"). For more information with respect to the Fund's Board of
Trustees, see "Management of the Trust" in the SAI. By virtue of the
responsibilities assumed by Bankers Trust, as administrator of the Trust,
the Trust does not need employees other than its executive officers. None
of the executive officers of the Trust devotes full time to the affairs of
the Fund or Trust.
INVESTMENT ADVISER
Bankers Trust Company, a New York banking corporation with principal
offices at 280 Park Avenue, New York, New York 10017, is a wholly owned
subsidiary of Bankers Trust New York Corporation. Bankers Trust conducts a
variety of general banking and trust activities and is a major wholesale
supplier of financial services to the international and domestic
institutional market.
As of June 30, 1996, Bankers Trust New York Corporation was the seventh
largest bank holding company in the United States with total assets of
approximately $115 billion. Bankers Trust is a worldwide merchant bank
dedicated to serving the needs of corporations, government, financial
institutions and private clients through a global network of over 120
offices in more than 40 countries. Investment management is a core business
of Bankers Trust, built in a tradition of excellence from its roots as a
trust bank founded in 1903. The scope of Bankers Trust's investment
management capability is unique due to its leadership positions in both
active and passive quantitative management and its presence in major equity
and
14
<PAGE>
- -------------------------------------------------------------------
fixed income markets around the world. Bankers Trust is one of the nation's
largest and most experienced investment managers with approximately $215
billion in assets under management globally.
Bankers Trust, subject to the supervision and direction of the Fund's Board
of Trustees, manages the Fund in accordance with the Fund's investment
objective and stated investment policies, makes investment decisions for
the Fund, places orders to purchase and sell securities and other financial
instruments on behalf of the Fund and employs professional investment
managers and securities analysts who provide research services to the Fund.
All orders for investment transactions on behalf of the Fund are placed by
Bankers Trust with broker-dealers and other financial intermediaries that
it selects, including those affiliated with Bankers Trust. A Bankers Trust
affiliate will be used in connection with a purchase or sale of an
investment for the Fund only if Bankers Trust believes that the affiliate's
charge for the transaction does not exceed usual and customary levels. The
Fund will not invest in obligations for which Bankers Trust or any of its
affiliates is the ultimate obligor or accepting bank. The Fund may,
however, invest in the obligations of correspondents and customers of
Bankers Trust.
Under its Investment Advisory Agreement, Bankers Trust receives a fee from
the Fund, computed daily and paid monthly, at the annual rate of 0.10% of
the average daily net assets of the Fund.
Bankers Trust has been advised by its counsel that, in counsel's opinion,
Bankers Trust currently may perform the services for the Fund and Trust
described in this Memorandum and the SAI without violation of the Glass-
Steagall Act or other applicable banking laws or regulations. State laws on
this issue may differ from the interpretations of relevant Federal law and
banks and financial institutions may be required to register as dealers
pursuant to state securities law.
ADMINISTRATOR
Under its Administration and Services Agreement with the Trust, Bankers
Trust acts as administrator, transfer agent, shareholder servicing agent,
custodian and dividend disbursing agent. As the Fund's administrator,
Bankers Trust calculates the net asset value of the Fund and generally
assists the Board of Trustees of the Fund in all aspects of the
administration and operation of the Trust. Under its Administration and
Services Agreement with the Trust, Bankers Trust receives a fee, computed
daily and paid monthly, at the annual rate of 0.02% of the average daily
net assets of the Fund. This fee is included in the Fund's other expenses.
(See Summary of the Fund Expenses) Under the Administration and Services
Agreement, Bankers Trust may delegate one or more of its responsibilities
to others, including affiliates of Edgewood, at Bankers Trust's expense.
For more information, see the SAI.
15
<PAGE>
- -------------------------------------------------------------------
PLACEMENT AGENT
Under its Placement Agent Agreement with the Fund, Edgewood, as Placement
Agent, serves as the Trust's principal underwriter on a best efforts basis.
In addition, Edgewood and its affiliates provide the Trust with office
facilities and currently provide administration and distribution services
for other registered investment companies. The principal business address
of Edgewood is Clearing Operations, P.O. Box 897, Pittsburgh, PA 15230-
0897.
SERVICE AGENT
Bankers Trust acts as service agent ("Service Agent") pursuant to its
Administration and Services Agreement with the Fund and receives no
additional compensation from the Fund for such shareholder services. The
services provided by Bankers Trust as Service Agent may include
establishing and maintaining shareholder accounts, processing purchase and
redemption transactions, performing shareholder sub-accounting, answering
client inquiries regarding the Fund, transmitting proxy statements,
updating prospectuses and other communications to shareholders and, with
respect to meetings of shareholders, collecting, tabulating and forwarding
to the Trust executed proxies and obtaining such other information and
performing such other services as the shareholders may reasonably request
and agree upon with the Service Agent.
CUSTODIAN AND TRANSFER AGENT
Bankers Trust acts as custodian of the assets of the Fund and serves as the
transfer agent for the Fund under the Administration and Services Agreement
with the Fund.
ORGANIZATION OF THE TRUST
The Trust was organized on March 26, 1990 under the laws of the
Commonwealth of Massachusetts. The Fund is a separate series of the Trust.
The Trust offers shares of beneficial interest of separate series, par
value $0.001 per share. The shares of the other series of the Trust are
offered through separate prospectuses. No series of shares has any
preference over any other series.
The Trust is an entity commonly known as a "Massachusetts business trust."
Under Massachusetts law, shareholders of such a business trust may, under
certain circumstances, be held personally liable as partners for its
obligations. However, the risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which both
inadequate insurance existed and the Trust itself was unable to meet its
obligations.
When matters are submitted for shareholder vote, shareholders of the Fund
will have one vote for each full share held and proportionate, fractional
votes for fractional shares held. A separate vote of the Fund is required
on any matter affecting the Fund on which shareholders are entitled to
vote. Shareholders of the Fund are not entitled to vote on Trust matters
that do not affect the Fund. There normally will be no meetings of
shareholders for the purpose of electing Trustees
16
<PAGE>
- -------------------------------------------------------------------
unless and until such time as less than a majority of Trustees holding
office have been elected by shareholders, at which time the Trustees then
in office will call a shareholders' meeting for the election of Trustees.
Any Trustee may be removed from office upon the vote of shareholders
holding at least two-thirds of the Trust's outstanding shares at a meeting
called for that purpose. The Trustees are required to call such a meeting
upon the written request of shareholders holding at least 10% of the
Trust's outstanding shares.
Shareholders of all the series of the Trust will vote together to elect
Trustees of the Trust and for certain other matters. Under certain
circumstances, the shareholders of one or more series could control the
outcome of these votes.
EXPENSES OF THE TRUST
The Fund bears its own expenses. Operating expenses for the Fund generally
consist of all costs not specifically borne by Bankers Trust, including
investment advisory fees, administration and services fees, fees for
necessary professional services, amortization of organizational expenses,
the costs of regulatory compliance and costs associated with maintaining
legal existence and shareholder relations. Bankers Trust has agreed to
reimburse the Fund to the extent required by applicable state law for
certain expenses that are described in the SAI.
17
<PAGE>
BT INSTITUTIONAL FUNDS --
INSTITUTIONAL DAILY ASSETS FUND
INVESTMENT ADVISER AND ADMINISTRATOR
BANKERS TRUST COMPANY
PLACEMENT AGENT
EDGEWOOD SERVICES, INC.
CUSTODIAN AND TRANSFER AGENT
BANKERS TRUST COMPANY
INDEPENDENT ACCOUNTANTS
COOPERS & LYBRAND LLP
COUNSEL
WILLKIE FARR & GALLAGHER
...........................
No person has been authorized to give any information or to make any
representations other than those contained in the Fund's Confidential
Private Offering Memorandum, its Confidential Statement of Additional
Information in connection with the offering of the Fund's shares and, if
given or made, such other information or representations must not be relied
on as having been authorized by the Trust. This Confidential Private
Offering Memorandum does not constitute an offer in any state in which, or
to any person to whom, such offer may not lawfully be made.
...........................
<PAGE>
DO NOT COPY OR CIRCULATE.
Investor Copy No.
=====================================
BT INSTITUTIONAL FUNDS ----------------------------------------------------
- ---------------------------
INSTITUTIONAL DAILY ASSETS FUND October 16,
1996
CONFIDENTIAL STATEMENT OF ADDITIONAL INFORMATION
BT Institutional Funds (the "Trust") is an open-end management investment
company that offers investors a selection of investment portfolios, each
having distinct investment objectives and policies. This Confidential
Statement of Additional Information relates to the Institutional Daily
Assets Fund (the "Fund"). The Fund seeks a high level of current income
consistent with liquidity and the preservation of capital through
investment in high-quality money market instruments.
Shares of the Fund are sold by Edgewood Services, Inc. ("Edgewood"),
the Trust's Distributor (and the Fund's Placement Agent), primarily to
clients and customers of Bankers Trust Company ("Bankers Trust") that
participate in Bankers Trust's securities lending program. Bankers Trust
serves as the Fund's investment adviser (the "Adviser").
THE SECURITIES DESCRIBED HEREIN ARE OFFERED PURSUANT TO AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND HAVE NOT BEEN REGISTERED WITH OR APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY OTHER
REGULATORY AUTHORITY OF ANY JURISDICTION, NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS CONFIDENTIAL STATEMENT OF ADDITIONAL
INFORMATION. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
SHARES OF THE FUND ARE BEING OFFERED ONLY TO INVESTORS WHO QUALIFY AS BOTH
(1) ACCREDITED INVESTORS AS DEFINED UNDER REGULATION D UNDER THE SECURITIES
ACT AND (2) INSTITUTIONAL INVESTORS. SHARES OF THE FUND ARE NOT BEING
OFFERED TO INDIVIDUALS OR TO ENTITIES ORGANIZED FOR THE PURPOSE OF
INVESTING ON BEHALF OF INDIVIDUALS. NO RESALE OF SHARES MAY BE MADE UNLESS
THE SHARES ARE SUBSEQUENTLY REGISTERED UNDER THE SECURITIES ACT OR AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
THIS CONFIDENTIAL STATEMENT OF ADDITIONAL INFORMATION HAS BEEN PREPARED ON
A CONFIDENTIAL BASIS SOLELY FOR THE INFORMATION OF THE RECIPIENT AND MAY
NOT BE REPRODUCED, PROVIDED TO OTHERS OR USED FOR ANY OTHER PURPOSE.
NO PERSON HAS BEEN AUTHORIZED TO MAKE REPRESENTATIONS OR ANY INFORMATION
WITH
RESPECT TO THE SHARES, EXCEPT THE INFORMATION CONTAINED HEREIN OR IN THE
TRUST'S REGISTRATION STATEMENT FILED UNDER THE 1940 ACT.
INVESTORS WILL BE REQUIRED TO REPRESENT THAT THEY MEET CERTAIN FINANCIAL
REQUIREMENTS AND THAT THEY ARE FAMILIAR WITH AND UNDERSTAND THE TERMS,
RISKS AND MERITS OF AN INVESTMENT IN THE FUND.
The Fund's confidential private offering memorandum, which may be amended
from time to time (the "Confidential Private Offering Memorandum"), is
dated October 10, 1996. The Confidential Private Offering Memorandum
provides the basic information investors should know before investing, may
be obtained without charge by calling the Fund at (212) 250-6934. This
Confidential Statement of Additional Information, which is not a
Confidential Private
Offering Memorandum, is intended to provide additional information
regarding the activities and operations of the Trust and should be read in
conjunction with the Confidential Private Offering Memorandum. Capitalized
terms not otherwise defined in this Confidential Statement of Additional
Information have the meanings accorded to them in the Fund's Confidential
Private Offering Memorandum.
BANKERS TRUST COMPANY
INVESTMENT ADVISER AND ADMINISTRATOR EDGEWOOD
SERVICES, INC.
PLACEMENT AGENT
Clearing Operations, P.O. Box 987 Pittsburgh, PA
15230-0897
2
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The Fund's Confidential Private Offering Memorandum discusses the
investment objective of the Fund and the policies to be employed to achieve
that objective. This section contains supplemental information concerning
the types of securities and other instruments in which the Fund may invest,
the investment policies and portfolio strategies that the Fund may utilize
and certain risks attendant to those investments, policies and strategies.
OBLIGATIONS OF BANKS AND OTHER FINANCIAL INSTITUTIONS
For purposes of the Fund's investment policies with respect to
obligations of financial institutions including banks, the assets of a bank
will be deemed to include the assets of its domestic and foreign branches.
Obligations of foreign branches of U.S. banks and foreign banks may be
general obligations of the parent bank in addition to the issuing bank or
may be limited by the terms of a specific obligation and by government
regulation. If Bankers Trust, acting under the supervision of the Board of
Trustees, deems the instruments to present minimal credit risk, the Fund
may invest in U.S. or foreign financial institutions, including banks
located in the United Kingdom, Grand Cayman Island, Nassau, Japan and
Canada. Investments in these obligations may entail risks that are
different from those of investments in obligations of U.S. domestic banks
or other financial institutions because of differences in political,
regulatory and economic systems and conditions. These risks include future
political and economic developments, currency blockage, the possible
imposition of withholding taxes on interest payments, possible seizure or
nationalization of foreign deposits, difficulty or inability of pursuing
legal remedies and obtaining judgments in foreign courts, possible
establishment of exchange controls or the adoption of other foreign
governmental restrictions that might affect adversely the payment of
principal and interest on bank
obligations. Foreign branches of U.S. banks and foreign banks may also be
subject to less stringent reserve requirements and to different accounting,
auditing, reporting and recordkeeping standards that those applicable to
domestic branches of U.S. banks.
COMMERCIAL PAPER
Commercial paper obligations in which the Fund may invest are short-
term, unsecured negotiable promissory notes of U.S. or foreign corporations
that at the time of purchase meet the rating criteria described in the
Confidential Private Offering Memorandum. Investments in foreign
commercial paper generally involve risks similar to those described above
relating to obligations of financial institutions, including foreign banks
or foreign branches and subsidiaries of U.S. and foreign banks.
U.S. GOVERNMENT OBLIGATIONS
The Fund may invest in direct obligations issued by the U.S. Treasury
or in obligations issued or guaranteed by the U.S. Treasury or by agencies
or instrumentalities of the U.S. Government ("U.S. Government
Obligations"). Certain short-term U.S. Government Obligations, such as
those issued by the Government National Mortgage Association ("GNMA"), are
supported by the "full faith and credit" of the U.S. Government; others,
such as those of the ExportImport Bank of the U.S., are supported by the
right of the issuer to borrow from the U.S. Treasury; others, such as those
of the Federal National Mortgage Association are solely the obligations of
the issuing entity but are supported
3
<PAGE>
by the discretionary authority of the U.S. Government to purchase the
agency's obligations; and still others, such as those of the Student Loan
Marketing Association, are supported by the credit of the instrumentality.
No assurance can be given that the U.S. Government would provide financial
support to U.S. Government-sponsored instrumentalities if it is not
obligated to do so by law.
Examples of the types of U.S. Government Obligations that the Fund may
hold include, in addition to those described above and direct U.S. Treasury
obligations, the obligations of the Federal Housing Administration, Farmers
Home Administration, Small Business Administration, General Services
Administration, Central Bank for Cooperatives, Federal Farm Credit Banks,
Federal Farm Credit Banks Funding Corp., Federal Home Loan Banks, Federal
Home Loan Mortgage Corporation, Federal Intermediate Credit Banks, Federal
Land Banks and Maritime Administration.
REVERSE REPURCHASE AGREEMENTS
The Fund may borrow funds for temporary or emergency purposes, such as
meeting larger than anticipated redemption requests, and not for leverage,
by among other things, agreeing to sell portfolio securities to financial
institutions such as banks and broker-dealers and to repurchase them at a
mutually agreed date and price (a "reverse repurchase agreement"). At the
time the Fund enters into a reverse repurchase agreement it will place in a
segregated custodial account cash, U.S. Government Obligations or high-
grade liquid debt obligations having a value equal to the repurchase price,
including accrued interest. Reverse repurchase agreements involve the risk
that the market value of the securities sold by the Fund may decline below
the repurchase price of those securities. Reverse repurchase agreements
are considered to be borrowings by the Fund.
INVESTMENTS IN OTHER INVESTMENT COMPANIES
Since the investment companies in which the Fund may invest have their
own operating expenses, the Fund's investment in these investment companies
may result in the duplication of expenses.
4
<PAGE>
RATING SERVICES
Ratings represent the opinions of rating services as to the quality of
the securities that they undertake to rate. It should be emphasized,
however, that ratings are relative and subjective and are not absolute
standards of quality. Although these ratings are an initial criterion for
selection of portfolio investments, Bankers Trust also makes its own
evaluation of these securities, subject to review by the Board of Trustees
of the Trust. After purchase by the Fund, an obligation may cease to be
rated or its rating may be reduced below the minimum required for purchase
by the Fund. Neither event would require the Fund to eliminate the
obligation from its portfolio, but Bankers Trust will consider such an
event in its determination of whether the Fund should continue to hold the
obligation. A description of the ratings used herein and in the
Confidential Private Offering Memorandum is set forth in the Appendix to
this Confidential Statement of Additional Information.
THE FOLLOWING FUNDAMENTAL INVESTMENT RESTRICTIONS AND NON-FUNDAMENTAL
INVESTMENT OPERATING POLICIES HAVE BEEN ADOPTED BY THE TRUST, WITH RESPECT
TO THE FUND BECAUSE OF REQUIREMENTS OF FEDERAL SECURITIES LAWS OR
REGULATIONS. UNLESS AN INVESTMENT INSTRUMENT OR TECHNIQUE IS DESCRIBED IN
THE CONFIDENTIAL PRIVATE OFFERING MEMORANDUM, THE FUND MAY NOT INVEST IN
THAT INVESTMENT INSTRUMENT OR ENGAGE IN THAT INVESTMENT TECHNIQUE.
INVESTMENT RESTRICTIONS
The investment restrictions below have been adopted by the Trust with
respect to the Fund as fundamental policies. Under the 1940 Act, a
"fundamental" policy may not be changed without the "vote of a majority of
the outstanding voting securities" of the Fund which is defined in the 1940
Act as the lesser of (a) 67% or more of the shares of the Fund present at a
shareholder meeting of the Fund if the holders of more than 50% of the
outstanding shares of the Fund are present or represented by proxy, or (b)
more than 50% of the outstanding shares of the Fund. The percentage
limitations contained in the restrictions listed below apply at the time of
the purchase of the securities.
As a matter of fundamental policy, the Fund may not:
1. Borrow money or mortgage or hypothecate assets of the Fund,
except that in an amount not to exceed 10% of the current value of the
Fund's total assets, it may borrow money as a temporary measure for
extraordinary or emergency purposes and enter into reverse repurchase
agreements or dollar roll transactions, and except that it may pledge,
mortgage or hypothecate not more than 10% of such assets to secure such
borrowings (it is intended that money would be borrowed only from banks or
through reverse repurchase agreements and only either to accommodate
redemption requests while effecting an orderly liquidation of portfolio
securities or to maintain liquidity in the event of an unanticipated
failure to complete a portfolio security transaction or other similar
situations), provided that collateral arrangements with respect to options
and futures, including deposits of initial deposit and variation
5
<PAGE>
margin, are not considered a pledge of assets for purposes of this
restriction and except that assets may be pledged to secure letters of
credit solely for the purpose of participating in a captive insurance
company sponsored by the Investment Company Institute; for additional
related restrictions, see clause (i) under the caption "Federal
Restrictions" below. (As an operating policy,
the Fund may not engage in dollar roll transactions or options and
futures);
2. Underwrite securities issued by other persons except insofar
as the Trust or the Fund may technically be deemed an underwriter under the
Securities Act of 1933, as amended (the "1933 Act"), in selling a portfolio
security;
3. Make loans to other persons except (a) through the use of
repurchase agreements or the purchase of short-term obligations or (b) by
purchasing a portion of an issue of debt securities of types distributed
publicly or privately;
4. Purchase or sell real estate (including limited partnership
interests but excluding securities secured by real estate or interests
therein), interests in oil, gas or mineral leases, commodities or commodity
contracts (except futures and option contracts) in the ordinary course of
business (except that the Fund may hold and sell, for the Fund's portfolio,
real estate acquired as a result of the Fund's ownership of securities);
5. Concentrate its investments in any particular industry
(excluding U.S. Government Obligations), except that the Fund will invest
more than 25% of its total assets in the obligations of banks and other
financial institutions, and if it is deemed appropriate for the achievement
of the Fund's investment objective, up to 25% of its total assets may be
invested in any other industry; and
6. Issue any "senior security" (as that term is defined in the
1940 Act) if such issuance is specifically prohibited by the 1940 Act or
the rules and regulations promulgated thereunder, provided that collateral
arrangements with respect to options and futures, including deposits of
initial deposit and variation margin, are not considered to be the issuance
of a senior security for purposes of this restriction.
PORTFOLIO TURNOVER
The Fund may attempt to increase yield by trading to take advantage of
short-term market variations, which results in higher portfolio turnover.
However, this policy does not result in higher brokerage commissions to the
Fund as the purchases and sales of portfolio securities are usually
effected as principal transactions. The Fund's turnover rate is not
expected to have a material effect on their income and have been and are
expected to be zero for regulatory reporting purposes.
6
<PAGE>
PORTFOLIO TRANSACTIONS
Decisions to buy and sell securities and other financial instruments
for the Fund are made by Bankers Trust, which also is responsible for
placing these transactions, subject to the overall review of the Trust's
Board of Trustees. Although investment requirements for the Fund are
reviewed independently from those of the other accounts managed by Bankers
Trust, investments of the type the Fund may make may also be made by these
other accounts. When the Fund and one or more other accounts managed by
Bankers Trust are prepared to invest in, or desire to dispose of, the same
security or other financial instrument, available investments or
opportunities for sales will be allocated in a manner believed by Bankers
Trust to be equitable to each. In some cases, this procedure may affect
adversely the price paid or received by the Fund or the size of the
position obtained or disposed of by the Fund.
Purchases and sales of securities on behalf of the Fund will be
principal transactions. These securities are normally purchased directly
from the issuer or from an underwriter or market maker for the securities.
The cost of securities purchased from underwriters includes an underwriting
commission or
concession and the prices at which securities are purchased from and sold
to dealers include a dealer's mark-up or mark-down. U.S. Government
Obligations are generally purchased from underwriters or dealers, although
certain newly issued U.S. Government Obligations may be purchased directly
from the U.S. Treasury or from the issuing agency or instrumentality.
Over-the-counter purchases and sales are transacted directly with
principal market makers except in those cases in which better prices and
executions may be obtained elsewhere and principal transactions are not
entered into with persons affiliated with the Fund except pursuant to
exemptive rules or orders adopted by the Securities and Exchange Commission
(the "SEC"). Under rules adopted by the SEC, broker-dealers may not
execute transactions on the floor of any national securities exchange for
the accounts of affiliated persons, but may effect transactions by
transmitting orders for execution.
In selecting dealers to execute portfolio transactions on behalf of the
Fund, Bankers Trust seeks the best overall terms available. In assessing
the best overall terms available for any transaction, Bankers Trust will
consider the factors it deems relevant, including the breadth of the market
in the investment, the price of the investment and the financial condition
and execution capability of the dealer for the specific transaction and on
a continuing basis. In addition, Bankers Trust is authorized, in selecting
parties to execute a particular transaction and in evaluating the best
overall terms available, to consider the "brokerage services", but not
"research services" (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934, as amended) provided to the Fund.
NET ASSET VALUE
7
<PAGE>
The Confidential Private Offering Memorandum discusses the time at which
the net asset value per share of the Fund is determined for purposes of
sales and redemptions.
The valuation of the Fund's securities is based on their amortized
cost, which does not take into account unrealized capital gains or losses.
Amortized cost valuation involves initially valuing an instrument at its
cost and thereafter assuming a constant amortization to maturity of any
discount or premium, generally without regard to the impact of fluctuating
interest rates on the market value of the instrument. Although this method
provides certainty in valuation, it may result in periods during which
value, as determined by amortized cost, is higher or lower than the price
the Fund would receive if it sold the instrument.
The Fund's use of the amortized cost method of valuing its securities
is permitted by a rule adopted by the SEC. Under this rule, the Fund must
maintain a dollar-weighted average portfolio maturity of 90 days or less,
purchase only instruments having remaining maturities of two years or less
and invest only in securities determined by or under the supervision of the
Trust's Board of Trustees to present minimal credit risks.
Pursuant to the rule, the Trust's Board of Trustees also has
established procedures designed to allow investors in the Fund to
stabilize, to the extent reasonably possible, the investors' price per
share as computed for the purpose of sales and redemptions at $1.00. These
procedures include review of the Fund's holdings by the Trust's Board of
Trustees, at such intervals as it deems appropriate, to determine whether
the value of the Fund's assets calculated by using available market
quotations or market equivalents deviates from such valuation based on
amortized cost.
The rule also provides that the extent of any deviation between the value
of the Fund's assets based on available market quotations or market
equivalents and such valuation based on amortized cost must be examined by
the Trust's Board
of Trustees. In the event the Trust's Board of Trustees determines that a
deviation exists that may result in material dilution or other unfair
results to investors or existing shareholders, pursuant to the rule, the
Trust's Board of Trustees must cause the Fund to take such corrective
action as the Board of Trustees regards as necessary and appropriate,
including: selling portfolio instruments prior to maturity to realize
capital gains or losses or to shorten average portfolio maturity;
withholding dividends or paying distributions from capital or capital
gains; redeeming shares in kind; or valuing the Fund's assets by using
available market quotations.
PURCHASE AND REDEMPTION INFORMATION
The Trust may suspend the right of redemption or postpone the date of
payment for shares of the Fund during any period when: (a) trading on the
NYSE is restricted by applicable rules and regulations of the SEC; (b) the
NYSE is closed for other than customary weekend and holiday closings; (c)
the SEC has by order permitted such suspension; or (d) an emergency exists
as determined by the SEC.
8
<PAGE>
Under the terms of a Placement Agent Agreement, Edgewood acts as
placement agent on a "best efforts" basis with respect to the sale of
shares of the Fund. In addition to Edgewood's duties as placement agent,
Edgewood may, in its discretion, perform additional functions in connection
with transactions in the shares of the Fund.
MANAGEMENT OF THE TRUST
The Trust's Board of Trustees is composed of persons experienced in
financial matters who meet throughout the year to oversee the activities of
the Fund. In addition, the Trustees review contractual arrangements with
companies that provide services to the Fund and review the Fund's
performance.
The Trustees and officers of the Trust and their principal occupations
during the past five years are set forth below. Their titles may have
varied during that period. Asterisks indicate those Trustees who are
"interested persons" (as defined in the 1940 Act) of the Trust. Unless
otherwise indicated, the address of each Trustee and officer is c/o
Edgewood Services, Inc., Clearing Operations, P.O. Box 897, Pittsburgh, PA
15230-0897.
TRUSTEES OF THE TRUST
CHARLES P. BIGGAR (age 65) ---- Trustee; Retired; Director of
Chase/NBW Bank Advisory Board; Director, Batemen, Eichler, Hill Richards
Inc.; formerly Vice President of International Business Machines and
President of the National Services and the Field Engineering Divisions of
IBM. His address is 12 Hitching Post Lane, Chappaqua, New York 10514.
PHILIP W. COOLIDGE* (age 44) ---- Trustee; Chairman, Chief Executive
Officer and President, Signature Financial Group, Inc. ("SFG") (since
December, 1988) and Signature (since April, 1989).
RICHARD J. HERRING (age 50) ---- Trustee; Professor, Finance Department,
Julian Avesty Professor, Vice Dean The Wharton School, University of
Pennsylvania. His address is Box 768, 325 S. Roberts Road, Bryn Mawr,
Pennsylvania 19010.
BRUCE E. LANGTON (age 64) ---- Trustee; Retired; Director, Adela
Investment Co. and University Patents, Inc.; formerly Assistant Treasurer
of IBM
Corporation (until 1986). His address is 99 Jordan Lane, Stamford,
Connecticut 06903.
OFFICERS OF THE TRUST
RONALD M. PETNUCH (birthdate: February 27, 1960) ---- President and
Treasurer; Senior Vice President, Federated Services Company ("FSC");
formerly, Director of Proprietary Client Services, Federated Administrative
Services ("FAS"), and Associate Corporate Counsel, Federated Investors
("FI").
CHARLES L. DAVIS, JR. (birthdate: March 23, 1960) ---- Vice President
and Assistant Treasurer; Vice President, FAS.
JAY S. NEUMAN (birthdate: April 22, 1950) ---- Secretary; Corporate
Counsel, FI.
9
<PAGE>
Messrs. Coolidge, Davis, Neuman, and Petnuch also hold similar
positions for other investment companies for which Signature or Edgewood,
respectively, or an affiliate, serves as the principal underwriter.
No person who is an officer or director of Bankers Trust is an officer or
Trustee of the Trust. No director, officer or employee of Signature or any
of its affiliates will receive any compensation from the Trust for serving
as an officer or Trustee of the Trust. The Trust pays each Trustee who is
not a director, officer or employee of the Adviser, the Placement Agent,
the Administrator or any of their affiliates an annual fee of $10,000,
respectively, per annum plus $1,250, respectively, per meeting attended and
reimburses them for travel and out-of-pocket expenses.
TRUSTEE COMPENSATION TABLE
(estimated for the fiscal year ended June 30, 1997*)
Aggregate Compensation Total Compensation from
Fund
Name of Trustee from Trust Complex Paid to Trustees**
- --------------- ---------- -------------------------
- -
Philip W. Coolidge None*** None***
Richard J. Herring $12,500 $12,500
Bruce E. Langton $12,500 $12,500
Charles P. Biggar $12,500 $12,500
* Amounts shown are estimates of future payments to be made pursuant to
existing arrangements.
** Each Trustee also serves as a Trustee of one other Trust of the BT
Family of
Funds.
*** Mr. Coolidge is considered to be an interested person as defined in the
1940 Act, and accordingly, receives no compensation for services as a
Trustee.
10
<PAGE>
As of September 15, 1996, the Trustees and officers of the Trust and
the Funds owned in the aggregate less than 1% of the shares of any Fund or
the Trust (all series taken together).
INVESTMENT ADVISER
Under the terms of an Advisory Agreement between the Fund and Bankers
Trust, Bankers Trust manages the Fund subject to the supervision and
direction of the Board of Trustees of the Fund. Bankers Trust will: (i)
act in strict conformity with the Fund's Declaration of Trust, the 1940 Act
and the Investment Advisers Act of 1940, as the same may from time to time
be amended; (ii) manage the Fund in accordance with the Fund's investment
objectives, restrictions and policies, as stated herein and in the
Confidential Private Offering Memorandum; (iii) make investment decisions
for the Fund; and (iv) place purchase and sale orders for securities and
other financial instruments on behalf of the Fund.
Bankers Trust bears all expenses in connection with the performance of
services under the Advisory Agreement. The Fund bears certain other
expenses incurred in its operation, including: taxes, interest, brokerage
fees and commissions, if any; fees of Trustees of the Trust who are not
officers, directors or employees of Bankers Trust, Signature or any of
their affiliates; SEC fees and state Blue Sky filing fees, if any;
administrative and services fees; certain insurance premiums; outside
auditing and legal expenses; costs of maintenance of corporate existence;
costs attributable to investor services, including, without limitation,
telephone and personnel expenses; and printing confidential private
offering memorandums and confidential statements of additional information
for regulatory purposes and for distribution to existing shareholders;
costs of shareholders' reports and meetings of shareholders, officers and
Trustees of the Trust; and any extraordinary expenses.
Bankers Trust may have deposit, loan and other commercial banking
relationships with the issuers of obligations which may be purchased on
behalf of the Fund, including outstanding loans to such issuers which could
be repaid in whole or in part with the proceeds of securities so purchased.
Such affiliates deal, trade and invest for their own accounts in such
obligations and are among the leading dealers of various types of such
obligations. Bankers Trust has informed the Trust that, in making its
investment decisions, it does not obtain or use material inside information
in its possession or in the possession of any of its affiliates. In making
investment recommendations for the Fund, Bankers Trust will not inquire or
take into consideration whether an issuer of securities proposed for
purchase or sale by the Fund is a customer of Bankers Trust, its parent or
its subsidiaries or affiliates and, in dealing with its customers, Bankers
Trust, its parent, subsidiaries, and affiliates will not inquire or take
into consideration whether securities of such customers are held by any
fund managed by Bankers Trust or any such affiliate.
11
<PAGE>
ADMINISTRATOR
Under the administration and services agreements, Bankers Trust is
obligated on a continuous basis to provide such administrative services as
the Board of Trustees of the Trust reasonably deems necessary for the
proper administration of the Trust. Bankers Trust will generally assist in
all aspects of the Fund's operations; supply and maintain office facilities
(which may be in Bankers Trust's own offices), statistical and research
data, data processing services, clerical, accounting, bookkeeping and
recordkeeping services (including without limitation the maintenance of
such books and records as are required under the 1940 Act and the rules
thereunder, except as maintained by other agents of the Trust), internal
auditing, executive and administrative services, and stationery and office
supplies; prepare reports to shareholders or investors; prepare and file
tax returns; supply financial information and supporting data for reports
to and filings with the SEC and various state Blue
Sky authorities, if applicable; supply supporting documentation for
meetings of the Board of Trustees; provide monitoring reports and
assistance regarding compliance with the Trust's Declaration of Trust, by-
laws, investment objectives and policies and with applicable Federal and
state securities laws; arrange for appropriate insurance coverage;
calculate the net asset value, net income and realized capital gains or
losses of the Trust; and negotiate arrangements with, and supervise and
coordinate the activities of, agents and others retained to supply
services.
Pursuant to a sub-administration agreement (the "Sub-Administration
Agreement") FSC performs such sub-administration duties for the Trust as
from time to time may be agreed upon by Bankers Trust and FSC. The Sub-
Administration Agreement provides that FSC will receive such compensation
as from time to time may be agreed upon by FSC and Bankers Trust. All such
compensation will be paid by Bankers Trust.
CUSTODIAN AND TRANSFER AGENT
Bankers Trust, 280 Park Avenue, New York, New York 10017, serves as
custodian and transfer agent for the Trust and as custodian for the Fund
pursuant to the administration and services agreements discussed above. As
custodian, Bankers Trust holds the Fund's assets. For such services,
Bankers Trust receives monthly fees from the Fund, which are included in
the administrative services fees discussed above. As transfer agent for
the Trust, Bankers Trust maintains the shareholder account records for the
Fund, handles certain communications between shareholders and the Trust and
causes to be distributed any dividends and distributions payable by the
Trust. Bankers Trust is also reimbursed by the Fund for its out-of-pocket
expenses. Bankers Trust will comply with the self-custodian provisions of
Rule 17f-2 under the 1940 Act.
USE OF NAME
The Trust and Bankers Trust have agreed that the Trust may use "BT" as
part of its name for so long as Bankers Trust serves as investment adviser.
The Trust has acknowledged that the term "BT" is used by and is a property
right of certain subsidiaries of Bankers Trust and that those subsidiaries
and/or Bankers Trust may at any time permit others to use that term.
The Trust may be required, on 60 days' notice from Bankers Trust at
any time, to abandon use of the acronym "BT" as part of its name. If this
were to occur, the Trustees would select an appropriate new name for the
Trust, but there would be no other material effect on the Trust, its
shareholders or activities.
12
<PAGE>
BANKING REGULATORY MATTERS
Bankers Trust has been advised by its counsel that in its opinion Bankers
Trust may perform the services for the Fund contemplated by the Advisory
Agreement and other activities for the Trust described in the Confidential
Private Offering Memorandum and this Confidential Statement of Additional
Information without violation of the Glass-Steagall Act or other applicable
banking laws or regulations. However, counsel has pointed out that future
changes in either Federal or state statutes and regulations concerning the
permissible activities of banks or trust companies, as well as future
judicial or administrative decisions or interpretations of present and
future statutes and regulations, might prevent Bankers Trust from
continuing to perform those services for the Trust. If the circumstances
described above should change, the Board of Trustees would review the
Trust's relationship with Bankers Trust and consider taking all actions
necessary in the circumstances. In addition, state securities law on this
issue may differ from interpretations of Federal law as expressed herein
and banks and financial institutions may be required to
register as dealer pursuant to state law.
COUNSEL AND INDEPENDENT ACCOUNTANTS
Willkie Farr & Gallagher, One Citicorp Center, 153 East 53rd Street,
New York, New York 10022-4669, serves as Counsel to the Trust and from time
to time provides certain legal services to Bankers Trust. Coopers &
Lybrand LLP, 1100 Main Street, Suite 900, Kansas City, Missouri 64105 has
been selected as Independent Accountants for the Trust.
ORGANIZATION OF THE TRUST
The Trust was organized on March 26, 1990 as a an unincorporated business
association under the laws of the Commonwealth of Massachusetts
("Massachusetts Business Trust"). The shares of each series participate
equally in the earnings, dividends and assets of the particular series.
The Trust may create and issue additional series of shares, and may divide
the shares of any series into one or more classes, in the future. The
Declaration of Trust of the Trust permits the Trustees to divide or combine
the shares into a greater or lesser number of shares without thereby
changing the proportionate beneficial interest in a series. Each share
represents an equal proportionate interest in a series with each other
share. Shares when issued are fully paid and non-assessable, except as set
forth below. Shareholders are entitled to one vote for each share held.
Shares of the Trust do not have cumulative voting rights, which means
that holders of more than 50% of the shares voting for the election of
Trustees can elect all Trustees. Shares of the Fund are not transferable
nor do shares have preemptive, conversion or subscription rights.
The Trust is not required to hold annual meetings of shareholders but
will hold special meetings of shareholders when in the judgement of the
Trustees it is necessary or desirable to submit matters for a shareholder
vote. Shareholders have under certain circumstances the right to
communicate with other shareholders in connection with requesting a meeting
of shareholders for the purpose of removing one or more Trustees without a
meeting. Upon liquidation of the Fund, shareholders of the Fund would be
entitled to share pro rata in the net assets of the Fund available for
distribution to shareholders.
13
<PAGE>
Massachusetts law provides that shareholders could under certain
circumstances be held personally liable for the obligations of the Trust.
However, the Declaration of Trust disclaims shareholder liability for acts
or obligations of the Trust and requires that notice of this disclaimer be
given in each agreement, obligation or instrument entered into or executed
by the Trust or a Trustee. The Declaration of Trust provides for
indemnification from the Trust's property for all losses and expenses of
any shareholder held personally liable for the obligations of the Trust.
Thus, the risk of shareholders incurring financial loss on account of
shareholder liability is limited to circumstances in which the Trust itself
would be unable to meet its obligations, a possibility that the Trust
believes is remote. Upon payment of any liability incurred by the Trust,
the shareholder paying the liability will be entitled to reimbursement from
the general assets of the Trust. The Trustees intend to conduct the
operations of the Trust in a manner so as to avoid, as far as possible,
ultimate liability of the shareholders for liabilities of the Trust.
TAXES
The following is only a summary of certain tax considerations
generally affecting the Fund and its shareholders, and is not intended as a
substitute for careful tax planning. Shareholders are urged to consult tax
advisers with
specific reference to their tax situations.
As described above and in the Fund's Confidential Private Offering
Memorandum: the Fund is designed to provide investors with liquidity and
current income. The Fund is not intended to constitute a balanced
investment program and is not designed for investors seeking capital gains,
maximum income or maximum tax-exempt income irrespective of fluctuations in
principal.
The Trust intends that the Fund qualify as a separate regulated
investment company under the Internal Revenue Code of 1986, as amended (the
"Code"). Provided that the Fund is a regulated investment company, the Fund
will not be liable for Federal income taxes to the extent all of its
taxable net investment income and net realized long- and short-term capital
gains, if any, are distributed to its shareholders. Although the Trust
expects the Fund to be relieved of all or substantially all Federal income
taxes, depending upon the extent of its activities in states and localities
in which its offices are maintained, in which its agents or independent
contractors are located or in which they are otherwise are deemed to be
conducting business, that portion of the Fund's income which is treated as
earned in any such state or locality could be subject to state and local
tax. Any such taxes paid by the Fund would reduce the amount of income and
gains available for distribution to its shareholders.
While the Fund does not expect to realize net long-term capital gains,
any such gains realized will be distributed annually as described in the
Fund's Confidential Private Offering Memorandum. Such distributions
("capital gain dividends"), if any, will be taxable to non tax-exempt
shareholders as long-term capital gains, regardless of how long a
shareholder has held Fund shares.
PERFORMANCE INFORMATION
14
<PAGE>
The "effective yield" of the Fund is an annualized "yield" based on a
compounding of the unannualized base period return. These yields are each
computed in accordance with a standard method prescribed by the rules of
the SEC, by first determining the "net change in account value" for a
hypothetical account having a share balance of one share at the beginning
of a seven-day period (the "beginning account value"). The net change in
account value equals the value of additional shares purchased with
dividends from the original share and dividends declared on both the
original share and any such additional shares. The unannualized "base
period return" equals the net change in account value divided by the
beginning account value. Realized gains or losses or changes in unrealized
appreciation or depreciation are not taken into account in determining the
net change in account value.
The yields are then calculated as follows:
Base Period Return = Net Change in Account Value
---------------------------
Beginning Account Value
Current Yield = Base Period Return x 365/7
365/7
Effective Yield = [(1 + Base Period Return) ] - 1
FINANCIAL STATEMENTS
The Fund's Annual Report, which, when available, will be attached hereto
and incorporated into this Confidential Statement of Additional Information
by reference, and Semi-Annual Report will be provided, without charge, to
each shareholder as they become available.
15
<PAGE>
BT INSTITUTIONAL FUNDS INSTITUTIONAL DAILY
ASSETS FUND
STATEMENT OF ASSETS AND LIABILITIES September 16,
1996
Assets:
Cash . . . . . . . . . . . . . . . . . . . . . . . . . $ 10
Deferred organization expenses. . . . . . . . . . . . . 200,000
--------
Total assets . . . . . . . . . . . . . . . . . . . 200,010
Liabilities:
Accrued organization expenses . . . . . . . . . . . . . 200,000
--------
Net assets . . . . . . . . . . . . . . . . . . . . $ 10
--------
-------
Net asset value per share of beneficial interest
($1.00 / 10 shares outstanding) . . . . . . . . . . . . $10.00
Notes:
- - BT Institutional Funds, a Massachusetts business trust (the "Trust"),
was
organized on March 26, 1990 and has been inactive since that date with
respect to Institutional Daily Assets Fund (the "Fund") except for the
Fund's establishment and designation as a series of the Trust, and the
registration of the Fund and the sale of 10 shares (the "Initial Shares")
of the Fund to Signature Financial Group, Inc. ("SFG").
- - Organization expenses of the Fund are being deferred and will be
amortized
on a straight-line basis over a period not to exceed five years from the
commencement of investment operations of the Fund. The amount paid by the
Trust on any redemption by SFG or any other then-current holder of the
Initial Shares of the Fund will be reduced by a portion of any unamortized
organization expenses of the Fund, determined by the proportion of the
number of the Initial Shares of the Fund redeemed to the number of the
Initial Shares then outstanding after taking into account any prior
redemptions of the Initial Shares of the Fund.
- - The Trust has entered into an Administration and Services Agreement
with
Bankers Trust Company under which Bankers Trust Company provides
administration, custody and transfer agency services to the Trust.
16
<PAGE>
APPENDIX
DESCRIPTION OF SECURITIES RATINGS
DESCRIPTION OF S&P COMMERCIAL PAPER RATINGS:
Commercial paper rated A-1 by S&P indicates that the degree of safety
regarding timely payment is either overwhelming or very strong. Those
issues determined to possess overwhelming safety characteristics are
denoted A-1+.
DESCRIPTION OF MOODY'S COMMERCIAL PAPER RATINGS:
The rating Prime-1 is the highest commercial paper rating assigned by
Moody's. Issuers rated Prime-1 (or related supporting institutions) are
considered to have a superior capacity for repayment of short-term
promissory obligations.
DESCRIPTION OF FITCH INVESTORS SERVICE'S COMMERCIAL PAPER RATINGS:
F-1+----Exceptionally Strong Credit Quality. Issues assigned this rating
are regarded as having the strongest degree of assurance for timely
payment.
F-1----Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than the strongest
issue.
DESCRIPTION OF DUFF & PHELPS' COMMERCIAL PAPER RATINGS:
Duff 1+----Highest certainty of timely payment. Short term liquidity,
including internal operating factors and/or access to alternative sources
of funds, is outstanding, and safety is just below risk free U.S. Treasury
short term obligations.
Duff 1----Very high certainty of timely payment. Liquidity factors are
excellent and supported by good fundamental protection factors. Risk
factors are minor.
DESCRIPTION OF IBCA'S SHORT-TERM RATINGS:
A1+----Obligations supported by the highest capacity for timely repayment.
A1----Obligations supported by a strong capacity for timely repayment.
DESCRIPTION OF THOMSON BANK WATCH SHORT-TERM RATINGS:
17
<PAGE>
TBW-1----The highest category; indicates a very high likelihood that
principal and interest will be paid on a timely basis.
18
<PAGE>
TABLE OF CONTENTS
Investment Objectives and Policies...................................... 3
Net Asset Value......................................................... 10
Purchase and Redemption Information..................................... 11
Management of the Trust................................................. 11
Organization of the Trust............................................... 15
Taxes................................................................... 16
Performance Information................................................. 17
Financial Statements.................................................... 17
Appendix: Description of Securities Ratings............................
A-1
INVESTMENT ADVISER AND ADMINISTRATOR
BANKERS TRUST COMPANY
PLACEMENT AGENT
EDGEWOOD SERVICES, INC.
CUSTODIAN AND TRANSFER AGENT BANKERS TRUST
COMPANY
INDEPENDENT ACCOUNTANTS COOPERS & LYBRAND
L.L.P.
COUNSEL
WILLKIE FARR & GALLAGHER
No person has been authorized to give any information or to make any
representations other than those contained in the Fund's Confidential
Private Offering Memorandum or its Confidential Statement of Additional
Information in connection with the offering of the Fund's shares and, if
given or made, such other information or representations must not be relied
on as having been authorized by the Trust. This Confidential Statement of
Additional Information does not constitute an offer in any state in which,
or to any person to whom, such offer may not lawfully be made.
BT0550E
PART C
Item 24. Financial Statements and Exhibits.
(a) Financial Statements. To be filed by Amendment; Statement of Assets
and Liabilities (Filed in Part B).
(b) EXHIBITS:
(1) (i) Amended and Restated Declaration of Trust of the
Trust. 5
(ii) Fifth Amended and Restated Establishment and
Designation of Series of the Trust. 5
(iii) Sixth Amended and Restated Establishment and
Designation of Series of the Trust. 5
(iv) Seventh Amended and Restated Establishment and
Designation of Series of the Trust. 5
(v) Eighth Amended and Restated Establishment and
Designation of Series of the Trust. 5
(vi) Ninth Amended and Restated Establishment and
Designation of Series of the Trust. 5
(vii) Tenth Amended and Restated Establishment and
Designation of Series of the Trust. 5
(viii)Eleventh Amended and Restated Establishment and
Designation of Series of the Trust. 7
(2) By-Laws of the Trust. 5
(3) Not Applicable.
(4) Specimen stock certificates for shares of beneficial
interest of the Trust. 1
(5) Investment Advisory Agreement. 7
(6) Inapplicable
(7) Inapplicable.
(8) See Item (9).
(9) (i) Administration and Services Agreement. 5
(ii) Schedule of fees under Administration and
Service Agreement. 7
(10) Not Applicable.
(11) Not Applicable.
(12) Not Applicable.
(13) (i) Investment representation letter of initial
shareholder of the Equity 500 Index Fund. 3
(ii) Investment representation letter of initial
shareholder of the Institutional Liquid Assets
Fund. 5
(iii) Investment representation letter of initial
shareholder of the Institutional Daily Assets
Fund. 7
1 Incorporated herein by reference from Pre-Effective Amendment No. 1 to
the Registration Statement as filed with the SEC on July 20, 1990.
3 Incorporated herein by reference from Post-Effective Amendment No. 4
to the Registration Statement as filed with the SEC on April 30, 1992.
5 Incorporated herein by reference from Post-Effective Amendment No. 15
to the Registration Statement as filed with the SEC on July 5, 1995.
7 Incorporated herein by reference from Post-Effective Amendment No. 21
to the Registration Statement as filed with the SEC on September 24, 1996.
(14) Not Applicable.
(15) (i) Plan of Distribution pursuant to Rule 12b-l
under the Investment Company Act of 1940, as
amended (the "1940 Act").4
(ii) Schedule of fees under Plan of Distribution. 5
(iii) Placement Agent Agreement. 7
(16) (i) Method of computation of performance information
for money market funds. 2
(ii) Method of computation of performance information
for non-money market funds. 3
(17) Financial Data Schedules. 7
(18) Not Applicable
(19) Powers of Attorney. 4
Item 25. Persons Controlled by or under Common Control with Registrant.
None
Item 26. Number of Holders of Securities.
Title of Class Number of Record Holders
(par value $0.01 per share) as of September 15, 1996
Institutional Cash Management Fund: 772
Institutional Treasury Money Fund: 565
Institutional Tax Free Money Fund: 0
Institutional NY Tax Free Money Fund: 0
Equity 500 Index Fund: 76
BT Institutional Capital Appreciation Fund: 0
Institutional Liquid Assets Fund: 2
Institutional Cash Reserves: 219
Institutional Daily Assets Fund: 0
Item 27. Indemnification.
Reference is hereby made to Article V of the Registrant's Declaration
of Trust, filed as an exhibit to the Registration Statement.
The Trustees and officers of the Registrant and the personnel of the
Registrant's administrator are insured under an errors and omissions
liability insurance policy. The Registrant and its officers are also
insured under the fidelity bond required by Rule 17g-1 under the Investment
Company Act of 1940.
2 Incorporated herein by reference from Post-Effective Amendment No. 1
to the Registration Statement as filed with the SEC on February 29, 1991.
3 Incorporated herein by reference from Post-Effective Amendment No. 4
to the Registration Statement as filed with the SEC on April 30, 1992.
4 Incorporated herein by reference from Post-Effective Amendment No. 6
to the Registration Statement as filed with the SEC on January 29, 1993.
5 Incorporated herein by reference from Post-Effective Amendment No. 15
to the Registration Statement as filed with the SEC on July 5, 1995.
7 Incorporated herein by reference from Post-Effective Amendment No. 21
to the Registration Statement as filed with the SEC on September 24, 1996.
Item 28. Business and Other Connections of Investment Adviser.
Bankers Trust serves as investment adviser to the Trust. Bankers Trust, a
New York banking corporation, is a wholly owned subsidiary of Bankers Trust
New York Corporation. Bankers Trust conducts a variety of commercial
banking and trust activities and is a major wholesale supplier of financial
services to the international institutional market.
To the knowledge of the Trust, none of the directors or officers of Bankers
Trust, except those set forth below, is engaged in any other business,
profession, vocation or employment of a substantial nature, except that
certain directors and officers also hold various positions with and engage
in business for Bankers Trust New York Corporation. Set forth below are the
names and principal businesses of the directors and officers of Bankers
Trust who are engaged in any other business, profession, vocation or
employment of a substantial nature.
NAME AND PRINCIPAL BUSINESS ADDRESS, PRINCIPAL OCCUPATION AND OTHER
INFORMATION
George B. Beitzel, International Business Machines Corporation, Old Orchard
Road, Armonk, NY 10504. Retired Senior Vice President and Director,
Member of Advisory Board of International Business Machines Corporation.
Director of Bankers Trust and Bankers Trust New York Corporation. Director
of FlightSafety International, Inc. Director of Phillips Petroleum
Company. Director of Roadway Services, Inc. Director of Rohm and Hass
Company.
William R. Howell, J.C. Penney Company, Inc., P.O. Box 10001, Plano, TX
75301-0001. Chairman of the Board and Chief Executive Officer, J.C. Penney
Company, Inc. Director of Bankers Trust and Bankers Trust New York
Corporation. Also a Director of Exxon Corporation, Halliburton Company and
Warner-Lambert Corporation.
Jon M. Huntsman, Huntsman Chemical Corporation, 2000 Eagle Gate Tower, Salt
Lake City, UT 84111. Chairman and Chief Executive Officer, Huntsman
Chemical Corporation, Director of Bankers Trust and Bankers Trust New York
Corporation. Chairman of Constar Corporation, Huntsman Corporation,
Huntsman Holdings Corporation and Petrostar Corporation. President of
Autostar Corporation, Huntsman Polypropylene Corporation and Restar
Corporation. Director of Razzleberry Foods Corporation and Thiokol
Corporation. General Partner of Huntsman Group Ltd., McLeod Creek
Partnership and Trustar Ltd.
Vernon E. Jordan, Jr., Akin, Gump, Strauss, Hauer & Feld, LLP, 1333 New
Hampshire Ave., N.W., Washington, DC 20036. Partner, Akin, Gump, Strauss,
Hauer & Feld, LLP. Director of Bankers Trust and Bankers Trust New York
Corporation. Also a Director of American Express Company, Corning
Incorporated, Dow Jones, Inc., J.C. Penney Company, Inc., RJR Nabisco Inc.,
Revlon Group Incorporated, Ryder System, Inc., Sara Lee Corporation, Union
Carbide Corporation and Xerox Corporation.
Hamish Maxwell, Philip Morris Companies Inc., 120 Park Avenue, New York, NY
10017. Chairman of the Executive Committee, Philip Morris Companies Inc.
Director of Bankers Trust and Bankers Trust New York Corporation. Director
of The News Corporation Limited.
Donald F. McCullough, Collins & Aikman Corporation, 210 Madison Avenue, New
York, NY 10016. Chairman Emeritus, Collins & Aikman Corporation.
Director of Bankers Trust and Bankers Trust New York Corporation. Director
of Massachusetts Mutual Life Insurance Co. and Melville Corporation.
N.J. Nicholas Jr., 745 Fifth Avenue, New York, NY 10020. Former
President, Co-Chief Executive Officer and Director of Time Warner Inc.
Director of Bankers Trust and Bankers Trust New York Corporation. Also a
Director of Xerox Corporation.
Russell E. Palmer, The Palmer Group, 3600 Market Street, Suite 530,
Philadelphia, PA 19104. Chairman and Chief Executive Officer of The Palmer
Group. Director of Bankers Trust and Bankers Trust New York Corporation.
Also Director of Allied-Signal Inc., Contel Cellular, Inc., Federal Home
Loan Mortgage Corporation, GTE Corporation, Goodyear Tire & Rubber Company,
Imasco Limited, May Department Stores Company and Safeguard Scientifics,
Inc. Member, Radnor Venture Partners Advisory Board.
Didier Pineau-Valencienne, Schneider S.A., 4 Rue de Longchamp, 75116 Paris,
France. Chairman and Chief Executive Officer, Schneider S.A. Director and
member of the European Advisory Board of Bankers Trust and Director of
Bankers Trust New York Corporation. Director of AXA (France) and Equitable
Life Assurance Society of America, Arbed (Luxembourg), Banque Paribas
(France), Ciments Francais (France), Cofibel (Belgique), Compagnie
Industrielle de Paris (France), SIAPAP, Schneider USA, Sema Group PLC
(Great Britain), Spie- Batignolles, Tractebel (Belgique) and Whirlpool.
Chairman and Chief Executive Officer of Societe Parisienne d'Entreprises et
de Participations.
Charles S. Sanford, Jr., Bankers Trust Company, 280 Park Avenue, New York,
NY 10017. Chairman of the Board of Bankers Trust and Bankers Trust New
York Corporation. Also a Director of Mobil Corporation and J.C. Penney
Company, Inc.
Eugene B. Shanks, Jr., Bankers Trust Company, 280 Park Avenue, New York, NY
10017. President of Bankers Trust and Bankers Trust New York Corporation.
Patricia Carry Stewart, c/o Office of the Secretary, 280 Park Avenue, New
York, NY 10017. Former Vice President, The Edna McConnell Clark
Foundation. Director of Bankers Trust and Bankers Trust New York
Corporation. Director, Borden Inc., Continental Corp. and Melville
Corporation.
George J. Vojta, Bankers Trust Company, 280 Park Avenue, New York, NY
10017. Vice Chairman of the Board of Bankers Trust and Bankers Trust New
York Corporation. Director of Northwest Airlines and Private Export
Funding Corp.
Item 29. Principal Underwriters.
(a) Edgewood Services, Inc., (``Edgewood'') the Distributor for shares
of the Registrant, also acts as principal underwriter for the following
open-end investment companies: FTI Funds, Excelsior Institutional Trust
(formerly, UST Master Funds, Inc.), Excelsior Tax-Exempt Funds, Inc.
(formerly, UST Master Tax-Exempt Funds, Inc.), Excelsior Institutional
Trust, Marketvest Funds, Marketvest Funds, Inc., BT Advisor Funds, BT
Investment Funds, and BT Pyramid Mutual Funds.
(b)
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant
R. Jeffrey Niss Senior Vice President and --
Federated Investors Tower Trustee, Edgewood Services,
Pittsburgh, PA 15222-3779 Inc.
Douglas L. Hein Trustee, --
Federated Investors Tower Edgewood Services, Inc.
Pittsburgh, PA 15222-3779
Frank E. Polefrone Trustee, --
Federated Investors Tower Edgewood Services, Inc.
Pittsburgh, PA 15222-3779
Newton Heston, III Vice President, --
Federated Investors Tower Edgewood Services, Inc.
Pittsburgh, PA 15222-3779
Ernest L. Linane Assistant Vice President, --
Federated Investors Tower Edgewood Services, Inc.
Pittsburgh, PA 15222-3779
S. Elliott Cohan Secretary, --
Federated Investors Tower Edgewood Services, Inc.
Pittsburgh, PA 15222-3779
Thomas J. Ward Assistant Secretary, --
Federated Investors Tower Edgewood Services, Inc.
Pittsburgh, PA 15222-3779
Kenneth W. Pegher, Jr. Treasurer, --
Federated Investors Tower Edgewood Services, Inc.
Pittsburgh, PA 15222-3779
(c) Not Applicable.
ITEM 30. 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 Investor Tower, Pittsburgh, PA
15222-3779.
Bankers Trust Company: 280 Park Avenue, New York, NY 10017.
Investors Fiduciary Trust Company: 127 West 10th Street, Kansas City, MO
64105.
Edgewood Services, Inc.: Clearing Operations, P.O. Box 897,
Pittsburgh, PA 15230-0897.
Item 31. Management Services.
Not applicable.
Item 32. Undertakings.
Not applicable.
SIGNATURES
Pursuant to the requirements of the Investment Company Act of 1940, the
Registrant BT INVESTMENT FUNDS has duly caused this Amendment to its
Registration statement on Form N-1A to be signed on its behalf by the
undersigned, thereto duly authorized in the City of Pittsburgh, and
Commonwealth of Pennsylvania on the 16th day of October, 1996.
BT INSTITUTIONAL FUNDS
By: /S/ Jay S. Neuman
Jay S. Neuman, Secretary
October 16, 1996
