TAX FREE RESERVES PORTFOLIO, N-1A/A, 1995-12-28

TAX FREE RESERVES PORTFOLIO
N-1A/A, 1995-12-28

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As filed with the Securities and Exchange Commission on December 28, 1995
File No. 811-6118

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549

FORM N-1A

REGISTRATION STATEMENT

UNDER

THE INVESTMENT COMPANY ACT OF 1940

AMENDMENT NO. 7

Tax Free Reserves Portfolio
(Exact Name of Registrant as Specified in Charter)

6 St. James Avenue, Boston, Massachusetts 02116
(Address of Principal Executive Offices)

Registrant's Telephone Number, including Area Code: 617-423-1679

Philip W. Coolidge, 6 St. James Avenue, Boston, Massachusetts 02116
(Name and Address of Agent for Service)

with a copy to
Roger P. Joseph, Esq.
Bingham, Dana & Gould
150 Federal Street
Boston, Massachusetts 02110

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Explanatory Note

This Registration Statement has been filed by the Registrant pursuant to
Section 8(b) of the Investment Company Act of 1940. However, beneficial
interests in the Registrant are not being registered under the Securities Act
of 1933 (the "1933 Act") since such interests will be issued solely in private
placement transactions which do not involve any "public offering" within the
meaning of Section 4(2) of the 1933 Act. Investments in the Registrant may only
be made by investment companies, insurance company separate accounts, common or
commingled trust funds or similar organizations or entities which are
"accredited investors" within the meaning of Regulation D under the 1933 Act.
This Registration Statement does not constitute an offer to sell, or the
solicitation of an offer to buy, any beneficial interests in the Registrant.

<PAGE>

Part A

Responses to Items 1 through 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.

Tax Free Reserves Portfolio (the "Portfolio") is a no-load,
non-diversified, open-end management investment company which was organized as
a trust under the laws of the State of New York on March 1, 1990. Beneficial
interests in the Portfolio are issued solely in private placement transactions
which do not involve any "public offering" within the meaning of Section 4(2)
of the Securities Act of 1933, as amended (the "1933 Act"). Investments in the
Portfolio may only be made by investment companies, insurance company separate
accounts, common or commingled trust funds or similar organizations or entities
which are "accredited investors" within the meaning of Regulation D under the
1933 Act. This registration statement does not constitute an offer to sell, or
the solicitation of an offer to buy, any "security" within the meaning of the
1933 Act.

Investment Objectives

The investment objectives of the Portfolio are to provide investors in the
Portfolio with high levels of current income exempt from federal income taxes,
preservation of capital and liquidity. The investment objectives of the
Portfolio may be changed without the approval of the investors in the
Portfolio, but not without written notice thereof to the investors in the
Portfolio at least 30 days prior to implementing the change. Of course, there
can be no assurance that the Portfolio will achieve its investment objectives.

Investment Policies

The Portfolio seeks its objectives by investing primarily in short-term,
high quality fixed rate and variable rate obligations issued by or on behalf of
states and municipal governments and their authorities, agencies,
instrumentalities and political subdivisions, the interest on which is exempt
from federal income taxes (these securities are referred to as "Municipal
Obligations"). As a fundamental policy, the Portfolio invests at least 80% of
its assets, under normal circumstances, in the following types of Municipal
Obligations and in participation interests in these obligations issued by
banks, insurance companies or other financial institutions ("Participation
Interests"):

(1) Municipal bonds that at the date of purchase are rated Aa or better
by Moody's Investors Service, Inc. ("Moody's") or AA or better by
Standard & Poor's Rating Group ("S&P") or Fitch Investors Service,
Inc. ("Fitch"), or are unrated but are of comparable quality as
determined by Citibank, N.A. ("Citibank"), the Portfolio's investment

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adviser (the "Adviser"), on the basis of a credit evaluation of the
obligor, or of the bank issuing the Participation Interest or
guarantee of the bonds, or of any insurance issued in support of the
bonds or the Participation Interest;

(2) Municipal notes that at the date of purchase are rated MIG 2/VMIG 2
or better by Moody's, SP-2 or better by S&P or F-2 or better by
Fitch, or are unrated but are of comparable quality as determined by
the Adviser; and

(3) Municipal commercial paper that at the date of purchase is rated
Prime-2 or better by Moody's, A-2 or better by S&P or F-2 or better
by Fitch, or is unrated but is of comparable quality as determined
by the Adviser.

Although the Portfolio attempts to invest all of its assets in Municipal
Obligations, the Portfolio may invest up to 20% of its assets in taxable
securities (such as U.S. Government obligations or certificates of deposit of
domestic banks). Any taxable securities in which the Portfolio invests are of
comparable quality to the Municipal Obligations in which the Portfolio invests.

In determining the tax status of interest on Municipal Obligations, the
Adviser relies on opinions of bond counsel who may be counsel to the issuer.

Certain Additional Investment Policies

90-day Average Maturity. All of the Portfolio's investments mature in 397
days or less from the date of purchase, have a variable rate of interest
adjusted no less frequently than every 397 days, or are purchased pursuant to a
repurchase agreement which provides for repurchase by the seller within 397
days from the date of purchase. The average maturity of the Portfolio's
investments (on a dollar-weighted basis) is 90 days or less. All of the
Portfolio's investments are "eligible securities" within the meaning of Rule
2a-7 under the Investment Company Act of 1940, as amended (the "1940 Act"), and
are determined by the Adviser, pursuant to power delegated by the Portfolio's
Board of Trustees, to present minimal credit risks. Investment in high quality,
short-term instruments may, in many circumstances, result in a lower yield than
would be available from investment in instruments with a lower quality or a
longer term.

Permitted Investments. Uninvested cash reserves may be held temporarily
for the Portfolio pending investment. The Portfolio may borrow from banks up to
15% of its total assets for temporary or emergency purposes. For more
information regarding permitted investments and investment practices, see
"Permitted Investments and Investment Practices" below. The Portfolio will not
necessarily invest or engage in each of the investments and investment
practices described in "Permitted Investments and Investment Practices," but
reserves the right to do so.

<PAGE>

Investment Restrictions. Part B of this Registration Statement contains a
list of specific investment restrictions which govern the Portfolio's
investment policies. Certain of these specific restrictions may not be changed
without the approval of the investors in the Portfolio. Except as otherwise
indicated, the Portfolio's investment restrictions and policies may be changed
without investor approval. If a percentage or rating restriction (other than a
restriction as to borrowing) is adhered to at the time an investment is made, a
later change in percentage or rating resulting from changes in the Portfolio's
securities will not be a violation of policy.

Brokerage Transactions. The primary consideration in placing the
Portfolio's security transactions with broker-dealers for execution is to
obtain and maintain the availability of execution at the most favorable prices
and in the most effective manner possible.

Certain Risk Considerations

The risks of investing in the Portfolio vary depending upon the nature of
the securities held, and the investment practices employed, on its behalf.
Certain of these risks are described below.

Non-diversified Status. The Portfolio is a non-diversified mutual fund.
This means that it is not subject to any statutory restrictions under the 1940
Act limiting the investment of its assets in one or relatively few issuers
(although certain diversification requirements are imposed by the Internal
Revenue Code). Since the Portfolio may invest a relatively high percentage of
its assets in the obligations of a limited number of issuers, the value of
shares of the Portfolio may be more susceptible to any single economic,
political or regulatory occurrence than the value of shares of a diversified
mutual fund would be. The Portfolio also may invest 25% or more of its assets
in securities the issuers of which are located in the same state or the
interest on which is paid from revenues of similar type projects or that are
otherwise related in such a way that a single economic, business or political
development or change affecting one of the securities would also affect other
securities. Investors should consider the greater risk inherent in these
policies when compared with a more diversified mutual fund.

"Concentration" in Participation Interests. The Portfolio invests more
than 25% of its assets in Participation Interests in Municipal Obligations
which are secured by bank letters of credit or guarantees. Banks are subject to
extensive governmental regulations which may limit both the amounts and types
of loans and other financial commitments which may be made and interest rates
and fees which may be charged. The profitability of this industry is largely
dependent upon the availability and cost of capital funds for the purpose of
financing lending operations under prevailing money market conditions. Also,
general economic conditions play an important part in the operation of this
industry and exposure to credit losses

<PAGE>

arising from possible financial difficulties of borrowers might affect a
bank's ability to meet its obligations under a letter of credit or guarantee.

Permitted Investments and Investment Practices

Municipal Bonds. Municipal bonds are debt obligations of states, cities,
municipalities and municipal agencies and authorities which generally have a
maturity at the time of issue of one year or more and which are issued to raise
funds for various public purposes, such as construction of a wide range of
public facilities, refunding outstanding obligations or obtaining funds for
institutions and facilities. The two principal classifications of municipal
bonds are "general obligation" and "revenue" bonds. General obligation bonds
are secured by the issuer's pledge of its full faith, credit and taxing power
for the payment of principal and interest. The principal of and interest on
revenue bonds are payable from the income of specific projects or authorities
and generally are not supported by the issuer's general power to levy taxes. In
some cases, revenues derived from specific taxes are pledged to support
payments on a revenue bond.

In addition, certain kinds of industrial development bonds ("IDBs") are
issued by or on behalf of public authorities to provide funding for various
privately operated industrial facilities, such as warehouse, office, plant and
store facilities and environmental and pollution control facilities. IDBs are,
in most cases, revenue bonds. The payment of the principal and interest on IDBs
usually depends solely on the ability of the user of the facilities financed by
the bonds or other guarantor to meet its financial obligations and, in certain
instances, the pledge of real and personal property as security for payment.
Many IDBs may not be readily marketable; however, the IDBs or the participation
certificates in IDBs purchased by the Portfolio will have liquidity because
they generally will be supported by demand features to "high quality" banks,
insurance companies or other financial institutions.

Municipal Notes. There are four major varieties of state and municipal
notes: Tax and Revenue Anticipation Notes ("TRANs"); Tax Anticipation Notes
("TANs"); Revenue Anticipation Notes ("RANs"); and Bond Anticipation Notes
("BANs"). TRANs, TANs and RANs are issued by states, municipalities and other
tax-exempt issuers to finance short-term cash needs or, occasionally, to
finance construction. Most TRANs, TANs and RANs are general obligations of the
issuing entity payable from taxes or designated revenues, respectively,
expected to be received within the related fiscal period. BANs are issued with
the expectation that principal and interest of the maturing notes will be paid
out of proceeds from notes or bonds to be issued concurrently or at a later
date. BANs are issued most frequently by both general obligation and revenue
bond issuers usually to finance such items as land acquisition, facility
acquisition and/or construction and capital improvement projects.

<PAGE>

Variable Rate Instruments and Participation Interests. Variable rate
instruments provide for a periodic adjustment in the interest rate paid on the
instrument and usually permit the holder to receive payment of principal and
accrued interest upon a specified number of days' notice. The Portfolio may
invest in participation interests in Municipal Obligations owned by a bank,
insurance company or other financial institution or affiliated organization
("Participation Interests"). A variable rate instrument or a Participation
Interest may be backed by an irrevocable letter of credit or guarantee of, or a
right to put to, a bank, or an insurance policy of an insurance company. See
"Stand-by Commitments." Purchase of a Participation Interest may involve the
risk that the Portfolio will not be deemed to be the owner of the underlying
Municipal Obligation for purposes of the ability to claim tax exemption of
interest paid on that Municipal Obligation. If interest rates rise or fall, the
rates payable on variable rate instruments will generally be readjusted. As a
result variable rate instruments do not offer the same opportunity for capital
appreciation or loss as fixed rate instruments.

Stand-by Commitments. When the Portfolio purchases Municipal Obligations
it may also acquire stand-by commitments from banks with respect to such
Municipal Obligations. The Portfolio also may acquire stand-by commitments from
broker-dealers. Under a stand-by commitment, a bank or broker-dealer agrees to
purchase at the Portfolio's option a specified Municipal Obligation at a
specified price. A stand-by commitment is the equivalent of a "put" option with
respect to a particular Municipal Obligation. The Portfolio intends to acquire
stand-by commitments solely to facilitate liquidity. Stand-by commitments are
subject to certain risks, which include the ability of the issuer of the
commitment to pay for the Municipal Obligations at the time the commitment is
exercised, the fact that the commitment is not marketable, and that the
maturity of the underlying security will generally be different from that of
the commitment.

"When-Issued" Securities. In order to ensure the availability of suitable
securities, the Portfolio may purchase securities on a "when-issued" or on a
"forward delivery" basis, which means that the securities would be delivered to
the Portfolio at a future date beyond customary settlement time. Under normal
circumstances, the Portfolio takes delivery of the securities. In general, the
purchaser does not pay for the securities until received and does not start
earning interest until the contractual settlement date. While awaiting delivery
of the securities, the Portfolio establishes a segregated account consisting of
cash, cash equivalents or high quality debt securities equal to the amount of
the Portfolio's commitments to purchase "when-issued" securities. An increase
in the percentage of the Portfolio's assets committed to the purchase of
securities on a "when-issued" basis may increase the volatility of its net
asset value.

<PAGE>

Repurchase Agreements. The Portfolio may enter into repurchase agreements
in order to earn a return on temporarily available cash. Repurchase agreements
are transactions in which an institution sells the Portfolio a security at one
price, subject to the Portfolio's obligation to resell and the selling
institution's obligation to repurchase that security at a higher price normally
within a seven day period. There may be delays and risks of loss if the seller
is unable to meet its obligation to repurchase. Repurchase agreements may
involve Municipal Obligations or other securities.

Restricted Securities. The Portfolio may purchase restricted securities
that are not registered for sale to the general public. Provided that a dealer
or institutional trading market in such securities exists, these restricted
securities are not treated as illiquid securities for purposes of the
Portfolio's investment limitations. Institutional trading in restricted
securities is relatively new, and the liquidity of the Portfolio's investments
could be impaired if trading does not develop or declines.

Private Placements and Illiquid Investments. The Portfolio may invest up
to 10% of its net assets in securities for which there is no readily available
market. These illiquid securities may include privately placed restricted
securities for which no institutional market exists. The absence of a trading
market can make it difficult to ascertain a market value for illiquid
investments. Disposing of illiquid investments may involve time-consuming
negotiation and legal expenses, and it may be difficult or impossible for the
Portfolio to sell them promptly at an acceptable price.

Item 5. Management.

Trustees

The Portfolio's Board of Trustees provides broad supervision over the
affairs of the Portfolio. A majority of the Portfolio's Trustees are not
affiliated with the Adviser. More information on the Trustees and officers of
the Portfolio appears in Part B of this Registration Statement.

Investment Adviser

Citibank. Citibank, N.A. ("Citibank") is the Portfolio's investment
adviser (the "Adviser"). The address of Citibank is 153 East 53rd Street, New
York, New York 10043. The Portfolio draws on the strength and experience of
Citibank. Citibank offers a wide range of banking and investment services to
customers across the United States and throughout the world, and has been
managing money since 1822. Its portfolio managers are responsible for investing
in money market, equity and fixed income securities. Citibank and its
affiliates manage more than $73 billion in assets worldwide, including the
Landmark Funds and Portfolios. Citibank is a wholly-owned subsidiary of
Citicorp.

<PAGE>

Citibank manages the assets of the Portfolio pursuant to an investment
advisory agreement (the "Advisory Agreement"). Subject to policies set by the
Portfolio's Trustees, Citibank makes investment decisions for the Portfolio.

Advisory Fees. For its services under the Advisory Agreement, the Adviser
receives investment advisory fees, which are accrued daily and paid monthly, of
0.20% of the Portfolio's average daily net assets on an annualized basis for
the Portfolio's then-current fiscal year. The Adviser has voluntarily agreed to
waive a portion of its investment advisory fee from the Portfolio.

For the fiscal year ended August 31, 1995, the investment advisory fees
payable to Citibank from the Portfolio were $613,607.

Banking Relationships. Citibank and its affiliates may have deposit, loan
and other relationships with the issuers of securities purchased on behalf of
the Portfolio, including outstanding loans to such issuers which may be repaid
in whole or in part with the proceeds of securities so purchased. Citibank has
informed the Portfolio that, in making its investment decisions, it does not
obtain or use material inside information in the possession of any division or
department of Citibank or in the possession of any affiliate of Citibank.

Bank Regulatory Matters. The Glass-Steagall Act prohibits certain
financial institutions, such as Citibank, from underwriting securities of
open-end investment companies, such as the Portfolio. Citibank believes that
its services under the Advisory Agreement and the activities performed by it or
its affiliates as sub-administrator are not underwriting and are consistent
with the Glass-Steagall Act and other relevant federal and state laws. However,
there is no controlling precedent regarding the performance of the combination
of investment advisory and sub-administrative activities by banks. State laws
on this issue may differ from applicable federal law and banks and financial
institutions may be required to register as dealers pursuant to state
securities laws. Changes in either federal or state statutes or regulations, or
in their interpretations, could prevent Citibank or its affiliates from
continuing to perform these services for the Portfolio. If Citibank or its
affiliates were to be prevented from acting as the Adviser or
sub-administrator, the Portfolio would seek alternative means for obtaining
these services. The Portfolio does not expect that investors would suffer any
adverse financial consequences as a result of any such occurrence.

<PAGE>

Administrative Services Plan

The Portfolio has an administrative services plan ("Administrative
Services Plan") which provides that the Portfolio may obtain the services of an
administrator, a transfer agent and a custodian, and may enter into agreements
providing for the payment of fees for such services. Under the Administrative
Services Plan, fees paid to the Administrator may not exceed 0.05% of the
Portfolio's average daily net assets on an annualized basis for the Portfolio's
then-current fiscal year. See "Administrator" and "Transfer Agent, Custodian
and Fund Accountant" below.

Administrator

The Landmark Funds Broker-Dealer Services, Inc. ("LFBDS"), the Portfolio's
administrator (the "Administrator"), supervises the overall administration of
the Portfolio. The address of LFBDS is 6 St. James Avenue, Boston,
Massachusetts 02116. LFBDS provides certain administrative services to the
Portfolio under an administrative services agreement ("Administrative Services
Agreement"). These administrative services include providing general office
facilities, supervising the overall administration of the Portfolio, and
providing persons satisfactory to the Board of Trustees to serve as Trustees
and officers of the Portfolio. These Trustees and officers may be directors,
officers or employees of LFBDS or its affiliates.

For these services, the Administrator receives fees, accrued daily and
paid monthly, of 0.05% of the assets of the Portfolio on an annualized basis
for the Portfolio's then-current fiscal year. The Administrator has voluntarily
agreed to waive a portion of the fees payable to it. For the fiscal year ended
August 31, 1995, the fees payable to LFBDS under the Administrative Services
Agreement were $153,402.

LFBDS is a wholly-owned subsidiary of Signature Financial Group, Inc.

Sub-Administrator

Pursuant to a sub-administrative services agreement, Citibank performs
such sub-administrative duties for the Portfolio as from time to time are
agreed upon by Citibank and LFBDS. Citibank's compensation as sub-administrator
is paid by LFBDS.

Transfer Agent, Custodian and Fund Accountant

The Portfolio's transfer agent and dividend paying agent is State Street
Bank and Trust Company ("State Street"). State Street acts as the custodian of
the Portfolio's assets. State Street also provides fund accounting services to
the Portfolio and calculates the daily net asset value for the Portfolio. The
address of State Street is 225 Franklin Street, Boston, Massachusetts 02110.

<PAGE>

Expenses

The Portfolio pays all of its expenses, including the compensation of its
Trustees who are not affiliated with LFBDS; governmental fees; interest
charges; taxes; membership dues in the Investment Company Institute allocable
to the Portfolio; fees and expenses of independent auditors, of legal counsel
and of any transfer agent, custodian, registrar or dividend disbursing agent of
the Portfolio; insurance premiums; expenses of calculating the net asset value
of and the net income on the Portfolio; expenses connected with the execution,
recording and settlement of security transactions; fees and expenses of the
custodian for all services to the Portfolio, including safekeeping of funds and
securities and maintaining required books and accounts; expenses of preparing
and mailing reports to investors and to governmental officers and commissions;
and the advisory fees payable to the Adviser and the administrative fees
payable to the Administrator. For the fiscal year ended August 31, 1995, the
Portfolio's total expenses were 0.32% of its average net assets.

Item 6. Capital Stock and Other Securities.

Investments in the Portfolio have no preference, pre-emptive or conversion
rights and are fully paid and non-assessable, except as set forth below. The
Portfolio is not required and has no current intention to hold annual meetings
of investors, but the Portfolio will hold special meetings of investors when in
the judgment of the Trustees it is necessary or desirable to submit matters for
an investor vote. Investors have under certain circumstances (e.g., upon
application and submission of certain specified documents to the Trustees by a
specified number of investors) the right to communicate with other investors in
connection with requesting a meeting of investors for the purpose of removing
one or more Trustees. Investors also have the right to remove one or more
Trustees without a meeting by a declaration in writing by a specified number of
investors. Upon liquidation or dissolution of the Portfolio, investors would be
entitled to share pro rata in the net assets of the Portfolio available for
distribution to investors.

The Portfolio is organized as a trust under the laws of the State of New
York. Under the Declaration of Trust, the Trustees are authorized to issue
beneficial interests in the Portfolio. Each investor is entitled to a vote in
proportion to the value of its investment in the Portfolio. Investments in the
Portfolio may not be transferred, but an investor may withdraw all or any
portion of its investment at any time at net asset value. Investors in the
Portfolio (e.g., investment companies, insurance company separate accounts and
common and commingled trust funds) are each liable for all obligations of the
Portfolio. However, it is not expected that the liabilities of the Portfolio
would ever exceed its assets.

The net income of the Portfolio is determined each day on which the New
York Stock Exchange is open for trading (a "Business Day") (and

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on such other days as are deemed necessary in order to comply with Rule 22c-1
under the 1940 Act). This determination is made once during each such day as of
12:00 noon, Eastern time. All the net income of the Portfolio, as defined
below, so determined is allocated pro rata among the investors in the Portfolio
at the time of such determination.

For this purpose the net income of the Portfolio (from the time of the
immediately preceding determination thereof) shall consist of (i) all income
accrued, less the amortization of any premium, on the assets of the Portfolio,
less (ii) all actual and accrued expenses of the Portfolio determined in
accordance with generally accepted accounting principles. Interest income
includes discount earned (including both original issue and market discount) on
discount paper accrued ratably to the date of maturity and any net realized
gains or losses on the assets of the Portfolio.

It is intended that the Portfolio's assets, income and distributions will
be managed in such a way that an investor in the Portfolio is able to satisfy
the requirements of Subchapter M of the Internal Revenue Code of 1986, as
amended, assuming that the investor invested all of its investable assets in
the Portfolio.

Item 7. Purchase of Securities.

Beneficial interests in the Portfolio are issued solely in private
placement transactions which do not involve any "public offering" within the
meaning of Section 4(2) of the 1933 Act. Investments in the Portfolio may only
be made by investment companies, insurance company separate accounts, common or
commingled trust funds or similar organizations or entities which are
"accredited investors" within the meaning of Regulation D under the 1933 Act.
This registration statement does not constitute an offer to sell, or the
solicitation of an offer to buy, any "security" within the meaning of the 1933
Act.

An investment in the Portfolio may be made without a sales load. All
investments are made at net asset value next determined after an order is
received by the Portfolio. The net asset value of the Portfolio is determined
on each Business Day. Securities are valued at amortized cost, which the
Trustees of the Portfolio have determined in good faith constitutes fair value
for the purposes of complying with the 1940 Act. This valuation method will
continue to be used until such time as the Trustees of the Portfolio determine
that it does not constitute fair value for such purposes.

There is no minimum initial or subsequent investment in the Portfolio.
However, since the Portfolio intends to be as fully invested at all times as is
reasonably practicable in order to enhance the yield on its assets, investments
must be made in federal funds (i.e., monies credited to the account of the
Portfolio's custodian bank by a Federal Reserve Bank).

<PAGE>

The Portfolio reserves the right to cease accepting investments at any
time or to reject any investment order.

The exclusive placement agent for the Portfolio is LFBDS. LFBDS receives
no additional compensation for serving as the exclusive placement agent for the
Portfolio.

Item 8. Redemption or Repurchase.

An investor in the Portfolio may withdraw all or any portion of its
investment at any time at the net asset value next determined after a
withdrawal request in proper form is furnished by the investor to the
Portfolio. The proceeds of a withdrawal will be paid by the Portfolio in
federal funds normally on the Business Day the withdrawal is effected, but in
any event within seven days. Investments in the Portfolio may not be
transferred.

The right of any investor to receive payment with respect to any
withdrawal may be suspended or the payment of the withdrawal proceeds postponed
during any period in which the New York Stock Exchange is closed (other than
weekends or holidays) or trading on such Exchange is restricted, or, to the
extent otherwise permitted by the 1940 Act, if an emergency exists.

Item 9. Pending Legal Proceedings.

Not applicable.

<PAGE>

Part B

Item 10. Cover Page.

Not applicable.

Item 11. Table of Contents. Page

General Information and History B-1
Investment Objectives and Policies B-1
Management B-13
Control Persons and Principal Holders of Securities B-15
Investment Advisory and Other Services B-16
Brokerage Allocation and Other Practices B-18
Capital Stock and Other Securities B-19
Purchase, Redemption and Pricing of Securities B-21
Tax Status B-22
Underwriters B-24
Calculations of Performance Data B-24
Financial Statements B-24

Item 12. General Information and History.

Not applicable.

Item 13. Investment Objectives and Policies.

The investment objectives of Tax Free Reserves Portfolio (the "Portfolio")
are to provide its investors with high levels of current income which is exempt
from federal income taxes, preservation of capital and liquidity. There can, of
course, be no assurance that the Portfolio will achieve its investment
objectives. The investment objectives of the Portfolio may be changed without
approval of the investors in the Portfolio.

The Portfolio seeks its investment objectives by investing primarily in
short-term, high quality fixed rate and variable rate obligations issued by or
on behalf of states and municipal governments and their authorities, agencies,
instrumentalities and political subdivisions, the interest on which is exempt
from federal personal income taxes, including participation interests in such
obligations issued by banks, insurance companies or other financial
institutions. (Such securities, whether or not the interest thereon is subject
to the federal alternative minimum tax, are referred to herein as "Municipal
Obligations"). In determining the tax status of interest on Municipal
Obligations, the Adviser relies on opinions of bond counsel who may be counsel
to the issuer. The Portfolio may hold uninvested cash reserves pending
investment. The Portfolio's investments may include "when-issued" or "forward
delivery" Municipal Obligations, stand-by

<PAGE>

commitments and taxable repurchase agreements. Although the Portfolio will
attempt to invest 100% of its assets in Municipal Obligations, the Portfolio
reserves the right to invest up to 20% of the value of its total assets in
securities, the interest income on which is subject to federal, state and local
income tax or the federal alternative minimum tax. The Portfolio invests more
than 25% of its assets in participation certificates issued by banks in
industrial development bonds and other Municipal Obligations. In view of this
"concentration" in these bank participation certificates, an investment in Fund
shares should be made with an understanding of the characteristics of the
banking industry and the risks which such an investment may entail. (See
"Variable Rate Instruments and Participation Interests" below.)

All investments by the Portfolio mature or are deemed to mature within 397
days from the date of acquisition and the average maturity of the Portfolio's
securities (on a dollar-weighted basis) is 90 days or less. The maturities of
variable rate instruments held by the Portfolio are deemed to be the longer of
the notice period, or the period remaining until the next interest rate
adjustment, although the stated maturities may be in excess of 397 days. (See
"Variable Rate Instruments and Participation Interests" below.) All investments
by the Portfolio are "eligible securities" (rated in one of the two highest
rating categories for short-term obligations by at least two nationally
recognized statistical rating organizations (each a "NRSRO") assigning a rating
to the security or issuer or, if only one NRSRO assigned a rating, that NRSRO,
or, in the case of an investment which is not rated, of comparable quality as
determined by or on behalf of the Portfolio's Board of Trustees on the basis of
its credit evaluation of the obligor or of the bank issuing a participation
interest, letter of credit or guarantee, or insurance issued in support of the
Municipal Obligations or participation interests). (See "Variable Rate
Instruments and Participation Interests" below.) Such instruments may produce a
lower yield than would be available from less highly rated instruments. The
Portfolio's Board of Trustees has determined that Municipal Obligations which
are backed by the full faith and credit of the U.S. Government are considered
to have a rating equivalent to Moody's Aaa.

As a fundamental policy, the investments of the Portfolio will be made
primarily (i.e., at least 80% of its assets under normal circumstances) in:

(1) Municipal bonds with remaining maturities of one year or less that are
rated within the Aaa or Aa categories at the date of purchase by Moody's
Investors Service, Inc. ("Moody's") or within the AAA or AA categories by
Standard & Poor's Ratings Group ("Standard & Poor's") or Fitch Investors
Service, Inc.("Fitch") or, if not rated by these rating agencies, are of
comparable quality as determined by or on behalf of the Board of Trustees of
the Portfolio on the basis of the credit evaluation of the obligor on the bonds
or of the bank issuing a participation interest or guarantee or of any
insurance issued in support of the bonds or the participation interests.

<PAGE>

(2) Municipal notes with remaining maturities of one year or less that at
the date of purchase are rated MIG-1/VMIG 1 or MIG-2/VMIG 2 by Moody's, SP-1+,
SP-1 or SP-2 by Standard & Poor's or F-1+,F-1 or F-2 by Fitch or, if not rated
by these rating agencies, are of comparable quality as determined by or on
behalf of the Board of Trustees of the Portfolio. The principal kinds of
municipal notes are tax and revenue anticipation notes, tax anticipation notes,
bond anticipation notes and revenue anticipation notes. Notes sold in
anticipation of collection of taxes, a bond sale or receipt of other revenues
are usually general obligations of the issuing municipality or agency.

(3) Municipal commercial paper that is rated Prime-1 or Prime-2 by
Moody's, A-1+, A-1 or A-2 by Standard & Poor's or F-1+, F-1 or F-2 by Fitch or,
if not rated by these rating agencies, is of comparable quality as determined
by or on behalf of the Board of Trustees of the Portfolio. Issues of municipal
commercial paper typically represent very short-term, unsecured, negotiable
promissory notes. These obligations are often issued to meet seasonal working
capital needs of municipalities or to provide interim construction financing
and are paid from general revenues of municipalities or are refinanced with
long-term debt. In most cases municipal commercial paper is backed by letters
of credit, lending agreements, note repurchase agreements or other credit
facility agreements offered by banks or other institutions which may be called
upon in the event of default by the issuer of the commercial paper.

Subsequent to its purchase by the Portfolio, a rated Municipal Obligation
may cease to be rated or its rating may be reduced below the minimum required
for purchase by the Portfolio. Neither event requires sale of such Municipal
Obligation by the Portfolio (other than variable rate instruments which must be
sold if they are not "high quality"), but the Adviser considers such event in
determining whether the Portfolio should continue to hold the Municipal
Obligation. To the extent that the ratings given to the Municipal Obligations
or other securities held by the Portfolio are altered due to changes in any of
the Moody's, Standard & Poor's or Fitch ratings systems, the Adviser adopts
such changed ratings as standards for its future investments in accordance with
the investment policies contained herein. Certain Municipal Obligations issued
by instrumentalities of the U.S. Government are not backed by the full faith
and credit of the U.S. Treasury but only by the creditworthiness of the
instrumentality. The Portfolio's Board of Trustees has determined that any
Municipal Obligation that depends directly, or indirectly through a government
insurance program or other guarantee, on the full faith and credit of the U.S.
Government is considered to have a rating in the highest category. Where
necessary to ensure that the Municipal Obligations are "eligible securities"
(i.e., within the two highest ratings assigned by Moody's, Standard & Poor's or
Fitch), or where the obligations are not freely transferable, the Portfolio
will require that the obligation to pay the principal and accrued interest be
backed by an unconditional irrevocable bank letter of credit, a guarantee,
insurance policy or other comparable undertaking of an approved financial
institution.

<PAGE>

The Portfolio may invest 25% or more of its assets in securities that are
related in such a way that an economic, business or political development or
change affecting one of the securities would also affect the other securities
including, for example, securities the interest upon which is paid from
revenues of similar type projects, or securities the issuers of which are
located in the same state.

Loans of Securities

The Portfolio may lend its securities to brokers, dealers and financial
institutions, provided (1) the loan is secured continuously by collateral
consisting of U.S. Government securities or cash or letters of credit which is
marked to the market daily to ensure that each loan is fully collateralized at
all times; (2) the Portfolio may at any time call the loan and obtain the
return of the securities loaned within five business days; (3) the Portfolio
will receive any interest or dividends paid on the securities loaned; and (4)
the aggregate market value of securities loaned will not at any time exceed 33
1/3% of the net assets of the Portfolio.

The Portfolio will earn income for lending its securities because cash
collateral pursuant to these loans will be invested in short term money market
instruments. In connection with lending securities, the Portfolio may pay
reasonable finders, administrative and custodial fees. Loans of securities
involve a risk that the borrower may fail to return the securities or may fail
to provide additional collateral.

Although the Portfolio reserves the right to lend its securities, it has
no current intention of doing so in the foreseeable future.

Variable Rate Instruments and Participation Interests

Variable rate instruments that the Portfolio may purchase are tax-exempt
Municipal Obligations (including municipal notes and municipal commercial
paper) that provide for a periodic adjustment in the interest rate paid on the
instrument and permit the holder to receive payment upon a specified number of
days' notice of the unpaid principal balance plus accrued interest either from
the issuer or by drawing on a bank letter of credit, a guarantee or an
insurance policy issued with respect to such instrument or by tendering or
"putting" such instrument to a third party.

The variable rate instruments in which the Portfolio's assets may be
invested are payable upon a specified period of notice which may range from one
day up to one year. The terms of the instruments provide that interest rates
are adjustable at intervals ranging from daily to up to one year and the
adjustments are based upon the prime rate of a bank or other appropriate
interest rate adjustment index as provided in the respective instruments. The
Portfolio will decide which variable rate instruments it will purchase in
accordance with procedures prescribed by its Board of Trustees to minimize
credit risks. An unrated variable rate instrument may be determined to meet the
Portfolio's high quality criteria if it is backed by a letter of credit or
guarantee or a right

<PAGE>

to tender or put the instrument to a third party or is insured by an insurer
that meets the high quality criteria for the Portfolio discussed above or on
the basis of a credit evaluation of the underlying obligor. If the credit of
the obligor is of "high quality," no credit support from a bank or other
financial institution will be necessary. Each unrated variable rate instrument
will be evaluated on a quarterly basis to determine that it continues to meet
the Portfolio's high quality criteria. If an instrument is ever deemed to be of
less than high quality, the Portfolio either will sell it in the market or
exercise the liquidity feature described below.

Variable rate instruments in which the Portfolio's assets may be invested
include participation interests in variable rate, tax-exempt Municipal
Obligations owned by a bank, insurance company or other financial institution
or affiliated organizations. Although the rate of the underlying Municipal
Obligations may be fixed, the terms of the participation interest may result in
the Portfolio receiving a variable rate on its investment. A participation
interest gives the Portfolio an undivided interest in the Municipal Obligation
in the proportion that the Portfolio's participation bears to the total
principal amount of the Municipal Obligation and provides the liquidity
feature. Each participation is backed by an irrevocable letter of credit or
guarantee of, or a right to put to, a bank (which may be the bank issuing the
participation interest, a bank issuing a confirming letter of credit to that of
the issuing bank, or a bank serving as agent of the issuing bank with respect
to the possible repurchase of the participation interest) or insurance policy
of an insurance company that has been determined by or on behalf of the Board
of Trustees of the Portfolio to meet the prescribed quality standards of the
Portfolio. The Portfolio has the right to sell the participation interest back
to the institution or draw on the letter of credit or insurance after a
specified period of notice, for all or any part of the full principal amount of
the Portfolio's participation in the security, plus accrued interest. The
Portfolio intends to exercise the liquidity feature only (1) upon a default
under the terms of the bond documents, (2) as needed to provide liquidity to
the Portfolio in order to facilitate withdrawals from the Portfolio, or (3) to
maintain a high quality investment portfolio. In some cases, this liquidity
feature may not be exercisable in the event of a default on the underlying
Municipal Obligations; in these cases, the underlying Municipal Obligations
must meet the Portfolio's high quality credit standards at the time of purchase
of the participation interest. Issuers of participation interests will retain a
service and letter of credit fee and a fee for providing the liquidity feature,
in an amount equal to the excess of the interest paid on the instruments over
the negotiated yield at which the participations were purchased on behalf of
the Portfolio. The total fees generally range from 5% to 15% of the applicable
prime rate or other interest rate index. With respect to insurance, the
Portfolio will attempt to have the issuer of the participation interest bear
the cost of the insurance, although the Portfolio retains the option to
purchase insurance if necessary, in which case the cost of insurance will be an
expense of the Portfolio subject to the expense limitation of 2 1/2% of the
first $30 million of the Portfolio's average net assets, 2% of the next $70
million and 1

<PAGE>

1/2% of the Portfolio's average net assets in excess of $100 million. The
Adviser has been instructed by the Portfolio's Board of Trustees to monitor
continually the pricing, quality and liquidity of the variable rate instruments
held by the Portfolio, including the participation interests, on the basis of
published financial information and reports of the rating agencies and other
bank analytical services to which the Portfolio may subscribe. Although
participation interests may be sold, the Portfolio intends to hold them until
maturity, except under the circumstances stated above.

In view of the "concentration" of the Portfolio in bank participation
interests in Municipal Obligations secured by bank letters of credit or
guarantees, an investment in the Portfolio should be made with an understanding
of the characteristics of the banking industry and the risks which such an
investment may entail. Banks are subject to extensive governmental regulations
which may limit both the amounts and types of loans and other financial
commitments which may be made and interest rates and fees which may be charged.
The profitability of this industry is largely dependent upon the availability
and cost of capital funds for the purpose of financing lending operations under
prevailing money market conditions. Also, general economic conditions play an
important part in the operations of this industry and exposure to credit losses
arising from possible financial difficulties of borrowers might affect a bank's
ability to meet its obligations under a letter of credit.

Periods of high inflation and periods of economic slowdown, together with
the fiscal measures adopted to attempt to deal with them, have brought wide
fluctuations in interest rates. When interest rates rise, the value of fixed
income securities generally falls; and vice versa. While this is true for
variable rate instruments generally, the variable rate nature of the underlying
instruments should minimize these changes in value. Accordingly, as interest
rates decrease or increase, the potential for capital appreciation and the risk
of potential capital depreciation is less than would be the case with a
portfolio of fixed income securities. Because the adjustment of interest rates
on the variable rate instruments is made in relation to movements of various
interest rate adjustment indices, the variable rate instruments are not
comparable to long-term fixed rate securities. Accordingly, interest rates on
the variable rate instruments may be higher or lower than current market rates
for fixed rate obligations of comparable quality with similar maturities.

Because of the variable rate nature of the instruments, when prevailing
interest rates decline the Portfolio's yield will decline and its shareholders
will forgo the opportunity for capital appreciation. On the other hand, during
periods when prevailing interest rates increase, the Portfolio's yield will
increase and its shareholders will have reduced risk of capital depreciation.

For purposes of determining whether a variable rate instrument held by the
Portfolio matures within 397 days from the date of its acquisition, the
maturity of the instrument will be deemed to be the

<PAGE>

longer of (1) the period required before the Portfolio is entitled to receive
payment of the principal amount of the instrument after notice or (2) the
period remaining until the instrument's next interest rate adjustment. The
maturity of a variable rate instrument will be determined in the same manner
for purposes of computing the Portfolio's dollar-weighted average portfolio
maturity.

"When-Issued" Securities

New issues of certain Municipal Obligations frequently are offered on a
"when-issued" or "forward delivery" basis. The payment obligation and the
interest rate that will be received on the Municipal Obligations are each fixed
at the time the buyer enters into the commitment although settlement, i.e.,
delivery of and payment for the Municipal Obligations, takes place beyond
customary settlement time (but normally within 45 days after the date of the
Portfolio's commitment to purchase). Although the Portfolio will only make
commitments to purchase "when-issued" or "forward delivery" Municipal
Obligations with the intention of actually acquiring them, the Portfolio may
sell these securities before the settlement date if deemed advisable by the
Adviser.

Municipal Obligations purchased on a "when-issued" or "forward delivery"
basis and the securities held by the Portfolio are subject to changes in value
(both generally changing in the same way, that is, both experiencing
appreciation when interest rates decline and depreciation when interest rates
rise) based upon the public's perception of the creditworthiness of the issuer
and changes, real or anticipated, in the level of interest rates. Purchasing
Municipal Obligations on a "when-issued" or "forward delivery" basis can
involve a risk that the yields available in the market on the settlement date
may actually be higher or lower than those obtained in the transaction itself.
A separate account of the Portfolio consisting of cash or liquid debt
securities equal to the amount of the "when-issued" or "forward delivery"
commitments will be established at the Portfolio's custodian bank. For the
purpose of determining the adequacy of the securities in the account, the
deposited securities will be valued at market value. If the market value of
such securities declines, additional cash or highly liquid securities will be
placed in the account daily so that the value of the account will equal the
amount of the Portfolio's commitments. On the settlement date of the
"when-issued" or "forward delivery" securities, the Portfolio's obligations
will be met from then-available cash flow, sale of securities held in the
separate account, sale of other securities or, although not normally expected,
from sale of the "when-issued" or "forward delivery" securities themselves
(which may have a value greater or lesser than the Portfolio's payment
obligations). Sale of securities to meet such obligations may result in the
realization of capital gains or losses, which are not exempt from federal
income tax.

Stand-by Commitments

When the Portfolio purchases Municipal Obligations it may also acquire
stand-by commitments from banks with respect to such Municipal Obligations. The
Portfolio also may acquire stand-by commitments from

<PAGE>

broker-dealers. Under the stand-by commitment, a bank or broker-dealer agrees
to purchase at the Portfolio's option a specified Municipal Obligation at a
specified price. A stand-by commitment is the equivalent of a "put" option
acquired by the Portfolio with respect to a particular Municipal Obligation
held in the Portfolio's portfolio.

The amount payable to the Portfolio upon the exercise of a stand-by
commitment normally would be (1) the acquisition cost of the Municipal
Obligation (excluding any accrued interest paid on the acquisition), less any
amortized market premium or plus any amortized market or original issue
discount during the period the Portfolio owned the security, plus (2) all
interest accrued on the security since the last interest payment date during
the period the security was owned by the Portfolio. Absent unusual
circumstances relating to a change in market value, the Portfolio would value
the underlying Municipal Obligation at amortized cost. Accordingly, the amount
payable by a bank or dealer during the time a stand-by commitment is
exercisable would be substantially the same as the market value of the
underlying Municipal Obligation. The Portfolio values stand-by commitments at
zero for purposes of computing the value of its net assets.

The stand-by commitments that the Portfolio may enter into are subject to
certain risks, which include the ability of the issuer of the commitment to pay
for the securities at the time the commitment is exercised and the fact that
the commitment is not marketable by the Portfolio and the maturity of the
underlying security will generally be different from that of the commitment.

Taxable Securities

Although the Portfolio attempts to invest 100% of its net assets in
tax-exempt Municipal Obligations, the Portfolio may invest up to 20% of the
value of the Portfolio's net assets in securities of the kind described below,
the interest income on which is subject to federal income tax, under any one or
more of the following circumstances: (a) pending investment in the type of
securities described above; and (b) to maintain liquidity for the purpose of
meeting anticipated withdrawals. In addition, the Portfolio may temporarily
invest more than 20% of its assets in such taxable securities when, in the
opinion of the Adviser, it is advisable to do so because of adverse market
conditions affecting the market for Municipal Obligations. The kinds of taxable
securities in which the Portfolio's assets may be invested are limited to the
following short-term, fixed-income securities (maturing in 397 days or less
from the time of purchase): (1) obligations of the U.S. Government or its
agencies, instrumentalities or authorities; (2) commercial paper rated Prime-1
or Prime-2 by Moody's, A-1+, A-1 or A-2 by Standard & Poor's or F-1+, F-1 or
F-2 by Fitch; (3) certificates of deposit of U.S. banks with assets of $1
billion or more; and (4) repurchase agreements with respect to any Municipal
Obligations or other securities which the Portfolio is permitted to own. The
Portfolio's assets may also be invested in Municipal Obligations which are
subject to an alternative minimum tax.

<PAGE>

Repurchase Agreements

The Portfolio may invest assets in instruments subject to repurchase
agreements only with member banks of the Federal Reserve System or "primary
dealers" (as designated by the Federal Reserve Bank of New York) in U.S.
Government securities. Under the terms of a typical repurchase agreement, the
Portfolio would acquire an underlying debt instrument for a relatively short
period (usually not more than one week) subject to an obligation of the seller
to repurchase and the Portfolio to resell the instrument at a fixed price and
time, thereby determining the yield during the Portfolio's holding period. This
results in a fixed rate of return insulated from market fluctuations during
such period. A repurchase agreement is subject to the risk that the seller may
fail to repurchase the security. Repurchase agreements may be deemed to be
loans under the Investment Company Act of 1940, as amended (the "1940 Act").
All repurchase agreements entered into by the Portfolio shall be fully
collateralized at all times during the period of the agreement in that the
value of the underlying security shall be at least equal to the amount of the
loan, including the accrued interest thereon, and the Portfolio or its
custodian or sub-custodian shall have possession of the collateral, which the
Portfolio's Board of Trustees believes will give it a valid, perfected security
interest in the collateral. Whether a repurchase agreement is the purchase and
sale of a security or a collateralized loan has not been definitively
established. This might become an issue in the event of the bankruptcy of the
other party to the transaction. In the event of default by the seller under a
repurchase agreement construed to be a collateralized loan, the underlying
securities are not owned by the Portfolio but only constitute collateral for
the seller's obligation to pay the repurchase price. Therefore, the Portfolio
may suffer time delays and incur costs in connection with the disposition of
the collateral. The Portfolio's Board of Trustees believes that the collateral
underlying repurchase agreements may be more susceptible to claims of the
seller's creditors than would be the case with securities owned by the
Portfolio. Repurchase agreements will give rise to income which will not
qualify as tax-exempt income when distributed by the Portfolio. The Portfolio
will not invest in a repurchase agreement maturing in more than seven days if
any such investment together with illiquid securities held by the Portfolio
exceed 10% of the Portfolio's total net assets. Repurchase agreements are also
subject to the same risks described herein with respect to stand-by
commitments.

Investment Restrictions

The Portfolio has adopted the following policies which may not be changed
without approval by a "majority of the outstanding voting securities" of the
Portfolio, which as used in this Registration Statement means the vote of the
lesser of (i) 67% or more of the outstanding voting securities of the Portfolio
present at a meeting if the holders of more than 50% of the outstanding voting
securities of the Portfolio are present or represented by proxy, or (ii) more
than 50% of the outstanding voting securities of the Portfolio.

<PAGE>

The Portfolio may not:

(1) borrow money, except that as a temporary measure for extraordinary or
emergency purposes the Portfolio may borrow from banks in an amount not to
exceed 1/3 of the value of the net assets of the Portfolio, including the
amount borrowed (moreover, the Portfolio may not purchase any securities at any
time at which borrowings exceed 5% of its total assets (taken at market
value))(it is intended that the Portfolio would borrow money only from banks
and only to accommodate requests for withdrawal of all or a portion of a
beneficial interest in the Portfolio while effecting an orderly liquidation of
securities); for additional related restrictions, see clause (i) under the
caption "State and Federal Restrictions" below;

(2) purchase any security or evidence of interest therein on margin,
except that the Portfolio may obtain such short term credit as may be necessary
for the clearance of purchases and sales of securities;

(3) underwrite securities issued by other persons, except insofar as the
Portfolio may technically be deemed an underwriter under the Securities Act of
1933 in selling a security;

(4) make loans to other persons except (a) through the lending of
securities held by the Portfolio, but not in excess of 33 1/3% of the
Portfolio's net assets, (b) through the use of fixed time deposits or
repurchase agreements or the purchase of short term obligations, or (c) by
purchasing all or a portion of an issue of debt securities of types commonly
distributed privately to financial institutions; for purposes of this paragraph
(4) the purchase of short term commercial paper or a portion of an issue of
debt securities which are part of an issue to the public shall not be
considered the making of a loan; for additional related restrictions, see
clause (x) under the caption "State and Federal Restrictions" below;

(5) purchase or sell real estate (including limited partnership interests
but excluding securities secured by real estate or interests therein),
interests in oil, gas or mineral leases, commodities or commodity contracts in
the ordinary course of business (the Portfolio reserves the freedom of action
to hold and to sell real estate acquired as the result of ownership of
securities by the Portfolio);

(6) concentrate its investments in any particular industry, but if it is
deemed appropriate for the achievement of its investment objective, up to 25%
of the assets of the Portfolio (taken at market value at the time of each
investment) may be invested in any one industry, except that the Portfolio will
invest at least 25% of its assets and may invest up to 100% of its assets in
bank obligations; or

(7) issue any senior security (as that term is defined in the 1940 Act) if
such issuance is specifically prohibited by the 1940 Act or the rules and
regulations promulgated thereunder, except as appropriate to evidence a debt
incurred without violating the investment restriction in paragraph (1) above.

<PAGE>

State and Federal Restrictions

In order to comply with certain state and federal statutes and policies,
the Portfolio does not as a matter of operating policy:

(i) borrow money for any purpose in excess of 10% of its total assets
(taken at cost) (moreover, the Portfolio will not purchase any securities at
any time at which borrowings exceed 5% of its total assets (taken at market
value)),

(ii) pledge, mortgage or hypothecate for any purpose in excess of 10% of
its net assets (taken at market value),

(iii) sell any security which it does not own unless by virtue of its
ownership of other securities the Portfolio has at the time of sale a right to
obtain securities, without payment of further consideration, equivalent in kind
and amount to the securities sold; provided, that if such right is conditional
the sale is made upon the same conditions,

(iv) invest for the purpose of exercising control or management,

(v) purchase securities issued by any registered investment company except
by purchase in the open market where no commission or profit to a sponsor or
dealer results from such purchase other than the customary broker's commission,
or except when such purchase, though not made in the open market, is part of a
plan of merger or consolidation; provided, however, that the Portfolio will not
purchase the securities of any registered investment company if such purchase
at the time thereof would cause more than 10% of the total assets of the
Portfolio (taken at the greater of cost or market value) to be invested in the
securities of such issuers or would cause more than 3% of the outstanding
voting securities of any such issuer to be held by the Portfolio; and provided,
further, that the Portfolio shall not purchase securities issued by any
open-end investment company,

(vi) taken together with any investments described in clause (x) below,
invest more than 10% of its net assets in securities that are not readily
marketable, including debt securities for which there is no established market
and fixed time deposits and repurchase agreements maturing in more than seven
days,

(vii) purchase securities of any issuer if such purchase at the time
thereof would cause the Portfolio to hold more than 10% of any class of
securities of such issuer, for which purposes all indebtedness of an issuer
shall be deemed a single class,

(viii) purchase or retain any securities issued by an issuer any of whose
officers, directors, trustees or security holders is an officer or Trustee of
the Portfolio, or is an officer or director of the Adviser, if after the
purchase of the securities of such issuer by the Portfolio one or more of such
persons owns beneficially more than 1/2 of 1% of the shares or securities, or
both, all taken at market value, of

<PAGE>

such issuer, and such persons owning more than 1/2 of 1% of such shares or
securities together own beneficially more than 5% of such shares or securities,
or both, all taken at market value,

(ix) write, purchase or sell any put or call option or any combination
thereof,

(x) taken together with any investments described in clause (vi) above,
invest in securities which are subject to legal or contractual restrictions on
resale (other than fixed time deposits and repurchase agreements maturing in
not more than seven days) if, as a result thereof, more than 10% of the net
assets of the Portfolio (taken at market value) would be so invested (including
fixed time deposits and repurchase agreements maturing in more than seven
days), or

(xi) make short sales of securities or maintain a short position, unless
at all times when a short position is open it owns an equal amount of such
securities or securities convertible into or exchangeable, without payment of
any further consideration, for securities of the same issue as, and equal in
amount to, the securities sold short, and unless not more than 10% of the net
assets, of the Portfolio (taken at market value) is held as collateral for
sales at any one time (the Portfolio does not presently intend to make such
sales).

These policies are not fundamental and may be changed by the Portfolio
without the approval of its investors in response to changes in the various
state and federal requirements.

Designation of Issuer of Securities

For purposes of the investment restrictions described above, the issuer of
a tax-exempt security is deemed to be the entity (public or private) ultimately
responsible for the payment of principal of and interest on the security. When
the assets and revenues of an agency, authority, instrumentality or other
political subdivision are separate from those of the government creating the
issuing entity and a security is backed only by the assets and revenues of the
entity, the entity would be deemed to be the sole issuer of the security.
Similarly, in the case of an industrial development bond, if that bond is
backed only by the assets and revenues of the non-governmental user, then such
non-governmental user would be deemed to be the sole issuer. If, however, in
either case, the creating government or some other entity, such as an insurance
company or other corporate obligor, guarantees a security or a bank issues a
letter of credit, such a guarantee or letter of credit may, in accordance with
applicable SEC rules, be considered a separate security and could be treated as
an issue of such government, other entity or bank.

Percentage and Rating Restrictions

If a percentage restriction or a rating restriction on investment or
utilization of assets set forth above is adhered to at the time an investment
is made or assets are so utilized, a later change in

<PAGE>

percentage resulting from changes in the value of the portfolio securities
or a later change in the rating of a portfolio security will not be considered
a violation of such policy.

Item 14. Management

The Trustees and officers of the Portfolio and their principal occupations
during the past five years are set forth below. Their titles may have varied
during that period. Asterisks indicate that those trustees and officers are
"interested persons" (as defined in the 1940 Act) of the Portfolio. Unless
otherwise indicated below, the address of each Trustee and officer is 6 St.
James Avenue, Boston, Massachusetts.

Trustees

ELLIOTT J. BERV (aged 52) - Chairman and Director, Catalyst, Inc. (Management
Consultants) (since August, 1992); President, Chief Operating Officer and
Director, Deven International, Inc. (International Consultants) (June, 1991
to July, 1992); President and Director, Elliott J. Berv & Associates
(Management Consultants) (since May, 1984). His address is 15 Stornoway
Drive, Cumberland Foreside, Maine.

PHILIP W. COOLIDGE* (aged 44) - President of the Portfolio; Chairman, Chief
Executive Officer and President, Signature Financial Group, Inc. and The
Landmark Funds Broker-Dealer Services, Inc. (since December, 1988).

MARK T. FINN (aged 52) - President and Director, Delta Financial, Inc. (since
June, 1983); Chairman of the Board and Chief Executive Officer, FX 500 Ltd.
(Commodity Trading Advisory Firm) (since April, 1990); Director, Vantage
Consulting Group, Inc. (since October, 1988). His address is 3500 Pacific
Avenue, P.O. Box 539, Virginia Beach, Virginia.

WALTER E. ROBB, III (aged 69) - President, Benchmark Advisors, Inc. (Corporate
Financial Advisors) (since 1989); Trustee of certain registered investment
companies in MFS Family of Funds. His address is 35 Farm Road, Sherborn,
Massachusetts.

Officers

DAVID G. DANIELSON* (aged 30) - Assistant Treasurer of the Portfolio;
Assistant Manager, Signature Financial Group, Inc. (since May, 1991);
Graduate Student, Northeastern University (April, 1990 to March, 1991).

JOHN R. ELDER* (aged 47) - Treasurer of the Portfolio; Vice President,
Signature Financial Group, Inc. (since April, 1995); Treasurer of the

<PAGE>

Phoenix Family of Mutual Funds, Phoenix Home Life Mutual Insurance Company
(1983 to March, 1995).

LINDA T. GIBSON* (aged 30) - Assistant Secretary of the Portfolio; Legal
Counsel, Signature Financial Group, Inc. (since June, 1991); Law Student,
Boston University School of Law (September, 1989 to May, 1992); Product
Manager, Signature Financial Group, Inc. (January, 1989 to September, 1989).

JAMES S. LELKO, JR.* (aged 30) - Assistant Treasurer of the Portfolio;
Assistant Manager, Signature Financial Group, Inc. (since January, 1993);
Senior Tax Compliance Accountant, the Putnam Companies (September, 1988 to
December, 1992).

THOMAS M. LENZ* (aged 37) - Secretary of the Portfolio; Vice President and
Associate General Counsel, Signature Financial Group, Inc. (since November,
1989); Assistant Secretary, Signature Broker-Dealer Services, Inc. (since
February, 1991); Attorney, Ropes & Gray (September, 1984 to November, 1989).

MOLLY S. MUGLER* (aged 44) - Assistant Secretary of the Portfolio; Legal
Counsel and Assistant Secretary, Signature Financial Group, Inc. (since
December, 1988); Assistant Secretary, The Landmark Funds Broker-Dealer
Services, Inc. (since December, 1988).

BARBARA M. O'DETTE* (aged 36) - Assistant Treasurer of the Portfolio;
Assistant Treasurer, Signature Financial Group, Inc. and The Landmark Funds
Broker-Dealer Services, Inc. (since December, 1988).

ANDRES E. SALDANA* (aged 33) - Assistant Secretary of the Portfolio; Legal
Counsel and Assistant Secretary, Signature Financial Group, Inc. (since
November, 1992); Attorney, Ropes & Gray (September, 1990 to November, 1992).

DANIEL E. SHEA* (aged 33) - Assistant Treasurer of the Portfolio; Assistant
Manager of Fund Administration, Signature Financial Group, Inc. (since
November, 1993); Supervisor and Senior Technical Advisor, Putnam Investments
(prior to 1990).

The Trustees and officers of the Portfolio hold comparable positions with
certain other funds for which LFBDS or an affiliate serves as distributor or
administrator.

The Trustees and Officers of the Portfolio also hold comparable positions
with certain other funds for which The Landmark Funds Broker-Dealer Services,
Inc. ("LFBDS"), the Portfolio's administrator and a wholly-owned subsidiary of
Signature Financial Group, Inc., or an affiliate, serves as the distributor or
administrator. Mr. Coolidge is also a Trustee of Landmark Tax Free Reserves, an
open-end investment company which is an investor in the Portfolio, and each
officer of the Portfolio holds the same position with such investment company.

<PAGE>

The Trustees of the Portfolio (with the exception of Mr. Coolidge, who
received no remuneration from the Portfolio) received the following
remuneration from the Portfolio during its fiscal year ended August 31, 1995:

<TABLE>

Pension or Total
Retirement Compensation
Benefits from Registrant
Aggregate Accrued as Estimated and Fund
Name of Person, Compensation Part of Fund Annual Benefits Complex Paid to
Position from Registrant Expenses Upon Retirement Trustees (1)

Elliott J. Berv,
Trustee $3,131.12 -- -- $40,000.00

Mark T. Finn, Trustee $2,962.31 -- -- $40,000.00

Walter E. Robb, III, $3,405.70 -- -- $44,500.00
Trustee

- --------------------------------
(1) Messrs. Berv, Finn and Robb are trustees of 12, 14 and 12 funds,
respectively, of the Landmark Family of Funds.

</TABLE>

The Portfolio's Declaration of Trust provides that it will indemnify its
Trustees and officers against liabilities and expenses incurred in connection
with litigation in which they may be involved because of their offices with the
Portfolio, unless, as to liability to the Portfolio or its investors, it is
finally adjudicated that they engaged in willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in their offices, or
unless with respect to any other matter it is finally adjudicated that they did
not act in good faith in the reasonable belief that their actions were in the
best interests of the Portfolio. In the case of settlement, such
indemnification will not be provided unless it has been determined by a court
or other body approving the settlement or other disposition, or by a reasonable
determination, based upon a review of readily available facts, by vote of a
majority of disinterested Trustees or in a written opinion of independent
counsel, that such officers or Trustees have not engaged in willful
misfeasance, bad faith, gross negligence or reckless disregard of their duties.

Item 15. Control Persons and Principal Holders of Securities.

Landmark Tax Free Reserves owns all of the beneficial interests in the
Portfolio except for an investment by LFBDS in the amount of $100.

Landmark Tax Free Reserves is a registered investment company which has
informed the Portfolio that whenever requested to vote on matters pertaining to
the Portfolio, it will hold a meeting of shareholders and will cast its vote as
instructed by its shareholders.

<PAGE>

Item 16. Investment Advisory and Other Services.

Citibank manages the assets of the Portfolio pursuant to an Investment
Advisory Agreement (the "Advisory Agreement"). Subject to such policies as the
Portfolio's Board of Trustees may determine, the Adviser makes investment
decisions for the Portfolio. The Adviser furnishes at its own expense all
services, facilities and personnel necessary in connection with managing the
Portfolio's investments and effecting securities transactions for the
Portfolio. The Advisory Agreement continues in effect if such continuance is
specifically approved at least annually by the Portfolio's Board of Trustees or
by a vote of a majority of the voting securities of the Portfolio and, in
either case, by a majority of the Portfolio's Trustees who are not parties to
the Advisory Agreement or interested persons of any such party, at a meeting
called for the purpose of voting on the Advisory Agreement.

The Advisory Agreement provides that the Adviser may render services to
others. The Advisory Agreement is terminable by the Portfolio without penalty
on not more than 60 days' nor less than 30 days' written notice when authorized
either by a vote of a majority of the voting securities of the Portfolio or by
a vote of a majority of its Board of Trustees, or by the Adviser on not more
than 60 days' nor less than 30 days' written notice, and will automatically
terminate in the event of its assignment. The Advisory Agreement provides that
neither the Adviser nor its personnel shall be liable for any error of judgment
or mistake of law or for any loss arising out of any investment or for any act
or omission in the execution of security transactions for the Portfolio, except
for willful misfeasance, bad faith or gross negligence or reckless disregard of
its or their obligations and duties under the Advisory Agreement.

Part A of this Registration Statement contains a description of the fees
payable to the Adviser for services under the Advisory Agreement. For the
fiscal year ended August 31, 1993, the fee payable to Citibank under the
Advisory Agreement with the Portfolio was $467,850 (of which $46,152 was
voluntarily waived). For the fiscal year ended August 31, 1994, the fee payable
to Citibank under the Advisory Agreement with the Portfolio was $493,866 (of
which $25,348 was voluntarily waived). For the fiscal year ended August 31,
1995, the fee payable to Citibank under the Advisory Agreement was $613,607.

The Portfolio has adopted an Administrative Services Plan (the
"Administrative Plan") which provides that the Portfolio may obtain the
services of an administrator, a transfer agent and a custodian, and may enter
into agreements providing for the payment of fees for such services. Under the
Administrative Plan, the administrative services fee payable to the
Administrator from the Portfolio may not exceed 0.05% of the Portfolio's
average daily net assets on an annualized basis for its then-current fiscal
year. The Administrative Plan continues in effect if such continuance is
specifically approved at least annually by a vote of both a majority of the
Portfolio's Trustees and a majority of the Portfolio's Trustees who are not
"interested persons" of the

<PAGE>

Portfolio and who have no direct or indirect financial interest in the
operation of the Administrative Plan or in any agreement related to such Plan
("Qualified Trustees"). The Administrative Plan requires that the Portfolio
provide to the Board of Trustees and the Board of Trustees review, at least
quarterly, a written report of the amounts expended (and the purposes therefor)
under the Administrative Plan. The Administrative Plan may be terminated at any
time by a vote of a majority of the Portfolio's Qualified Trustees or by a vote
of a majority of the outstanding voting securities of the Portfolio. The
Administrative Plan may not be amended to increase materially the amount of
permitted expenses thereunder without the approval of a majority of the
outstanding voting securities of the Portfolio and may not be materially
amended in any case without a vote of the majority of both the Portfolio's
Trustees and the Portfolio's Qualified Trustees.

Pursuant to an Administrative Services Agreement (the "Administrative
Services Agreement"), LFBDS provides the Portfolio with general office
facilities and supervises the overall administration of the Portfolio,
including, among other responsibilities, the negotiation of contracts and fees
with, and the monitoring of performance and billings of, the independent
contractors and agents of the Portfolio; the preparation and filing of all
documents required for compliance by the Portfolio with applicable laws and
regulations; and arranging for the maintenance of books and records of the
Portfolio. LFBDS provides persons satisfactory to the Board of Trustees of the
Portfolio to serve as Trustees and officers of the Portfolio. Such Trustees and
officers may be directors, officers or employees of LFBDS or its affiliates.

The Administrative Services Agreement continues in effect if such
continuance is specifically approved at least annually by the Portfolio's Board
of Trustees or by a vote of a majority of the outstanding voting securities of
the Portfolio and, in either case, by a majority of the Trustees of the
Portfolio who are not parties to the Administrative Services Agreement or
interested persons of any such party. The Administrative Services Agreement
terminates automatically if it is assigned and may be terminated without
penalty by a vote of a majority of the outstanding voting securities in the
Portfolio or by either party on not more than 60 days' nor less than 30 days'
written notice. The Administrative Services Agreement also provides that
neither LFBDS, as the Administrator, nor its personnel shall be liable for any
error of judgment or mistake of law or for any act or omission in the
administration or management of the Portfolio, except for willful misfeasance,
bad faith or gross negligence in the performance of its or their duties or by
reason of reckless disregard of its or their obligations and duties under the
Administrative Services Agreement. The Administrative Services Agreement was
most recently approved by the Portfolio's Board of Trustees on May 5, 1995.

Part A of this Registration Statement contains a description of the fees
payable to the LFBDS under the Administrative Services Agreement. For the
fiscal years ended August 31, 1993 and August 31, 1994, the fees payable to
LFBDS under the Administrative Services Agreement with the Portfolio were
$116,962 and $123,466, respectively

<PAGE>

(of which $11,538 and $6,337, respectively, was voluntarily waived). For the
fiscal year ended August 31, 1995, the fees payable to LFBDS were $153,402.

The Administrative Services Agreement provides that LFBDS may render
administrative services to others.

LFBDS is a wholly-owned subsidiary of Signature Financial Group, Inc.

Pursuant to a sub-administrative services agreement, Citibank performs
such sub-administrative duties for the Portfolio as are from time to time
agreed upon by Citibank and LFBDS. Citibank's sub-administrative duties may
include providing equipment and clerical personnel necessary for maintaining
the organization of the Portfolio, participation in the preparation of
documents required for compliance by the Portfolio with applicable laws and
regulations, preparation of certain documents in connection with meetings of
Trustees and shareholders of the Portfolio, and other functions which would
otherwise be performed by the Administrator as set forth above. For performing
such sub-administrative services, Citibank receives such compensation as is
from time to time agreed upon by LFBDS and Citibank, not to exceed the amount
paid to the Administrator for its services under the Administrative Services
Agreement. All such compensation is paid by LFBDS.

The Portfolio has entered into a Transfer Agency Agreement and a Custodian
Agreement with State Street Bank and Trust Company ("State Street") pursuant to
which State Street acts as transfer agent and custodian for the Portfolio. The
principal business address of State Street is 225 Franklin Street, Boston,
Massachusetts 02110.

Deloitte & Touche LLP are the independent certified public accountants for
the Portfolio, providing audit services, and assistance and consultation with
respect to the preparation of filings with the Securities and Exchange
Commission. The principal business address of Deloitte & Touche LLP is 125
Summer Street, Boston, Massachusetts, 02110.

Item 17. Brokerage Allocation and Other Practices.

The Portfolio's purchases and sales of securities usually are principal
transactions. Securities are normally purchased directly from the issuer or
from an underwriter or market maker for the securities. There usually are no
brokerage commissions paid for such purchases. The Portfolio does not
anticipate paying brokerage commissions. Any transaction for which the
Portfolio pays a brokerage commission will be effected at the best price and
execution available. Purchases from underwriters of securities include a
commission or concession paid by the issuer to the underwriter, and purchases
from dealers serving as market makers include the spread between the bid and
asked price.

<PAGE>

Allocation of transactions, including their frequency, to various dealers
is determined by the Adviser in its best judgment and in a manner deemed to be
in the best interest of the investors in the Portfolio rather than by any
formula. The primary consideration is prompt execution of orders in an
effective manner at the most favorable price.

Investment decisions for the Portfolio are made independently from those
for any other account or investment company that is or may in the future become
managed by the Adviser or its affiliates. If, however, the Portfolio and other
investment companies or accounts managed by the Adviser are contemporaneously
engaged in the purchase or sale of the same security, the transactions may be
averaged as to price and allocated equitably to each account. In some cases,
this policy may adversely affect the price paid or received by the Portfolio or
the size of the position obtainable for the Portfolio. In addition, when
purchases or sales of the same security for the Portfolio and for other
investment companies or accounts managed by the Adviser occur
contemporaneously, the purchase or sale orders may be aggregated in order to
obtain any price advantages available to large denomination purchases or sales.

No transactions are executed with the Adviser or an affiliate of the
Adviser, in any case acting either as principal or as broker.

Item 18. Capital Stock and Other Securities.

Under the Declaration of Trust, the Trustees are authorized to issue
beneficial interests in the Portfolio. Investors are entitled to participate
pro rata in distributions of taxable income, loss, gain and credit of the
Portfolio. Upon liquidation or dissolution of the Portfolio, investors are
entitled to share pro rata in the Portfolio's net assets available for
distribution to its investors. Investments in the Portfolio have no preference,
pre-emptive, conversion or similar rights and are fully paid and
non-assessable, except as set forth below. Investments in the Portfolio may not
be transferred. Certificates representing an investor's beneficial interest in
the Portfolio are issued only upon the written request of an investor.

Each investor is entitled to a vote in proportion to the value of its
investment in the Portfolio. Investors in the Portfolio do not have cumulative
voting rights, and investors holding more than 50% of the aggregate beneficial
interest in the Portfolio may elect all of the Trustees of the Portfolio if
they choose to do so and in such event the other investors in the Portfolio
would not be able to elect any Trustee. The Portfolio is not required and has
no current intention to hold annual meetings of investors but the Portfolio
will hold special meetings of investors when in the judgment of the Portfolio's
Trustees it is necessary or desirable to submit matters for an investor vote.
No material amendment may be made to the Portfolio's Declaration of Trust
without the affirmative vote of a majority of the outstanding voting securities
of the Portfolio.

<PAGE>

The Portfolio may enter into a merger or consolidation, or sell all or
substantially all of its assets, if approved by the vote of two-thirds of the
outstanding voting securities of the Portfolio. The Portfolio may also be
terminated (i) by the affirmative vote of two-thirds of the outstanding voting
securities of the Portfolio or (ii) by the Trustees of the Portfolio by written
notice to its investors.

The Portfolio is organized as a trust under the laws of the State of New
York. Investors in the Portfolio are personally liable for its obligations and
liabilities, subject, however, to indemnification by the Portfolio in the event
that there is imposed upon an investor a greater portion of the liabilities and
obligations of the Portfolio than its proportionate beneficial interest in the
Portfolio. The Declaration of Trust also provides that the Portfolio maintain
appropriate insurance (for example, fidelity bonding and errors and omissions
insurance) for the protection of the Portfolio, its investors, Trustees,
officers, employees and agents covering possible tort and other liabilities.
Thus, the risk of an investor incurring financial loss on account of investor
liability is limited to circumstances in which both inadequate insurance
existed and the Portfolio itself was unable to meet its obligations. It is not
expected that the liabilities of the Portfolio would ever exceed its assets.

The Portfolio's Declaration of Trust further provides that obligations of
the Portfolio are not binding upon the Trustees individually, but only upon the
property of the Portfolio and that the Trustees will not be liable for any
action or failure to act, but nothing in the Declaration of Trust protects a
Trustee against any liability to which he would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of his office.

Each investor in the Portfolio may add to or reduce its investment in the
Portfolio on each business day. At 12:00 noon, Eastern time, on each such
business day, the value of each investor's interest in the Portfolio is
determined by multiplying the net asset value of the Portfolio by the
percentage representing that investor's share of the aggregate beneficial
interests in the Portfolio effective for that day. Any additions or
withdrawals, which are to be effected on that day, are then effected. The
investor's percentage of the aggregate beneficial interests in the Portfolio is
then recomputed as the percentage equal to the fraction (i) the numerator of
which is the value of such investor's investment in the Portfolio as of 12:00
noon, Eastern time, on such day plus or minus, as the case may be, the amount
of any additions to or withdrawals from the investor's investment in the
Portfolio effected on such day, and (ii) the denominator of which is the
aggregate net asset value of the Portfolio as of 12:00 noon, Eastern time, on
such day plus or minus, as the case may be, the amount of the net additions to
or withdrawals from the aggregate investments in the Portfolio by all investors
in the Portfolio. The percentage so determined is then applied to determine the
value of the investor's interest in the

<PAGE>

Portfolio as of 12:00 noon, Eastern time, on the following business day of the
Portfolio.

Item 19. Purchase, Redemption and Pricing of Securities.

Beneficial interests in the Portfolio are issued solely in private
placement transactions which do not involve any "public offering" within the
meaning of Section 4(2) of the Securities Act of 1933, as amended (the "1933
Act"). Investments in the Portfolio may only be made by investment companies,
insurance company separate accounts, common or commingled trust funds or
similar organizations or entities which are "accredited investors" within the
meaning of Regulation D under the 1933 Act. This registration statement does
not constitute an offer to sell, or the solicitation of an offer to buy, any
"security" within the meaning of the 1933 Act.

The Portfolio determines its net asset value as of 12:00 noon, Eastern
time, on each day on which the New York Stock Exchange is open for trading. As
of the date of this Registration Statement, the New York Stock Exchange will be
open for trading every weekday except for the following holidays (or the days
on which they are observed): New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
Purchases and withdrawals will be effected at the time of determination of net
asset value next following the receipt of any purchase or withdrawal order.

The securities held by the Portfolio are valued at their amortized cost.
Amortized cost valuation involves valuing an instrument at its cost and
thereafter assuming a constant amortization to maturity of any discount or
premium. If fluctuating interest rates or other factors cause the market value
of the securities held by the Portfolio to deviate more than 1/2 of 1% from
their value determined on the basis of amortized cost, the Portfolio's Board of
Trustees will consider whether any action should be initiated, as described in
the following paragraph. Although the amortized cost method provides certainty
in valuation, it may result in periods during which the stated value of an
instrument is higher or lower than the price an investment company would
receive if the instrument were sold.

Pursuant to the rules of the Securities and Exchange Commission, the
Portfolio's Board of Trustees has established procedures to stabilize the value
of the Portfolio's net assets within 1/2 of 1% of the value determined on the
basis of amortized cost. These procedures include a review of the extent of any
such deviation of net asset value, based on available market quotations. Should
that deviation exceed 1/2 of 1%, the Portfolio's Board of Trustees will
consider whether any action should be initiated to eliminate or reduce material
dilution or other unfair results to the investors in the Portfolio. Such action
may include withdrawal in kind, selling its securities prior to maturity and
utilizing a net asset value as determined by using available market quotations.
The Portfolio maintains a dollar-weighted average maturity of 90 days or less,
does not purchase any instrument with a remaining maturity greater than 397
days or subject to a repurchase agreement

<PAGE>

having a duration of greater than 397 days, limits its investments, including
repurchase agreements, to those U.S. dollar-denominated instruments that have
been determined by or on behalf of the Portfolio's Board of Trustees to present
minimal credit risks and complies with certain reporting and recordkeeping
procedures. The Portfolio has also established procedures to ensure that
securities purchased by it meet its high quality criteria.

Subject to compliance with applicable regulations, the Portfolio has
reserved the right to pay the redemption price of beneficial interests in the
Portfolio, either totally or partially, by a distribution in kind of readily
marketable securities (instead of cash). The securities so distributed would be
valued at the same amount as that assigned to them in calculating the net asset
value for the beneficial interests being redeemed. If a holder of beneficial
interests received a distribution in kind, such holder could incur brokerage or
other charges in converting the securities to cash.

The Portfolio may suspend the right of redemption or postpone the date of
payment for beneficial interests in the Portfolio more than seven days during
any period when (a) trading in the markets the Portfolio normally utilizes is
restricted, or an emergency, as defined by the rules and regulations of the
Securities and Exchange Commission exists making disposal of the Portfolio's
investments or determination of its net asset value not reasonably practicable;
(b) the New York Stock Exchange is closed (other than customary weekend and
holiday closings); or (c) the Securities and Exchange Commission has by order
permitted such suspension.

Item 20. Tax Status.

The Portfolio is organized as a trust under New York law. The Portfolio
has determined, on the basis of an opinion of special tax counsel, that it is
properly treated as a partnership for federal and New York income tax purposes.
Accordingly, the Portfolio is not subject to any income tax, but each investor
in the Portfolio must take account of its share of the Portfolio's ordinary
income and capital gains in determining its income tax liability. The
determination of such share will be made in accordance with the governing
instruments of the Portfolio and the Internal Revenue Code of 1986, as amended
(the "Code"), and regulations promulgated thereunder.

The Portfolio's taxable year-end is August 31. Although the Portfolio is
not subject to federal income tax, it files appropriate federal income tax
returns.

The Portfolio believes that, in the case of an investor in the Portfolio
that seeks to qualify as a regulated investment company ("RIC") under the Code,
the investor should be treated for federal income tax purposes as an owner of
an undivided interest in the assets and operations of the Portfolio, and
accordingly should be deemed to own a proportionate share of each of the assets
of the

<PAGE>

Portfolio and should be entitled to treat as earned by it the portion of the
Portfolio's gross income attributable to that share. The Portfolio also
believes that each such investor should be deemed to hold its proportionate
share of the Portfolio's assets for the period the Portfolio has held the
assets or for the period the investor has been a partner in the Portfolio,
whichever is shorter. Each such investor should consult its tax advisers
regarding whether, in light of its particular tax status and any special tax
rules applicable to it, this approach applies to its investment in the
Portfolio, or whether the Portfolio should be treated, as to it, as a separate
entity as to which the investor has no direct interest in Portfolio assets or
operations.

In order to enable an investor in the Portfolio that is otherwise eligible
to qualify as a RIC under the Code to so qualify, the Portfolio intends to
satisfy the requirements of Subchapter M of the Code relating to the nature of
the Portfolio's gross income and the composition (diversification) and holding
period of the Portfolio's assets as if those requirements were directly
applicable to the Portfolio, and to allocate and permit withdrawals of its net
investment income and any net realized capital gains in a manner that will
enable an investor that is a RIC to comply with the qualification requirements
imposed by Subchapter M of the Code.

The Portfolio will allocate at least annually among its investors each
investor's distributive share of the Portfolio's net investment income
(including net investment income derived from interest on Municipal
Obligations), net realized capital gains, and any other items of income, gain,
loss, deduction, or credit in a manner intended to comply with the Code and
applicable Treasury regulations.

To the extent the cash proceeds of any withdrawal or distribution exceed
an investor's adjusted tax basis in its partnership interest in the Portfolio,
the investor will generally recognize gain for federal income tax purposes. If,
upon a complete withdrawal (i.e., a redemption of its entire interest in the
Portfolio), the investor's adjusted tax basis in its partnership interest in
the Portfolio exceeds the proceeds of the withdrawal, the investor will
generally recognize a loss for federal income tax purposes. An investor's
adjusted tax basis in its partnership interest in the Portfolio will generally
be the aggregate price paid therefor, increased by the amounts of its
distributive share of items of realized net income (including income, if any,
exempt from Federal income tax) and gain, and reduced, but not below zero, by
the amounts of its distributive share of items of realized net loss and the
amounts of any distributions received by the investor.

There are certain tax issues which will be relevant to only certain of the
Portfolio's investors, specifically, investors which are segregated asset
accounts and investors who contribute assets other than cash to the Portfolio.
It is intended that such segregated asset accounts will be able to satisfy
diversification requirements applicable

<PAGE>

to them and that such contributions of assets will not be taxable provided
certain requirements are met.

The above discussion does not address the special tax rules applicable to
certain classes of investors, such as tax-exempt entities, insurance companies,
and financial institutions, or the state, local, or non-United States tax laws
that may be applicable to certain investors. Investors should consult their own
tax advisers with respect to the special tax rules that may apply in their
particular situations, as well as the state, local, or foreign tax consequences
to them of investing in the Portfolio.

Item 21. Underwriters.

The exclusive placement agent for the Portfolio is LFBDS, which receives
no additional compensation for serving in this capacity. Investment companies,
insurance company separate accounts, common and commingled trust funds and
similar organizations and entities may continuously invest in the Portfolio.

Item 22. Calculations of Performance Data.

Not applicable.

Item 23. Financial Statements.

The financial statements contained in the Annual Report of the Portfolio
(Accession Number 864953-95-000003) for the fiscal year ended August 31, 1995
are incorporated by reference into this Statement of Additional Information.

A copy of the Annual Report of the Portfolio accompanies this Statement of
Additional Information.

<PAGE>

Part C

Item 24. Financial Statements and Exhibits.

(a) Financial Statements Included in Part A:

Not applicable.

Financial Statements Included in Part B:

Portfolio of Investments at August 31, 1995*

Statement of Assets and Liabilities at August 31, 1995*

Statement of Operations for the year ended August 31, 1995*

Statement of Changes in Net Assets for the years ended August 31,
1995 and August 31, 1994*

Financial Highlights for the years ended August 31, 1995,
August 31, 1994, August 31, 1993 and August 31, 1992 and the
period from February 5, 1991 (commencement of operations) to
August 31, 1991*

Notes to Financial Statements - August 31, 1995*

Independent Auditors' Report - September 30, 1995*

- ---------------
* Incorporated herein by reference to the Annual Report of the Registrant
for the fiscal year ended August 31, 1995, filed with the Securities and
Exchange Commission on the EDGAR system on or about October 26, 1995
(Accession Number 864953-95-000003).

(b) Exhibits

*1 Declaration of Trust of the Registrant

**2 By-Laws of the Registrant

**5 Investment Advisory Agreement between the Registrant and
Citibank, N.A., as investment adviser

**8 Custodian Agreement between the Registrant and State Street
Bank and Trust Company, as custodian

**9(a) Transfer Agency and Service Agreement between the Registrant
and State Street Bank and Trust Company, as transfer agent

<PAGE>

**9(b) Administrative Services Agreement between the Registrant and
The Landmark Funds Broker-Dealer Services, Inc. ("LFBDS"), as
administrator

**9(c) Sub-Administrative Services Agreement between LFBDS and
Citibank, N.A.

**9(d) Administrative Services Plan of the Registrant

11 Consent of Deloitte & Touche LLP, independent auditors of the
Registrant

**13 Copies of investment representation letters from initial
shareholders

27 Financial Data Schedule

- ---------------
* Incorporated by reference to Registrant's Registration Statement on Form
N-1A as filed with the Securities and Exchange Commission on June 18, 1990.
** Incorporated by reference to Amendment No. 1 to Registrant's
Registration Statement on Form N-1A as filed with the Securities and
Exchange Commission on February 4, 1991.

Item 25. Persons Controlled by or under Common Control with Registrant.

Not applicable.

Item 26. Number of Holders of Securities.

(1) (2)
Title of Class Number of Record Holders
(as of December 15, 1995)

Beneficial Interests 2

Item 27. Indemnification.

Reference is hereby made to Article V of the Registrant's Declaration of
Trust, filed as an Exhibit to its Registration Statement on Form N-1A.

The Trustees and officers of the Registrant and the personnel of the
Registrant's administrator are insured under an errors and omissions liability
insurance policy. The Registrant and its officers are also insured under the
fidelity bond required by Rule 17g-1 under the Investment Company Act of 1940.

<PAGE>

Item 28. Business and Other Connections of Investment Adviser.

Citibank, N.A. ("Citibank") is a commercial bank offering a wide range of
banking and investment services to customers across the United States and
around the world. Citibank is a wholly-owned subsidiary of Citicorp, a
registered bank holding company. Citibank also serves as investment adviser to
the following registered investment companies (or series thereof): The Premium
Portfolios (Balanced Portfolio, Equity Portfolio, Government Income Portfolio,
International Equity Portfolio, Emerging Asian Markets Equity Portfolio and
Small Cap Equity Portfolio), U.S. Treasury Reserves Portfolio, Cash Reserves
Portfolio, Landmark Multi-State Tax Free Funds (Landmark California Tax Free
Reserves, Landmark Connecticut Tax Free Reserves, Landmark New York Tax Free
Reserves), Landmark Fixed Income Funds (Landmark Intermediate Income Fund),
Landmark Tax Free Income Funds (Landmark New York Tax Free Income Fund and
Landmark National Tax Free Income Fund) and Landmark VIP Funds (Landmark VIP
U.S. Government Portfolio, Landmark VIP Balanced Portfolio, Landmark VIP Equity
Portfolio and Landmark VIP International Equity Portfolio). As of December 31,
1994, Citibank and its affiliates managed assets in excess of $73 billion
worldwide. The principal place of business of Citibank is located at 399 Park
Avenue, New York, New York 10043.

The Chairman of the Board and a Director of Citibank is John S. Reed. The
following are Vice Chairmen of the Board and Directors of Citibank: Paul J.
Collins, Pei-yuan Chia, William R. Rhodes and H. Onno Ruding. Other Directors
of Citibank are D. Wayne Calloway, Chairman and Chief Executive Officer,
PepsiCo, Inc., Purchase, New York; Colby H. Chandler, Former Chairman and Chief
Executive Officer, Eastman Kodak Company; Kenneth T. Derr, Chairman and Chief
Executive Officer, Chevron Corporation; H.J. Haynes, Senior Counselor, Bechtel
Group, Inc., San Francisco, California; Rozanne L. Ridgway, President, The
Atlantic Council of the United States; Robert B. Shapiro, President and Chief
Operating Officer, Monsanto Company; Frank A. Shrontz, Chairman and Chief
Executive Officer, Boeing Company, Seattle, Washington; Mario Henrique
Simonsen, Vice Chairman, Brazilian Institute of Economics, The Getulio Vargas
Foundation; Roger B. Smith, Former Chairman and Chief Executive Officer,
General Motors Corporation; Franklin A. Thomas, President, The Ford Foundation,
New York, New York; and Edgar S. Woolard, Jr., Chairman and Chief Executive
Officer, E.I. DuPont De Nemours & Company.

Each of the individuals named above is also a Director of Citicorp. In
addition, the following persons have the affiliations indicated:

D. Wayne Calloway Director, Exxon Corporation
Director, General Electric Company
Director, PepsiCo., Inc.

<PAGE>

Colby H. Chandler Director, Digital Equipment Corporation
Director, Ford Motor Company
Director, J.C. Penney Company, Inc.

Pei-yuan Chia None

Paul J. Collins Director, Kimberly-Clark Corporation

Kenneth T. Derr Director, Chevron Corporation
Director, Potlatch Corporation

H.J. Haynes Director, Bechtel Group, Inc.
Director, Boeing Company
Director, Fremont Group, Inc.
Director, Hewlett-Packard Company
Director, Paccar Inc.
Director, Saudi Arabian Oil Company

John S. Reed Director, Monsanto Company
Director, Philip Morris Companies,
Incorporated
Stockholder, Tampa Tank & Welding, Inc.

William R. Rhodes Director, Private Export Funding
Corporation

Rozanne L. Ridgway Director, 3M
Director, Bell Atlantic Corporation
Director, Boeing Company
Director, Emerson Electric Company
Member-International Advisory Board,
New Perspective Fund, Inc.
Director, RJR Nabisco, Inc.
Director, Sara Lee Corporation
Director, Union Carbide Corporation

H. Onno Ruding Member, Board of Supervisory Directors,
Amsterdam Trustee's Kantoor
Board Member, Corning Incorporated
Advisor, Intercena (C&A) (Netherlands)
Member, Board of Supervisory Directors,
Pechiney Nederland N.V.
Member, Board of Advisers, Robeco N.V.
Advisory Director, Unilever N.V.
Advisory Director, Unilever PLC

Robert B. Shapiro Director, G.D. Searle & Co.
Director, Liposome Technology, Inc.
Director, Monsanto Company
Director, The Nutrasweet Company

<PAGE>

Frank A. Shrontz Director, 3M
Director, Baseball of Seattle, Inc.
Director, Boeing Company
Director, Boise Cascade Corp.

Mario Henrique Simonsen Director, Companhia Bozano Simonsen
Comercioe E Industria
Director, Companhia Monteia & Aranha
President, Simposium Consultoria E
Servicos Tecnicos LTDA

Roger B. Smith Director, International Paper Company
Director, Johnson & Johnson
Director, Pepsico, Inc.
Director, Rubatex Corporation

Franklin A. Thomas Director, Aluminum Company of America
Director, American Telephone & Telegraph
Co.
Director, CBS, Inc.
Director, Cummins Engine Company, Inc.
Director, Pepsico, Inc.

Edgar S. Woolard, Jr. Director, E.I. DuPont De Nemours &
Company
Director, International Business
Machines Corp.
Director, Seagram Company, Ltd.

Item 29. Principal Underwriters.

(a) The Landmark Funds Broker-Dealer Services, Inc. ("LFBDS"), the
Registrant's Distributor, is also the distributor for Landmark International
Equity Fund, Landmark Emerging Asian Markets Equity Fund, Landmark U.S.
Treasury Reserves, Landmark Cash Reserves, Premium U.S. Treasury Reserves,
Premium Liquid Reserves, Landmark Institutional U.S. Treasury Reserves,
Landmark Institutional Liquid Reserves, Landmark Tax Free Reserves, Landmark
California Tax Free Reserves, Landmark Connecticut Tax Free Reserves, Landmark
New York Tax Free Reserves, Landmark U.S. Government Income Fund, Landmark
Intermediate Income Fund, Landmark Balanced Fund, Landmark Equity Fund,
Landmark Small Cap Equity Fund, Landmark National Tax Free Income Fund,
Landmark New York Tax Free Income Fund, and Landmark VIP Funds (Landmark VIP
U.S. Government Portfolio, Landmark VIP Balanced Portfolio, Landmark VIP Equity
Portfolio and Landmark VIP International Equity Portfolio). LFBDS is also the
placement agent for International Equity Portfolio, Balanced Portfolio, Equity
Portfolio, Small Cap Equity Portfolio, Government Income Portfolio, Emerging
Asian Markets Equity Portfolio, Cash Reserves Portfolio, and U.S. Treasury
Reserves Portfolio.

<PAGE>

(b) The information required by this Item 29 with respect to each director
and officer of LFBDS is incorporated by reference to Schedule A of Form BD
filed by LFBDS pursuant to the Securities and Exchange Act of 1934 (File No.
8-32417).

Item 30. Location of Accounts and Records.

The accounts and records of the Registrant are located, in whole or in part, at
the office of the Registrant and the following locations:

Name Address

The Landmark Funds Broker-Dealer 6 St. James Avenue
Services, Inc. Boston, MA 02116
(administrator and exclusive
placement agent)

State Street Bank and Trust Company State Street South
(custodian and transfer agent) 1776 Heritage Drive
North Quincy, MA
02171

Citibank, N.A. 153 East 53rd Street
(investment adviser) New York, NY 10043

Item 31. Management Services.

Not applicable.

Item 32. Undertakings.

Not applicable.

<PAGE>

SIGNATURE

Pursuant to the requirements of the Investment Company Act of 1940, the
Registrant has duly caused this Amendment to its Registration Statement on Form
N-1A to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Boston and Commonwealth of Massachusetts on the 27th day of
December, 1995.

TAX FREE RESERVES PORTFOLIO

By: Philip W. Coolidge
Philip W. Coolidge,
President

<PAGE>

EXHIBIT INDEX

Number

11 Consent of Deloitte & Touche LLP, independent
auditors of the Registrant

27 Financial Data Schedule

EXHIBIT 11

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

We consent to the use in Part B, constituting part of Amendment No. 7 of the
Registration Statement (File No. 811-6118) on Form N-1A, of our report dated
October 9, 1995, accompanying the Statement of Assets and Liabilities of Tax
Free Reserves Portfolio contained in such Registration Statement and the use of
our name, and the statement with respect to us, as appearing under the heading
"Investment Advisory and Other Services" in Part B.

Deloitte & Touche LLP

Boston, Massachusetts
December 27, 1995

[ARTICLE] 6
[CIK] 0000864953
[NAME] TAX FREE RESERVES PORTFOLIO
<TABLE>
<S> <C>
[PERIOD-TYPE] 12-mos
[FISCAL-YEAR-END] Aug-31-1995
[PERIOD-END] Aug-31-1995
[INVESTMENTS-AT-COST] 403,529,884
[INVESTMENTS-AT-VALUE] 403,529,884
[RECEIVABLES] 3,176,569
[ASSETS-OTHER] 692
[OTHER-ITEMS-ASSETS] 36,927
[TOTAL-ASSETS] 406,744,072
[PAYABLE-FOR-SECURITIES] 12,412,858
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 0
[TOTAL-LIABILITIES] 12,412,858
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 394,222,251
[SHARES-COMMON-STOCK] 0
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 0
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 0
[NET-ASSETS] 394,222,251
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 11,858,169
[OTHER-INCOME] 0
[EXPENSES-NET] 973,687
[NET-INVESTMENT-INCOME] 10,884,482
[REALIZED-GAINS-CURRENT] 75,464
[APPREC-INCREASE-CURRENT] 0
[NET-CHANGE-FROM-OPS] 10,959,946
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 487,327,869
[NUMBER-OF-SHARES-REDEEMED] (337,173,146)
[SHARES-REINVESTED] 0
[NET-CHANGE-IN-ASSETS] 161,114,669
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] (75,464)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 613,607
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 973,687
[AVERAGE-NET-ASSETS] 306,803
[PER-SHARE-NAV-BEGIN] 0.00
[PER-SHARE-NII] 0.00
[PER-SHARE-GAIN-APPREC] 0.00
[PER-SHARE-DIVIDEND] 0.00
[PER-SHARE-DISTRIBUTIONS] 0.00
[RETURNS-OF-CAPITAL] 0.00
[PER-SHARE-NAV-END] 0.00
[EXPENSE-RATIO] 0.32
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>