FEDERATED CALIFORNIA MUNICIPAL INCOME FUND
(A PORTFOLIO OF MUNICIPAL SECURITIES INCOME TRUST)
SUPPLEMENT TO PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION, AS
APPROPRIATE, DATED OCTOBER 31, 1998
I. At the June 25, 1999 shareholder meeting, shareholders approved the
following changes to become effective July 1, 1999:
1. Elected six Trustees.
2. Ratified the selection of the Trust's independent auditors.
II. The meeting was adjourned to August 11, 1999, 2:00 p.m. (Eastern time), at
2800 Corporate Drive, Pittsburgh, PA 15237-7000 with respect to the
following proposals. Unless shareholders are notified otherwise, these
changes will take effect on August 12, 1999.
1. To make changes to the Fund's fundamental investment policies:
a. To amend the Fund's fundamental investment policy regarding
borrowing money and issuing senior securities to read as follows:
"The Fund may borrow money, directly or indirectly, and issue
senior securities to the maximum extent permitted under the 1940
Act."
b. To amend the Fund's fundamental investment policy regarding
investments in real estate to read as follows:
"The Fund may not purchase or sell real estate, provided that
this restriction does not prevent the Fund from investing in
issuers which invest, deal, or otherwise engage in transactions
in real estate or interests therein, or investing in securities
that are secured by real estate or interest therein. The Fund may
exercise its rights under agreements relating to such securities,
including the right to enforce security interests and to hold
real estate acquired by reason of such enforcement until that
real estate can be liquidated in an orderly manner."
c. To amend the Fund's fundamental investment policy regarding
investments in commodities to read as follows:
"The Fund may not purchase or sell physical commodities, provided
that the Fund may purchase securities of companies that deal in
commodities.
For purposes of this restriction, as a matter of non-fundamental
policy, investments in transactions involving futures contracts
and options, forward currency contracts, swap transactions and
other financial contracts that settle by payment of cash are not
deemed to be investments in commodities."
d. To amend the Fund's fundamental investment policy regarding
underwriting securities to read as follows:
"The Fund may not underwrite the securities of other issuers,
except that the Fund may engage in transactions involving the
acquisition, disposition or resale of its portfolio securities,
under circumstances where it may be considered to be an
underwriter under the Securities Act of 1933."
e. To amend the Fund's fundamental investment policy regarding
lending by the Fund to read as follows:
"The Fund may not make loans, provided that this restriction does
not prevent the Fund from purchasing debt obligations, entering
into repurchase agreements, lending its assets to broker/dealers
or institutional investors and investing in loans, including
assignments and participation interests."
f. To amend the Fund's fundamental investment policy regarding
concentration of the Fund's investments in the securities of
companies in the same industry to read as follows:
"The Fund will not make investments that will result in the
concentration of its investments in the securities of issuers
primarily engaged in the same industry. Government securities,
municipal securities and bank instruments will not be deemed to
constitute an industry.
To conform to the current view of the SEC that only domestic bank
instruments may be excluded from industry concentration
limitations, as a matter of non-fundamental policy, the Fund will
not exclude foreign bank instruments from industry concentration
limits as long as the policy of the SEC remains in effect. As a
non-fundamental operating policy, the Fund will consider
concentration to be the investment of more than 25% of the value
of its total assets in any one industry."
g. To amend, and make non-fundamental, the Fund's fundamental
investment policy regarding buying securities on margin to read
as follows:
"The Fund will not purchase securities on margin, provided that
the Fund may obtain short-term credits necessary for the
clearance of purchases and sales of securities, and further
provided that the Fund may make margin deposits in connection
with its use of financial options and futures, forward and spot
currency contracts, swap transactions and other financial
contracts or derivative instruments."
h. To amend, and make non-fundamental, the Fund's fundamental
investment policy regarding pledging assets to read as follows:
"The Fund will not mortgage, pledge, or hypothecate any of its
assets, provided that this shall not apply to the transfer of
securities in connection with any permissible borrowing or to
collateral arrangements in connection with permissible
activities."
2. To eliminate certain of the Fund's fundamental investment policies:
a. To remove the Fund's fundamental investment policy regarding
selling securities short; and
b. To remove the Fund's fundamental investment policy regarding
dealing in puts, calls, straddles, spreads and any combination
thereof.
3. To approve an amendment and restatement to the Trust's Declaration of
Trust to permit the Board of Trustees to liquidate assets of the Trust
without seeking shareholder approval.
III. The following actions have been taken by the Board of Trustees with
regard to non- fundamental investment policies.
1. Approved the elimination of the following non-fundamental investment
limitation of the Fund:
"The Fund will not invest more than 10% of the value of its total
assets in securities subject to restrictions on resale under the
Securities Act of 1933."
2. Approved revisions to the Fund's non-fundamental investment
limitations to read as follows:
a. "The Fund will not purchase securities for which there is no
readily available market, or enter into repurchase agreements or
purchase time deposits maturing in more than seven days, if
immediately after and as a result, the value of such securities
would exceed, in the aggregate, 15% of the Fund's net assets;
and,
b. The Fund may purchase and sell interest rate and index financial
futures contracts."
3. Approved the addition of a non-fundamental investment policy as
follows:
"In applying the Fund's concentration restriction, (a)
utility companies will be divided according to their
services, for example, gas, gas transmission, electric and
telephone will each be considered a separate industry; (b)
financial service companies will be classified according to
the end users of their services, for example, automobile
finance, bank finance and diversified finance will each be
considered a separate industry; and (c) asset-backed
securities will be classified according to the underlying
assets securing such securities."
4. Approved the elimination of the Fund's non-fundamental investment
policy pertaining to when-issued and delayed delivery transactions
that provides that the Fund will not engage in such transactions to an
extent that would cause the segregation of more than 20% of the value
of its total assets.
June 25, 1999
Cusip 625922109
Cusip 625922828
G02650-04 (7/99)
FEDERATED NEW YORK MUNICIPAL INCOME FUND
(A PORTFOLIO OF MUNICIPAL SECURITIES INCOME TRUST)
SUPPLEMENT TO PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION, AS
APPROPRIATE, DATED OCTOBER 31, 1998
I. At the June 25, 1999 shareholder meeting, shareholders approved the
following changes to become effective July 1, 1999:
1. Elected six Trustees.
2. Ratified the selection of the Trust's independent auditors.
3. Amended the Fund's fundamental investment policy regarding
underwriting securities to read as follows:
"The Fund may not underwrite the securities of other issuers, except
that the Fund may engage in transactions involving the acquisition,
disposition or resale of its portfolio securities, under circumstances
where it may be considered to be an underwriter under the Securities
Act of 1933."
II. The meeting was adjourned to August 11, 1999, 2:00 p.m. (Eastern time), at
2800 Corporate Drive, Pittsburgh, PA 15237-7000 with respect to the
following proposals. Unless shareholders are notified otherwise, these
changes will take effect on August 12, 1999.
1. To make changes to the Fund's fundamental investment policies:
a. To amend the Fund's fundamental investment policy regarding
borrowing money and issuing senior securities to read as follows:
"The Fund may borrow money, directly or indirectly,
and issue senior securities to the maximum extent permitted under the 1940 Act."
b. To amend the Fund's fundamental investment policy regarding
investments in real estate to read as follows:
"The Fund may not purchase or sell real estate, provided that
this restriction does not prevent the Fund from investing in
issuers which invest, deal, or otherwise engage in transactions
in real estate or interests therein, or investing in securities
that are secured by real estate or interest therein. The Fund may
exercise its rights under agreements relating to such securities,
including the right to enforce security interests and to hold
real estate acquired by reason of such enforcement until that
real estate can be liquidated in an orderly manner."
c. To amend the Fund's fundamental investment policy regarding
investments in commodities to read as follows:
"The Fund may not purchase or sell physical commodities, provided
that the Fund may purchase securities of companies that deal in
commodities.
For purposes of this restriction, as a matter of non-fundamental
policy, investments in transactions involving futures contracts
and options, forward currency contracts, swap transactions and
other financial contracts that settle by payment of cash are not
deemed to be investments in commodities."
d. To amend the Fund's fundamental investment policy regarding
lending by the Fund to read as follows:
"The Fund may not make loans, provided that this restriction does
not prevent the Fund from purchasing debt obligations, entering
into repurchase agreements, lending its assets to broker/dealers
or institutional investors and investing in loans, including
assignments and participation interests."
e. To amend the Fund's fundamental investment policy regarding
concentration of the Funds' investments in the securities of
companies in the same industry to read as follows:
"The Fund will not make investments that will result in the
concentration of its investments in the securities of issuers
primarily engaged in the same industry. Government securities,
municipal securities and bank instruments will not be deemed to
constitute an industry.
To conform to the current view of the SEC that only domestic bank
instruments may be excluded from industry concentration
limitations, as a matter of non-fundamental policy, the Fund will
not exclude foreign bank instruments from industry concentration
limits as long as the policy of the SEC remains in effect. As a
non-fundamental operating policy, the Fund will consider
concentration to be the investment of more than 25% of the value
of its total assets in any one industry."
f. To amend, and make non-fundamental, the Fund's fundamental
investment policy regarding buying securities on margin to read
as follows:
"The Fund will not purchase securities on margin, provided that
the Fund may obtain short-term credits necessary for the
clearance of purchases and sales of securities, and further
provided that the Fund may make margin deposits in connection
with its use of financial options and futures, forward and spot
currency contracts, swap transactions and other financial
contracts or derivative instruments."
g. To amend, and make non-fundamental, the Fund's fundamental
investment policy regarding pledging assets to read as follows:
"The Fund will not mortgage, pledge, or hypothecate any of its
assets, provided that this shall not apply to the transfer of
securities in connection with any permissible borrowing or to
collateral arrangements in connection with permissible
activities."
2. To eliminate certain of the Fund's fundamental investment policies:
a. To remove the Fund's fundamental investment policy regarding
selling securities short; and
b. To remove the Fund's fundamental investment policy regarding
dealing in puts, calls, straddles, spreads and any combination
thereof.
3. To approve an amendment and restatement to the Trust's Declaration of
Trust to permit the Board of Trustees to liquidate assets of the Trust
without seeking shareholder approval.
III. The following actions have been taken by the Board of Trustees with
regard to non- fundamental investment policies.
1. Approved revisions to the Fund's non-fundamental investment
limitations to read as follows:
a. "The Fund will not purchase securities for which there is no
readily available market, or enter into repurchase agreements or
purchase time deposits maturing in more than seven days, if
immediately after and as a result, the value of such securities
would exceed, in the aggregate, 15% of the Fund's net assets;
and,
b. The Fund may purchase and sell interest rate and index financial
futures contracts."
2. Approved the addition of a non-fundamental investment policy as follows:
"In applying the Fund's concentration restriction, (a) utility
companies will be divided according to their services, for
example, gas, gas transmission, electric and telephone will each
be considered a separate industry; (b) financial service
companies will be classified according to the end users of their
services, for example, automobile finance, bank finance and
diversified finance will each be considered a separate industry;
and (c) asset-backed securities will be classified according to
the underlying assets securing such securities."
3. Approved the elimination of the Fund's non-fundamental investment policy
pertaining to when-issued and delayed delivery transactions that provides
that the Fund will not engage in such transactions to an extent that would
cause the segregation of more than 20% of the value of its total assets.
June 25, 1999
Cusip 625922208
G02650-06 (7/99)
