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LIQUID INSTITUTIONAL RESERVES
Money Market Fund
Government Securities Fund
Treasury Securities Fund
SUPPLEMENT TO PROSPECTUS DATED SEPTEMBER 1, 1996
May 9, 1997
Dear Investor:
This is a supplement to the Liquid Institutional Reserves (LIR)
Prospectus dated September 1, 1996. The purpose of this supplement is to notify
all existing shareholders and prospective investors of new features and services
being provided to investors. There will be new enhancements to the Funds that
will affect the current method of investing in LIR. For clients with PaineWebber
Resource Management Accounts (RMAs)'r' and Business Services Accounts (BSAs)'r',
the LIR Funds will no longer be available as sweep options for these accounts,
so please disregard all references in the prospectus with regard to RMA/BSA
accounts. Any questions regarding this change should be directed to your
PaineWebber Investment Executive (IE).
EFFECTIVE JUNE 2, 1997, the following features will be available, and
the disclosure contained in the prospectus concerning investing in LIR will be
superseded by the following:
Toll free Client Services Hotline #1-888-LIR-FUND
Dedicated service center to provide yields, account balance information and
trade execution
Monthly dividends payable the last business day of the month
Option of dividend reinvestment or Fed wire to a designated bank account
Receipt of month-to-date accrued dividends with redemption proceeds upon
full account redemption.
TRANSFER AGENT
First Data Investor Services Group, Inc. (First Data) is LIR's new transfer and
dividend disbursing agent. First Data is located at 4400 Computer Drive,
Westborough, Massachusetts 01581-5159.
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PURCHASES
Each Fund offers investors the choice of investing in two separate classes
of shares-Institutional shares and Financial Intermediary shares.
Institutional shares in each Fund are available for purchase by
institutional investors, and, at the discretion of PaineWebber, for purchase
by individuals or other entities. Financial Intermediary shares in each Fund
are available for purchase only by banks and other financial intermediaries
for the benefit of their customers. Financial Intermediaries shares bear all
fees payable by the Fund to those financial intermediary for certain
services they provide to the beneficial owners of these shares.
Minimum initial investment is $1,000,000 for LIR Money Market and Government
Securities Funds (or in a combination of both) and $250,000 for Treasury
Securities Fund. These minimums may be waived at the discretion of
PaineWebber. Financial intermediaries purchasing shares for the accounts of
their customers may set a higher minimum for their customers.
There is no minimum subsequent investment.
The LIR Funds accept the settlement of purchase orders only in available
Federal funds.
Shares of the Funds are offered for sale, without a sales charge, at the net
asset value (NAV) per share next determined after receipt and acceptance of
a purchase order by the Transfer Agent, subject to timely receipt of Federal
funds as provided below.
An investor can place a purchase order up until 2:30 p.m. (Eastern time) for
LIR Money Market Fund and 12:00 noon (Eastern time) for LIR Government
Securities and Treasury Securities Funds by telephoning the Transfer Agent
at #1-888-LIR-FUND and speaking with a representative. For the purchase of
Fund shares to be effected on that Business Day, the investor must wire
Federal funds to LIR, care of the Transfer Agent, and that wire must be
credited to that bank account by a Federal Reserve Bank on that Business
Day. Otherwise, the order will be executed as of such times on the following
Business Day if Federal funds have been received by that time. Calls may be
initiated by any authorized party on the account, including your IE.
Shares are entitled to receive dividends beginning on the date the purchase
order is accepted.
A "Business Day" is any day on which the Massachusetts offices of LIR's
custodian, State Street Bank and Trust Company, and First Data, and the New
York City offices of PaineWebber are all open for business.
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Wiring instructions are as follows:
LIR -----------------Fund
[insert Fund name: Money Market, Government or Treasury]
c/o BSD&T Company
CR DDA #13-860-6
CR PW A/C #----------------------
[insert PaineWebber account name and account number]
ABA #011001234
Unless the investor otherwise specifies, all LIR shares purchased will be
Institutional shares. The availability of LIR shares to customers of
PaineWebber's correspondent firms varies depending on the arrangements
between PaineWebber and such firms.
LIR and PaineWebber reserve the right to reject any purchase order and to
suspend the offering of Fund shares for a period of time.
PaineWebber and/or an investor's bank may impose a service charge for wire
transfers.
REDEMPTIONS
Shareholders may redeem all or any portion of the shares in their accounts
at any time at the NAV per share next computed after the receipt of a
redemption request in proper form by First Data.
Redemption orders are accepted up until 2:30 p.m. (Eastern time) for LIR
Money Market Fund and 12:00 noon (Eastern time) for LIR Government
Securities and Treasury Securities Funds by telephoning the Transfer Agent
at #1-888-LIR-FUND and speaking with a representative. Calls may be
initiated by any authorized party on the account, including your IE.
Redemption proceeds will be paid by Federal funds to one or more of the bank
accounts that have been designated by the shareholder, normally on the
Business Day the redemption request is accepted.
Shareholders will receive dividends earned on redeemed shares up to (but not
including) the day of redemption. The redemption price may be more or less
than the purchase price, depending on the market value of a Fund's
portfolio; however, each Fund anticipates that its NAV per share will
normally be $1.00 per share.
There is no minimum amount for redemptions.
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EXCHANGES
Shareholders may exchange shares of one LIR Fund for shares of another LIR
Fund based on the next determined NAV.
Exchange transactions must meet the minimum initial investment of the new
Fund.
There is no minimum for subsequent exchanges between Fund accounts once they
have been activated.
Exchange orders are accepted up until 12:00 noon (Eastern time) for LIR
Money Market, Government Securities and Treasury Securities Funds by
telephoning the Transfer Agent at #1-888-LIR-FUND and speaking with a
representative. Calls may be initiated by any authorized party on the
account, including your IE.
DIVIDENDS
Each Business Day, each Fund declares as dividends all of its net investment
income.
Shares are entitled to receive dividends beginning on the date the purchase
order is accepted.
Dividends are accrued to shareholder accounts daily and are paid on the last
Business Day of the month.
Investors may request dividend reinvestment in additional Fund shares, Fed
wire cash option to a designtaed bank account or a Fed wire cash option to a
designated PaineWebber account.
NET ASSET VALUE (NAV)
The NAV for LIR Money Market Fund is determined once each Business Day at
2:30 p.m (Eastern time). The NAV for LIR Government Securities and Treasury
Securities Funds is determined once each Business Day at 12:00 noon (Eastern
time).
REMOTE TRADE ENTRY
At its discretion, LIR may offer eligible institutional investors an
electronic trade order entry (RTE) capability. For more information on this
option, please contact your IE.
STATEMENT OF DIFFERENCES
The registered trademark symbol shall be expressed as.......................'r'
