SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (No. 33-43757)
UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 18 [X]
and
REGISTRATION STATEMENT (No. 811-6452)
UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 18 [X]
Fidelity Union Street Trust II
(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, Massachusetts 02109
(Address Of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number: 617-563-7000
Arthur S. Loring, Secretary
82 Devonshire Street
Boston, Massachusetts 02109
(Name and Address of Agent for Service)
It is proposed that this filing will become effective
( ) immediately upon filing pursuant to paragraph (b).
( ) on ( ) pursuant to paragraph (b).
( ) 60 days after filing pursuant to paragraph (a)(1).
(x) on ( December 19, 1997 ) pursuant to paragraph (a)(1) of Rule
485.
( ) 75 days after filing pursuant to paragraph (a)(2).
( ) on ( ) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
( ) this post-effective amendment designates a new effective date
for a previously filed
post-effective amendment.
Registrant has filed a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940 and filed the Notice required by such
Rule on October 8, 1997.
FIDELITY UNION STREET TRUST II
SPARTAN MUNICIPAL MONEY FUND
FIDELITY MUNICIPAL MONEY MARKET FUND
CROSS REFERENCE SHEET
FORM N-1A
ITEM NUMBER PROSPECTUS SECTION
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1 .............................. Cover Page
2 a .............................. Expenses
b, c .............................. Contents; The Funds at a Glance; Who May Want
to Invest
3 a .............................. *
b .............................. *
c .............................. Performance
d .............................. Performance
4 a i............................. Charter
ii........................... The Funds at a Glance; Investment Principles and
Risks
b .............................. Investment Principles and Risks
c .............................. Who May Want to Invest; Investment Principles
and Risks
5 a .............................. Charter
b i............................. The Funds at a Glance; Doing Business with
Fidelity; Charter; Cover Page
ii........................... Charter
iii.......................... Expenses; Breakdown of Expenses
c .............................. Charter
d .............................. Charter; Breakdown of Expenses
e .............................. Charter; Cover Page
f .............................. Expenses
g .............................. Charter
5A .............................. *
6 a i............................. Charter
ii........................... How to Buy Shares; How to Sell Shares;
Transaction Details; Exchange Restrictions
iii.......................... Charter
b ............................. Charter
c .............................. Exchange Restrictions; Transaction Details
d .............................. *
e .............................. Doing Business with Fidelity; How to Buy Shares;
How to Sell Shares; Investor Services
f, g .............................. Dividends, Capital Gains, and Taxes
7 a .............................. Charter; Cover Page
b .............................. How to Buy Shares; Transaction Details; Expenses
c .............................. *
d .............................. How to Buy Shares
e .............................. *
f .............................. Breakdown of Expenses
8 .............................. How to Sell Shares; Investor Services; Transaction
Details; Exchange Restrictions
9 .............................. *
</TABLE>
* Not Applicable
CROSS REFERENCE SHEET
(CONTINUED)
FORM N-1A
ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION SECTION
<TABLE>
<CAPTION>
<S> <C> <C> <C>
10, 11 ............................ Cover Page
12 ............................ Description of the Trust
13 a - c ............................ Investment Policies and Limitations
d ............................ *
14 a - c ............................ Trustees and Officers
15 ............................ Trustees and Officers
16 a i........................... FMR; Portfolio Transactions
ii.......................... Trustees and Officers
iii......................... Management Contracts
b ............................ Management Contracts
c, d ............................ Contracts with FMR Affiliates
e ............................ *
f ............................ Distribution and Service Plans
g ............................ *
h ............................ Description of the Trust
i ............................ Contracts with FMR Affiliates
17 a ............................ Portfolio Transactions
b ............................ *
c ............................ Portfolio Transactions
d, e ............................ *
18 a ............................ Description of the Trust
b ............................ *
19 a ............................ Additional Purchase and Redemption Information
b ............................ Additional Purchase and Redemption Information;
Valuation of Portfolio Securities
c ............................ *
20 ............................ Distributions and Taxes
21 a, b ............................ Contracts with FMR Affiliates
c ............................ *
22 ............................ Performance
23 ............................ *
</TABLE>
* Not Applicable
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how
the fund invests and the services available to shareholders.
To learn more about the fund and its investments, you can obtain a
copy of the fund's most recent financial report and portfolio listing,
or a copy of the Statement of Additional Information (SAI) dated
December 19, 1997 . The SAI has been filed with the Securities
and Exchange Commission (SEC) and is available along with other
related materials on the SEC's Internet Web site (http://www.sec.gov).
The SAI is incorporated herein by reference (legally forms a part of
the prospectus). For a free copy of either document, call Fidelity at
1-800-544-8888.
Investments in the fund are neither insured nor guaranteed by the U.S.
Government, and there can be no assurance that the fund will maintain
a stable $1.00 share price.
Mutual fund shares are not deposits or obligations of, or guaranteed
by, any depository institution. Shares are not insured by the FDIC,
Federal Reserve Board, or any other agency, and are subject to
investment risks, including possible loss of principal amount
invested.
FIDELITY MUNICIPAL
MONEY MARKET
FUND
(FUND NUMBER 010, TRADING SYMBOL FTEXX)
AND
SPARTAN(REGISTERED TRADEMARK)
MUNICIPAL MONEY
FUND
(FUND NUMBER 460, TRADING SYMBOL FIMXX)
Each fund seeks a high level of current income free from
federal income tax while maintaining a stable $1.00 share price by
investing in high quality, short-term municipal money market
securities.
LIKE ALL MUTUAL FUNDS, THESE
SECURITIES HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE
COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
SMM/MMM-PRO-1297
PROSPECTUS
DECEMBER 19, 1997 (FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE
STREET, BOSTON, MA 02109
CONTENTS
KEY FACTS 3 THE FUNDS AT A GLANCE
WHO MAY WANT TO INVEST
EXPENSES Each fund's yearly operating
expenses.
FINANCIAL HIGHLIGHTS A summary of
each fund's financial data.
PERFORMANCE How each fund has done
over time.
THE FUNDS IN DETAIL 9 CHARTER How each fund is organized.
INVESTMENT PRINCIPLES AND RISKS
Each fund's overall approach to
investing.
BREAKDOWN OF EXPENSES How
operating costs are calculated and what
they include.
YOUR ACCOUNT DOING BUSINESS WITH FIDELITY
TYPES OF ACCOUNTS Different ways to
set up your account.
HOW TO BUY SHARES Opening an
account and making additional
investments.
HOW TO SELL SHARES Taking money out
and closing your account.
INVESTOR SERVICES Services to help you
manage your account.
SHAREHOLDER AND DIVIDENDS, CAPITAL GAINS,
ACCOUNT POLICIES AND TAXES
TRANSACTION DETAILS Share price
calculations and the timing of
purchases and redemptions.
EXCHANGE RESTRICTIONS
KEY FACTS
THE FUNDS AT A GLANCE
GOAL: Income free from federal income tax while maintaining
a stable $1.00 share price.
STRATEGY: Invest in high-quality, short-term municipal money
market securities of all types.
MANAGEMENT: Fidelity Management & Research Company (FMR) is the
management arm of Fidelity Investments, which was established in 1946
and is now America's largest mutual fund manager. FMR Texas Inc. (FMR
Texas), a subsidiary of FMR, chooses investments for the funds.
As with any mutual fund, there is no assurance that a fund will
achieve its goal.
MUNICIPAL MONEY MARKET
SIZE: As of October 31, 1997, the fund had over $__ billion
in assets.
SPARTAN MUNICIPAL MONEY
SIZE: As of October 31, 1997, the fund had over $__ billion
in assets.
WHO MAY WANT TO INVEST
These funds may be appropriate for investors in higher tax
brackets who would like to earn federal tax-exempt income at current
municipal money market rates while preserving the value of their
investment. The funds are managed to keep their share price stable
at $1.00. The rate of income will vary from day to day, generally
reflecting short-term interest rates.
These funds do not constitute a balanced investment plan.
However, be cause they emphasize stability, they could be
well-suited for a portion of your investments. Each fund offers
checkwriting to give you easy access to your money.
THE SPECTRUM OF
FIDELITY FUNDS
BROAD CATEGORIES OF FIDELITY
FUNDS ARE PRESENTED HERE IN
ORDER OF ASCENDING RISK.
GENERALLY, INVESTORS SEEKING TO
MAXIMIZE RETURN MUST ASSUME
GREATER RISK. THE FUNDS IN THIS
PROSPECTUS ARE IN THE MONEY
MARKET CATEGORY.
(RIGHT ARROW) MONEY MARKET SEEKS
INCOME AND STABILITY BY
INVESTING IN HIGH-QUALITY,
SHORT-TERM INVESTMENTS.
(SOLID BULLET) INCOME SEEKS INCOME BY
INVESTING IN BONDS.
(SOLID BULLET) GROWTH AND INCOME SEEKS
LONG-TERM GROWTH AND INCOME
BY INVESTING IN STOCKS AND
BONDS.
(SOLID BULLET) GROWTH SEEKS LONG-TERM
GROWTH BY INVESTING MAINLY IN
STOCKS.
(CHECKMARK)
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you may pay when you buy,
sell, or exchange shares of a fund. In addition, you may be charged an
annual account maintenance fee if your account balance falls below
$2,500. See "Transaction Details," page __, for an explanation of how
and when these charges apply.
Sales charge on purchases None
and reinvested distributions
Deferred sales charge on redemptions None
Exchange fee $5.00
(for Spartan Municipal Money only)
Wire transaction fee $5.00
(for Spartan Municipal Money only)
Checkwriting fee, per check written $2.00
(for Spartan Municipal Money only)
Account closeout fee $5.00
(for Spartan Municipal Money only)
Annual account maintenance fee (for accounts under $2,500) $12.00
THE FEES FOR INDIVIDUAL TRANSACTIONS are waived if your account
balance at the time of the transaction is $50,000 or more.
ANNUAL FUND OPERATING EXPENSES are paid out of each fund's assets.
Spartan Municipal Money pays a management fee to FMR. FMR is
responsible for the payment of all other expenses for Spartan
Municipal Money with certain limited exceptions. Municipal Money
Market pays a management fee to FMR. Municipal Money Market also
incurs other expenses for services such as maintaining shareholder
records and furnishing shareholder statements and financial reports. A
fund's expenses are factored into its share price or dividends and
are not charged directly to shareholder accounts (see "Breakdown of
Expenses" page ).
The following figures are based on historical expenses, adjusted to
reflect current fees, of each fund and are calculated as a
percentage of aver age net assets of each fund. A portion of the
brokerage commissions that certain funds pay is used to reduce each of
those fund's expenses. In addition, on behalf of Spartan Municipal
Money, FMR has entered into arrangements with the fund's custodian and
transfer agent whereby credits realized as a result of uninvested cash
balances are used to reduce fund expenses. Municipal Money Market has
entered into arrangements with its custodian and transfer agent
whereby credits realized as a result of uninvested cash balances are
used to reduce custodian and transfer agent expenses. Including these
reductions, the total fund operating expenses presented in the table
would have been __% for Municipal Money Market and __% for Spartan
Municipal Money.
MUNICIPAL MONEY MARKET
Management fee %
12b-1 fee None
Other expenses %
Total fund operating expenses %
SPARTAN MUNICIPAL MONEY
Management fee [(after reimbursement)] %
12b-1 fee None
Other expenses %
Total fund operating expenses %
EXAMPLES: Let's say, hypothetically, that each fund's annual return
is 5% and that your shareholder transaction ex penses and each
fund's annual operating expenses are exactly as just described.
For every $1,000 you invested, here's how much you would pay in
total expenses if you close your account after the number of years
indicated, and, for Spartan Municipal Money, if you leave your
account open:
MUNICIPAL MONEY MARKET
1 year $
3 years $
5 years $
10 years $
SPARTAN MUNICIPAL MONEY
Account open Account closed
1 year $ $
3 years $ $
5 years $ $
10 years $ $
These examples illustrate the effect of expenses, but are not meant to
suggest actual or expected expenses or returns, all of which may vary.
FMR has voluntarily agreed to reimburse Spartan Municipal Money to
the extent that total operating expenses exceed __% of its average net
assets. If this agreement were not in effect, the management fee,
other expenses, and total operating expenses would have been __%, __%,
and __%, respectively. Expenses eligible for reimbursement do not
include interest, taxes, brokerage commissions, or extraordinary
expenses.
FINANCIAL HIGHLIGHTS
The financial highlights tables that follow have been audited by
__________
_________, independent accountants (for Municipal Money Market) and
_________________, independent accountants (for Spartan Municipal
Money). The funds' financial highlights, financial statements, and
reports of the auditors are included in the funds' Annual Reports, and
are incorporated by reference into (are legally a part of) the funds'
SAI. Contact Fidelity for a free copy of an Annual Report or the
SAI.
[FINANCIAL HIGHLIGHTS TO BE FILED BY SUBSEQUENT AMENDMENT.]
PERFORMANCE
Money market fund performance can be measured as TOTAL RETURN or
YIELD. The total returns that follow are based on historical fund
results and do not reflect the effect of any transaction fees you may
have paid. The figures would be lower if fees were taken into
account.
Municipal Money Market's fiscal year runs from November 1 through
October 31. Spartan Municipal Money's fiscal year runs from September
1 through August 31. The tables below show each fund's performance
over past fiscal years compared to a measure of inflation and
do not include the effect of the $5 account closeout fee.
MUNICIPAL MONEY MARKET
Fiscal periods ended Past 1 Past 5 Past
October 31, 1997 year years 10
years
Average annual total return % % %
Cumulative total return % % %
Consumer Price Index % % %A
SPARTAN MUNICIPAL MONEY
Fiscal periods ended Past 1 Past 5 Life of
August 31, 19;97 year years FundA
Average annual total return % % %
Cumulative total return % % %
Consumer Price Index % % %
A FROM JANUARY 14, 1991 (COMMENCEMENT OF OPERATIONS)
UNDERSTANDING
PERFORMANCE
SEVEN-DAY YIELD ILLUSTRATES THE
INCOME EARNED BY A MONEY
MARKET FUND OVER A RECENT
SEVEN-DAY PERIOD. TOTAL RETURN
REFLECTS BOTH THE REINVESTMENT OF
INCOME AND THE CHANGE IN A
FUND'S SHARE PRICE. SINCE MONEY
MARKET FUNDS MAINTAIN A STABLE
$1.00 SHARE PRICE, CURRENT
SEVEN-DAY YIELDS ARE THE MOST
COMMON ILLUSTRATION OF MONEY
MARKET FUND PERFORMANCE.
(CHECKMARK)
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment over a given
period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated
period of time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate
of return that, if achieved annually, would have produced the same
cumulative total return if performance had been constant over the
entire period. Average annual total returns smooth out variations in
performance; they are not the same as actual year-by-year results.
YIELD refers to the income generated by an investment in a fund
over a given period of time, expressed as an annual percentage
rate. When a yield assumes that income earned is reinvested, it is
called an EFFECTIVE YIELD. A TAX-EQUIVALENT YIELD shows what an
investor would have to earn before taxes to equal a tax-free yield.
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation
calculated by the U.S. Government.
The funds' recent strategies, performance, and holdings are
detailed twice a year in financial reports, which are sent to all
shareholders. For current performance call 1-800-544-8888.
TOTAL RETURNS AND YIELDS ARE BASED ON PAST RESULTS AND ARE NOT AN
INDICATION OF FUTURE PERFORMANCE.
THE FUNDS IN DETAIL
CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools
shareholders' money and invests it toward a specified goal. Each
fund is a diversified fund of Fidelity Union Street Trust II, an
open-end management investment company organized as a Delaware
business trust on June 20, 1991.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet periodically throughout the year to oversee the
funds' activities, review contractual arrangements with companies
that provide services to the funds, and review the funds'
performance. The trustees serve as trustees for other Fidelity funds.
The majority of trustees are not otherwise affiliated with
Fidelity.
THE FUNDS MAY HOLD SPECIAL SHAREHOLDER MEETINGS AND MAIL PROXY
MATERIALS. These meetings may be called to elect or remove trustees,
change fundamental policies, approve a management contract, or for
other purposes. Shareholders not attending these meetings are
encouraged to vote by proxy. Fidelity will mail proxy materials in
advance, including a voting card and information about the proposals
to be voted on. The number of votes you are entitled to is based
upon the dollar value of your investment.
FMR AND ITS AFFILIATES
The funds are managed by FMR, which handles their business affairs.
FMR Texas, located in Irving, Texas, has primary responsibility
for providing investment management services.
Fidelity investment personnel may in vest in securities for their
own accounts pursuant to a code of ethics that establishes
procedures for personal investing and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets
Fidelity's funds and services.
UMB Bank, n.a. (UMB) is each fund's transfer agent, and is located
at 1010 Grand Avenue, Kansas City, Missouri. UMB employs
Fidelity Service Company, Inc. (FSC) to perform transfer agent
servicing functions for each fund.
FIDELITY FACTS
Fidelity offers the broadest
selection of mutual funds
in the world.
(solid bullet) Number of Fidelity mutual
funds: over ___
(solid bullet) Assets in Fidelity mutual
funds: over $___ billion
(solid bullet) Number of shareholder
accounts: over __ million
(solid bullet) Number of investment
analysts and portfolio
managers: over ___
(checkmark)
FMR Corp. is the ultimate parent company of FMR and FMR Texas. Members
of the Edward C. Johnson 3d family are the predominant owners of a
class of shares of common stock representing approximately 49% of the
voting power of FMR Corp. Under the Investment Company Act of 1940
(the 1940 Act), control of a company is presumed where one individual
or group of individuals owns more than 25% of the voting stock of that
company; therefore, the Johnson family may be deemed under the 1940
Act to form a controlling group with respect to FMR Corp.
As of [DATE], approximately ___% and ___% of each of [NAME OF
FUND]'s and [NAME OF FUND]'s total outstanding shares, respectively,
were held by [FMR/FMR and [an] FMR affiliate[s]/[an] FMR
affiliate[s].]
As of [DATE], approximately ____% of [NAME OF FUND]'s total
outstanding shares were held by [NAME OF SHAREHOLDER]; approximately
___% of [NAME OF FUND]'s total outstanding shares were held by [NAME
OF SHAREHOLDER];
FMR may use its broker-dealer affiliates and other firms that sell
fund shares to carry out a fund's transactions, provided that
the fund receives brokerage services and commission rates comparable
to those of other broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
EACH FUND seeks to earn a high level of current income that is free
from federal income tax while maintaining a stable $1.00 share
price by investing in high-quality, short-term municipal securities
of all types. FMR normally invests so that at least 80% of each
fund's income distributions are exempt from federal income tax.
The funds comply with industry-standard requirements on the
quality, maturity, and diversification of their investments, which
are designed to help maintain a stable $1.00 share price. Of course,
there is no guarantee that the funds will maintain a stable $1.00
share price. The funds will purchase only high-quality securities
that FMR believes present minimal credit risks and will observe
maturity restrictions on securities they buy. In general, securities
with longer maturities are more vulnerable to price changes, although
they may provide higher yields. It is possible that a major change in
interest rates or a default on the funds' investments could cause
their share prices (and the value of your investment) to change.
Each fund earns income at current municipal money market rates.
They stress tax-free income, preservation of capital, and
liquidity, and do not seek the higher yields or capital
appreciation that more aggressive investments may provide. Each fund's
yield will vary from day to day and generally reflects current
short-term interest rates and other market conditions.
If you are subject to the federal alternative minimum tax, you should
note that FMR may invest all of each fund's assets in municipal
securities issued to finance private activities. The interest from
these investments is a tax-preference item for purposes of the tax.
FMR normally invests each fund's assets according to its
investment strategy and does not expect to invest in federally
taxable obligations. Each fund also reserves the right to hold
a substantial amount of uninvested cash or to invest more than
normally permitted in federally taxable obligations for temporary,
defensive purposes.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instru ments in which a fund may invest, strategies FMR may
employ in pursuit of a fund's investment objective, and a
summary of related risks. Any restrictions listed supplement those
discussed earlier in this section. A complete list ing of each
fund's limitations and more detailed information about each fund's
investments are contained in a fund's SAI. Policies and
limitations are considered at the time of purchase; the sale of
instruments is not required in the event of a subsequent change in
circumstances.
FMR may not buy all of these instruments or use all of these
techniques unless it believes that they are consistent with a
fund's investment objective and policies and that doing so will help
a fund achieve its goal. Fund holdings and recent investment
strategies are de tailed in each fund's financial reports, which
are sent to shareholders twice a year. For a free SAI or financial
report, call 1-800-544-8888.
MONEY MARKET SECURITIES are high-quality, short-term instruments
issued by municipalities, local and state governments, and other
entities. These securities may carry fixed, variable, or floating
interest rates. Some money market securities employ a trust or similar
structure to modify the maturity, price characteristics, or quality of
financial assets so that they are eligible investments for money
market funds. If the structure does not perform as intended, adverse
tax or investment consequences may result.
CREDIT AND LIQUIDITY SUPPORT. Issuers may employ various forms of
credit and liquidity enhancement, including letters of credit,
guarantees, puts and demand features, and insurance, provided by
foreign or domestic entities such as banks and other financial
insti tutions. These arrangements expose a fund to the credit
risk of the entity providing the credit or liquidity support. Changes
in the credit quality of the provider could affect the value of the
security and a fund's share price. In addition, in the case of
foreign providers of credit or liquidity support, extensive public
information about the provider may not be available, and unfavorable
political, economic, or governmental developments could affect its
ability to honor its commitment.
MUNICIPAL SECURITIES are issued to raise money for a variety of public
or private purposes, including general financing for state and local
governments, or financing for specific projects or public
facilities. They may be fully or partially backed by the local
government, or by the credit of a private issuer or the current or
anticipated revenues from specific projects or assets. Because many
municipal securities are issued to finance similar types of projects,
especially those relating to education, health care, housing,
transportation, and utilities, the municipal markets can be affected
by conditions in those sectors. In addition, all municipal securities
may be affected by uncertainties regarding their tax status,
legislative changes, or rights of municipal securities holders. A
municipal security may be owned directly or through a
participation interest.
VARIABLE AND FLOATING RATE SECURITIES have interest rates that are
periodically adjusted either at specific intervals or whenever a
benchmark rate changes. These interest rate adjustments are designed
to help stabilize the security's price.
MUNICIPAL LEASE OBLIGATIONS are used by municipalities to acquire
land, equipment, or facilities. If the municipality stops making
payments or transfers its obligations to a private entity, the
obligation could lose value or become taxable.
OTHER MUNICIPAL SECURITIES may include obligations of U.S. territories
and possessions such as Guam, the Virgin Islands, and Puerto Rico, and
their political subdivisions and public corporations.
PUT FEATURES entitle the holder to put (sell back) a security to the
issuer or another party. In exchange for this benefit, a fund may
accept a lower interest rate. The credit quality of the investment
may be affected by the creditworthiness of the put provider. Demand
features, standby commitments, and tender options are types of put
features.
PRIVATE ENTITIES may be involved in some municipal securities. For
example, industrial revenue bonds are backed by private entities, and
resource recovery bonds often involve private corporations. The
viability of a project or tax incentives could affect the value and
credit quality of these securities.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined
by FMR, under the supervision of the Board of Trustees, to be
illiquid, which means that they may be difficult to sell promptly at
an acceptable price. The sale of some illiquid securities and some
other securities may be subject to legal restrictions. Difficulty in
selling securities may result in a loss or may be costly to a fund.
RESTRICTIONS: A fund may not purchase a security if, as
a result, more than 10% of its assets would be invested in illiquid
securities.
WHEN-ISSUED AND FORWARD PURCHASE OR SALE TRANSACTIONS are
trading practices in which payment and delivery for the security
take place at a later date than is customary for that type of
security. The market value of the security could change during
this period.
CASH MANAGEMENT. A fund may invest in money market securities
and in a money market fund available only to funds and accounts
managed by FMR or its affiliates, whose goal is to seek a high level
of current income exempt from federal income tax while maintaining a
stable $1.00 share price. A major change in interest rates or a
default on the money market fund's investments could cause its share
price to change.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce
the risks of investing. This may include limiting the amount of money
invested in any one issuer or, on a broader scale, in any one industry
or type of project. Economic, business, or political changes can
affect all securities of a similar type.
RESTRICTIONS: With respect to 75% of its total assets, each
fund may not purchase a security if, as a result, more than 5%
would be invested in the securities of any one issuer. This limitation
does not apply to U.S. Government secu rities or to securities of
other investment companies. Each fund may invest more than 25% of
its total assets in tax-free securities that finance similar types of
projects.
BORROWING. Each fund may borrow from banks or from other funds
advised by FMR, or through reverse repurchase agreements, and may make
additional investments while borrowings are outstanding.
RESTRICTIONS: Each fund may borrow only for temporary or
emergency purposes, but not in an amount exceeding 331/3% of its total
assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages
are fundamental, that is, subject to change only by shareholder
approval. The following paragraphs restate all those that are
fundamental. All policies stated throughout this prospectus, other
than those identified in the following paragraphs, can be changed
without shareholder approval.
MUNICIPAL MONEY MARKET seeks as high a level of interest income
exempt from federal income tax as is consistent with a portfolio of
high-quality, short-term municipal obligations selected on the basis
of liquidity and stability of principal. The fund normally invests so
that at least 80% of its income is free from federal income tax.
SPARTAN MUNICIPAL MONEY seeks as high a level of federally tax-exempt
income as is consistent with the preservation of capital and
liquidity. The fund will normally invest so that at least 80% of its
income is free from federal income tax.
With respect to 75% of its total assets, each fund may not purchase
a security if, as a result, more than 5% would be invested in the
securities of any one is suer. This limitation does not apply to
U.S. Government securities or to securities of other investment
companies.
Each fund may borrow only for temporary or emergency purposes,
but not in an amount exceeding 33 1/3 % of its total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of a fund's assets are reflected in
its share price or dividends; they are neither billed directly to
shareholders nor deducted from shareholder accounts.
Each fund pays a MANAGEMENT FEE to FMR for managing its
investments and business affairs. FMR in turn pays fees to an
affiliate who provides assistance with these services. Municipal Money
Market also pays OTHER EXPENSES, which are explained on page
__.
FMR may, from time to time, agree to re imburse the funds for
management fees and, for Municipal Money Market, other expenses above
a specified limit. FMR retains the ability to be repaid by a
fund if expenses fall below the specified limit prior to the end
of the fiscal year. Reimbursement arrangements, which may be
terminated at any time without notice, can decrease a fund's
expenses and boost its performance.
MANAGEMENT FEE AND OTHER EXPENSES
Each fund's management fee is calculated and paid to FMR every
month.
FMR pays all of the other expenses of Spartan Municipal Money with
limited exceptions. The annual management fee rate for Spartan
Municipal Money is __% of its average net assets.
For Municipal Money Market, the fee is calculated by adding a group
fee rate to an individual fund fee rate, and multiplying the result by
the fund's average net assets.
The group fee rate is based on the average net assets of all the
mutual funds advised by FMR. This rate cannot rise above 0.37%, and it
drops as total assets under management increase.
For October 1997, the group fee rate was __%. The individual fund
fee rate is __% for Municipal Money Market.
For the fiscal year ended August 31, 1997, Spartan Municipal Money
paid FMR, after reimbursement, fees equal to ___% of average net
assets.
The total management fee rate for the fiscal year ended October
1997 was __% for Municipal Money Market.
FMR has voluntarily agreed to limit [FUND NAME(S)] total operating
expenses to an annual rate of __% of average net assets. These
agreements will continue until _________.] .
FMR Texas is the funds' sub-adviser and has primary responsibility
for managing their investments. FMR is responsible for providing other
management services. FMR pays FMR Texas 50% of its management fee
(before expense reimbursements) for FMR Texas's services. FMR paid
FMR Texas fees equal to __% of Municipal Money Market 's and __%
of Spartan Municipal Money 's average net assets for the
fiscal years ended October 31, 1997 and August 31, 1997,
respectively.
While the management fee is a significant component of annual
operating costs for Municipal Money Market, these funds have other
expenses as well.
UMB is the transfer and service agent for each fund. UMB has entered
into sub-agreements with FSC under which FSC performs transfer agency,
dividend disbursing, shareholder servicing, and accounting functions
for the funds.
These services include processing shareholder transactions, valuing
each fund's investments, and calculating each fund's share price and
dividends.
Under the terms of the sub-agreements, FSC receives all related
fees paid to UMB by Municipal Money Market. Under the terms of the
sub-agreements, FSC receives all related fees paid to UMB by FMR on
behalf of Spartan Municipal Money.
For the fiscal year ended October 31, 1997, transfer agency and
pricing and bookkeeping fees paid by Municipal Money Market amounted
to 0.__% of its average net assets. This amount is before expense
reductions, if any.
In the case of Spartan Municipal Money, FMR, not the fund, pays for
these services.
To offset shareholder service costs, FMR or its affiliates also
collect Spartan Municipal Money's $5.00 exchange fee, $5.00 account
closeout fee, $5.00 fee for wire purchases and redemptions, and the
$2.00 checkwriting charge.
Municipal Money Market also pays other expenses, such as legal,
audit, and custodian fees; in some instances, proxy
solicitation costs; and the compensation of trustees who are not
affiliated with Fidelity.
Spartan Municipal Money also pays other expenses, such as brokerage
fees and commissions, interest on borrowings, taxes, and the
compensation of trustees who are not affiliated with Fidelity.
Each fund has adopted a DISTRIBUTION AND SERVICE PLAN. Each plan
recognizes that FMR may use its management fee revenues, as well as
its past profits or its resources from any other source, to pay FDC
for expenses incurred in connection with the distribution of fund
shares. FMR directly, or through FDC, may make payments to third
parties, such as banks or broker-dealers, that engage in the sale of,
or provide shareholder support services for, the fund's shares.
Currently, the Board of Trustees has not authorized such payments.
YOUR ACCOUNT
DOING BUSINESS WITH FIDELITY
Fidelity Investments was established in 1946 to manage one of
America's first mutual funds. Today, Fidelity is the largest mutual
fund company in the country, and is known as an innovative provider of
high-quality financial services to individuals and institutions.
In addition to its mutual fund business, the company operates one of
America's leading discount brokerage firms, Fidelity Brokerage
Services, Inc. (FBSI). Fidelity is also a leader in providing
tax-sheltered retirement plans for individuals investing on their own
or through their employer.
Fidelity is committed to providing investors with practical
information to make investment decisions. Based in Boston, Fidelity
provides customers with complete service 24 hours a day, 365 days a
year, through a network of telephone service centers around the
country.
To reach Fidelity for general information, call these numbers:
(small solid bullet) For mutual funds, 1-800-544-8888
(small solid bullet) For brokerage, 1-800-544-7272
If you would prefer to speak with a representative in person, Fidelity
has over __ walk-in Investor Centers across the country.
TYPES OF ACCOUNTS
You may set up an account directly in a fund or, if you own or
intend to purchase individual securities as part of your total
investment portfolio, you may consider investing in a fund through a
brokerage account. You can choose Municipal Money Market as your
core account for your Fidelity Ultra Service Account(registered
trademark) or FidelityPlusSM brokerage account.
You may purchase or sell shares of the funds through an investment
professional, including a broker, who may charge you a transaction
fee for this service. If you invest through FBSI, another financial
institution, or an investment professional, read their program
materials for any special provisions, additional service features or
fees that may apply to your investment in a fund. Certain features
of the funds, such as the minimum initial or subsequent investment
amounts, may be modified.
The different ways to set up (register) your account with Fidelity are
listed in the table that follows.
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have
two or more owners (tenants).
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and
obtain tax benefits. An individual can give up to $10,000 a year per
child without paying federal gift tax. Depending on state laws, you
can set up a custodial account under the Uniform Gifts to Minors Act
(UGMA) or the Uniform Transfers to Minors Act (UTMA).
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR
OTHER GROUPS
Requires a special application.
HOW TO BUY SHARES
THE PRICE TO BUY ONE SHARE of each fund is the fund's net asset
value per share (NAV). Each fund is managed to keep its NAV stable at
$1.00. Each fund's shares are sold without a sales charge.
Your shares will be purchased at the next NAV calculated after your
investment is received and accepted. Each fund's NAV is normally
calculated each business day at 4:00 p.m. Eastern time, and also at
12:00 noon Eastern time for Municipal Money Market.
IF YOU ARE NEW TO FIDELITY, complete and sign an account application
and mail it along with your check. You may also open your account in
person or by wire as described on page . If there is no application
accompanying this prospectus, call 1-800-544-8888.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Mail in an application with a check, or
(small solid bullet) Open your account by exchanging from another
Fidelity fund.
If you buy shares by check or Fidelity Money Line(registered
trademark), and then sell those shares by any method other than by
exchange to another Fidelity fund, the payment may be delayed for up
to seven business days to ensure that your previous investment has
cleared.
MINIMUM INVESTMENTS FOR
MUNICIPAL MONEY MARKET
TO OPEN AN ACCOUNT $5,000
TO ADD TO AN ACCOUNT $500
Through regular investment plans* $100
MINIMUM BALANCE $2,000
MINIMUM INVESTMENTS FOR
SPARTAN MUNICIPAL MONEY
TO OPEN AN ACCOUNT $25,000
TO ADD TO AN ACCOUNT $1,000
Through regular investment plans* $500
MINIMUM BALANCE $10,000
*For more information about regular investment plans, please refer to
"Investor Services," page __.
These minimums may vary for investments through Fidelity Portfolio
Advisory Services. Refer to the program materials for details.
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TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
Phone 1-800-544-7777
(phone_graphic) (small solid bullet) Exchange from another Fidelity fund (small solid bullet) Exchange from another
Fidelity fund
account with the same registration, account with the same registration,
including name, address, and including name, address, and
taxpayer ID number. taxpayer ID number.
(small solid bullet) Use Fidelity Money Line to
transfer
from your bank account. Call before
your first use to verify that this
service is in place on your account.
Maximum Money Line: up to
$100,000.
</TABLE>
<TABLE>
<CAPTION>
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Mail
(mail_graphic) (small solid bullet) Complete and sign the application. (small solid bullet) Make your check payable to
the
Make your check payable to the complete name of the fund. Indicate
complete name of the fund. Mail to you r fund account number on your
the address indicated on the check and mail to the address printed
application. on your account statement.
(small solid bullet) Exchange by mail: call
1-800-544-6666 for instructions.
</TABLE>
<TABLE>
<CAPTION>
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In Person
(hand_graphic) (small solid bullet) Bring your application and check to a (small solid bullet) Bring your check to a
Fidelity Investor
Fidelity Investor Center. Call Center. Call 1-800-544-9797 for the
1-800-544-9797 for the center center nearest you.
nearest you.
</TABLE>
<TABLE>
<CAPTION>
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Wire
(wire_graphic) (small solid bullet) For Spartan Municipal Money, there (small solid bullet) For Spartan
Municipal Money, there
may be a $5.00 fee for each wire may be a $5.00 fee for each wire
purchase. purchase.
(small solid bullet) Call 1-800-544-7777 to set up your (small solid bullet) Wire to:
account and to arrange a wire FOR MUNICIPAL MONEY MARKET:
transaction. The Chase Manhattan Bank
(small solid bullet) Wire within 24 hours to: Bank Routing #021000021
FOR MUNICIPAL MONEY MARKET: FCC Fidelity/SAS INST DEP
The Chase Manhattan Bank Account #323039502
Bank Routing #021000021 FOR SPARTAN MUNICIPAL MONEY:
FCC Fidelity/SAS INST DEP Bankers Trust Company,
Account #323039502 Bank Routing #021001033,
FOR SPARTAN MUNICIPAL MONEY: Account #00163053.
Bankers Trust Company, Specify the complete name of the
Bank Routing #021001033, fund and include your account
Account #00163053. number and your name.
Specify the complete name of the
fund and include your new account
number and your name.
</TABLE>
<TABLE>
<CAPTION>
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Automatically
(automatic_graphic) (small solid bullet) Not available. (small solid bullet) Use Fidelity Automatic Account
Builder. Sign up for this service
when opening your account, or call
1-800-544-6666 to add it.
</TABLE>
<TABLE>
<CAPTION>
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(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118
</TABLE>
HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares.
THE PRICE TO SELL ONE SHARE of each fund is the fund's NAV.
Your shares will be sold at the next NAV calculated after your order
is received and accepted. Each fund's NAV is normally calculated each
business day at 4:00 p.m. Eastern time, and also at 12:00 noon Eastern
time for Municipal Money Market.
TO SELL SHARES THROUGH YOUR FIDELITY ULTRA SERVICE OR FIDELITYPLUS
ACCOUNT, call 1-800-544-6262 to receive a handbook with instructions.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, l eave at least
$2,000 worth of Municipal Money Market shares in the account ($10,000
worth of shares for Spartan Municipal Money) to keep it open.
TO SELL SHARES BY BANK WIRE OR FIDELITY MONEY LINE, you will need to
sign up for these services in advance.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to
protect you and Fidelity from fraud. Your request must be made in
writing and include a signature guarantee if any of the following
situations apply:
(small solid bullet) You wish to redeem more than $100,000 worth of
shares,
(small solid bullet) Your account registration has changed within the
last 30 days,
(small solid bullet) The check is being mailed to a different address
than the one on your account (record address),
(small solid bullet) The check is being made payable to someone other
than the account owner, or
(small solid bullet) The redemption proceeds are being transferred to
a Fidelity account with a different registration.
You should be able to obtain a signature guarantee from a bank, broker
(including Fidelity Investor Centers), dealer, credit union (if
authorized under state law), securities exchange or association,
clearing agency, or savings association. A notary public cannot
provide a signature guarantee.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(small solid bullet) Your name,
(small solid bullet) The fund's name,
(small solid bullet) Your fund account number,
(small solid bullet) The dollar amount or number of shares to be
redeemed, and
(small solid bullet) Any other applicable requirements listed in the
table that follows.
Unless otherwise instructed, Fidelity will send a check to the record
address. Deliver your letter to a Fidelity Investor Center, or mail it
to:
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
CHECKWRITING
If you have a checkbook for your account, you may write an unlimited
number of checks. Do not, however, try to close out your account by
check.
ACCOUNT TYPE SPECIAL REQUIREMENTS
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IF YOUR ACCOUNT BALANCE IN SPARTAN MUNICIPAL MONEY IS LESS THAN $50,000, THERE ARE FEES
FOR INDIVIDUAL REDEMPTION TRANSACTIONS: $2.00 FOR EACH CHECK YOU WRITE AND $5.00 FOR EACH
EXCHANGE, BANK WIRE, AND ACCOUNT CLOSEOUT.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Phone 1-800-544-777
(phone_graphic) All account types (small solid bullet) Maximum check request: $100,000.
(small solid bullet) For Money Line transfers to your bank account;
minimum: $10; maximum: up to $100,000.
(small solid bullet) You may exchange to other Fidelity funds if
both accounts are registered with the same
name(s), address, and taxpayer ID number.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Mail or in Person
(mail_graphic)
(hand_graphic) Individual, Joint Tenant, (small solid bullet) The letter of instruction must be signed by all
Sole Proprietorship, persons required to sign for transactions,
UGMA, UTMA exactly as their names appear on the account.
Trust (small solid bullet) The trustee must sign the letter indicating
capacity as trustee. If the trustee's name is not
in the account registration, provide a copy of the
trust document certified within the last 60 days.
Business or Organization (small solid bullet) At least one person authorized by corporate
resolution to act on the account must sign the
letter.
(small solid bullet) Include a corporate resolution with corporate
seal or a signature guarantee.
Executor, Administrator, (small solid bullet) Call 1-800-544-6666 for instructions.
Conservator, Guardian
Wire (wire_graphic) All account types (small solid bullet) You must sign up for the wire feature before
using it. To verify that it is in place, call
1-800-544-6666. Minimum wire: $5,000.
(small solid bullet) For wire redemptions from Municipal Money
Market processed at the 12:00 noon Eastern
time NAV, federal funds will be wired to your
bank that day.
(small solid bullet) Your wire redemption request must be received
and accepted by Fidelity before 4 p.m. Eastern
time for money to be wired on the next
business day.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Check (check_graphic) All account types (small solid bullet) Minimum check: $1,000 (for Spartan
Municipal Money only).
(small solid bullet) All account owners must sign a signature card
to receive a checkbook.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118
</TABLE>
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your
account.
INFORMATION SERVICES
FIDELITY'S TELEPHONE REPRESENTATIVES are available 24 hours a day, 365
days a year. Whenever you call, you can speak with someone equipped to
provide the information or service you need.
STATEMENTS AND REPORTS that Fidelity sends to you include the
following:
(small solid bullet) Confirmation statements (after every transaction,
except reinvestments, that affects your account balance or your
account registration)
(small solid bullet) Account statements (quarterly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed to your household, even if you have more
than one account in the fund. Call 1-800-544-6666 if you need copies
of financial reports, prospectuses, or historical account information.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of
other Fidelity funds by telephone or in writing. You may pay a
$5.00 fee for each exchange out of Spartan Municipal Money, unless you
place you r transaction through Fidelity's automated exchange
services.
Note that exchanges out of Spartan Municipal Money are limited to
four per calendar year, and that exchanges out of either fund may have
tax consequences for you. For details on policies and restrictions
governing exchanges, including circumstances under which a
shareholder's exchange privilege may be suspended or revoked, see page
.
FIDELITY MONEY LINE(registered trademark) enables you to transfer
money by phone between your bank account and your fund account. Most
transfers are complete within three business days of your call.
REGULAR INVESTMENT PLANS
One easy way to pursue your financial goals is to invest money
regularly. Fidelity offers services that let you transfer money into
your fund account, or between fund accounts, automatically.
FIDELITY AUTOMATIC ACCOUNT BUILDERSM
TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND
MINIMUM $100 for Municipal Money Market
$500 for Spartan Municipal Money
FREQUENCY Monthly or quarterly
SETTING UP Complete the appropriate section on
the fund application. For existing
accounts, call 1-800-544-6666 for
an application.
DIRECT DEPOSIT
TO SEND ALL OR A PORTION OF YOUR PAYCHECK OR GOVERNMENT CHECK TO A
FIDELITY FUND
MINIMUM $100 for Municipal Money Market
$500 for Spartan Municipal Money
FREQUENC Every pay period
Y
SETTING Check the appropriate box on the
UP fund application, or call
1-800-544-6666 for an
authorization form.
FIDELITY AUTOMATIC EXCHANGE SERVICE
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY
FUND
MINIMUM $100 for Municipal Money Market
$500 for Spartan Municipal Money
FREQUENC Monthly, bimonthly, quarterly, or
Y annually
SETTING To establish, call 1-800-544-6666
UP after both accounts are opened.
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net investment
income and capital gains, if any, to shareholders each year. Income
dividends are declared daily and paid monthly.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. If the option you prefer is not listed on
the application, call 1-800-544-6666 for instruc tions. Each fund
offers three options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions,
if any, will be automatically reinvested in additional shares of the
fund. If you do not indicate a choice on your application, you will be
assigned this option.
2. CASH OPTION. You will be sent a check for your dividend and capital
gain distributions, if any.
3. DIRECTED DIVIDENDS(registered trademark) OPTION. Your dividend and
capital gain distributions, if any, will be automatically invested in
another identically registered Fidelity fund.
Dividends will be reinvested at the fund's NAV on the last day of the
month. Capital gain distributions, if any, will be reinvested at the
NAV as of the record date of the distribution. The mailing of
distribution checks will begin within seven days.
UNDERSTANDING
DISTRIBUTIONS
AS A FUND SHAREHOLDER, YOU ARE
ENTITLED TO YOUR SHARE OF THE
FUND'S NET INCOME AND GAINS
ON ITS INVESTMENTS. A FUND
PASSES ITS EARNINGS ALONG TO ITS
INVESTORS AS DISTRIBUTIONS.
EACH FUND EARNS INTEREST FROM
ITS INVESTMENTS. THESE ARE
PASSED ALONG AS DIVIDEND
DISTRIBUTIONS. THE FUND MAY
REALIZE CAPITAL GAINS IF IT SELLS
SECURITIES FOR A HIGHER PRICE
THAN IT PAID FOR THEM. THESE
ARE PASSED ALONG AS CAPITAL
GAIN DISTRIBUTIONS. MONEY
MARKET FUNDS USUALLY DON'T
MAKE CAPITAL GAIN DISTRIBUTIONS.
(CHECKMARK)
TAXES
As with any investment, you should consider how an investment in a
tax-free fund could affect you. Below are some of the funds' tax
implications.
Interest income that a fund earns is distributed to
shareholders as income dividends. Interest that is federally tax-free
remains tax-free when it is distributed.
However, gain on the sale of tax-free bonds results in taxable
distributions. Short-term capital gains and a portion of the gain on
bonds purchased at a discount are taxed as dividends. Long-term
capital gain distributions are taxed as long-term capital gains. These
distributions are taxable when they are paid, whether you take them in
cash or reinvest them. However, distributions declared in December and
paid in January are taxable as if they were paid on December 31.
Fidelity will send you and the IRS a statement showing the tax status
of the distributions paid to you in the previous year.
The interest from some municipal securities is subject to the federal
alternativ e minimum tax. Each fund may invest up to 100% of its
assets in these securities. Individuals who are subject to the tax
must report this interest on their tax returns.
A portion of a fund's dividends may be free from state or local
taxes. Income from investments in your state are often tax-free to
you. Each year, Fidelity will send you a breakdown of your
fund's income from each state to help you calculate your taxes.
During the fiscal years ended October 31, 1997 (for Municipal Money
Market) and August 31, 1997 (for Spartan Municipal Money) __% of each
fund's income dividends was free from federal income tax. __% of
Municipal Money Market's and __% of Spartan Municipal Money Market's
income dividends were subject to the federal alternative minimum
tax.
TRANSACTION DETAILS
THE FUNDS ARE OPEN FOR BUSINESS each day the New York Stock Exchange
(NYSE) is open. FSC normally calculates each fund's NAV as of the
close of business of the NYSE, normally 4 :00 p.m. Eastern time, and
also at 12:00 noon for Municipal Money Market.
EACH FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and then dividing the result by the
number of shares outstanding.
Like most money market funds, each fund values the securities
it owns on the basis of amortized cost. This method minimizes the
effect of changes in a security's market value and helps each
fund to maintain a stable $1.00 share price.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to
certify that your social security or taxpayer identification number is
correct and that you are not subject to 31% backup withholding for
failing to report income to the IRS. If you violate IRS regulations,
the IRS can require a fund to withhold 31% of your taxable
distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity may only be
liable for losses resulting from unauthorized transactions if it does
not follow reasonable procedures designed to verify the identity of
the caller. Fidelity will request personalized security codes or other
information, and may also record calls. You should verify the accuracy
of your confirmation statements immediately after you receive them. If
you do not want the ability to redeem and exchange by telephone, call
Fidelity for instructions.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during
periods of unusual market activity), consider placing your order by
mail or by visiting a Fidelity Investor Center.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES
for a period of time. Each fund also reserves the right to
reject any specific purchase order, including certain purchases by
exchange. See "Exchange Restrictions" on page . Purchase orders may be
refused if, in FMR's opinion, they would disrupt management of a
fund.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased
at the next NAV calculated after your investment is received and
accepted. Note the following:
(small solid bullet) All of your purchases must be made in U.S.
dollars and checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check,
each check must have a value of at least $50.
(small solid bullet) Each fund reserves the right to limit the
number of checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will
be cancelled and you could be liable for any losses or fees a
fund or its transfer agent has incurred.
(small solid bullet) Shares of Municipal Money Market purchased by
12:00 noon Eastern time will earn the dividend declared that day;
shares purchased by 4:00 p.m. Eastern time begin to earn dividends on
the following business day. Shares of Spartan Municipal Money earn
dividends as of the first business day following the day of your
purchase.
TO AVOID THE COLLECTION PERIOD associated with check and Money Line
purchases, consider buying shares by bank wire, U.S. Postal money
order, U.S. Treasury check, Federal Reserve check, or direct deposit
instead.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at
the next NAV calculated after your order is received and accepted.
Note the following:
(small solid bullet) Normally, redemption proceeds will be mailed to
you on the next business day, but if making immediate payment could
adversely affect a fund, it may take up to seven days to pay you.
(small solid bullet) Shares of Municipal Money Market redeemed
before 12:00 noon Eastern time do not earn the dividend declared on
the date of redemption; shares redeemed after 12:00 noon Eastern time
do earn dividends through the date of redemption. Shares of Spartan
Municipal Money redeemed at any time before 4:00 p.m. Eastern time
earn dividends through the date of redemption. Shares of either fund
redeemed on a Friday or prior to a holiday will continue to earn
dividends until the next business day.
(small solid bullet) Fidelity Money Line redemptions generally will be
credited to your bank account on the second or third business day
after your phone call.
(small solid bullet) Each fund may hold payment on redemptions
until it is reasonably satisfied that investments made by check or
Fidelity Money Line have been collected, which can take up to seven
business days.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays),
when trading on the NYSE is restricted, or as permitted by the SEC.
(small solid bullet) If you sell shares by writing a check and the
amount of the check is greater than the value of your account, your
check will be returned to you and you may be subject to additional
charges.
SPARTAN MUNICIPAL MONEY'S FEES FOR INDIVIDUAL TRANSACTIONS are waived
if your account balance at the time of the transaction is $50,000 or
more. Otherwise, you should note the following:
(small solid bullet) The $2.00 checkwriting charge will be deducted
from your account.
(small solid bullet) The $5.00 exchange fee will be deducted from the
amount of your exchange.
(small solid bullet) The $5.00 wire fee will be deducted from the
amount of your wire.
(small solid bullet) The $5.00 account closeout fee does not apply to
exchanges or wires, but it will apply to checkwriting.
FIDELITY RESERVES THE RIGHT TO DEDUCT AN ANNUAL MAINTENANCE FEE of
$12.00 from accounts with a value of less than $2,500, subject to an
annual maximum charge of $24.00 per shareholder. It is expected
that accounts will be valued on the second Friday in November of each
year. Accounts opened after September 30 will not be subject to the
fee for that year. The fee, which is payable to the transfer agent, is
designed to offset in part the relatively higher costs of servicing
smaller accounts. This fee will not be deducted from Fidelity
brokerage accounts, retirement accounts (except non-prototype
retirement accounts), accounts using regular investment plans, or
if total assets with Fidelity exceed $30,000. Eligibility for the
$30,000 waiver is determined by aggregating Fidelity accounts
maintained by FSC or FBSI which are registered under the same social
security number or which list the same social security number for the
custodian of a Uniform Gifts/Transfers to Minors Act account.
IF YOUR ACCOUNT BALANCE FALLS BELOW $2,000 FOR MUNICIPAL MONEY
MARKET ($10,000 FOR SPARTAN MUNICIPAL MONEY), you will be given 30
days' notice to reestablish the minimum balance. If you do not
increase your balance, Fidelity reserves the right to close your
account and send the proceeds to you. Your shares will be redeemed at
the NAV on the day your account is closed and, for Spartan
Municipal Money, the $5.00 account close out fee will be charged.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
FDC may, at its own expense, provide promotional incentives to
qualified recipients who support the sale of shares of the funds
without reimbursement from the funds. Qualified recipients are
securities dealers who have sold fund shares or others, including
banks and other financial institutions, under special arrangements in
connection with FDC's sales activities. In some instances, these
incentives may be offered only to certain institutions whose
representatives provide services in connection with the sale or
expected sale of significant amounts of shares.
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of exchanging shares of a
fund for shares of other Fidelity funds. However, you should note
the following:
(small solid bullet) The fund you are exchanging into must be
available for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification
number.
(small solid bullet) Before exchanging into a fund, read its
prospectus.
(small solid bullet) If you exchange into a fund with a sales charge,
you pay the percentage-point difference between that fund's sales
charge and any sales charge you have previously paid in connection
with the shares you are exchanging. For example, if you had already
paid a sales charge of 2% on your shares and you exchange them into a
fund with a 3% sales charge, you would pay an additional 1% sales
charge.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Because excessive trading can hurt fund
performance and shareholders, Spartan Municipal Money reserves
the right to temporarily or permanently terminate the exchange
privilege of any investor who makes more than four exchanges out of
the fund per calendar year. Accounts under common ownership or
control, including accounts with the same taxpayer identification
number, will be counted together for purposes of the four exchange
limit.
(small solid bullet) Each fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would
be unable to invest the money effectively in accordance with its
investment objective and policies, or would otherwise potentially be
adversely affected.
(small solid bullet) Your exchanges may be restricted or refused if
a fund receives or anticipates simultaneous orders affecting
significant portions of the fund's assets. In particular, a pattern of
exchanges that coincides with a "market timing" strategy may be
disruptive to a fund.
Although the funds will attempt to give you prior notice whenever
they are reasonably able to do so, they may impose these restrictions
at any time. The funds reserve the right to terminate or modify
the exchange privilege in the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may
im pose fees of up to 1.00% on purchases, administrative fees of
up to $7.50, and trading fees of up to 1.50% on exchanges. Check each
fund's prospectus for details.
From Filler pages
FIDELITY MUNICIPAL MONEY MARKET FUND
AND
SPARTAN(registered trademark) MUNICIPAL MONEY FUND
FUNDS OF FIDELITY UNION STREET TRUST II
STATEMENT OF ADDITIONAL INFO RMATION
DECEMBER 19, 1997
This Statement of Additional Information (SAI) is not a prospectus
but should be read in conjunction with the funds' current Prospectus
(dated December 19, 1997). Please retain this document for future
reference. The funds' Annual Reports are separate documents supplied
with this SAI. To obtain a free additional copy of the Prospectus or
an Annual Report, please call Fidelity at 1-800-544-8888.
TABLE OF CONTENTS PAGE
Investment Policies and Limitations
Portfolio Transactions
Valuation
Performance
Additional Purchase and Redemption Information
Distributions and Taxes
FMR
Trustees and Officers
Management Contracts
Distribution and Service Plans
Contracts with FMR Affiliates
Description of the Trust
Financial Statements
Appendix
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
INVESTMENT SUB-ADVISER
FMR Texas Inc. (FMR Texas)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
UMB Bank, n.a. (UMB )
and Fidelity Service Company, Inc. (FSC)
SMM/MMM-ptb-1297
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in
the Prospectus. Unless otherwise noted, whenever an investment
policy or limitation states a maximum percentage of a fund's assets
that may be invested in any security or other asset, or sets forth
a policy regarding quality standards, such standard or percentage
limitation will be determined immediately after and as a result of the
fund's acquisition of such security or other asset. Accordingly, any
subsequent change in values, net assets, or other circumstances will
not be considered when determining whether the investment complies
with the fund's investment policies and limitations.
A fund's fundamental investment policies and limitations cannot be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940) of the
fund. However, except for the fundamental investment limitations
listed below, the investment policies and limitations described in
this SAI are not fundamental and may be changed without
shareholder approval.
INVESTMENT LIMITATIONS OF MUNICIPAL MONEY MARKET FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or
guaran teed by the U.S. Government, or any of its agencies or
instrumentalities, or securities of other investment companies) if, as
a result, (a) more than 5% of the fund's total assets would be
invested in the securities of that issuer, or (b) the fund would hold
more than 10% of the outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) make short sales of securities;
(4) purchase any securities on margin, except for such short-term
credits as are necessary for the clearance of transactions;
(5) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(6) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(7) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities, or tax-exempt obligations issued or guaranteed by a
U.S. territory or possession or a state or local government, or a
political subdivision of any of the foregoing) if, as a result, more
than 25% of the fund's total assets would be invested in the
securities of companies whose principal business activities are in the
same industry;
(8) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(9) purchase or sell commodities or commodity contracts;
(10) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties (but
this limit does not apply to purchases of debt securities or to
repurchase agreements); or
(11) invest in oil, gas, or other mineral exploration or development
programs.
(12) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company with substantially the
same fundamental investment objective, policies, and limitations as
the fund.
THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (5)). The fund will not purchase any security while
borrowings representing more than 5% of its total assets are
outstanding. The fund will not borrow from other funds advised by FMR
or its affiliates if total outstanding borrowings immediately after
such borrowing would exceed 15% of the fund's total assets.
(ii) The fund does not currently intend to purchase any security if,
as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(iii) The fund does not currently intend to engage in repurchase
agreements or make loans, but this limitation does not apply to
purchases of debt securities.
(iv) The fund does not currently intend to invest all of its assets
in the securities of a single open-end management investment
company with substantially the same fundamental investment objective,
policies, and limitations as the fund.
For purposes of limitation (1), certain securities subject to credit
guarantees or puts from third parties are not considered securities of
their issuer in accordance with industry standard requirements for
money market funds. For purposes of limitation (1) and (7), FMR
identifies the issuer of a security depending on its terms and
conditions. In identifying the issuer, FMR will consider the entity or
entities responsible for payment of interest and repayment of
principal and the source of such payments; the way in which assets and
revenues of an issuing political subdivision are separated from those
of other political entities; and whether a government or other entity
is guaranteeing the security.
For the fund's policies on quality and maturity, see the section
entitled "Quality and Maturity" on page __.
INVESTMENT LIMITATIONS OF SPARTAN MUNICIPAL MONEY FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or
guaranteed by the U.S. Government, or any of its agencies or
instrumentalities, or securities of other investment companies) if,
as a result, (a) more than 5% of the fund's total assets would be
invested in the securities of that issuer, or (b) the fund would hold
more than 10% of the outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) sell securities short, unless it owns or has the right to obtain
securities equivalent in kind and amount to the securities sold short;
(4) purchase securities on margin, except that the fund may obtain
such short-term credits as are necessary for the clearance of
transactions;
(5) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;
(6) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(7) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities, or tax-exempt obligations issued or guaranteed by a
U.S. territory or possession or a state or local government, or a
political subdivision of any of the foregoing) if, as a result, more
than 25% of the fund's total assets would be invested in securities of
companies whose principal business activities are in the same
industry;
(8) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);
(9) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments; or
(10) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties (for
this purpose, purchasing debt securities and engaging in repurchase
agreements do not constitute lending).
(11) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company with substantially the
same fundamental investment objective, policies, and limitations as
the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.
(ii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (5)). The fund will not purchase any security while
borrowings representing more than 5% of its total assets are
outstanding. The fund will not borrow from other funds advised by FMR
or its affiliates if total outstanding borrowings immediately after
such borrowing would exceed 15% of the fund's total assets.
(iii) The fund does not currently intend to purchase any security if,
as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
(iv) The fund does not currently intend to engage in repurchase
agreements or make loans, but this limitation does not apply to
purchases of debt securities.
(v) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
For purposes of limitations (1) and (7), FMR identifies the issuer of
a security depending on its terms and conditions. In identifying the
issuer, FMR will consider the entity or entities responsible for
payment of interest and repayment of principal and the source of such
payments; the way in which assets and revenues of an issuing political
subdivision are separated from those of other political entities; and
whether a governmental body is guaranteeing the security.
For the fund's policies on quality and maturity, see the section
entitled "Quality and Maturity" on page __.
The following pages contain more detailed information about types
of instruments in which a fund may invest, strategies FMR may employ
in pursuit of a fund's investment objective, and a summary of related
risks. FMR may not buy all of these instruments or use all of these
techniques unless it believes that doing so will help the fund achieve
its goal.
AFFILIATED BANK TRANSACTIONS. A fund may engage in
transactions with financial institutions that are, or may be
considered to be, "affiliated persons" of the fund under the
Investment Company Act of 1940. These transactions may include
repurchase agreements with custodian banks; short-term obligations of,
and repurchase agreements with, the 50 largest U.S. banks (measured by
deposits); municipal securities; U.S. Government securities with
affiliated financial institutions that are primary dealers in these
securities; short-term currency transactions; and short-term
borrowings. In accordance with exemptive orders issued by the
Securities and Exchange Commission (SEC), the Board of Trustees has
established and periodically reviews procedures applicable to
transactions involving affiliated financial institutions.
DELAYED-DELIVERY TRANSACTIONS. Each fund may buy and sell
securities on a delayed-delivery or when-issued basis. These
transactions involve a commitment by a fund to purchase or sell
specific securities at a predetermined price or yield, with
payment and delivery taking place after the customary settlement
period for that type of security. Typically, no interest accrues to
the purchaser until the security is delivered.
When purchasing securities on a delayed-delivery basis, each fund
assumes the rights and risks of ownership, including the risk of price
and yield fluctuations. Because a fund is not required to pay for
securities until the delivery date, these risks are in addition to the
risks associated with the fund's other investments. If a fund remains
substantially fully invested at a time when delayed-delivery
purchases are outstanding, the delayed-delivery purchases may result
in a form of leverage. When delayed-delivery purchases are
outstanding, the fund will set aside appropriate liquid assets in a
segregated custodial account to cover its purchase obligations.
When a fund has sold a security on a delayed-delivery basis, the fund
does not participate in further gains or losses with respect to
the security. If the other party to a delayed-delivery transaction
fails to deliver or pay for the securities, the fund could miss a
favorable price or yield opportunity, or could suffer a loss.
Each fund may renegotiate delayed-delivery transactions after they
are entered into, and may sell underlying securities before they
are delivered, which may result in capital gains or losses.
FEDERALLY TAXABLE OBLIGATIONS. Under normal conditions, the funds
do not intend to invest in securities whose interest is federally
taxable. However, from time to time on a temporary basis, each fund
may invest a portion of its assets in fixed-income obligations
whose interest is subject to federal income tax.
Should a fund invest in federally taxable obligations, it would
purchase securities that, in FMR's judgment, are of high quality.
These obligations would include those issued or guaranteed by the U.S.
Government or its agencies or instrumentalities and repurchase
agreements backed by such obligations.
Proposals to restrict or eliminate the federal income tax exemption
for interest on municipal obligations are introduced before Congress
from time to time. Proposals also may be introduced before state
legislatures that would affect the state tax treatment of the
funds' distributions. If such proposals were enacted, the availability
of municipal obligations and the value of the funds' holdings would be
affected and the Trustees would reevaluate the funds' investment
objectives and policies.
ILLIQUID INVESTMENTS are investments that cannot be sold or disposed
of in the ordinary course of business at approximately the prices
at which they are valued. Under the supervision of the Board of
Trustees, FMR determines the liquidity of a fund's investments and,
through reports from FMR, the Board monitors investments in illiquid
instruments. In determining the liquidity of a fund's investments,
FMR may consider various factors, including (1) the frequency of
trades and quotations, (2) the number of dealers and prospective
purchasers in the marketplace, (3) dealer undertakings to make a
market, (4) the nature of the security (including any demand or tender
features), and (5) the nature of the marketplace for trades (including
the ability to assign or offset the fund's rights and obligations
relating to the investment).
FMR may determine some restricted securities and municipal lease
obligations to be illiquid.
In the absence of market quotations, illiquid investments are valued
for purposes of monitoring amortized cost valuation at fair value as
determined in good faith by a committee appointed by the Board of
Trustees. If through a change in values, net assets, or other
circumstances, a fund were in a position where more than 10% of its
net assets was invested in illiquid securities, it would seek to
take appropriate steps to protect liquidity.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive
order issued by the SEC, each fund has received permission to lend
money to, and borrow money from, other funds advised by FMR or its
affiliates, but each fund currently intends to participate in this
program only as a borrower. Interfund borrowings normally extend
overnight, but can have a maximum dura tion of seven days. A fund
will borrow through the program only when the costs are equal to or
lower than the costs of bank loans. Loans may be called on one
day's notice, and a fund may have to borrow from a bank at a higher
interest rate if an interfund loan is called or not renewed.
MARKET DISRUPTION RISK. The value of municipal securities may be
affected by uncertainties in the municipal market related to
legislation or litigation involving the taxation of municipal
securities or the rights of municipal securities holders in the event
of a bankruptcy. Municipal bankruptcies are relatively rare, and
certain provisions of the U.S. Bankruptcy Code governing such
bankruptcies are unclear and remain untested. Further, the application
of state law to municipal issuers could produce varying results among
the states or among municipal securities issuers within a state. These
legal uncertainties could affect the municipal securities market
generally, certain specific segments of the market, or the relative
credit quality of particular securities. Any of these effects could
have a significant impact on the prices of some or all of the
mu nicipal securities held by a fund, making it more difficult
for a fund to maintain a stable net asset value per share.
MONEY MARKET SECURITIES are high-quality, short-term obligations. Some
money market securities employ a trust or other similar structure to
modify the maturity, price characteristics, or quality of financial
assets. For example, put features can be used to modify the maturity
of a security or interest rate adjustment features can be used to
enhance price stability. If the structure does not perform as
intended, adverse tax or investment consequences may result. Neither
the Internal Revenue Service (IRS) nor any other regulatory authority
has ruled definitively on certain legal issues presented by structured
securities. Future tax or other regulatory determinations could
adversely affect the value, liquidity, or tax treatment of the income
received from these securities or the nature and timing of
distributions made by the funds.
MUNICIPAL LEASES and participation interests therein may take the form
of a lease, an installment purchase, or a conditional sale contract
and are issued by state and local governments and authorities to
acquire land or a wide variety of equipment and facilities.
Generally, the funds will not hold such obligations directly as a
lessor of the property, but will purchase a participation interest in
a municipal obligation from a bank or other third party. A
participation interest gives a fund a specified, undivided
interest in the obligation in proportion to its purchased interest in
the total amount of the obligation.
Municipal leases frequently have risks distinct from those associated
with general obligation or revenue bonds. State constitutions and
statutes set forth requirements that states or municipalities must
meet to incur debt. These may include voter referenda, interest rate
limits, or public sale requirements. Leases, installment purchases, or
conditional sale contracts (which normally provide for title to the
leased asset to pass to the governmental issuer) have evolved as a
means for governmental issuers to acquire property and equipment
without meeting their constitutional and statutory requirements for
the issuance of debt. Many leases and contracts include
"non-appropriation clauses" providing that the governmental issuer has
no obligation to make future payments under the lease or contract
unless money is appropriated for such purposes by the appropriate
legislative body on a yearly or other periodic basis.
Non-appropriation clauses free the issuer from debt issuance
limitations.
MUNICIPAL SECTORS:
ELECTRIC UTILITIES. The electric utilities industry has been
experiencing, and will continue to experience, increased competitive
pressures. Federal legislation in the last two years will open
transmission access to any electricity supplier, although it is not
presently known to what extent competition will evolve. Other risks
include: (a) the availability and cost of fuel, (b) the availability
and cost of capital, (c) the effects of conservation on energy demand,
(d) the effects of rapidly changing environmental, safety, and
licensing requirements, and other federal, state, and local
regulations, (e) timely and sufficient rate increases, and (f)
opposition to nuclear power.
HEALTH CARE. The health care industry is subject to regulatory action
by a number of private and governmental agencies, including federal,
state, and local governmental agencies. A major source of revenues for
the health care industry is payments from the Medicare and Medicaid
programs. As a result, the industry is sensitive to legislative
changes and reductions in governmental spending for such programs.
Numerous other factors may affect the industry, such as general and
local economic conditions; demand for services; expenses (including
malpractice insurance premiums); and competition among health care
providers. In the future, the following elements may adversely affect
health care facility operations: adoption of legislation proposing a
national health insurance program; other state or local health care
reform measures; medical and technological advances which dramatically
alter the need for health services or the way in which such services
are delivered; changes in medical coverage which alter the traditional
fee-for-service revenue stream; and efforts by employers, insurers,
and governmental agencies to reduce the costs of health insurance and
health care services.
HOUSING. Housing revenue bonds are generally issued by a state,
county, city, local housing authority, or other public agency. They
generally are secured by the revenues derived from mortgages purchased
with the proceeds of the bond issue. It is extremely difficult to
predict the supply of available mortgages to be purchased with the
proceeds of an issue or the future cash flow from the underlying
mortgages. Consequently, there are risks that proceeds will exceed
supply, resulting in early retirement of bonds, or that homeowner
repayments will create an irregular cash flow. Many factors may affect
the financing of multi-family housing projects, including acceptable
completion of construction, proper management, occupancy and rent
levels, economic conditions, and changes to current laws and
regulations.
EDUCATION. In general, there are two types of education-related bonds;
those issued to finance projects for public and private colleges and
universities, and those representing pooled interests in student
loans. Bonds issued to supply educational institutions with funds are
subject to the risk of unanticipated revenue decline, primarily the
result of decreasing student enrollment or decreasing state and
federal funding. Among the factors that may lead to declining or
insufficient revenues are restrictions on students' ability to pay
tuition, availability of state and federal funding, and general
economic conditions. Student loan revenue bonds are generally offered
by state (or substate) authorities or commissions and are backed by
pools of student loans. Underlying student loans may be guaranteed by
state guarantee agencies and may be subject to reimbursement by the
United States Department of Education through its guaranteed student
loan program. Others may be private, uninsured loans made to parents
or students which are supported by reserves or other forms of credit
enhancement. Recoveries of principal due to loan defaults may be
applied to redemption of bonds or may be used to re-lend, depending on
program latitude and demand for loans. Cash flows supporting student
loan revenue bonds are impacted by numerous factors, including the
rate of student loan defaults, seasoning of the loan portfolio, and
student repayment deferral periods of forbearance. Other risks
associated with student loan revenue bonds include potential changes
in federal legislation regarding student loan revenue bonds, state
guarantee agency reimbursement and continued federal interest and
other program subsidies currently in effect.
WATER AND SEWER. Water and sewer revenue bonds are often considered to
have relatively secure credit as a result of their issuer's
importance, monopoly status, and generally unimpeded ability to raise
rates. Despite this, lack of water supply due to insufficient rain,
run-off, or snow pack is a concern that has led to past defaults.
Further, public resistance to rate increases, costly environmental
litigation, and Federal environmental mandates are challenges faced by
issuers of water and sewer bonds.
TRANSPORTATION. Transportation debt may be issued to finance the
construction of airports, toll roads, highways, or other transit
facilities. Airport bonds are dependent on the general stability of
the airline industry and on the stability of a specific carrier who
uses the airport as a hub. Air traffic generally follows broader
economic trends and is also affected by the price and availability of
fuel. Toll road bonds are also affected by the cost and availability
of fuel as well as toll levels, the presence of competing roads and
the general economic health of an area. Fuel costs and availability
also affect other transportation-related securities, as do the
presence of alternate forms of transportation, such as public
transportation.
PUT FEATURES entitle the holder to sell a security back to the issuer
or a third party at any time or at specified intervals. They are
subject to the risk that the put provider is unable to honor the put
feature (purchase the security). Put providers often support their
ability to buy securities on demand by obtaining letters of credit or
other guarantees from other entities. Demand features, standby
commitments, and tender options are types of put features.
QUALITY AND MATURITY. Pursuant to procedures adopted by the Board
of Trustees, the funds may purchase only high-quality securities
that FMR believes present minimal credit risks. To be considered
high-quality, a security must be rated in accordance with applicable
rules in one of the two highest categories for short-term securities
by at least two nationally recognized rating services (or by one, if
only one rating service has rated the security); or, if unrated,
judged to be of equivalent quality by FMR.
High-quality securities are divided into "first tier" and "second
tier" securities. First tier securities are those deemed to be in the
highest rating category (e.g., Standard & Poor's A-1 or SP-1), and
second tier securities are those deemed to be in the second highest
rating category (e.g., Standard & Poor's A-2 or SP-2).
A fund currently intends to limit its investments to securities
with remaining maturities of 397 days or less, and to maintain a
dollar-weighted average maturity of 90 days or less. When determining
the maturity of a security, a fund may look to an interest rate reset
or demand feature.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund
purchases a security and simultaneously commits to sell that
security back to the original seller at an agreed-upon price. The
resale price reflects the purchase price plus an agreed-upon
incre mental amount which is unrelated to the coupon rate or
maturity of the purchased security. To protect the fund from the risk
that the original seller will not fulfill its obligation, the
securities are held in an account of the fund at a bank,
marked-to-market daily, and maintained at a value at least equal to
the sale price plus the accrued incremental amount. While it does not
presently appear possible to eliminate all risks from these
transactions (particularly the possibility that the value of the
underlying security will be less than the resale price, as well as
delays and costs to a fund in connection with bankruptcy proceedings),
it is each fund's current policy to engage in repurchase agreement
transactions with parties whose creditworthiness has been reviewed and
found satisfactory by FMR.
RESTRICTED SECURITIES generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the
Securities Act of 1933, or in a registered public offering. Where
registration is required, a fund may be obligated to pay all or
part of the registration expense and a considerable period may elapse
between the time it decides to seek registration and the time it may
be permitted to sell a security under an effective registration
statement. If, during such a period, adverse market condi tions were
to develop, a fund might obtain a less favorable price than prevailed
when it decided to seek registration of the security. However, in
general, each fund anticipates holding restricted securities to
maturity or selling them in an exempt transaction.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a
fund sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the
instrument at a particular price and time. While a reverse repurchase
agreement is outstanding, the fund will maintain appropriate liquid
assets in a segregated custodial account to cover its obligation
under the agreement. A fund will enter into reverse repurchase
agreements only with parties whose creditworthiness has been found
satisfactory by FMR. Such transactions may increase fluctuations in
the market value of the fund's assets and may be viewed as a form of
leverage.
SOURCES OF CREDIT OR LIQUIDITY SUPPORT. FMR may rely on its evaluation
of the credit of a bank or other entity in determining whether to
purchase a security supported by a letter of credit guarantee, put or
demand feature, insurance or other source of credit or liquidity. In
evaluating the credit of a foreign bank or other foreign entities, FMR
will consider whether adequate public information about the entity is
available and whether the entity may be subject to unfavorable
political or economic developments, currency controls, or other
government restrictions that might affect its ability to honor its
commitment.
VARIABLE AND FLOATING RATE SECURITIES provide for periodic adjustments
of the interest rate paid on the security. Variable rate securities
provide for a specified periodic adjustment in the interest rate,
while floating rate securities have interest rates that change
whenever there is a change in a designated benchmark rate. Some
variable or floating rate securities have put features.
ZERO COUPON BONDS do not make regular interest payments. Instead, they
are sold at a deep discount from their face value and are redeemed at
face value when they mature. Because zero coupon bonds do not pay
current income, their prices can be very volatile when interest rates
change. In calculating its daily dividend, a fund takes into account
as income a portion of the difference between a zero coupon bond's
purchase price and its face value.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are
placed on behalf of each fund by FMR pursuant to authority
contained in the fund's management contract. FMR has granted
investment management authority to the sub-adviser (see the section
entitled "Management Contracts"), and the sub-adviser is authorized
to place orders for the purchase and sale of portfolio securities,
and will do so in accordance with the policies described below. FMR is
also responsible for the placement of transaction orders for other
investment companies and accounts for which it or its affiliates act
as investment adviser. Securities purchased and sold by a fund
generally will be traded on a net basis (i.e., without commission). In
selecting broker-dealers, subject to applicable limitations of the
federal securities laws, FMR considers various relevant factors,
including, but not limited to, the size and type of the transaction;
the nature and character of the markets for the security to be
purchased or sold; the execution efficiency, settlement capability,
and financial condition of the broker-dealer firm; the broker-dealer's
execution services rendered on a continuing basis; and the
reasonableness of any commissions.
The funds may execute portfolio transactions with broker-dealers
who provide research and execution services to the funds or other
accounts over which FMR or its affiliates exercise investment
discretion. Such services may include advice concerning the value of
securities; the advisability of investing in, purchasing, or selling
securities; and the availability of securities or the purchasers or
sellers of securities. In addition, such broker-dealers may furnish
analyses and reports concerning issuers, industries, securities,
economic factors and trends, portfolio strategy, and performance of
accounts; effect securities transactions, and perform functions
incidental thereto (such as clearance and settlement). FMR maintains a
listing of broker-dealers who provide such services on a regular
basis. However, as many transactions on behalf of the money market
funds are placed with broker-dealers (including broker-dealers on
the list) without regard to the furnishing of such services, it is not
possible to estimate the proportion of such transactions directed to
such broker-dealers solely because such services were provided. The
selection of such broker-dealers generally is made by FMR (to the
extent possible consistent with execution considerations) based upon
the quality of research and execution services provided.
The receipt of research from broker-dealers that execute
transactions on behalf of the funds may be useful to FMR in rendering
investment management services to the funds or its other clients, and
conversely, such research provided by broker-dealers who have executed
transaction orders on behalf of other FMR clients may be useful to FMR
in carrying out its obligations to the funds. The receipt of such
research has not reduced FMR's normal independent research activities;
however, it enables FMR to avoid the additional expenses that could be
incurred if FMR tried to develop comparable information through its
own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that
are in excess of the amount of commissions charged by other
broker-dealers in recognition of their research and execu tion
services. In order to cause each fund to pay such higher commissions,
FMR must determine in good faith that such commissions are
reasonable in relation to the value of the brokerage and research
services provided by such executing broker-dealers, viewed in terms
of a particular transaction or FMR's overall responsibilities to the
funds and its other clients. In reaching this determination, FMR
will not attempt to place a specific dollar value on the brokerage and
research services provided, or to determine what portion of the
compensation should be related to those services.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided
assistance in the distribution of shares of the funds, or shares of
other Fidelity funds to the extent permitted by law. FMR may use
research services provided by and place agency transactions with
National Financial Services Corporation (NFSC), an indirect subsidiary
of FMR Corp., if the commissions are fair, reasonable, and comparable
to commissions charged by non- affiliated, qualified brokerage
firms for similar services.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members
of national securities exchanges from executing exchange transactions
for accounts which they or their affiliates manage, unless certain
requirements are satisfied. Pursuant to such requirements, the
Board of Trustees has authorized NFSC to execute portfolio
transactions on national securities exchanges in accordance with
approved procedures and applicable SEC rules.
Each fund's Trustees periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio
transactions on behalf of the funds and review the commissions paid by
each fund over representative periods of time to determine if they
are reasonable in relation to the benefits to the fund.
For the fiscal years ended October 31, 1997, 1996, and 1995,
Municipal Money Market paid [no brokerage commissions/ brokerage
commissions of $____, $______, and $______, respectively; and for the
fiscal years ended August 31. 1997, 1996, and 1995, Spartan Municipal
Money paid [no brokerage commissions/brokerage commissions of $______,
$______, and $_____, respectively]. [IF APPROPRIATE: During the fiscal
years ended October 31. 1997 and August 31, 1997, this amounted to
approximately __% and __%, respectively, of the aggregate brokerage
commissions paid by each fund involving approximately __% and __%,
respectively, of the aggregate dollar amount of transactions for which
the funds paid brokerage commissions.]
During the fiscal year ended October 31, 1997, Municipal Money
Market paid $__ in commissions to brokerage firms that provided
research services involving approximately $___of transactions; during
the fiscal year ended August 31, 1997, Spartan Municipal Money
paid $__ in commissions to brokerage firms that provided research
services involving approximately $___of transactions. The provision of
research services was not necessarily a factor in the placement of all
this business with such firms. [IF APPLICABLE: During the fiscal years
ended October 31, 1997 and August 31, 1997, the funds paid no fees to
brokerage firms that provided research services.]
From time to time the Trustees will review whether the recapture for
the benefit of the funds of some portion of the brokerage commissions
or similar fees paid by the funds on portfolio transactions is legally
permissible and advisable. Each fund seeks to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at
present no other recapture arrangements are in effect. The Trustees
intend to continue to review whether recapture opportunities are
available and are legally permissible and, if so, to determine in
the exercise of their business judgment whether it would be advisable
for each fund to seek such recapture.
Although the Trustees and officers of each fund are substantially
the same as those of other funds managed by FMR, investment decisions
for each fund are made independently from those of other funds managed
by FMR or accounts managed by FMR affiliates. It sometimes happens
that the same security is held in the portfolio of more than one of
these funds or accounts. Simultaneous transactions are inevitable when
several funds and accounts are managed by the same investment adviser,
particularly when the same security is suitable for the investment
objective of more than one fund or account.
When two or more funds are simultaneously engaged in the purchase or
sale of the same security, the prices and amounts are allocated in
accordance with procedures believed to be appropriate and equitable
for each fund. In some cases this system could have a detrimental
effect on the price or value of the security as far as each fund is
concerned. In other cases, however, the ability of the funds to
participate in volume transactions will produce better executions and
prices for the funds. It is the current opinion of the Trustees that
the desirability of retaining FMR as investment adviser to each fund
outweighs any disadvantages that may be said to exist from
exposure to simultaneous transactions.
VALUATION
Fidelity Service Company, Inc. (FSC) normally determines Spartan
Money Fund's net asset value per share (NAV) as of the close of the
New York Stock Exchange (NYSE) (normally 4:00 p.m. Eastern time). FSC
normally determines Municipal Money Market's NAV at 12:00 noon and
4:00 p.m. Eastern time. The valuation of portfolio securities is
determined as of these times for the purpose of computing each fund's
NAV.
Portfolio securities and other assets are valued on the basis of
amortized cost. This technique involves initially valuing an
instrument at its cost as adjusted for amortization of premium or
accretion of discount rather than its current market value. The
amortized cost value of an instrument may be higher or lower than the
price a fund would receive if it sold the instrument.
Securities of other open-end investment companies are valued at
their respective NAVs.
During periods of declining interest rates, a fund's yield based on
amortized cost valuation may be higher than would result if the fund
used market valuations to determine its NAV. The converse would apply
during periods of rising interest rates.
Valuing each fund's investments on the basis of amortized cost and
use of the term "money market fund" are permitted pursuant to Rule
2a-7 under the Investment Company Act of 1940 (1940 Act). Each fund
must adhere to certain conditions under Rule 2a-7, as summarized
in the section entitled "Quality and Maturity" on page ___.
The Board of Trustees oversees FMR's adherence to the provisions of
Rule 2a-7 and has established procedures designed to stabilize each
fund's NAV at $1.00. At such intervals as they deem appropriate, the
Trustees consider the extent to which NAV calculated by using
market valuations would deviate from $1.00 per share. If the Trustees
believe that a deviation from a fund's amortized cost per share may
result in material dilution or other unfair results to shareholders,
the Trustees have agreed to take such corrective action, if any, as
they deem appropriate to eliminate or reduce, to the extent reasonably
practicable, the dilution or unfair results. Such corrective action
could include selling portfolio instruments prior to maturity to
realize capital gains or losses or to shorten average portfolio
maturity; withholding dividends; redeeming shares in kind;
establishing NAV by using available market quotations; and such other
measures as the Trustees may deem appropriate.
PERFORMANCE
The funds may quote performance in various ways. All performance
information supplied by the funds in advertising is historical and is
not intended to indicate future returns. Each fund's yield and total
return fluctuate in response to market conditions and other
factors.
YIELD CALCULATIONS. To compute a fund's yield for a period, the net
change in value of a hypothetical account containing one share
reflects the value of additional shares purchased with dividends from
the one original share and dividends declared on both the original
share and any additional shares. The net change is then divided by the
value of the account at the beginning of the period to obtain a
base period return. This base period return is annualized to obtain a
current annualized yield. A fund also may calculate an effective
yield by compounding the base period return over a one-year period. In
addition to the current yield, the funds may quote yields in
advertising based on any historical seven-day period. Yields for the
funds are calculated on the same basis as other money market
funds, as required by applicable regulations.
Yield information may be useful in reviewing a fund's performance
and in providing a basis for comparison with other investment
alternatives. However, each fund's yield fluctuates, unlike
investments that pay a fixed interest rate over a stated period of
time. When comparing investment alternatives, investors should also
note the quality and maturity of the portfolio securities of
respective investment companies they have chosen to consider.
Investors should recognize that in periods of declining interest
rates a fund's yield will tend to be somewhat higher than
prevailing market rates, and in periods of rising interest rates
the fund's yield will tend to be somewhat lower. Also, when interest
rates are falling, the inflow of net new money to a fund from the
continuous sale of its shares will likely be invested in
instruments producing lower yields than the balance of the fund's
holdings, thereby reducing the fund's current yield. In periods of
rising interest rates, the opposite can be expected to occur.
A fund's tax-equivalent yield is the rate an investor would have to
earn from a fully taxable investment before taxes to equal the fund's
tax-free yield. Tax-equivalent yields are calculated by dividing a
fund's yield by the result of one minus a stated federal income tax
rate. If only a portion of a fund's yield is tax-exempt, only that
portion is adjusted in the calculation.
The following table shows the effect of a shareholder's tax status
on effective yield under federal income tax laws for 1997. It
shows the approximate yield a taxable security must provide at various
income brackets to produce after-tax yields equivalent to those of
hypothetical tax-exempt obligations yielding from _% to _%. Of course,
no assurance can be given that a fund will achieve any specific
tax-exempt yield. While the funds invest principally in obligations
whose interest is exempt from federal income tax, other income
received by the funds may be taxable.
1997 TAX RATES AND TAX-EQUIVALENT YIELDS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Federal If individual tax-exempt yield is:
Taxable Income* Marginal % % % % % % % %
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Single Return Joint Return Rate** Then taxable-equivalent yield is
$ $ % % % % % % % %
</TABLE>
* Net amount subject to federal income tax after deductions and
exemptions. Assumes ordinary income only.
** Excludes the impact of the phaseout of personal exemptions,
limitations on itemized deductions, and other credits, exclusions, and
adjustments which may increase a taxpayer's marginal tax rate. An
increase in a shareholder's marginal tax rate would increase that
shareholder's tax-equivalent yield.
Each fund may invest a portion of its assets in obligations that
are subject to federal income tax. When a fund invests in these
obligations, its tax-equivalent yields will be lower. In the table
above, tax-equivalent yields are calculated assuming investments are
100% federally tax-free.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising
reflect all aspects of a fund's return, including the effect of
reinvesting dividends and capital gain distributions, and any change
in the fund's NAV over a stated period. Average annual total
returns are calculated by determining the growth or decline in
value of a hypothetical historical investment in a fund over a
stated period, and then calculating the annually compounded
percentage rate that would have produced the same result if the rate
of growth or decline in value had been constant over the period. For
example, a cumulative total return of 100% over ten years would
produce an average annual total return of 7.18%, which is the steady
annual rate of return that would equal 100% growth on a compounded
basis in ten years. While average annual total returns are a
convenient means of comparing investment alternatives, investors
should realize that a fund's performance is not constant over time,
but changes from year to year, and that average annual total
returns represent averaged figures as opposed to the actual
year-to-year performance of the fund.
In addition to average annual total returns, the fund may quote
unaveraged or cumulative total returns reflecting the simple change in
value of an investment over a stated period. Average annual and
cumulative total returns may be quoted as a percentage or as a dollar
amount, and may be calculated for a single investment, a series of
investments, or a series of redemptions, over any time period. Total
returns may be broken down into their components of income and capital
(including capital gains and changes in share price) in order to
illustrate the relationship of these factors and their contributions
to total return. Total returns may be quoted on a before-tax or
after-tax basis. Total returns, yields, and other performance
information may be quoted numerically or in a table, graph, or similar
illustration, and may omit or include the effect of the $5.00 account
closeout fee.
HISTORICAL FUND RESULTS. The following table shows each
fund's 7-day yields, tax-equivalent yields, and total returns for the
periods ended October 31, 1997 (for Municipal Money Market) and August
31, 1997 (for Spartan Municipal Money). Total return figures for
Spartan Municipal Money include the effect of the $5.00 account
closeout fee based on an average sized account.
The tax-equivalent yield is based on a __% federal income tax rate.
Note that each fund may invest in securities whose income is
subject to the federal alternative minimum tax.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Average Annual Total Returns Cumulative Total Returns
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Seven-Day Tax- One Five Ten One Five Ten
Yield Equivalent Year Years Years/ Year Years Years/
Yield Life of Life of
Fund Fund
Municipal Money % % % % % % % %
Market
Spartan Municipal % % % % %* % % %*
Money
</TABLE>
* From January 14, 1991 (commencement of operations).
Note: If FMR had not reimbursed certain fund expenses during these
periods, Spartan Municipal Money's yield would have been ___% and
total returns would have been lower.
The following tables show the income and capital elements of each
fund's cumulative total return. The tables compare each fund's return
to the record of the Standard & Poor's 500 Index (S&P 500), the Dow
Jones Industrial Average (DJIA), and the cost of living, as measured
by the Consumer Price Index (CPI), over the same period. The CPI
information is as of the month-end closest to the initial
investment date for each fund. The S&P 500 and DJIA comparisons are
provided to show how each fund's total return compared to the
record of a broad unmanaged index of common stocks and a narrower set
of stocks of major industrial companies, respectively, over the
same period. Because each fund invests in short-term fixed-income
securities, common stocks represent a different type of investment
from the funds. Common stocks generally offer greater growth potential
than the funds, but generally experience greater price volatility,
which means greater potential for loss. In addition, common stocks
generally provide lower income than fixed-income investments such as
the funds. The S&P 500 and DJIA returns are based on the prices of
unmanaged groups of stocks and, unlike each fund's returns, do not
include the effect of brokerage commissions or other costs of
investing.
The following tables show the growth in value of a hypothetical
$10,000 investment in each fund during the past 10 fiscal years ended
1997 or life of the fund, as applicable, assuming all distributions
were reinvested. The figures below reflect the fluctuating interest
rates of the specified periods and should not be considered
representative of the dividend income or capital gain or loss that
could be realized from an investment in a fund today. Tax consequences
of different investments have not been factored into the figures
below.
During the 10-year period ended October 31, 1997, a hypothetical
$10,000 investment in Municipal Money Market would have grown to
$______.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FIDELITY MUNICIPAL MONEY MARKET FUND INDICES
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of
October 31 Initial Reinvested Reinvested Value Living[**]
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1997 $ $ $ $ $ $ $
1996 $ $ $ $ $ $ $
1995 $ $ $ $ $ $ $
1994 $ $ $ $ $ $ $
1993 $ $ $ $ $ $ $
1992 $ $ $ $ $ $ $
1991 $ $ $ $ $ $ $
1990 $ $ $ $ $ $ $
1989 $ $ $ $ $ $ $
1988 $ $ $ $ $ $ $
</TABLE>
[IF APPROPRIATE: ** From month-end closest to initial investment
date.]
Explanatory Notes: With an initial investment of $10,000 in
Municipal Money Market on November 1, 1987, the net amount
invested in fund shares was $10,000. The cost of the initial
investment ($10,000) together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their
cash value at the time they were reinvested) amounted to $______. If
distributions had not been reinvested, the amount of distributions
earned from the fund over time would have been smaller, and cash
payments for the period would have amounted to $______ for dividends.
The fund did not distribute any capital gains during the period.
During the period from January 14, 1991 (commencement of
operations) to August 31, 1997, a hypothetical $10,000 investment in
Spartan Municipal Money would have grown to $_____.
SPARTAN MUNICIPAL MONEY FUND INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Period Ended Value of Value of Total S&P 500 DJIA Cost of
August 31 Initial Reinvested Value Living[**]
$10,000 Dividend
Investment Distributions
1997 $ $ $ $ $ $
1996 $ 10,000 $ 2,068 $ 12,068 $ 24,238 $ 26,225 $ 11,756
1995 $ 10,000 $ 1,670 $ 11,670 $ 20,415 $ 21,064 $ 11,428
1994 $ 10,000 $ 1,265 $ 11,265 $ 16,810 $ 17,424 $ 11,136
1993 $ 10,000 $ 990 $ 10,990 $ 15,938 $ 15,820 $ 10,822
1992 $ 10,000 $ 705 $ 10,705 $ 13,832 $ 13,704 $ 10,531
1991* $ 10,000 $ 303 $ 10,303 $ 12,815 $ 12,431 $ 10,209
</TABLE>
* From January 14, 1991 (commencement of operations).
[IF APPROPRIATE: ** From month-end closest to initial investment
date.]
Explanatory Notes: With an initial investment of $10,000 in Spartan
Municipal Money on January 14, 1991, the net amount invested in
fund shares was $10,000. The cost of the initial investment ($10,000)
together with the aggregate cost of reinvested dividends and
capital gain distributions for the period covered (their cash value at
the time they were reinvested) amounted to $______. If
distributions had not been reinvested, the amount of distributions
earned from the fund over time would have been smaller, and cash
payments for the period would have amounted to $______ for dividends.
The fund did not distribute any capital gains during the period.
The figures in the table do not include the effect of the fund's $5.00
account closeout fee.
PERFORMANCE COMPARISONS. A fund's performance may be
compared to the performance of other mutual funds in general, or
to the performance of particular types of mutual funds. These
comparisons may be expressed as mutual fund rankings prepared by
Lipper Analytical Services, Inc. (Lipper), an independent service
located in Summit, New Jersey that monitors the performance of mutual
funds. Generally, Lipper rankings are based on total return, assume
reinvestment of distributions, do not take sales charges or trading
fees into consideration, and are prepared without regard to tax
consequences. Lipper may also rank funds based on yield. In
addition to the mutual fund rankings, a fund's performance may be
compared to stock, bond, and money market mutual fund performance
indices prepared by Lipper or other organizations. When comparing
these indices, it is important to remember the risk and return
characteristics of each type of investment. For example, while stock
mutual funds may offer higher potential returns, they also carry the
highest degree of share price volatility. Likewise, money market funds
may offer greater stability of principal, but generally do not offer
the higher potential returns available from stock mutual funds.
From time to time, a fund's performance may also be compared to
other mutual funds tracked by financial or business publications
and periodicals. For example, the fund may quote Morningstar, Inc. in
its advertising materials. Morningstar, Inc. is a mutual fund rating
service that rates mutual funds on the basis of risk-adjusted
performance. Rankings that compare the performance of Fidelity funds
to one another in appropriate categories over specific periods of time
may also be quoted in advertising.
A fund may be compared in advertising to Certificates of Deposit
(CDs) or other investments issued by banks or other depository
institutions. Mutual funds differ from bank investments in several
respects. For example, a fund may offer greater liquidity or higher
potential returns than CDs, a fund does not guarantee your principal
or your return, and fund shares are not FDIC insured.
Fidelity may provide information designed to help individuals
understand their investment goals and explore various financial
strategies. Such information may include information about current
economic, market, and political conditions; materials that describe
general principles of investing, such as asset allocation,
diversification, risk tolerance, and goal setting; questionnaires
designed to help create a personal financial profile; worksheets used
to project savings needs based on assumed rates of inflation and
hypothetical rates of return; and action plans offering investment
alternatives. Materials may also include discussions of Fidelity's
asset allocation funds and other Fidelity funds, products, and
services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides
historical returns of the capital markets in the United States,
including common stocks, small capitalization stocks, long-term
corporate bonds, intermediate-term government bonds, long-term
government bonds, Treasury bills, the U.S. rate of inflation (based
on the CPI), and combinations of various capital markets. The
performance of these capital markets is based on the returns of
different indices.
Fidelity funds may use the performance of these capital markets in
order to demonstrate general risk-versus-reward investment scenarios.
Performance comparisons may also include the value of a hypothetical
investment in any of these capital markets. The risks associated with
the security types in any capital market may or may not correspond
directly to those of the funds. Ibbotson calculates total returns in
the same method as the funds. The funds may also compare performance
to that of other compilations or indices that may be developed and
made available in the future.
A fund may compare its performance or the performance of securities
in which it may invest to averages published by IBC Financial
Data, Inc. of Ashland, Massachusetts. These averages assume
reinvestment of distributions. IBC's MONEY FUND REPORT
AVERAGES(trademark)/All Tax-Free, which is reported in IBC's MONEY
FUND REPORT(trademark), covers over ___ tax-free money market funds.
In advertising materials, Fidelity may reference or discuss its
products and services, which may include other Fidelity funds;
retirement investing; brokerage products and services; model
portfolios or allocations; saving for college or other goals;
charitable giving; and the Fidelity credit card. In addition, Fidelity
may quote or reprint financial or business publications and
periodicals as they relate to current economic and political
conditions, fund management, portfolio composition, investment
philosophy, investment techniques, the desirability of owning a
particular mutual fund, and Fidelity services and products. Fidelity
may also reprint, and use as advertising and sales literature,
articles from Fidelity Focus(Registered trademark), a quarterly
magazine provided free of charge to Fidelity fund shareholders.
A fund may present its fund number, Quotron(trademark) number, and
CUSIP number, and discuss or quote its current portfolio manag er.
As of October 31, 1997, FMR advised over $__ billion in
tax-free fund assets, $__ billion in money market fund assets,
$___ billion in equity fund assets, $__ billion in international
fund assets, and $___ billion in Spartan fund assets. The funds may
reference the growth and variety of money market mutual funds and the
adviser's innovation and participation in the industry. The equity
funds under management figure represents the largest amount of equity
fund assets under management by a mutual fund investment adviser in
the United States, making FMR America's leading equity (stock) fund
manager. FMR, its subsidiaries, and affiliates maintain a worldwide
information and communications network for the purpose of researching
and managing investments abroad.
In addition to performance rankings, each fund may compare its
total expense ratio to the average total expense ratio of similar
funds tracked by Lipper. A fund's total expense ratio is a significant
factor in comparing bond and money market investments because of
its effect on yield.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
Each fund is open for business and its net asset value per share
(NAV) is calculated each day the New York Stock Exchange (NYSE) is
open for trading. The NYSE has designated the following holiday
closings for 1998: New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day
(observed), Labor Day, Thanksgiving Day, and Christmas Day.
Although FMR expects the same holiday schedule to be observed in the
future, the NYSE may modify its holiday schedule at any time. In
addition, the funds will not process wire purchases and redemptions on
days when the Federal Reserve Wire System is closed.
FSC normally determines Spartan Municipal Money's NAV as of the
close of the NYSE (normally 4:00 p.m. Eastern time). FSC normally
calculates Municipal Money Market's NAV twice each business day, once
at 12:00 noon Eastern time and once as of the close of the NYSE
(normally 4:00 p.m. Eastern time). However, NAV may be calculated
earlier if trading on the NYSE is restricted or as permitted by the
Securities and Exchange Commission (SEC). To the extent that portfolio
securities are traded in other markets on days when the NYSE is
closed, a fund's NAV may be affected on days when investors do not
have access to the fund to purchase or redeem shares. In addition,
trading in some of a fund's portfolio securities may not occur on days
when the fund is open for business.
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are
valued in computing a fund's NAV. Shareholders receiving
securities or other property on redemption may realize a gain or loss
for tax purposes, and will incur any costs of sale, as well as the
associated inconveniences.
Pursuant to Rule 11a-3 under the Investment Company Act of 1940
(the 1940 Act), each fund is required to give shareholders at
least 60 days' notice prior to terminating or modifying its exchange
privilege. Under the Rule, the 60-day notification requirement may be
waived if (i) the only effect of a modification would be to reduce or
eliminate an administrative fee, redemption fee, or deferred sales
charge ordinarily payable at the time of an exchange, or (ii) the fund
suspends the redemption of the shares to be exchanged as permitted
under the 1940 Act or the rules and regulations thereunder, or the
fund to be acquired suspends the sale of its shares because it is
unable to invest amounts effectively in accordance with its investment
objective and policies.
In the Prospectus, each fund has notified shareholders that it
reserves the right at any time, without prior notice, to refuse
exchange purchases by any person or group if, in FMR's judgment, the
fund would be unable to invest effectively in accordance with its
investment objective and policies, or would otherwise potentially be
adversely affected.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to you and
the U.S. Postal Service cannot deliver your checks, or if your checks
remain uncashed for six months, Fidelity may reinvest your
distributions at the then-current NAV. All subsequent distributions
will then be reinvested until you provide Fidelity with alternate
instructions.
DIVIDENDS. To the extent that each fund's income is designated as
federally tax-exempt interest, the daily dividends declared by the
fund are also federally tax-exempt. Short-term capital gains are
distributed as dividend income, but do not qualify for the
dividends-received deduction. These gains will be taxed as ordinary
income. Each fund will send each shareholder a notice in January
describing the tax status of dividend and capital gain distributions
(if any) for the prior year.
Shareholders are required to report tax-exempt income on their federal
tax returns. Shareholders who earn other income, such as Social
Security benefits, may be subject to federal income tax on up to 85%
of such benefits to the extent that their income, including tax-exempt
income, exceeds certain base amounts.
A fund purchases municipal securities whose interest FMR believes
is free from federal income tax. Generally, issuers or other
parties have entered into covenants requiring continuing compliance
with federal tax requirements to preserve the tax-free status of
interest payments over the life of the security. If at any time the
covenants are not complied with, or if the IRS otherwise determines
that the issuer did not comply with relevant tax requirements,
interest payments from a security could become federally taxable
retroactive to the date the security was issued. For certain types of
structured securities, the tax status of the pass-through of tax-free
income may also be based on the federal tax treatment of the
structure.
As a result of the Tax Reform Act of 1986, interest on certain
"private activity" securities is subject to the federal alternative
minimum tax (AMT), although the interest continues to be excludable
from gross income for other tax purposes. Interest from private
activity securities will be considered tax-exempt for purposes of each
fund's policies of investing so that at least 80% of its income is
free from federal income tax. Interest from private activity
securities is a tax preference item for the purposes of determining
whether a taxpayer is subject to the AMT and the amount of AMT to be
paid, if any. Private activity securities issued after August 7, 1986
to benefit a private or industrial user or to finance a private
facility are affected by this rule.
A portion of the gain on bonds purchased with market discount after
April 30, 1993 and short-term capital gains distributed by each
fund are taxable to shareholders as dividends, not as capital gains.
Dividend distributions resulting from a recharacterization of gain
from the sale of bonds purchased with market discount after April 30,
1993 are not considered income for purposes of each fund's policy of
investing so that at least 80% of its income is free from federal
income tax. Each fund may distribute any net realized short-term
capital gains and taxable market discount once a year or more
often, as necessary, to maintain its net asset value at $1.00 per
share.
Corporate investors should note that a tax preference item for
purposes of the corporate AMT is 75% of the amount by which adjusted
current earnings (which includes tax-exempt interest) exceeds the
alternative minimum taxable income of the corporation. If a
shareholder receives an exempt-interest dividend and sells shares at a
loss after holding them for a period of six months or less, the loss
will be disallowed to the extent of the amount of exempt-interest
dividend.
CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by each
fund on the sale of securities and distributed to shareholders are
federally taxable as long-term capital gains, regardless of the length
of time shareholders have held their shares. If a shareholder
receives a long-term capital gain distribution on shares of a fund,
and such shares are held six months or less and are sold at a
loss, the portion of the loss equal to the amount of the long-term
capital gain distribution will be considered a long-term loss for
tax purposes. Short-term capital gains distributed by each fund are
taxable to shareholders as dividends, not as capital gains. Each fund
does not anticipate distributing long-term capital gains.
As of August/October 31, 1997, __________ hereby designates
approximately $_______ as a capital gain dividend for the purpose of
the dividend-paid deduction.
As of October 31, 1997, Municipal Money Market had a capital loss
carryforward aggregating approximately $____. This loss carryforward,
of which $___, $___, and $___will expire on October 31, 199_,
___, ____, and ____ , respectively, is available to offset future
capital gains.
As of August 31, 1997, Spartan Municipal Money had a capital loss
carryforward aggregating approximately $______. This loss
carryforward, of which $______, $______, and $______ will expire on
August 31, 199_, ___, ___, and ___, respectively, is available to
offset future capital gains.
TAX STATUS OF THE FUNDS. Each fund intends to qualify each year as
a "regulated investment company" for tax purposes so that it will
not be liable for federal tax on income and capital gains distributed
to shareholders. In order to qualify as a regulated invest ment
company and avoid being subject to federal income or excise taxes at
the fund level, each fund intends to distribute substantially all
of its net investment income and net realized capital gains within
each calendar year as well as on a fiscal year basis and intends to
comply with other tax rules applicable to regulated investment
companies.
Each fund is treated as a separate entity from the other funds of
Fidelity Union Street Trust II for tax purposes.
OTHER TAX INFORMATION. The information above is only a
summary of some of the tax consequences generally affecting each
fund and its shareholders, and no attempt has been made to discuss
individual tax consequences. In addition to federal income taxes,
shareholders may be subject to state and local taxes on fund
distributions, and shares may be subject to state and local personal
property taxes. Investors should consult their tax advisers to
determine whether a fund is suitable to their particular tax
situation.
FMR
All of the stock of FMR is owned by FMR Corp., its parent organized in
1972. The voting common stock of FMR Corp. is divided into two
classes. Class B is held predominantly by members of the Edward C.
Johnson 3d family and is entitled to 49% of the vote on any matter
acted upon by the voting common stock. Class A is held predominantly
by non-Johnson family member employees of FMR Corp. and its affiliates
and is entitled to 51% of the vote on any such matter. The Johnson
family group and all other Class B shareholders have entered into a
shareholders' voting agreement under which all Class B shares will be
voted in accordance with the majority vote of Class B shares. Under
the 1940 Act, control of a company is presumed where one individual or
group of individuals owns more than 25% of the voting stock of that
company. Therefore, through their ownership of voting common stock and
the execution of the shareholders' voting agreement, members of the
Johnson family may be deemed, under the 1940 Act, to form a
controlling group with respect to FMR Corp.
At present, the principal operating activities of FMR Corp. are
those conducted by its division, Fidelity Investments Retail Marketing
Company, which provides marketing services to various companies within
the Fidelity organization.
Fidelity investment personnel may invest in securities for their own
accounts pursuant to a code of ethics that sets forth all employees'
fiduciary responsibilities regarding the funds, establishes procedures
for personal investing and restricts certain transactions. For
example, all personal trades in most securities require pre-clearance,
and participation in initial public offerings is prohibited. In
addition, restrictions on the timing of personal investing in relation
to trades by Fidelity funds and on short-term trading have been
adopted.
TRUSTEES AND OFFICERS
The Trustees, Members of the Advisory Board, and executive officers
of the trust are listed below. Except as indicated, each individual
has held the office shown or other offices in the same company for the
last five years. All persons named as Trustees and Members of the
Advisory Board also serve in similar capacities for other funds
advised by FMR. The business address of each Trustee, Member of the
Advisory Board, and officer who is an "interested person" (as defined
in the Investment Company Act of 1940) is 82 Devonshire Street,
Boston, Massachusetts 02109, which is also the address of FMR. The
business address of all the other Trustees is Fidelity Investments,
P.O. Box 9235, Boston, Massachusetts 02205-9235. Those Trustees who
are "interested persons" by virtue of their affiliation with either
the trust or FMR are indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d (67), Trustee and President, is Chairman,
Chief Executive Officer and a Director of FMR Corp.; a Director
and Chairman of the Board and of the Executive Committee of FMR;
Chairman and a Director of FMR Texas Inc., Fidelity Management &
Research (U.K.) Inc., and Fidelity Management & Research (Far East)
Inc.
J. GARY BURKHEAD (56), Member of the Advisory Board (1997), is Vice
Chairman and a Member of the Board of Directors of FMR Corp. (1997)
and President and Chief Executive Officer of the Fidelity
Institutional Group (1997). Previously, Mr. Burkhead served as
President of Fidelity Management & Research Company.
RALPH F. COX (65), Trustee, is President of RABAR Enterprises
(management consulting-engineering industry, 1994). Prior to
February 1994, he was President of Greenhill Petroleum Corporation
(petroleum exploration and production). Until March 1990, Mr. Cox was
President and Chief Operating Officer of Union Pacific Resources
Company (exploration and production). He is a Director of USA Waste
Services, Inc. (non-hazardous waste, 1993), CH2M Hill Companies
(engineering), Rio Grande, Inc. (oil and gas production), and
Daniel Industries (petroleum measurement equipment manufacturer). In
addition, he is a member of advisory boards of Texas A&M University
and the University of Texas at Austin.
PHYLLIS BURKE DAVIS (65), Trustee (1992). Prior to her retirement
in September 1991, Mrs. Davis was the Senior Vice President of
Corporate Affairs of Avon Products, Inc. She is currently a Director
of BellSouth Corporation (telecommunications), Eaton Corporation
(manufacturing, 1991), and the TJX Companies, Inc. (retail stores),
and previously served as a Director of Hallmark Cards, Inc.
(1985-1991) and Nabisco Brands, Inc. In addition, she is a member of
the President's Advisory Council of The University of Vermont
School of Business Administration.
ROBERT M. GATES (54), Trustee (1997), is a consultant, author, and
lecturer (1993). Mr. Gates was Director of the Central Intelligence
Agency (CIA) from 1991-1993. From 1989 to 1991, Mr. Gates served as
Assistant to the President of the United States and Deputy National
Security Advisor. Mr. Gates is currently a Trustee for the Forum For
International Policy, a Board Member for the Virginia Neurological
Institute, and a Senior Advisor of the Harvard Journal of World
Affairs. In addition, Mr. Gates also serves as a member of the
corporate board for LucasVarity PLC (automotive components and diesel
engines), Charles Stark Draper Laboratory (non-profit), NACCO
Industries, Inc. (mining and manufacturing), and TRW Inc. (original
equipment and replacement products).
E. BRADLEY JONES (69), Trustee. Prior to his retirement in 1984,
Mr. Jones was Chairman and Chief Executive Officer of LTV Steel
Company. He is a Director of TRW Inc. (original equipment and
replacement products), Consolidated Rail Corporation, Birmingham Steel
Corporation, and RPM, Inc. (manufacturer of chemical products), and he
previously served as a Director of NACCO Industries, Inc. (mining
and manufacturing, 1985-1995), Hyster-Yale Materials Handling, Inc.
(1985-1995), and Cleveland-Cliffs Inc (mining), and as a Trustee of
First Union Real Estate Investments. In addition, he serves as a
Trustee of the Cleveland Clinic Foundation, where he has also been a
member of the Executive Committee as well as Chairman of the Board and
President, a Trustee and member of the Executive Committee of
University School (Cleveland), and a Trustee of Cleveland Clinic
Florida.
DONALD J. KIRK (64), Trustee, is Executive-in-Residence (1995) at
Columbia University Graduate School of Business and a financial
consultant. From 1987 to January 1995, Mr. Kirk was a Professor at
Columbia University Graduate School of Business. Prior to 1987, he was
Chairman of the Financial Accounting Standards Board. Mr. Kirk is a
Director of General Re Corporation (reinsurance), and he previously
served as a Director of Valuation Research Corp. (appraisals and
valuations, 1993-1995). In addition, he serves as Chairman of the
Board of Directors of the National Arts Stabilization Fund, Chairman
of the Board of Trustees of the Greenwich Hospital Association, a
Member of the Public Oversight Board of the American Institute of
Certified Public Accountants' SEC Practice Section (1995), and as a
Public Governor of the National Association of Securities Dealers,
Inc. (1996).
*PETER S. LYNCH (54), Trustee, is Vice Chairman and Director of FMR
(1992). Prior to May 31, 1990, he was a Director of FMR and
Executive Vice President of FMR (a position he held until March 31,
1991); Vice President of Fidelity Magellan Fund and FMR Growth Group
Leader; and Managing Director of FMR Corp. Mr. Lynch was also Vice
President of Fidelity Investments Corporate Services (1991-1992). In
addition, he serves as a Trustee of Boston College, Massachusetts Eye
& Ear Infirmary, Historic Deerfield (1989) and Society for the
Preservation of New England Antiquities, and as an Overseer of the
Museum of Fine Arts of Boston.
WILLIAM O. McCOY (64), Trustee (1997), is the Vice President of
Finance for the University of North Carolina (16-school system, 1995).
Prior to his retirement in December 1994, Mr. McCoy was Vice Chairman
of the Board of BellSouth Corporation (telecommunications, 1984) and
President of BellSouth Enterprises (1986). He is currently a Director
of Liberty Corporation (holding company, 1984), Weeks Corporation of
Atlanta (real estate, 1994), Carolina Power and Light Company
(electric utility, 1996), and the Kenan Transport Co. (1996).
Previously, he was a Director of First American Corporation (bank
holding company, 1979-1996). In addition, Mr. McCoy serves as a member
of the Board of Visitors for the University of North Carolina at
Chapel Hill (1994) and for the Kenan-Flager Business School
(University of North Carolina at Chapel Hill, 1988).
GERALD C. McDONOUGH (68), Trustee and Chairman of the non-interested
Trustees, is Chairman of G.M. Management Group (strategic advisory
services). Mr. McDonough is a Director of York International Corp.
(air conditioning and refrigeration), Commercial Intertech Corp.
(hydraulic systems, building systems, and metal products, 1992), CUNO,
Inc. (liquid and gas filtration products, 1996), and Associated
Estates Realty Corporation (a real estate investment trust, 1993). Mr.
McDonough served as a Director of ACME-Cleveland Corp. (metal working,
telecommunications, and electronic products) from 1987-1996.
MARVIN L. MANN (64), Trustee (1993) is Chairman of the Board,
President, and Chief Executive Officer of Lexmark International,
Inc. (office machines, 1991). Prior to 1991, he held the positions of
Vice President of International Business Machines Corporation ("IBM")
and President and General Manager of various IBM divisions and
subsidiaries. Mr. Mann is a Director of M.A. Hanna Company
(chemicals, 1993), Imation Corp. (imaging and information storage,
1997), and Infomart (marketing services, 1991), a Trammell Crow
Co. In addition, he serves as the Campaign Vice Chairman of the
Tri-State United Way (1993) and is a member of the University of
Alabama President's Cabinet.
*ROBERT C. POZEN (51), Trustee (1997) and Senior Vice President, is
also President and a Director of FMR (1997); and President and a
Director of FMR Texas Inc. (1997), Fidelity Management & Research
(U.K.) Inc. (1997), and Fidelity Management & Research (Far East) Inc.
(1997). Previously, Mr. Pozen served as General Counsel, Managing
Director, and Senior Vice President of FMR Corp.
THOMAS R. WILLIAMS (69), Trustee, is President of The Wales Group,
Inc. (m anagement and financial advisory services). Prior to
retiring in 1987, Mr. Williams served as Chairman of the Board of
First Wachovia Corporation (bank holding company), and Chairman and
Chief Executive Officer of The First National Bank of Atlanta and
First Atlanta Corporation (bank holding company). He is currently a
Director of ConAgra, Inc. (agricultural products), Georgia Power
Company (electric utility), National Life Insurance Company of
Vermont, American Software, Inc., and AppleSouth, Inc. (restaurants,
1992).
BOYCE I. GREER (41), is Vice President of Money Market Funds
(1997), Group Leader of the Money Market Group (1997), and Senior Vice
President of FMR (1997). Mr. Greer served as the Leader of the
Fixed-Income Group for Fidelity Management Trust Company (1993-1995)
and was Vice President and Group Leader of Municipal Fixed-Income
Investments (1996-1997). Prior to 1993, Mr. Greer was an associate
portfolio manager.
FRED L. HENNING, JR. (58), is Vice President of Fidelity's
fixed-income funds (1995) and Senior Vice President of FMR (1995).
Before assuming his current responsibilities, Mr. Henning was head of
Fidelity's Money Market Division.
DIANNE MCLAUGHLIN ( ), is Vice President of Fidelity Municipal
Money Market (1997) and Spartan Municipal Money (1997) and an employee
of FMR (1992).
ARTHUR S. LORING (50), Secretary, is Senior Vice President
(1993) and General Counsel of FMR, Vice President-Legal of FMR Corp.,
and Vice President and Clerk of FDC.
RICHARD A. SILVER (50), Treasurer (1997), is Treasurer of the
Fidelity funds and is an employee of FMR (1997). Before joining FMR,
Mr. Silver served as Executive Vice President, Fund Accounting &
Administration at First Data Investor Services Group, Inc.
(1996-1997). Prior to 1996, Mr. Silver was Senior Vice President and
Chief Financial Officer at The Colonial Group, Inc. Mr. Silver also
served as Chairman of the Accounting/Treasurer's Committee of the
Investment Company Institute (1987-1993).
THOMAS D. MAHER (52), Assistant Vice President, is Assistant
Vice President of Fidelity's municipal bond funds (1996) and of
Fidelity's money market funds and Vice President and Associate General
Counsel of FMR Texas Inc.
JOHN H. COSTELLO (51), Assistant Treasurer, is an employee of
FMR.
LEONARD M. RUSH (51), Assistant Treasurer (1994), is an
employee of FMR (1994). Prior to becoming Assistant Treasurer of the
Fidelity funds, Mr. Rush was Chief Compliance Officer of FMR Corp.
(1993-1994) and Chief Financial Officer of Fidelity Brokerage
Services, Inc. (1990-1993).
THOMAS J. SIMPSON (39) , Assistant Treasurer, is Assistant
Treasurer of Fidelity's municipal bond funds (1996) and of Fidelity's
money market funds (1996) and an employee of FMR (1996). Prior to
joining FMR, Mr. Simpson was Vice President and Fund Controller of
Liberty Investment Services (1987-1995).
The following table sets forth information describing the
compensation of each Trustee and Member of the Advisory Board of each
fund for his or her services for the fiscal years ended August 31,
1997, in the case of Spartan Municipal Money, and October 31, 1997, in
the case of Municipal Money Market (during which period it was a fund
of Fidelity Beacon Street Trust). Information describing total
compensation from the fund complex is for the calendar year ended
December 31, 1996.
COMPENSATION TABLE
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Trustees Aggregate Aggregate Total
and Compensation Compensation Compensation
Members of the Advisory Board from from from the
Municipal Money Spartan Municipal Fund Complex*
MarketB,C MoneyB,D A
J. Gary Burkhead ** $ $ $ 0
Ralph F. Cox $ $ 137,700
Phyllis Burke Davis $ $ 134,700
Richard J. Flynn*** $ $ 168,000
Robert M. Gates **** $ $ 0
Edward C. Johnson 3d ** $ $ 0
E. Bradley Jones $ $ 134,700
Donald J. Kirk $ $ 136,200
Peter S. Lynch ** $ $ 0
William O. McCoy***** $ $ 85,333
Gerald C. McDonough $ $ 136,200
Edward H. Malone*** $ $ 136,200
Marvin L. Mann $ $ 134,700
Robert C. Pozen** $ $ 0
Thomas R. Williams $ $ 136,200
</TABLE>
* Information is for the calendar year ended December 31, 1996 for
235 funds in the complex.
** Interested Trustees of the funds and Mr. Burkhead are
compensated by FMR.
*** Richard J. Flynn and Edward H. Malone served on the Board of
Trustees through December 31, 1996.
****Mr. Gates was elected to the Board of Trustees of Fidelity
Union Street Trust II on September 17, 1997.
*****During the period from May 1, 1996 through December 31, 1996,
William O. McCoy served as a Member of the Advisory Board of each
trust. Mr. McCoy was elected to the Board of Trustees of Fidelity
Union Street Trust II on September 17, 1997.
A Compensation figures include cash, a pro rata portion of benefits
accrued under the retirement program for the period ended December 30,
1996 and required to be deferred, and may include amounts deferred at
the election of Trustees.]
B Compensation figures include cash, and may include amounts
required to be deferred, a pro rata portion of benefits accrued under
the retirement program for the period ended December 30, 1996 and
required to be deferred, and amounts deferred at the election of
Trustees.
C The following amounts are required to be deferred by each
non-interested Trustee, most of which is subject to vesting: Ralph F.
Cox, $__, Phyllis Burke Davis, $__, Richard J. Flynn, $0, Robert M.
Gates, $__, E. Bradley Jones, $__, Donald J. Kirk, $__, William O.
McCoy, $__, Gerald C. McDonough, $__, Edward H. Malone, $__, Marvin L.
Mann, $__, and Thomas R. Williams, $__.
D The following amounts are required to be deferred by each
non-interested Trustee, most of which is subject to vesting: Ralph F.
Cox, $__, Phyllis Burke Davis, $__, Richard J. Flynn, $0, Robert M.
Gates, $__, E. Bradley Jones, $__, Donald J. Kirk, $__, William O.
McCoy, $__, Gerald C. McDonough, $__, Edward H. Malone, $__, Marvin L.
Mann, $__, and Thomas R. Williams, $__.
E For the fiscal year ended August 31, 1997, certain of the
non-interested Trustees' aggregate compensation from a fund includes
accrued voluntary deferred compensation as follows: [trustee name,
dollar amount of deferred compensation, fund name]; [trustee name,
dollar amount of deferred compensation, fund name]; and [trustee name,
dollar amount of deferred compensation, fund name].
Under a retirement program adopted in July 1988 and modified in
November 1995 and November 1996, each non-interested Trustee who
retired before December 30, 1996 may receive payments from a Fidelity
fund during his or her lifetime based on his or her basic trustee fees
and length of service. The obligation of a fund to make such payments
is neither secured nor funded. A Trustee became eligible to
participate in the program at the end of the calendar year in which he
or she reached age 72, provided that, at the time of retirement, he or
she had served as a Fidelity fund Trustee for at least five years.
Under a deferred compensation plan adopted in September 1995 and
amended in November 1996 (the Plan), non-interested Trustees must
defer receipt of a portion of, and may elect to defer receipt of an
additional portion of, their annual fees. Amounts deferred under the
Plan are treated as though equivalent dollar amounts had been invested
in shares of a cross-section of Fidelity funds including funds in each
major investment discipline and representing a majority of Fidelity's
assets under management (the Reference Funds). The amounts ultimately
received by the Trustees under the Plan will be directly linked to the
investment performance of the Reference Funds. Deferral of fees in
accordance with the Plan will have a negligible effect on a fund's
assets, liabilities, and net income per share, and will not obligate a
fund to retain the services of any Trustee or to pay any particular
level of compensation to the Trustee. A fund may invest in the
Reference Funds under the Plan without shareholder approval.
As of December 30, 1996, the non-interested Trustees terminated the
retirement program for Trustees who retire after such date. In
connection with the termination of the retirement program, each
then-existing non-interested Trustee received a credit to his or her
Plan account equal to the present value of the estimated benefits that
would have been payable under the retirement program. The amounts
credited to the non-interested Trustees' Plan accounts are subject to
vesting and are treated as though equivalent dollar amounts had been
invested in shares of the Reference Funds. The amounts ultimately
received by the Trustees in connection with the credits to their Plan
accounts will be directly linked to the investment performance of the
Reference Funds. The termination of the retirement program and related
crediting of estimated benefits to the Trustees' Plan accounts did not
result in a material cost to the funds.
As of [DATE], approximately __% of [Fund Name]'s total outstanding
shares was held by [an] FMR affiliate[s]. FMR Corp. is the ultimate
parent company of [this/these] FMR affiliate[s]. By virtue of his
ownership interest in FMR Corp., as described in the "FMR" section on
page ___, Mr. Edward C. Johnson 3d, President and Trustee of the fund,
may be deemed to be a beneficial owner of these shares. As of the
above date, with the exception of Mr. Johnson 3d's deemed ownership of
[Fund Name]'s shares, the Trustees, Members of the Advisory Board, and
officers of the funds owned, in the aggregate, less than __% of each
fund's total outstanding shares.
As of [DATE], the Trustees, Members of the Advisory Board, and
officers of each fund owned, in the aggregate, less than __% of each
fund's total outstanding shares.
As of [DATE], the following owned of record or beneficially 5% or
more of a fund's outstanding shares:
A shareholder owning of record or beneficially more than 25% of a
fund's outstanding shares may be considered a controlling person. That
shareholder's vote could have a more significant effect on matters
presented at a shareholders' meeting than votes of other
shareholders.
MANAGEMENT CONTRACTS
FMR is manager of Municipal Money Market and Spartan Municipal
Money pursuant to management contracts dated [December 20, 1997] and
February 28, 1992, respectively, which were approved by shareholders
on November 19, 1997 and December 11, 1991.
MANAGEMENT SERVICES. Each fund employs FMR to furnish investment
advisory and other services. Under the terms of its management
contract with each fund, FMR acts as investment adviser and, subject
to the supervision of the Board of Trustees, directs the investments
of the fund in accordance with its investment objective, policies, and
limitations. FMR also provides each fund with all necessary office
facilities and personnel for servicing the fund's investments,
compensates all officers of each fund and all Trustees who are
"interested persons" of the trust or of FMR, and all personnel of each
fund or FMR performing services relating to research, statistical,
and investment activities.
In addition, FMR or its affiliates, subject to the supervision of the
Board of Trustees, provide the management and administra tive
services necessary for the operation of each fund. These services
include providing facilities for maintaining each fund's
organization; supervising relations with custodians, transfer and
pricing agents, accountants, underwriters, and other persons
dealing with each fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining each
fund's records and the registration of each fund's shares under
federal securities laws and making necessary filings under state
securities laws; developing management and shareholder services for
each fund; and furnishing reports, evaluations, and analyses on a
variety of subjects to the Trustees.
MANAGEMENT-RELATED EXPENSES (MUNICIPAL MONEY MARKET). In addition
to the management fee payable to FMR and the fees payable to the
transfer, dividend disbursing, and shareholder servicing agent, and
pricing and bookkeeping agent, the fund pays all of its expenses that
are not assumed by those parties. The fund pays for the the
typesetting, printing, and mailing of its proxy materials to
shareholders, legal expenses, and the fees of the custodian, auditor
and non-interested Trustees. The fund's management contract further
provides that the fund will pay for typesetting, printing, and mailing
prospectuses, statements of additional information, notices, and
reports to shareholders; however, under the terms of each fund's
transfer agent agreement, the transfer agent bears the costs of
providing these services to existing shareholders. Other expenses paid
by the fund include interest, taxes, brokerage commissions, the fund's
proportionate share of insurance premiums and Investment Company
Institute dues, and the costs of registering shares under federal
securities laws and making necessary filings under state securities
laws. The fund i s also liable for such non-recurring expenses as
may arise, including costs of any litigation to which the fund may be
a party, and any obligation it may have to indemnify its officers and
Trustees with respect to litigation.
MANAGEMENT-RELATED EXPENSES (SPARTAN MUNICIPAL MONEY). Under the
terms of its management contract with the fund, FMR is responsible
for payment of all operating expenses of the fund with certain
exceptions. Specific expenses payable by FMR include expenses for
typesetting, printing, and mailing proxy materials to shareholders,
legal expenses, fees of the custodian, auditor and interested
Trustees, the fund's proportionate share of insurance premiums and
Investment Company Institute dues, and the costs of registering shares
under federal securities laws and making necessary filings under state
securities laws. The fund's management contract further provides that
FMR will pay for typesetting, printing, and mailing prospectuses,
statements of additional information, notices, and reports to
shareholders; however, under the terms of the fund's transfer agent
agreement, the transfer agent bears the costs of providing these
services to existing shareholders. FMR also pays all fees associated
with transfer agent, dividend disbursing, and shareholder services,
and pricing and bookkeeping services.
FMR pays all other expenses of Spartan Municipal Income with the
following exceptions: fees and expenses of the non-interested
Trustees, interest, taxes, brokerage commissions (if any), and such
nonrecurring expenses as may arise, including costs of any litigation
to which the fund may be a party, and any obligation it may have to
indemnify its officers and Trustees with respect to litigation.
MANAGEMENT FEES. For the services of FMR under the management
contract, Spartan Municipal Money pays FMR a monthly management
fee at the annual rate of 0.50% of its average net assets throughout
the month.
The management fee paid to FMR by Spartan Municipal Money is
reduced by an amount equal to the fees and expenses paid by the
fund to the non-interested Trustees.
For the services of FMR under the management contract, Municipal
Money Market pays FMR a monthly management fee which has two
components: a group fee rate and an individual fund fee rate.
The group fee rate is based on the monthly average net assets of all
of the registered investment companies with which FMR has management
contracts.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Annualized Group Net Effective Annual
Assets Rate Assets Fee Rate
0 - $3 billion .3700% $ 0.5 billion .3700%
3 - 6 .3400 25 .2664
6 - 9 .3100 50 .2188
9 - 12 .2800 75 .1986
12 - 15 .2500 100 .1869
15 - 18 .2200 125 .1793
18 - 21 .2000 150 .1736
21 - 24 .1900 175 .1695
24 - 30 .1800 200 .1658
30 - 36 .1750 225 .1629
36 - 42 .1700 250 .1604
42 - 48 .1650 275 .1583
48 - 66 .1600 300 .1565
66 - 84 .1550 325 .1548
84 - 120 .1500 350 .1533
120 - 174 .1450 400 .1507
174 - 228 .1400
228 - 282 .1375
282 - 336 .1350
Over 336 .1325
Prior to December 19, 1997, the group fee rate was based on a
schedule with breakpoints ending at 0.1400% for average group
assets in excess of $174 billion. The group fee rate breakpoints shown
above for average group assets in excess of $120 billion and under
$228 billion were voluntarily adopted by FMR on January 1, 1992. The
additional breakpoints shown above for average group assets in excess
of $228 billion were voluntarily adopted by FMR on November 1, 1993.
On August 1, 1994, FMR voluntarily revised the prior extensions to the
group fee rate schedule, and added new breakpoints for average group
assets in excess of $156 billion and under $372 billion as shown in
the schedule below. The revised group fee rate schedule was identical
to the above schedule for average group assets under $156 billion.
On January 1, 1996, FMR voluntarily added new breakpoints to the
revised schedule for average group assets in excess of $372 billion.
The revised group fee rate schedule and its extensions provide for
lower management fee rates as FMR's assets under management
increase. Municipal Money Market's current management contract
reflects the group fee rate schedule above for average group assets
under $156 billion and the group fee rate schedule below for average
group assets in excess of $156 billion.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Annualized Group Net Effective Annual
Assets Rate Assets Fee Rate
120 - $156 billion .1450% $ 150 billion .1736%
156 - 192 .1400 175 .1690
192 - 228 .1350 200 .1652
228 - 264 .1300 225 .1618
264 - 300 .1275 250 .1587
300 - 336 .1250 275 .1560
336 - 372 .1225 300 .1536
372 - 408 .1200 325 .1514
408 - 444 .1175 350 .1494
444 - 480 .1150 375 .1476
480 - 516 .1125 400 .1459
Over 516 .1100 425 .1443
450 .1427
475 .1413
500 .1399
525 .1385
550 .1372
The group fee rate is calculated on a cumulative basis pursuant to
the graduated fee rate schedule shown above on the left. The schedule
above on the right shows the effective annual group fee rate at
various asset levels, which is the result of cumulatively applying the
annualized rates on the left. For example, the effective annual fee
rate at $___ billion of group net assets - the approximate level for
October 1997 - was ___%, which is the weighted average of the
respective fee rates for each level of group net assets up to $__
billion.
The individual fund fee rate for Municipal Money Market is 0.15%.
Based on the average group net assets of the funds advised by FMR for
October 1997, the fund's annual management fee rate would be
calculated as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Group Fee Rate Individual Fund Fee Rate Management
Fee Rate
Municipal Money Market 0.___% + 0.15% = 0.___%
</TABLE>
One-twelfth of this annual management fee rate is applied to the
fund's net assets averaged for the most recent month, giving a dollar
amount, which is the fee for that month.
The following table shows the amount of management fees paid by
each fund to FMR for the past three fiscal years, and the amount of
credits reducing management fees for Spartan Municipal Money.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Fiscal Years Ended
October 31 (for Municipal Amount of
Money Market) and August 31 Credits Reducing Management Fees
Fund (for Spartan Municipal Money) Management Fees Paid to FMR
Municipal Money Market 1997 $ $
1996 $ $10,874,000
1995 $ $10,988,000
Spartan Municipal Money 1997 $ $
1996 $197,613 $8,914,176
1995 $ $8,907,588
</TABLE>
* After reduction of fees and expenses paid by the fund to the
non-interested Trustees.
FMR may, from time to time, voluntarily reimburse all or a portion
of a fund's operating expenses (exclusive of interest, taxes,
brokerage commissions, and extraordinary expenses). FMR retains the
ability to be repaid for these expense reimbursements in the amount
that expenses fall below the limit prior to the end of the fiscal
year.
Expense reimbursements by FMR will increase a fund's total returns and
yield, and repayment of the reimbursement by a fund will lower its
total returns and yield.
Effective August 1, 1994, FMR voluntarily agreed, subject to
revision or termination, to reimburse Spartan Municipal Money if and
to the extent that its aggregate operating expenses, including
management fees, were in excess of an annual rate of 0.40% of its
average net assets. For the fiscal years ended August 31, 1997, 1996,
and 1995, management fees incurred under the fund's contract prior to
reimbursement amounted to $_________, $___________, and $_________,
respectively, and management fees reimbursed by FMR amounted to
$_________, $___________, and $_________, respectively (after
reduction for compensation to the non-interested Trustees).
To defray shareholder service costs, FMR or its affiliates also
collect Spartan Municipal Money's $5.00 exchange fee, $5.00 account
closeout fee, $5.00 fee for wire purchases and redemptions, and $2.00
checkwriting charge. Shareholder transaction fees and charges
collected by FMR are shown in the table below.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Period Ended Account Checkwriting
August 31 Exchange Fees Closeout Fees Wire Fees Charges
Spartan Municipal Money 1997 $ $ $ $
1996 $10,444 $2,684 $2,305 $14,281
1995 $13,120 $3,274 $3,005 $16,448
</TABLE>
SUB-ADVISER. FMR has entered into sub-advisory agreements with FMR
Texas pursuant to which FMR Texas has primary responsibility for
providing portfolio investment management services to the funds.
Under the terms of the sub-advisory agreements, dated December 20,
1997 and February 28, 1992, which were approved by shareholders on
November 19, 1997 and December 11, 1991, FMR pays FMR Texas fees equal
to 50% of the management fee payable to FMR under its management
contracts with Municipal Money Market and Spartan Municipal Money,
respectively. The fees paid to FMR Texas are not reduced by any
voluntary or mandatory expense reimbursements that may be in effect
from time to time.
Fees paid to FMR Texas by FMR on behalf of the funds for the past
three fiscal years are shown in the table below.
Fund Fiscal Years Ended October 31 (for
Municipal Money Market) and August 31
(for Spartan Municipal Money) Fees Paid to FMR Texas
Municipal Money Market 1997 $
1996 $
1995 $
Spartan Municipal Money 1997 $
1996 $ 5,695,935
1995 $ 5,568,762
DISTRIBUTION AND SERVICE PLANS
The Trustees have approved Distribution and Service Plans on behalf
of each fund (the Plans) pursuant to Rule 12b-1 under the 1940 Act
(the Rule). The Rule provides in substance that a mutual fund may not
engage directly or indirectly in financing any activity that is
primarily intended to result in the sale of shares of a fund except
pursuant to a plan approved on behalf of the fund under the Rule. The
Plans, as approved by the Trustees, allow the funds and FMR to incur
certain expenses that might be considered to constitute indirect
payment by the funds of distribution expenses.
Under each Plan, if the payment of management fees by the fund to
FMR is deemed to be indirect financing by the fund of the distribution
of its shares, such payment is authorized by the Plan. Each Plan
specifically recognizes that FMR may use its management fee revenue,
as well as its past profits or its other resources, to pay FDC for
expenses incurred in connection with the distribution of fund shares.
In addition, each Plan provides that FMR, directly or through FDC, may
make payments to third parties, such as banks or broker-dealers, that
engage in the sale of fund shares, or provide shareholder support
services. Currently, the Board of Trustees has not authorized such
payments for Municipal Money Market nor Spartan Municipal Money
shares.
Payments made by FMR either directly or through FDC to third
parties for the fiscal year ended 1997 amounted to $_____ for
Municipal Money Market and $_____ for Spartan Municipal Money. FMR
made no payments either directly or through FDC to third parties for
the fiscal year ended 1997.
Prior to approving each Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of the Plan, and
determined that there is a reasonable likelihood that the Plan will
benefit each fund and its shareholders. In particular, the Trustees
noted that each Plan does not authorize payments by each fund other
than those made to FMR under its management contract with each fund.
To the extent that each Plan gives FMR and FDC greater flexibility in
connection with the distribution of fund shares, additional sales of
fund shares may result. Furthermore, certain shareholder support
services may be provided more effectively under the Plans by local
entities with whom shareholders have other relationships.
The Plans for Municipal Money Market and Spartan Municipal Money
were approved by shareholders on November 19, 1997 and December 11,
1991, respectively.
The Glass-Steagall Act generally prohibits federally and state
chartered or supervised banks from engaging in the business of
underwriting, selling, or distributing securities. Although the scope
of this prohibition under the Glass-Steagall Act has not been clearly
defined by the courts or appropriate regulatory agencies, FDC believes
that the Glass-Steagall Act should not preclude a bank from performing
shareholder support services, or servicing and recordkeeping
functions. FDC intends to engage banks only to perform such functions.
However, changes in federal or state statutes and regulations
pertaining to the permissible activities of banks and their affiliates
or subsidiaries, as well as further judicial or administrative
decisions or interpretations, could prevent a bank from continuing to
perform all or a part of the contemplated services. If a bank were
prohibited from so acting, the Trustees would consider what actions,
if any, would be necessary to continue to provide efficient and
effective shareholder services. In such event, changes in the
operation of the funds might occur, including possible termination of
any automatic investment or r edemption or other services then
provided by the bank. It is not expected that shareholders would
suffer any adverse financial consequences as a result of any of these
occurrences. In addition, state securities laws on this issue may
differ from the interpretations of
Each fund may execute portfolio transactions with, and purchase
securities issued by, depository institutions that receive payments
under the Plans. No preference for the instruments of such depository
institutions will be shown in the selection o f investments.
CONTRACTS WITH FMR AFFILIATES
Each fund has entered into a transfer agent agreement with UMB.
Under the terms of the agreements, UMB provides transfer agency,
dividend disbursing, and shareholder services for each fund. UMB in
turn has entered into sub-transfer agent agreements with FSC ,
an affiliate of FMR. Under the terms of the sub-agreements, FSC
performs all processing activities associated with providing these
services for each fund and receives all related transfer agency fees
paid to UMB.
For providing transfer agency services, FSC receives an annual account
fee and an asset-based fee each based on account size and fund type
for each retail account and certain institutional accounts. With
respect to certain institutional retirement accounts, FSC receives an
annual account fee and an asset-based fee based on account type or
fund type. These annual account fees are subject to increase based on
postal rate changes.
FSC also collects small account fees from certain accounts with
balances of less than $2,500.
In addition, UMB receives the pro rata portion of the transfer
agency fees applicable to shareholder accounts in each Fidelity
Freedom Fund, a fund of funds managed by an FMR affiliate, according
to the percentage of the Freedom Fund's assets that is invested in a
fund.
FSC pays out-of-pocket expenses associated with providing transfer
agent services. In addition, FSC bears the expense of typesetting,
printing, and mailing prospectuses, statements of additional
information, and all other reports, notices, and statements to
existing shareholders, with the exception of proxy statements.
FSC has entered into a sub-agreement with Fidelity Brokerage
Services, Inc. (FBSI), an affiliate of FMR. Under the terms of this
sub-agreement, FBSI performs certain recordkeeping, communication, and
other services for shareholders of Municipal Money Market
participating in the Fidelity Ultra Service Account program. FBSI
directly charges a monthly administrative fee to each Ultra
Service Account client who chooses certain additional features. This
fee is in addition to the transfer agency fee received by FSC.
Each fund has also entered into a service agent agreement with UMB.
Under the terms of the agreements, UMB provides pricing and
bookkeeping services for each fund. UMB in turn has entered into
sub-service agent agreements with FSC. Under the terms of the
sub-agreements, FSC performs all processing activities associated with
providing these services, including calculating the NAV and dividends
for each fund and maintaining each fund's portfolio and general
accounting records, and receives all related pricing and bookkeeping
fees paid to UMB.
For providing pricing and bookkeeping services, FSC receives a
monthly fee based on each fund's average daily net assets throughout
the month. The annual fee rates for pricing and bookkeeping services
are 0.0175% of the first $500 million of average net assets and
0.0075% of average net assets in excess of $500 million. The fee, not
including reimbursement for out-of-pocket expenses, is limited to a
minimum of $40,000 and a maximum of $800,000 per year.
For the fiscal years ended October 31, 1997, 1996, and 1995
Municipal Money Market paid FSC pricing and bookkeeping fees,
including reimbursement for related out-of-pocket expenses, of
$_______, $402,000 and $410,000, respectively.
For Spartan Municipal Money, FMR bears the cost of transfer agency,
dividend disbursing, and shareholder services and pricing and
bookkeeping services under the terms of its management contract with
the fund.
Each fund has entered into a distribution agreement with FDC, an
affiliate of FMR organized as a Massachusetts corporation on July
18, 1960. FDC is a broker-dealer registered under the Securities
Exchange Act of 1934 and a member of the National Association of
Securities Dealers, Inc. The distribution agreements call for FDC to
use all reasonable efforts, consistent with its other business, to
secure purchasers for shares of the fund, which are continuously
offered at NAV. Promotional and administrative expenses in
connection with the offer and sale of shares are paid by FMR.
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Fidelity Municipal Money Market Fund and
Spartan Municipal Money Fund are funds of Fidelity Union Street Trust
II, an open-end management investment company organized as a Delaware
business trust on June 20, 1991. Currently, there are five funds of
Fidelity Union Street Trust II: Fidelity Municipal Money Market Fund,
Spartan Municipal Money Fund, Fidelity Daily Income Trust, Spartan
Arizona Municipal Money Market Fund and Spartan World Money Fund. The
Trust Instrument permits the Trustees to create additional funds.
Prior to December 19, 1997, Fidelity Municipal Money Market Fund was a
fund of Fidelity Beacon Street Trust.
In the event that FMR ceases to be the investment adviser to the trust
or a fund, the right of the trust or fund to use the identify ing
names "Fidelity" and "Spartan" may be withdrawn. There is a remote
possibility that one fund might become liable for any misstatement in
its prospectus or statement of additional information about another
fund.
The assets of the trust received for the issue or sale of shares of
each fund and all income, earnings, profits, and proceeds thereof,
subject only to the rights of creditors, are especially allocated to
such fund, and constitute the underlying assets of such fund. The
underlying assets of each fund are segregated on the books of account,
and are to be charged with the liabilities with respect to such fund
and with a share of the general expenses of the trust. Expenses with
respect to the trust are to be allocated in proportion to the asset
value of the respective funds, except where allocations of direct
expense can otherwise be fairly made. The officers of the trust,
subject to the general supervision of the Board of Trustees, have the
power to determine which expenses are allocable to a given fund, or
which are general or allocable to all of the funds. In the event of
the dissolution or liquidation of the trust, shareholders of each fund
are entitled to receive as a class the underlying assets of such fund
available for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. The trust is a business trust
organized under Delaware law. Delaware law provides that shareholders
shall be entitled to the same limitations of personal liability
extended to stockholders of private corporations for profit. The
courts of some states, however, may decline to apply Delaware law on
this point. The Trust Instrument contains an express disclaimer of
shareholder liability for the debts, liabilities, obligations, and
expenses of the trust and requires that a disclaimer be given in each
contract entered into or executed by the trust or the Trustees. The
Trust Instrument provides for indemnification out of each fund's
property of any shareholder or former shareholder held personally
liable for the obligations of the fund. The Trust Instrument also
provides that each fund shall, upon request, assume the defense of any
claim made against any shareholder for any act or obligation of the
fund and satisfy any judgment thereon. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is
limited to circumstances in which Delaware law does not apply, no
contractual limitation of liability was in effect, and the fund is
unable to meet its obligations. FMR believes that, in view of the
above, the risk of personal liability to shareholders is extremely
remote.
The Trust Instrument further provides that the Trustees, if they have
exercised reasonable care, shall not be personally liable to any
person other than the trust or its shareholders; moreover, the
Trustees shall not be liable for any conduct whatsoever, provided that
Trustees are not protected against any liability to which they would
otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence, or reckless disregard of the duties involved in the
conduct of their office.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. As a shareholder, you receive one vote for each dollar value
of net asset value you own. The shares have no preemptive or
conversion rights; the voting and dividend rights, the right of
redemption, and the privilege of exchange are described in the
Prospectus. Shares are fully paid and nonassessable, except as set
forth under the heading "Shareholder and Trustee Liability" above.
Shareholders representing 10% or more of the trust or a fund may, as
set forth in the Trust Instrument, call meetings of the trust or fund
for any purpose related to the trust or fund, as the case may be,
including, in the case of a meeting of the entire trust, the purpose
of voting on removal of one or more Trustees.
The trust or any fund may be terminated upon the sale of its assets
to, or merger with, another open-end management investment company or
series thereof, or upon liquidation and distribution of its assets.
Generally such terminations must be approved by vote of the holders
of a majority of the trust or the fund, as determined by the current
value of each shareholder's investment in the fund or trust; however,
the Trustees may, without prior shareholder approval, change the form
of organization of the trust by merger, consolidation, or
incorporation. If not so terminated or reorganized, the trust and its
funds will continue indefinitely.
Under the Trust Instrument, the Trustees may, without shareholder
vote, cause the trust to merge or consolidate into one or more trusts,
partnerships, or corporations, or cause the trust to be incorporated
under Delaware law, so long as the surviving entity is an open-end
management investment company that will succeed to or assume the trust
registration statement. Each fund may invest all of its assets in
another investment company.
CUSTODIAN. UMB Bank, n.a., 1010 Grand Avenue, Kansas City,
Missouri, is custodian of the assets of the funds. The custodian
is responsible for the safekeeping of a fund's assets and the
appointment of any subcustodian banks and clearing agencies. The
custodian takes no part in determining the investment policies of a
fund or in deciding which securities are purchased or sold by a fund.
However, a fund may invest in obligations of the custodian and may
purchase securities from or sell securities to the custodian.
FMR, its officers and directors, its affiliated companies, and the
Board of Trustees may, from time to time, conduct transactions with
various banks, including banks serving as custodians for certain funds
advised by FMR. Transactions that have occurred to date include
mortgages and personal and general business loans. In the judgment of
FMR, the terms and conditions of those transactions were not
influenced by existing or potential custodial or other fund
relationships.
AUDITOR. __________________________ serves as the trust's
independent accountant. The auditor examines financial statements
for the funds and provides other audit, tax, and related services.
FINANCIAL STATEMENTS
Each fund's financial statements and financial highlights for the
fiscal years ended October 31, 1997 (for Municipal Money Market) and
August 31, 1997 (for Spartan Municipal Money), and reports of the
auditors, are included in the funds' Annual Reports, which are
separate reports supplied with this SAI. The funds' financial
statements, including the financial highlights, and reports of the
auditors are incorporated herein by reference. For a free additional
copy of a fund's Annual Report, contact Fidelity at 1-800-544-8888, 82
Devonshire Street, Boston, MA 02109.
APPENDIX
The descriptions that follow are examples of eligible ratings for
the funds. A fund may, however, consider the ratings for other
types of investments and the ratings assigned by other rating
organizations when determining the eligibility of a particular
investment.
DESCRIPTION OF MOODY'S INVESTORS SERVICE RATINGS OF MUNICIPAL
OBLIGATIONS
Moody's ratings for short-term municipal obligations will be
designated Moody's Investment Grade ("MIG"). A two-component rating is
assigned to variable rate demand obligations. The first component
represents an evaluation of the degree of risk associated with
scheduled principal repayment and interest payments and is designated
by a long-term rating, e.g., "Aaa" or "A." The second component
represents an evaluation of the degree of risk associated with the
demand feature and is designated "VMIG."
MIG 1/VMIG 1 - This designation denotes best quality. There
is present strong protection by established cash flows, superior
liquidity support, or demonstrated broad-based access to the market
for refinancing.
MIG 2/VMIG 2 - This designation denotes high quality.
Margins of protection are ample although not so large as in the
preceding group.
DESCRIPTION OF STANDARD & POOR'S RATINGS OF MUNICIPAL
NOTES
Municipal notes maturing in three years or less will likely receive
a "note" rating symbol. Notes that have a put option or demand feature
are assigned a dual rating. The first rating addresses the likelihood
of repayment of principal and payment of interest due and for
short-term obligations is designated by a note rating symbol. The
second rating addresses only the demand feature, and is designated by
a commercial paper rating symbol, e.g., "A-1" or "A-2."
SP-1 - Strong capacity to pay principal and interest. Issues
determined to possess very strong characteristics are given a plus (+)
designation.
SP-2 - Satisfactory capacity to pay principal and interest,
with some vulnerability to adverse financial and economic changes over
the term of the notes.
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a)(1) Financial Statements and Financial Highlights for the fiscal
year ended August 31, 1997 will be filed by subsequent amendment.
(b) Exhibits:
(1) Trust Instrument dated June 20, 1991 is incorporated herein by
reference to Exhibit 1 of Post-Effective Amendment No. 11.
(1)(a) Supplement dated September 26, 1997 to the July 20, 1991
Trust Instrument is filed herein as Exhibit 1(a).
(2) Bylaws of the Trust are incorporated by reference to Exhibit 2(a)
of Post-Effective Amendment No. 10.
(3) Not applicable.
(4) Not applicable.
(5)(a) Management Contract between Fidelity Union Street Trust II on
behalf of Spartan Arizona Municipal Money Market Portfolio (currently
known as Spartan Arizona Municipal Money Market Fund) and Fidelity
Management & Research Company, dated September 16, 1994, is
incorporated herein by reference to Exhibit 5(g) of Post-Effective
Amendment No. 11.
(b) Sub-Advisory Agreement between FMR Texas Inc. and Fidelity
Management & Research Company with respect to Spartan Arizona
Municipal Money Market Portfolio (currently known as Spartan Arizona
Municipal Money Market Fund), dated September 16, 1994, is
incorporated herein by reference to Exhibit 5(h) of Post-Effective
Amendment No. 11.
(c) Management Contract between Fidelity Union Street Trust II on
behalf of Fidelity Daily Income Trust and Fidelity Management &
Research Company, dated January 28, 1993, is incorporated herein by
reference to Exhibit 5(c) of Post-Effective Amendment No. 11.
(d) Sub-Advisory Agreement between FMR Texas Inc. and Fidelity
Management & Research Company with respect to Fidelity Daily Income
Trust, dated February 28, 1992, is incorporated herein by reference to
Exhibit 5(d) of Post-Effective Amendment No. 11.
(e) Management Contract between Fidelity Union Street Trust II on
behalf of Spartan Municipal Money Fund and Fidelity Management &
Research Company, dated February 28, 1992 is incorporated herein by
reference to Exhibit 5(a) of Post-Effective Amendment No. 11.
(f) Sub-Advisory Agreement between FMR Texas Inc. and Fidelity
Management & Research Company with respect to Spartan Municipal Money
Fund, dated February 28, 1992, is incorporated herein by reference to
Exhibit 5(b) of Post-Effective Amendment No. 11.
(g) Management Contract, dated November, 1, 1993, between
Fidelity Tax-Exempt Money Market Trust (currently known as Fidelity
Municipal Money Market Fund) and Fidelity Management & Research Co. is
incorporated herein by reference to Exhibit 5(a) of Fidelity Beacon
Street Trust's Post-Effective Amendment No. 36 (File No. 2-64791).
(h) Sub-Advisory Agreement, dated December 30, 1991, between
Fidelity Management & Research Co. and FMR Texas Inc. on behalf of
Fidelity Tax-Exempt Money Market Trust (currently known as Fidelity
Municipal Money Market Fund) is incorporated herein by reference to
Exhibit 5(b) of Fidelity Beacon Street Trust's Post-Effective
Amendment No. 33 (File No. 2-64791)
(6)(a) General Distribution Agreement between Fidelity Union Street
Trust II on behalf of Spartan Arizona Municipal Money Market Portfolio
(currently known as Spartan Arizona Municipal Money Market Fund),
Fidelity Daily Income Trust, and Spartan Municipal Money Market Fund,
and Fidelity Distributors Corporation, dated September 16, 1994 is
incorporated herein by reference to Exhibit 6(c) of Post-Effective
Amendment No.12.
(6)(b) Amendments to the General Distribution Agreement between
Fidelity Union Street Trust II on behalf of Spartan Arizona Municipal
Money Market Fund, Fidelity Daily Income Trust, and Spartan Municipal
Money Market Fund and Fidelity Distributors Corporation, dated March
14, 1996 and July 15, 1996, are incorporated herein by reference to
Exhibit 6(k) of Fidelity Select Portfolios' Post-Effective Amendment
No. 57 (File No. 2-69972).
(6)(c) General Distribution Agreement, dated December 30, 1991,
between Fidelity Tax-Exempt Money Market Trust (currently known as
Fidelity Municipal Money Market Fund) and Fidelity Distributors
Corporation is incorporated herein by reference to Exhibit 6(a) of
Fidelity Beacon Street Trust's Post-Effective Amendment No. 33 (File
No. 2-64791).
(7)(a) Retirement Plan for Non-Interested Person Trustees,
Directors or General Partners, as amended on November 16, 1995, is
incorporated herein by reference to Exhibit 7(a) of Fidelity Select
Portfolio's (File No. 2-69972) Post-Effective Amendment No. 54.
(b) The Fee Deferral Plan for Non-Interested Person
Directors and Trustees of the Fidelity Funds, effective as of
September 14, 1995 and amended through November 14, 1996, is
incorporated herein by reference to Exhibit 7(b) of Fidelity Aberdeen
Street Trust's (File No. 33-43529) Post-Effective Amendment No. 19.
(8)(a) Custodian Agreement, Appendix B, and Appendix C, dated
December 1, 1994, between UMB Bank, n.a. and Fidelity Union Street
Trust II, on behalf of Spartan Arizona Municipal Money Market Fund and
Spartan Municipal Money Market Fund, is incorporated herein by
reference to Exhibit 8 of Fidelity California Municipal Trust's
Post-Effective Amendment No. 28 (File No. 2-83367).
(small solid bullet) (b) Appendix A, dated October 17, 1996, to the
Custodian Agreement, dated December 1, 1994, between UMB Bank, n.a.
and Fidelity Union Street Trust II, on behalf of Spartan Arizona
Municipal Money Market Fund and Spartan Municipal Money Market Fund,
is incorporated herein by reference to Exhibit 8(a) of Fidelity Court
Street Trust's Post-Effective Amendment No. 61 (File No. 2-58774).
(small solid bullet) (c) Custodian Agreement and Appendix C, dated
December 1, 1994, between The Bank of New York and Fidelity Union
Street Trust II on behalf of Fidelity Daily Income Trust is
incorporated herein by reference to Exhibit 8(a) of Fidelity Hereford
Street Trust's Post-Effective Amendment No. 4 (File No. 33-52577).
(small solid bullet) (d) Appendix A, dated August 31, 1996, to the
Custodian Agreement, dated December 1, 1994, between The Bank of New
York and Fidelity Union Street Trust II on behalf of Fidelity Daily
Income Trust is incorporated herein by reference to Exhibit 8(b) of
Daily Money Fund's Post-Effective Amendment No. 40 (File No. 2-77909).
(small solid bullet) (e) Appendix B, dated July 31, 1996, to the
Custodian Agreement, dated December 1, 1994, between The Bank of New
York and Fidelity Union Street Trust II on behalf of Fidelity Daily
Income Trust is incorporated herein by reference to Exhibit 8(c) of
Fidelity Income Fund's Post-Effective Amendment No. 35 (File No.
2-92661).
(f) Fidelity Group Repo Custodian Agreement among The Bank of New
York, J. P. Morgan Securities, Inc., and Fidelity Union Street Trust
II, on behalf of Fidelity Daily Income Trust, dated February 12, 1996,
is incorporated herein by reference to Exhibit 8(d) of Fidelity
Institutional Cash Portfolios' (File No. 2-74808) Post-Effective
Amendment No. 31.
(g) Schedule 1 to the Fidelity Group Repo Custodian Agreement
between The Bank of New York and Fidelity Union Street Trust II, on
behalf of Fidelity Daily Income Trust, dated February 12, 1996, is
incorporated herein by reference to Exhibit 8(e) of Fidelity
Institutional Cash Portfolios' (File No. 2-74808) Post-Effective
Amendment No. 31.
(h) Fidelity Group Repo Custodian Agreement among Chase Manhattan
Bank, Greenwich Capital Markets, Inc., and Fidelity Union Street Trust
II, on behalf of Fidelity Daily Income Trust, dated November 13, 1995,
is incorporated herein by reference to Exhibit 8(f) of Fidelity
Institutional Cash Portfolios' (File No. 2-74808) Post-Effective
Amendment No. 31.
(i) Schedule 1 to the Fidelity Group Repo Custodian Agreement
between The Chase Manhattan Bank and Fidelity Union Street Trust II,
on behalf of Fidelity Daily Income Trust dated November 13, 1995, is
incorporated herein by reference to Exhibit 8(g) of Fidelity
Institutional Cash Portfolios' (File No. 2-74808) Post-Effective
Amendment No. 31.
(j) Joint Trading Account Custody Agreement between The Bank of
New York and Fidelity Union Street Trust II, on behalf of Fidelity
Daily Income Trust, dated May 11, 1995, is incorporated herein by
reference to Exhibit 8(h) of Fidelity Institutional Cash Portfolios'
(File No. 2-74808) Post-Effective Amendment No. 31.
(k) First Amendment to Joint Trading Account Custody Agreement
between The Bank of New York and Fidelity Union Street Trust II, on
behalf Fidelity Daily Income Trust, dated July 14, 1995, is
incorporated herein by reference to Exhibit 8(i) of Fidelity
Institutional Cash Portfolios' (File No. 2-74808) Post-Effective
Amendment No. 31.
(l) Custodian Agreement, Appendix B, and Appendix C, dated
December 1, 1994, between UMB Bank, n.a. and Fidelity Beacon Street
Trust, on behalf of Fidelity Tax-Exempt Money Market Trust (currently
known as Fidelity Municipal Money Market Trust), is incorporated
herein by reference to Exhibit 8 of Fidelity California Municipal
Trust's Post-Effective Amendment No. 28 (File No. 2-83367).
(9) Not applicable.
(10) Not applicable.
(11) Not applicable.
(12) Not applicable.
(13) Not applicable.
(14) (a) Fidelity Individual Retirement Account Custodial Agreement
and Disclosure Statement, as currently in effect, is incorporated
herein by reference to Exhibit 14(a) of Fidelity Union Street Trust's
(File No. 2-50318) Post-Effective Amendment No. 87.
(b) Fidelity Institutional Individual Retirement Account Custodial
Agreement and Disclosure Statement, as currently in effect, is
incorporated herein by reference to Exhibit 14(d) of Fidelity Union
Street Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(c) National Financial Services Corporation Individual Retirement
Account Custodial Agreement and Disclosure Statement, as currently in
effect, is incorporated herein by reference to Exhibit 14(h) of
Fidelity Union Street Trust's (File No. 2-50318) Post-Effective
Amendment No. 87.
(d) Fidelity Portfolio Advisory Services Individual Retirement
Account Custodial Agreement and Disclosure Statement, as currently in
effect, is incorporated herein by reference to Exhibit 14(i) of
Fidelity Union Street Trust's (File No. 2-50318) Post-Effective
Amendment No. 87.
(e) Fidelity 403(b)(7) Custodial Account Agreement, as currently in
effect, is incorporated herein by reference to Exhibit 14(e) of
Fidelity Union Street Trust's (File No. 2-50318) Post-Effective
Amendment No. 87.
(f) National Financial Services Corporation Defined Contribution
Retirement Plan and Trust Agreement, as currently in effect, is
incorporated herein by reference to Exhibit 14(k) of Fidelity Union
Street Trust's (File No. 2-50318) Post-Effective Amendment No. 87.
(g) The CORPORATEplan for Retirement Profit Sharing/401K Plan, as
currently in effect, is incorporated herein by reference to Exhibit
14(l) of Fidelity Union Street Trust's (File No. 2-50318)
Post-Effective Amendment No. 87.
(h) The CORPORATEplan for Retirement Money Purchase Pension Plan, as
currently in effect, is incorporated herein by reference to Exhibit
14(m) of Fidelity Union Street Trust's (File No. 2-50318)
Post-Effective Amendment No. 87.
(i) Fidelity Investments Section 403(b)(7) Individual Custodial
Account Agreement and Disclosure Statement, as currently in effect, is
incorporated herein by reference to Exhibit 14(f) of Fidelity
Commonwealth Trust's (File No. 2-52322) Post-Effective Amendment No.
57.
(j) Plymouth Investments Defined Contribution Retirement Plan and
Trust Agreement, as currently in effect, is incorporated herein by
reference to Exhibit 14(o) of Fidelity Commonwealth Trust's (File No.
2-52322) Post-Effective Amendment No. 57.
(k) The Fidelity Prototype Defined Benefit Pension Plan and Trust
Basic Plan Document and Adoption Agreement, as currently in effect, is
incorporated herein by reference to Exhibit 14(d) of Fidelity
Securities Fund's (File No. 2-93601) Post-Effective Amendment No. 33.
(l) The Institutional Prototype Plan Basic Plan Document,
Standardized Adoption Agreement, and Non-Standardized Adoption
Agreement, as currently in effect, is incorporated herein by reference
to Exhibit 14(o) of Fidelity Securities Fund's (File No. 2-93601)
Post-Effective Amendment No. 33.
(m) The CORPORATEplan for Retirement 100SM Profit Sharing/401(k)
Basic Plan Document, Standardized Adoption Agreement, and
Non-Standardized Adoption Agreement, as currently in effect, is
incorporated herein by reference to Exhibit 14(f) of Fidelity
Securities Fund's (File No. 2-93601) Post-Effective Amendment No. 33.
(n) The Fidelity Investments 401(a) Prototype Plan for Tax-Exempt
Employers Basic Plan Document, Standardized Profit Sharing Plan
Adoption Agreement, Non-Standardized Discretionary Contribution Plan
No. 002 Adoption Agreement, and Non-Standardized Discretionary
Contribution Plan No. 003 Adoption Agreement, as currently in effect,
is incorporated herein by reference to Exhibit 14(g) of Fidelity
Securities Fund's (File No. 2-93601) Post-Effective Amendment No. 33.
(o) Fidelity Investments 403(b) Sample Plan Basic Plan Document and
Adoption Agreement, as currently in effect, is incorporated herein by
reference to Exhibit 14(p) of Fidelity Securities Fund's (File No.
2-93601) Post-Effective Amendment No. 33.
(p) Fidelity Defined Contribution Retirement Plan and Trust
Agreement, as currently in effect, is incorporated herein by reference
to Exhibit 14(c) of Fidelity Securities Fund's (File No. 2-93601)
Post-Effective Amendment No. 33.
(q) Fidelity SIMPLE-IRAPlan Adoption Agreement, Company Profile Form,
and Plan Document, as currently in effect, is incorporated herein by
reference to Exhibit 14(q) of Fidelity Aberdeen Street Trust's (File
No. 33-43529) Post-Effective Amendment No. 19.
(15)(a) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Union Street Trust II on behalf of Spartan Arizona Municipal
Money Portfolio (currently known as Spartan Arizona Municipal Money
Market Fund) is incorporated herein by reference to Exhibit 15(c) of
Post-Effective Amendment No. 13.
(b) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Union Street Trust II on behalf of Fidelity Daily Income
Trust is incorporated herein by reference to Exhibit 15(b) of
Post-Effective Amendment No. 11.
(c) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Union Street Trust II on behalf of Spartan Municipal Money
Fund is incorporated herein by reference to Exhibit 15(a) of
Post-Effective Amendment No. 11.
(d) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Tax-Exempt Money Market Trust (currently known as Fidelity
Municipal Money Market Fund) is incorporated herein by reference to
Exhibit 15(a) of Fidelity Beacon Street Trust's Post-Effective
Amendment No. 36 (File No. 2-64791).
(16)(a) A schedule for the computation of 7-day yields and total
returns on behalf of Fidelity Daily Income Trust, Spartan Arizona
Municipal Money Market Fund and Spartan Municipal Money Market Fund is
incorporated herein by reference to Exhibit 16 of Post-Effective
Amendment No. 13
(b) A schedule for the computation of total returns for Fidelity
Tax-Exempt Money Market Trust (currently known as Fidelity Municipal
Money Market Fund) if incorporated herein by reference to Exhibit
16(a) of Fidelity Beacon Street Trust's Post-Effective Amendment No.
39 (File No. 2-64791).
(c) A schedule for the computation of 7-day yields for Fidelity
Tax-Exempt Money Market Trust (currently known as Fidelity Municipal
Money Market Fund) if incorporated herein by reference to Exhibit
16(b) of Fidelity Beacon Street Trust's Post-Effective Amendment No.
39 (File No. 2-64791).
(17) Financial Data Schedules to be filed by subsequent amendment.
(18) Not applicable.
Item 25. Persons Controlled by or under Common Control with Registrant
The Registrant's Board of Trustees is the same as the boards of other
funds managed by Fidelity Management & Research Company. In addition,
the officers of these funds are substantially identical. Nonetheless,
Registrant takes the position that it is not under common control with
these other funds since the power residing in the respective boards
and officers arises as the result of an official position with the
respective funds.
Item 26. Number of Holders of Securities: August 31, 1997
Title of Class: Shares of Beneficial Interest
Name of Series Number of Record Holders
Fidelity Daily Income Trust 63,333
Spartan Arizona Municipal Money Market Fund 539
Spartan Municipal Money Market 13,575
Fidelity Municipal Money Market Fund 140,375
Item 27. Indemnification
Pursuant to Del. Code Ann. title 12 (sub-section) 3817, a Delaware
business trust may provide in its governing instrument for the
indemnification of its officers and trustees from and against any and
all claims and demands whatsoever. Article X, Section 10.02 of the
Trust Instrument states that the Registrant shall indemnify any
present trustee or officer to the fullest extent permitted by law
against liability, and all expenses reasonably incurred by him or her
in connection with any claim, action, suit or proceeding in which he
or she is involved by virtue of his or her service as a trustee,
officer, or both, and against any amount incurred in settlement
thereof. Indemnification will not be provided to a person adjudged by
a court or other adjudicatory body to be liable to the Registrant or
its shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of his or her duties (collectively,
"disabling conduct"), or not to have acted in good faith in the
reasonable belief that his or her action was in the best interest of
the Registrant. In the event of a settlement, no indemnification may
be provided unless there has been a determination, as specified in the
Trust Instrument, that the officer or trustee did not engage in
disabling conduct.
Pursuant to Section 11 of the Distribution Agreement, the Registrant
agrees to indemnify and hold harmless the Distributor and each of its
directors and officers and each person, if any, who controls the
Distributor within the meaning of Section 15 of the 1933 Act against
any loss, liability, claim, damages or expense arising by reason of
any person acquiring any shares, based upon the ground that the
registration statement, Prospectus, Statement of Additional
Information, shareholder reports or other information filed or made
public by the Registrant included a materially misleading statement or
omission. However, the Registrant does not agree to indemnify the
Distributor or hold it harmless to the extent that the statement or
omission was made in reliance upon, and in conformity with,
information furnished to the Registrant by or on behalf of the
Distributor. The Registrant does not agree to indemnify the parties
against any liability to which they would be subject by reason of
their own disabling conduct.
Pursuant to the agreement by which Fidelity Service Co. ("FSC") is
appointed sub-transfer agent, the Transfer Agent agrees to indemnify
Service for its losses, claims, damages, liabilities and expenses to
the extent the Transfer Agent is entitled to and receives
indemnification from the Registrant for the same events. Under the
Transfer Agency Agreement, the Registrant agrees to indemnify and hold
the Transfer Agent harmless against any losses, claims, damages,
liabilities, or expenses resulting from:
(1) any claim, demand, action or suit brought by any person other
than the Registrant, which names the Transfer Agent and/or the
Registrant as a party and is not based on and does not result from the
Transfer Agent's willful misfeasance, bad faith, negligence or
reckless disregard of its duties, and arises out of or in connection
with the Transfer Agent's performance under the Transfer Agency
Agreement; or
(2) any claim, demand, action or suit (except to the extent
contributed to by the Transfer Agent's willful misfeasance, bad faith,
negligence or reckless disregard of its duties) which results from the
negligence of the Registrant, or from the Transfer Agent's acting upon
any instruction(s) reasonably believed by it to have been executed or
communicated by any person duly authorized by the Registrant, or as a
result of the Transfer Agent's acting in reliance upon advice
reasonably believed by the Transfer Agent to have been given by
counsel for the Registrant, or as a result of the Transfer Agent's
acting in reliance upon any instrument or stock certificate reasonably
believed by it to have been genuine and signed, countersigned or
executed by the proper person.
Item 28. Business and Other Connections of Investment Adviser
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY (FMR)
FMR serves as investment adviser to a number of other investment
companies. The directors and officers of the Adviser have held,
during the past two fiscal years, the following positions of a
substantial nature.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman of the Board of FMR; President and Chief
Executive Officer of FMR Corp.; Chairman of the
Board and Director of FMR, FMR Corp., FMR Texas
Inc., FMR (U.K.) Inc., and FMR (Far East) Inc.;
Chairman of the Board and Representative Director of
Fidelity Investments Japan Limited; President and
Trustee of funds advised by FMR.
Robert C. Pozen President and Director of FMR; Senior Vice President
and Trustee of funds advised by FMR; President and
Director of FMR Texas Inc., FMR (U.K.) Inc., and
FMR (Far East) Inc.; General Counsel, Managing
Director, and Senior Vice President of FMR Corp.
J. Gary Burkhead President of FIIS; President and Director of FMR, FMR
Texas Inc., FMR (U.K.) Inc., and FMR (Far East) Inc.;
Managing Director of FMR Corp.; Senior Vice
President and Trustee of funds advised by FMR.
Peter S. Lynch Vice Chairman of the Board and Director of FMR.
Marta Amieva Vice President of FMR.
John Carlson Vice President of FMR.
Dwight D. Churchill Senior Vice President of FMR.
Barry Coffman Vice President of FMR.
Arieh Coll Vice President of FMR.
Stephen G. Manning Assistant Treasurer of FMR
William Danoff Senior Vice President of FMR and of a fund advised by
FMR.
Scott E. DeSano Vice President of FMR.
Craig P. Dinsell Vice President of FMR.
Penelope Dobkin Vice President of FMR and of a fund advised by FMR.
George C. Domolky Vice President of FMR.
Bettina Doulton Vice President of FMR and of funds advised by FMR.
Margaret L. Eagle Vice President of FMR and a fund advised by FMR.
Richard B. Fentin Senior Vice President of FMR and Vice President of a
fund advised by FMR.
Gregory Fraser Vice President of FMR and of a fund advised by FMR.
Jay Freedman Assistant Clerk of FMR; Clerk of FMR Corp., FMR
(U.K.) Inc., and FMR (Far East) Inc.; Secretary of FMR
Texas Inc.
Robert Gervis Vice President of FMR.
David L. Glancy Vice President of FMR and of a fund advised by FMR.
Kevin E. Grant Vice President of FMR and of funds advised by FMR.
Barry A. Greenfield Vice President of FMR and of a fund advised by FMR.
Boyce I. Greer Senior Vice President of FMR.
Bart A. Grenier Vice President of FMR and of High-Income Funds
advised by FMR.
Robert Haber Vice President of FMR.
Richard C. Habermann Senior Vice President of FMR; Vice President of funds
advised by FMR.
William J. Hayes Senior Vice President of FMR; Vice President of Equity
funds advised by FMR.
Richard Hazlewood Vice President of FMR and of a fund advised by FMR.
Fred L. Henning Jr. Senior Vice President of FMR; Vice President of
Fixed-Income funds advised by FMR.
Bruce Herring Vice President of FMR.
John R. Hickling Vice President of FMR and of a fund advised by FMR.
Robert F. Hill Vice President of FMR; Director of Technical Research.
Curt Hollingsworth Vice President of FMR and of funds advised by FMR.
Abigail P. Johnson Senior Vice President of FMR and of a fund advised by
FMR; Associate Director and Senior Vice President of
Equity funds advised by FMR.
David B. Jones Vice President of FMR.
Steven Kaye Vice President of FMR and of a fund advised by FMR.
Francis V. Knox Vice President of FMR; Compliance Officer of FMR
(U.K.) Inc.
David P. Kurrasch Vice President of FMR.
Robert A. Lawrence Senior Vice President of FMR; Associate Director and
Senior Vice President of Equity funds advised by FMR;
Vice President of High Income funds advised by FMR.
Harris Leviton Vice President of FMR and of a fund advised by FMR.
Bradford E. Lewis Vice President of FMR and of funds advised by FMR.
Mark G. Lohr Vice President of FMR; Treasurer of FMR, FMR (U.K.)
Inc., FMR (Far East) Inc., and FMR Texas Inc.
Arthur S. Loring Senior Vice President, Clerk, and General Counsel of
FMR; Vice President/Legal, and Assistant Clerk of
FMR Corp.; Secretary of funds advised by FMR.
Richard R. Mace Jr. Vice President of FMR and of funds advised by FMR.
Charles Mangum Vice President of FMR.
Kevin McCarey Vice President of FMR.
Diane McLaughlin Vice President of FMR.
Neal P. Miller Vice President of FMR.
Robert H. Morrison Vice President of FMR; Director of Equity Trading.
David L. Murphy Vice President of FMR and of funds advised by FMR.
Scott Orr Vice President of FMR.
Jacques Perold Vice President of FMR.
Anne Punzak Vice President of FMR.
Kenneth A. Rathgeber Vice President of FMR; Treasurer of funds advised by
FMR.
Kennedy P. Richardson Vice President of FMR.
Mark Rzepczynski Vice President of FMR.
Lee H. Sandwen Vice President of FMR.
Patricia A. Satterthwaite Vice President of FMR and of a fund advised by FMR.
Fergus Shiel Vice President of FMR.
Carol Smith-Fachetti Vice President of FMR.
Steven J. Snider Vice President of FMR.
Thomas T. Soviero Vice President of FMR and of a fund advised by FMR.
Richard Spillane Senior Vice President of FMR; Associate Director and
Senior Vice President of Equity funds advised by FMR;
Senior Vice President and Director of Operations and
Compliance of FMR (U.K.) Inc.
Thomas Sprague Vice President of FMR.
Robert E. Stansky Senior Vice President of FMR; Vice President of a fund
advised by FMR.
Scott Stewart Vice President of FMR.
Cythia Straus Vice President of FMR.
Thomas Sweeney Vice President of FMR and of a fund advised by FMR.
Beth F. Terrana Senior Vice President of FMR; Vice President of a fund
advised by FMR.
Yoko Tilley Vice President of FMR.
Joel C. Tillinghast Vice President of FMR and of a fund advised by FMR.
Robert Tuckett Vice President of FMR.
Jennifer Uhrig Vice President of FMR and of funds advised by FMR.
George A. Vanderheiden Senior Vice President of FMR; Vice President of funds
advised by FMR.
</TABLE>
(2) FMR TEXAS INC. (FMR Texas)
FMR Texas provides investment advisory services to Fidelity
Management & Research Company. The directors and officers of the
Sub-Adviser have held the following positions of a substantial nature
during the past two fiscal years.
Edward C. Johnson 3d Chairman of the Board and Director of FMR
Texas, FMR, FMR Corp., FMR (Far East) Inc.,
and FMR (U.K.) Inc.; Chairman of the Board of
FMR; President and Chief Executive Officer of
FMR Corp.; Chairman of the Board and
Representative Director of Fidelity Investments
Japan Limited; President and Trustee of funds
advised by FMR.
J. Gary Burkhead President of FIIS; President and Director of FMR
Texas, FMR, FMR (Far East) Inc., and FMR
(U.K.) Inc.; Managing Director of FMR Corp.;
Senior Vice President and Trustee of funds
advised by FMR.
Robert C. Pozen President and Director of FMR; Senior Vice
President and Trustee of funds advised by FMR;
President and Director of FMR Texas Inc., FMR
(U.K.) Inc., and FMR (Far East) Inc.; General
Counsel, Managing Director, and Senior Vice
President of FMR Corp.
Robert H. Auld Vice President of FMR Texas.
Robert K. Duby Vice President of FMR Texas and of funds
advised by FMR.
Robert Litterst Vice President of FMR Texas and of funds
advised by FMR.
Thomas D. Maher Vice President of FMR Texas and Assistant Vice
President of Money Market funds advised by
FMR.
Scott A. Orr Vice President of FMR Texas and of funds
advised by FMR.
Burnell R. Stehman Vice President of FMR Texas and of funds
advised by FMR.
John J. Todd Vice President of FMR Texas and of funds
advised by FMR.
Mark G. Lohr Treasurer of FMR Texas, FMR (U.K.) Inc., FMR
(Far East) Inc., and FMR; Vice President of
FMR.
Stephen G. Manning Assistant Treasurer of FMR Texas, FMR (U.K.)
Inc., FMR (Far East) Inc., and FMR; Vice
President and Treasurer of FMR Corp.
Jay Freedman Secretary of FMR Texas; Clerk of FMR (U.K.)
Inc., FMR (Far East) Inc., and FMR Corp.;
Assistant Clerk of FMR.
Item 29. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for
most funds advised by FMR.
(b)
Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
Edward C. Johnson 3d Director Trustee and President
Michael Mlinac Director None
Arthur S. Loring Vice President and Clerk Secretary
Caron Ketchum Treasurer and Controller None
Gary Greenstein Assistant Treasurer None
Jay Freedman Assistant Clerk None
Linda Holland Compliance Officer None
* 82 Devonshire Street, Boston, MA
(c) Not applicable.
Item 30. Location of Accounts and Records
All accounts, books, and other documents required to be maintained by
Section 31a of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company or Fidelity
Service Co., 82 Devonshire Street, Boston, MA 02109, or the funds'
respective custodian: The Bank of New York, 110 Washington Street,
New York, N.Y. (Fidelity Daily Income Trust) and UMB Bank, n.a., 1010
Grand Avenue, Kansas City, MO (Spartan Municipal Money Fund, Spartan
Arizona Municipal Money Market Fund and Fidelity Municipal Money
Market Fund).
Item 31. Management Services
Not applicable.
Item 32. Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 18 to the Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in
the City of Boston, and Commonwealth of Massachusetts, on the 10th day
of October 1997.
Fidelity Union Street Trust II
By /s/Edward C. Johnson 3d (dagger)
Edward C. Johnson 3d, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons
in the capacities and on the dates indicated.
(Signature) (Title) (Date)
<TABLE>
<CAPTION>
<S> <C> <C>
/s/Edward C. Johnson 3d (dagger) President and Trustee October 10, 1997
Edward C. Johnson 3d (Principal Executive Officer)
/s/Richard A. Silver Treasurer October 10, 1997
Richard A. Silver
/s/Robert C. Pozen Trustee October 10, 1997
Robert C. Pozen
/s/Ralph F. Cox * Trustee October 10, 1997
Ralph F. Cox
/s/Phyllis Burke Davis * Trustee October 10, 1997
Phyllis Burke Davis
/s/Robert M. Gates ** Trustee October 10, 1997
Robert M. Gates
/s/E. Bradley Jones * Trustee October 10, 1997
E. Bradley Jones
/s/Donald J. Kirk * Trustee October 10, 1997
Donald J. Kirk
/s/Peter S. Lynch * Trustee October 10, 1997
Peter S. Lynch
/s/Marvin L. Mann * Trustee October 10, 1997
Marvin L. Mann
/s/William O. McCoy * Trustee October 10, 1997
William O. McCoy
/s/Gerald C. McDonough * Trustee October 10, 1997
Gerald C. McDonough
/s/Thomas R. Williams * Trustee October 10, 1997
Thomas R. Williams
</TABLE>
(dagger) Signatures affixed by Robert C. Pozen pursuant to a power of
attorney dated July 17, 1997 and filed herewith.
* Signature affixed by Robert C. Hacker pursuant to a power of
attorney dated December 19, 1996 and filed herewith.
** Signature affixed by Robert C. Hacker pursuant to a power of
attorney dated March 6, 1997 and filed herewith.
POWER OF ATTORNEY
I, the undersigned President and Director, Trustee, or General
Partner, as the case may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Hereford Street Trust
Fidelity Advisor Series I Fidelity Income Fund
Fidelity Advisor Series II Fidelity Institutional Cash Portfolios
Fidelity Advisor Series III Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series IV Fidelity Investment Trust
Fidelity Advisor Series V Fidelity Magellan Fund
Fidelity Advisor Series VI Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series VII Fidelity Money Market Trust
Fidelity Advisor Series VIII Fidelity Mt. Vernon Street Trust
Fidelity Beacon Street Trust Fidelity Municipal Trust
Fidelity Boston Street Trust Fidelity Municipal Trust II
Fidelity California Municipal Trust Fidelity New York Municipal Trust
Fidelity California Municipal Trust II Fidelity New York Municipal Trust II
Fidelity Capital Trust Fidelity Phillips Street Trust
Fidelity Charles Street Trust Fidelity Puritan Trust
Fidelity Commonwealth Trust Fidelity Revere Street Trust
Fidelity Concord Street Trust Fidelity School Street Trust
Fidelity Congress Street Fund Fidelity Securities Fund
Fidelity Contrafund Fidelity Select Portfolios
Fidelity Corporate Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Court Street Trust Fidelity Summer Street Trust
Fidelity Court Street Trust II Fidelity Trend Fund
Fidelity Covington Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Daily Money Fund Fidelity U.S. Investments-Government Securities
Fidelity Destiny Portfolios Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity Union Street Trust
Portfolio, L.P. Fidelity Union Street Trust II
Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Exchange Fund Newbury Street Trust
Fidelity Financial Trust Variable Insurance Products Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund II
Fidelity Government Securities Fund Variable Insurance Products Fund III
Fidelity Hastings Street Trust
</TABLE>
in addition to any other investment company for which Fidelity
Management & Research Company or an affiliate acts as investment
adviser and for which the undersigned individual serves as President
and Director, Trustee, or General Partner (collectively, the "Funds"),
hereby constitute and appoint Robert C. Pozen my true and lawful
attorney-in-fact, with full power of substitution, and with full power
to him to sign for me and in my name in the appropriate capacity, all
Registration Statements of the Funds on Form N-1A, Form N-8A, or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A, Form N-8A, or any successor thereto, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such
things in my name and on my behalf in connection therewith as said
attorney-in-fact deems necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and the Investment Company
Act of 1940, and all related requirements of the Securities and
Exchange Commission. I hereby ratify and confirm all that said
attorney-in-fact or his substitutes may do or cause to be done by
virtue hereof. This power of attorney is effective for all documents
filed on or after August 1, 1997.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d_ July 17, 1997
Edward C. Johnson 3d
POWER OF ATTORNEY
I, the undersigned Director, Trustee, or General Partner, as the case
may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Government Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Institutional Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Portfolios Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity U.S. Investments-Government Securities
Portfolio, L.P. Fund, L.P.
Fidelity Devonshire Trust Fidelity Union Street Trust
Fidelity Exchange Fund Fidelity Union Street Trust II
Fidelity Financial Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Variable Insurance Products Fund II
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company or an affiliate acts as investment adviser and for
which the undersigned individual serves as Director, Trustee, or
General Partner (collectively, the "Funds"), hereby constitute and
appoint Arthur J. Brown, Arthur C. Delibert, Stephanie A. Djinis,
Robert C. Hacker, Thomas M. Leahey, Richard M. Phillips, and Dana L.
Platt, each of them singly, my true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to
sign for me and in my name in the appropriate capacities, all
Registration Statements of the Funds on Form N-1A, Form N-8A or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A or any successor thereto, any Registration
Statements on Form N-14, and any supplements or other instruments in
connection therewith, and generally to do all such things in my name
and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the
Securities Act of 1933 and the Investment Company Act of 1940, and all
related requirements of the Securities and Exchange Commission. I
hereby ratify and confirm all that said attorneys-in-fact or their
substitutes may do or cause to be done by virtue hereof. This power
of attorney is effective for all documents filed on or after March 1,
1997.
WITNESS my hand on the date set forth below.
/s/Robert M. Gates March 6, 1997
Robert M. Gates
POWER OF ATTORNEY
We, the undersigned Directors, Trustees, or General Partners, as the
case may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Government Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Institutional Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Portfolios Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity U.S. Investments-Government Securities
Portfolio, L.P. Fund, L.P.
Fidelity Devonshire Trust Fidelity Union Street Trust
Fidelity Exchange Fund Fidelity Union Street Trust II
Fidelity Financial Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Variable Insurance Products Fund II
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company or an affiliate acts as investment adviser and for
which the undersigned individual serves as Directors, Trustees, or
General Partners (collectively, the "Funds"), hereby constitute and
appoint Arthur J. Brown, Arthur C. Delibert, Stephanie A. Djinis,
Robert C. Hacker, Thomas M. Leahey, Richard M. Phillips, and Dana L.
Platt, each of them singly, our true and lawful attorneys-in-fact,
with full power of substitution, and with full power to each of them,
to sign for us and in our names in the appropriate capacities, all
Registration Statements of the Funds on Form N-1A, Form N-8A or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A or any successor thereto, any Registration
Statements on Form N-14, and any supplements or other instruments in
connection therewith, and generally to do all such things in our names
and behalf in connection therewith as said attorneys-in-fact deems
necessary or appropriate, to comply with the provisions of the
Securities Act of 1933 and the Investment Company Act of 1940, and all
related requirements of the Securities and Exchange Commission. I
hereby ratify and confirm all that said attorneys-in-fact or their
substitutes may do or cause to be done by virtue hereof. This power
of attorney is effective for all documents filed on or after January
1, 1997.
WITNESS our hands on this nineteenth day of December, 1996.
/s/Edward C. Johnson 3d___________ /s/Peter S. Lynch________________
Edward C. Johnson 3d Peter S. Lynch
/s/J. Gary Burkhead_______________ /s/William O. McCoy______________
J. Gary Burkhead William O. McCoy
/s/Ralph F. Cox __________________ /s/Gerald C. McDonough___________
Ralph F. Cox Gerald C. McDonough
/s/Phyllis Burke Davis_____________ /s/Marvin L. Mann________________
Phyllis Burke Davis Marvin L. Mann
/s/E. Bradley Jones________________ /s/Thomas R. Williams ____________
E. Bradley Jones Thomas R. Williams
/s/Donald J. Kirk __________________
Donald J. Kirk
Exhibit 1(a)
Supplement to
Trust Instrument of
Fidelity Union Street Trust II
This Supplement to the Trust Instrument of Fidelity Union Street Trust
II, (the "Trust"), dated June 20, 1991 is adopted pursuant to a
resolution of the shareholders adopted at a meeting on September 17,
1997 as follows:
1. Article VII, Section 7.01 of the Trust Instrument is amended and
restated as follows:
VOTING POWERS
Section 7.01. The Shareholders shall have power to vote only (i) for
the election of Trustees as provided in Article III, Sections 3.01 and
3.02 hereof, (ii) for the removal of Trustees as provided in Article
III, Section 3.03(d) hereof, (iii) with respect to any investment
advisory or management contract as provided in Article VI, Sections
6.01 and 6.05 hereof, and (iv) with respect to such additional matters
relating to the Trust as may be required by law, by this Trust
Instrument, or the Bylaws or any registration of the Trust with the
Commission or any State, or as the Trustees may consider desirable.
On any matter submitted to a vote of the Shareholders, all Shares
shall be voted separately by individual Series, except (i) when
required by the 1940 Act, Shares shall be voted in the aggregate and
not by individual Series; and (ii) when the Trustees have determined
that the matter affects the interests of one or more Series, then the
Shareholders of all such Series shall be entitled to vote thereon.
The Trustees may also determine that a matter affects only the
interests of one or more classes of a Series, in which case any such
matter shall be voted on by such class or classes. A Shareholder of
each Series shall be entitled to one vote for each dollar of net asset
value (number of shares owned times net asset value per share) of such
Series, on any matter on which such Shareholder is entitled to vote
and each fractional dollar amount shall be entitled to a proportionate
fractional vote. There shall be no cumulative voting in the election
of Trustees. Shares may be voted in person or by proxy or in any
manner provided for in the Bylaws. A proxy may be given in writing.
The Bylaws may provide that proxies may also, or may instead, be given
by any electronic or telecommunications device or in any other manner.
Notwithstanding anything else herein or in the Bylaws, in the event a
proposal by anyone other than the officers or Trustees of the Trust is
submitted to a vote of the Shareholders of one or more Series or of
the Trust, or in the event of any proxy contest or proxy solicitation
or proposal in opposition to any proposal by the officers or Trustees
of the Trust, Shares may be voted only in person or by written proxy.
Until Shares are issued, the Trustees may exercise all rights of
Shareholders and may take any action required or permitted by law,
this Trust Instrument or any Bylaws of the Trust to be taken by
Shareholders.
IN WITNESS WHEREOF, the undersigned, being a trustee of the Trust,
has executed this instrument.
/s/Robert C. Pozen
Robert C. Pozen, as Trustee
and not individually.
Dated: Sept. 26, 1997
