March 11, 1994
DREYFUS INSTITUTIONAL SHORT TERM TREASURY FUND
Supplement to Prospectus
Dated October 12, 1993
The following information supplements and should be read in
conjunction with the section of the Fund's Prospectus entitled "Management
of the Fund."
The Fund's manager, The Dreyfus Corporation ("Dreyfus"), has entered
into an Agreement and Plan of Merger (the "Merger Agreement") providing for
the merger of Dreyfus with a subsidiary of Mellon Bank Corporation
("Mellon").
Following the merger, it is planned that Dreyfus will be a direct
subsidiary of Mellon Bank, N.A. Closing of this merger is subject to a
number of contingencies, including receipt of certain regulatory approvals
and approvals of the stockholders of Dreyfus and of Mellon. The merger is
expected to occur in mid-1994, but could occur significantly later.
As a result of regulatory requirements and the terms of the Merger
Agreement, Dreyfus will seek various approvals from the Fund's board and
shareholders before completion of the merger. Shareholder approval will be
solicited by a proxy statement.
The following information supersedes the information contained in the
section of the Fund's Prospectus captioned "Description of the Fund--
Investment Techniques--Forward Commitments."
When Issued Securities -- The Fund may purchase U.S. Government securities
on a when-issued basis, which means that the price is fixed at the time of
commitment, but delivery and payment ordinarily take place a number of days
after the date of the commitment to purchase. The Fund will make
commitments to purchase such securities only with the intention of actually
acquiring the securities, but the Fund may sell these securities before the
settlement date if it is deemed advisable. The Fund will not accrue income
in respect of a security purchased on a when-issued basis prior to its
stated delivery date.
Securities purchased on a when-issued basis and certain other securities
held by the Fund are subject to changes in value (both generally changing
in the same way, i.e., appreciating when interest rates decline and
depreciating when interest rates rise) based upon the public's perception
of the creditworthiness of the issuer and changes, real or anticipated, in
the level of interest rates. Securities purchased on a when-issued basis
may expose the Fund to risk because they may experience such fluctuations
prior to their actual delivery. Purchasing securities on a when-issued
basis can involve the additional risk that the yield available in the
market when the delivery takes place actually may be higher than that
obtained in the transaction itself. A segregated account of the Fund
consisting of cash or U.S. Government securities at least equal at all
times to the amount of the when-issued commitments will be established and
maintained at the Fund's custodian bank. Purchasing securities on a when-
issued basis when the Fund is fully or almost fully invested may result in
greater potential fluctuation in the value of the Fund's net assets and its
net asset value per share.
The following information supplements and supersedes information
contained in the section in the Fund's Prospectus entitled "Redemption of
Fund Shares--Redemption by Wire or Telephone" and describes a new telephone
redemption privilege.
Wire Redemption Privilege. An investor may request by wire or telephone
that redemption proceeds (minimum $1,000) be wired to the investor's
account at a bank which is a member of the Federal Reserve System, or a
correspondent bank if the investor's bank is not a member. An investor may
direct that redemption proceeds be paid by check (maximum $150,000 per day)
made out to the owners of record and mailed to the investor's address.
Redemption proceeds of less than $1,000 will be paid automatically by
check. Holders of jointly registered Fund or bank accounts may have
redemption proceeds of only up to $250,000 wired within any 30-day period.
The Fund reserves the right to refuse any redemption request, including
requests made shortly after a change of address, and may limit the amount
involved or the number of such requests.
Telephone Redemption Privilege. An investor may redeem Fund shares
(maximum $150,000 per day) by telephone if the investor has checked the
appropriate box on the Fund's Account Application or has filed a
Shareholder Services Form with the Transfer Agent. The redemption proceeds
will be paid by check and mailed to the investor's address. An
investor may telephone redemption instructions by calling 1-800-221-4060
or, if the investor is calling from overseas, 1-401-455-3306. The Fund
reserves the right to refuse any request made by telephone, including
requests made shortly after a change of address, and may limit the amount
involved or the number of telephone redemption requests. This Privilege
may be modified or terminated at any time by the Transfer Agent or the
Fund. Shares for which certificates have been issued, are not eligible for
this Privilege.
