Registration Nos. 33-
811-
==============================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OF 1933 /X/
Pre-Effective Amendment No. _____ / /
Post-Effective Amendment No. _____ / /
and
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 /X/
Amendment No. __ / /
(Check appropriate box or boxes)
PRAIRIE INSTITUTIONAL FUNDS
(Exact Name of Registrant as Specified in Charter)
c/o The First National Bank of Chicago
Three First National Plaza
Chicago, Illinois 60670 60670
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (312) 732-
4231
Bradford M. Markham, Esq.
c/o The First National Bank of Chicago
Three First National Plaza
Chicago, Illinois 60670
(Name and Address of Agent for Service)
copy to:
Lewis G. Cole, Esq.
Stroock & Stroock & Lavan
7 Hanover Square
New York, New York 10004-2696
Approximate Date of Proposed Public Offering: As soon as
practicable after this Registration Statement is declared
effective.
<PAGE>
<TABLE>
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
================================================================= Proposed Proposed
<CAPTION>
MAXIMUM MAXIMUM
TITLE OF AMOUNT OFFERING AGGREGATE AMOUNT OF
SECURITIES BEING PRICE PER OFFERING REGISTRATION
BEING REGISTERED REGISTERED UNIT PRICE FEE
<S> <C> <C> <C> <C>
Shares of Beneficial * * * $500.00
Interest, par value
$.001 per share
============================================================================
* Pursuant to Regulation 270.24f-2 under the Investment Company Act of 1940, the Registrant hereby elects to register an
indefinite number of shares of its Beneficial Interest.
============================================================================
</TABLE>
The Registrant hereby amends this registration
statement on
such date or dates as may be necessary to delay its
effective date until the Registrant shall file a
further
amendment which specifically states that this
registration
statement shall thereafter become effective in
accordance
with Section 8(a) of the Securities Act of 1933 or
until
the registration statement shall become effective on
such
date as the Commission, acting pursuant to said Section
8(a), may determine.
=================================================================
<PAGE>
Cross-Reference Sheet Pursuant to
Rule 495(a)
<TABLE>
<CAPTION>
Items in
Part A of
Form N-1A Caption Page
<S> <C> <C>
1 Cover Page Cover
2 Synopsis 3
3 Condensed Financial Information *
4 General Description of Registrant 4, 21
5 Management of the Fund 11
5(a) Management's Discussion of Fund's *
Performance
6 Capital Stock and Other Securities 21
7 Purchase of Securities Being
Offered 13
8 Redemption or Repurchase 15
9 Pending Legal Proceedings *
Items in
Part B of
Form N-1A
10 Cover Page B-1
11 Table of Contents B-1
12 General Information and History *
13 Investment Objectives and Policies B-2
14 Management of the Fund B-11
15 Control Persons and Principal Holders
of Securities B-11
16 Investment Advisory and Other Services B-11
17 Brokerage Allocation B-18
Items in
Part B of
Form N-1A Caption Page
18 Capital Stock and Other Securities B-21
19 Purchase, Redemption and Pricing of
Securities Being Offered B-14
20 Tax Status *
21 Underwriters B-14
22 Calculations of Performance Data *
23 Financial Statements B-27
Items in
Part C of
Form N-1A
24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under Common
Control with Registrant C-2
26 Number of Holders of Securities C-2
27 Indemnification C-2
28 Business and Other Connections of
Investment Adviser C-3
29 Principal Underwriters C-3
30 Location of Accounts and Records C-3
31 Management Services C-3
32 Undertakings C-4
- - ---------
*Omitted since answer is negative or inapplicable.
</TABLE>
<PAGE>
PRAIRIE INSTITUTIONAL
FUNDS
CASH MANAGEMENT FUND
MUNICIPAL CASH MANAGEMENT FUND
TREASURY PRIME CASH MANAGEMENT FUND
U.S. GOVERNMENT SECURITIES CASH MANAGEMENT FUND
PROSPECTUS
The First National Bank of
Chicago
MANAGER
Concord Financial Group, Inc.
DISTRIBUTOR
Prospectus begins on
page one.
<PAGE>
PRAIRIE INSTITUTIONAL
FUNDS
PROSPECTUS - __________, 1994
Prairie Institutional Funds (the "Trust") is an
open-end, management investment company, known as a series fund.
By this Prospectus, the Trust is offering Institutional and
Service shares of four separate diversified, money market series
(each, a "Fund"): Cash Management Fund, Municipal Cash
Management Fund, Treasury Prime Cash Management Fund and U.S.
Government Securities Cash Management Fund. Each Fund's goal is
to provide investors with as high a level of current income as is
consistent with the preservation of capital and the maintenance
of liquidity, and, in the case of the Municipal Cash Management
Fund, exempt from Federal income tax.
Each Fund is designed for institutional
investors,
including banks, acting for themselves or in a fiduciary,
advisory, agency, custodial or similar capacity, public agencies
and municipalities. Fund shares may not be purchased directly by
individuals, although institutions may purchase shares for
accounts maintained by individuals. Such institutions have
agreed to transmit copies of this Prospectus to each individual
or entity for whose account the institution purchases Fund
shares, to the extent required by law.
Each Fund's shares are sold without a sales
charge.
Investors can invest or reinvest in or redeem shares at any time
without charge or penalty imposed by the Fund.
Institutional shares and Service shares are
identical,
except as to the services offered to and expenses borne by each
Class. Service bears certain costs pursuant to a Service Plan
adopted in accordance with Rule 12b-1 under the Investment
Company Act of 1940.
The First National Bank of Chicago (the
"Manager")
serves as each Fund's investment adviser.
Concord Financial Group, Inc. (the
"Distributor")
serves as each Fund's distributor.
AN INVESTMENT IN A FUND IS NEITHER INSURED NOR
GUARANTEED BY THE U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE
THAT EACH FUND WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE
OF $1.00 PER SHARE.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR
OBLIGATIONS OF,
OR GUARANTEED OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION ("FDIC"),
THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. MONEY MARKET
MUTUAL SHARES INVOLVE CERTAIN INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.
______________________
This Prospectus sets forth concisely
information about
the Trust and Funds that an investor should know before
investing. It should be read and retained for future reference.
Part B (also known as the Statement of
Additional
Information), dated ___________, 1994, which may be revised from
time to time, provides a further discussion of certain areas in
this Prospectus and other matters which may be of interest to
some investors. It has been filed with the Securities and
Exchange Commission and is incorporated herein by reference. For
a free copy, write to the Trust at _________________________, or
call ______________.
________________________________________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
________________________________________________________________
TABLE OF CONTENTS
Annual Fund Operating Expenses. . . . . . . . . . . . . . . .
Description of the Funds. . . . . . . . . . . . . . . . . . .
Management of the Trust . . . . . . . . . . . . . . . . . . .
How to Buy Fund Shares. . . . . . . . . . . . . . . . . . . .
Exchange Privilege. . . . . . . . . . . . . . . . . . . . . .
How to Redeem Fund Shares . . . . . . . . . . . . . . . . . .
Service Plan. . . . . . . . . . . . . . . . . . . . . . . . .
Dividends, Distributions and Taxes. . . . . . . . . . . . . .
Yield Information . . . . . . . . . . . . . . . . . . . . . .
General Information . . . . . . . . . . . . . . . . . . . . .
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
<TABLE>
CASH MANAGEMENT MUNICIPAL CASH
SERIES MANAGEMENT SERIES
Institutional Service Institutional Service
Shares Shares Shares Shares
<S> <C> <C> <C> <C>
Management Fees..................... .35% .35%. 35% .35%
12b-1 Fees (distribution and
servicing)........................ None .25% None .25%
Total Fund Operating Expenses...... .35% .60% .35% .60%
EXAMPLE:
An investor would pay the following
expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption
at the end of each time period:
Institutional Service Institutional Service
Shares Shares Shares Shares
1 YEAR ........................ $ 4 $ 6 $ 4 $ 6
3 YEARS........................ $10 $19 $10 $19
U.S. GOVERNMENT
TREASURY PRIME CASH SECURITIES CASH
MANAGEMENT SERIES MANAGEMENT SERIES
Institutional Service Institutional Service
Shares Shares Shares Shares
Management Fees................ .35% .35% .35%. 35%
12-b Fees (distribution
and servicing)............... None .25% None .25%
Total Fund Operating Expenses .35% .60% .35% .60%
EXAMPLE:
An investor would pay the following
expenses on a $1,000 investment,
assuming (1) 5% annual return and
(2) redemption at the end
of each time period:
Institutional Service Institutional Service
Shares Shares Shares Shares
1 Year...................... $ 4 $ 6 $ 4 $ 6
3 Years.....................$10 $19 $10 $19
</TABLE>
THE AMOUNTS LISTED IN THE EXAMPLES SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE
GREATER OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE
EXAMPLE ASSUMES A 5% ANNUAL RETURN, EACH FUND'S ACTUAL
PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL RETURN GREATER
OR LESS THAN 5%.
The purpose of the foregoing table is to assist investors in
understanding the various costs and expenses borne by a Fund, and
therefore indirectly by investors, the payment of which will
reduce investors' return on an annual basis. The Manager has
undertaken, as to each Fund, until such time as it gives
investors at least 90 days' notice to the contrary, that if, in
any fiscal year, certain expenses, including the management fee,
exceed .35% and .60% of the value of the average net assets of
Institutional and Service, respectively, for the fiscal year, the
Trust may deduct from the payment to be made to the Manager under
the Management Agreement, or the Manager will bear, such excess
expense. Institutions effecting transactions in Fund shares may
charge their clients direct fees in connection with such
transactions; such fees are not reflected in the foregoing table.
See "Management of the Trust," "How to Buy Fund Shares" and
"Service Plan."
DESCRIPTION OF THE
FUNDS
GENERAL
The Trust is a "series fund," which is a mutual
fund
divided into separate portfolios. Each portfolio is treated as a
separate entity for certain matters under the Investment Company
Act of 1940, as amended (the "1940 Act"), and for other purposes,
and a shareholder of one portfolio is not deemed to be a
shareholder of any other portfolio. As described below, for
certain matters Trust shareholders vote together as a group; as
to others they vote separately by Fund.
By this Prospectus, two classes of shares of
each Fund
are being offered--Institutional shares and Service shares (each
such class being referred to as a "Class"). The Classes are
identical, except that Service shares are subject to an annual
distribution and service fee at the rate of .25% of the value of
the average daily net assets of Service. The fee is payable to
the Trust's distributor for advertising, marketing and
distributing Service shares and for ongoing personal services
relating to Service shareholder accounts and services related to
the maintenance of such shareholder accounts pursuant to a
Service Plan adopted in accordance with Rule 12b-1 under the 1940
Act. The Trust's distributor may make payments to certain
financial institutions, securities dealers and other industry
professionals (collectively, "Service Agents") in respect of
these services. See "Service Plan." The distribution and
service fee paid by Service will cause such Class to have a
higher expense ratio and to pay lower dividends than
Institutional.
WHEN USED IN THIS PROSPECTUS AND THE STATEMENT
OF
ADDITIONAL INFORMATION, THE TERMS "INVESTOR" AND "SHAREHOLDER"
REFER TO THE INSTITUTION PURCHASING FUND SHARES AND DO NOT REFER
TO ANY INDIVIDUAL OR ENTITY FOR WHOSE ACCOUNT THE INSTITUTION MAY
PURCHASE FUND SHARES. Such institutions have agreed to transmit
copies of this Prospectus and all relevant Fund materials,
including proxy materials, to each individual or entity for whose
account the institution purchases Fund shares, to the extent
required by law.
INVESTMENT OBJECTIVE
Each Fund's goal is to provide investors with as
high a
level of current income as is consistent with the preservation of
capital and the maintenance of liquidity, and, in the case of the
Municipal Cash Management Fund, exempt from Federal income tax.
Each Fund's investment objective cannot be changed without
approval by the holders of a majority (as defined in the 1940
Act) of such Fund's outstanding voting shares. There can be no
assurance that the Fund's investment objective will be achieved.
Securities in which the Funds invest may not earn as high a level
of current income as long-term or lower quality securities which
generally have less liquidity, greater market risk and more
fluctuation in market value.
MANAGEMENT POLICIES
Each Fund seeks to maintain a net asset value of
$1.00
per share for purchases and redemptions. To do so, the Trust
uses the amortized cost method of valuing each Fund's securities
pursuant to Rule 2a-7 under the 1940 Act, certain requirements of
which are summarized below.
In accordance with Rule 2a-7, each Fund is
required to
maintain a dollar-weighted average portfolio maturity of 90 days
or less, purchase only instruments having remaining maturities of
13 months or less and invest only in U.S. dollar denominated
securities determined in accordance with procedures established
by the Board of Trustees to present minimal credit risks and, in
the case of the Cash Management Fund and Municipal Cash
Management Fund, which are rated in one of the two highest rating
categories for debt obligations by at least two nationally
recognized statistical rating organizations (or one rating
organization if the instrument was rated by only one such
organization) or, if unrated, are of comparable quality as
determined in accordance with procedures established by the Board
of Trustees. The Cash Management Fund and Municipal Cash
Management Fund will purchase only instruments so rated in the
highest rating category or, if unrated, of comparable quality as
determined in accordance with procedures established by the Board
of Trustees. The nationally recognized statistical rating
organizations currently rating instruments of the type the Cash
Management Fund and Municipal Cash Management Fund may purchase
are Moody's Investors Service, Inc., ("Moody's"), Standard &
Poor's Corporation ("S&P"), Duff and Phelps, Inc., Fitch
Investors Service, Inc. ("Fitch"), IBCA Limited and IBCA Inc.,
and Thomson BankWatch, Inc. and their rating criteria are
described in the Appendix to the Statement of Additional
Information. For further information regarding the amortized
cost method of valuing securities, see "Determination of Net
Asset Value" in the Statement of Additional Information. There
can be no assurance that each Fund will be able to maintain a
stable net asset value of $1.00 per share.
- CASH MANAGEMENT FUND invests in short-term
money
market obligations, including securities issued or guaranteed by
the U.S. Government or its agencies or instrumentalities,
certificates of deposit, time deposits, bankers' acceptances and
other short-term obligations issued by domestic banks, foreign
branches of domestic banks, foreign subsidiaries of domestic
banks, domestic and foreign branches of foreign banks and thrift
institutions, repurchase agreements, and high quality domestic
and foreign commercial paper and other short-term corporate
obligations, including those with floating or variable rates of
interest. See "Appendix--Portfolio Securities." In addition,
the Fund is permitted to lend portfolio securities to the extent
described under "Appendix--Investment Practices." During normal
market conditions, at least 25% of the Fund's total assets will
be invested in bank obligations.
The Fund will not invest more than 5% of its
total
assets in the securities (including the securities
collateralizing a repurchase agreement) of, or subject to puts
issued by, a single issuer, except that (i) the Fund may invest
more than 5% of its total assets in a single issuer for a period
of up to three business days in certain limited circumstances,
(ii) the Fund may invest in obligations issued or guaranteed by
the U.S. Government without any such limitation, and (iii) the
limitation with respect to puts does not apply to unconditional
puts if no more than 10% of the Fund's total assets is invested
in securities issued or guaranteed by the issuer of the
unconditional put. As to each security, these percentages are
measured at the time the Fund purchases the security.
- MUNICIPAL CASH MANAGEMENT FUND invests at
least 80%
of the value of its net assets (except when maintaining a
temporary defensive position) in Municipal Obligations. Municipal
Obligations are debt obligations issued by states, territories
and possessions of the United States and the District of Columbia
and their political subdivisions, agencies and instrumentalities,
or multi-state agencies or authorities, the interest from which
is, in the opinion of bond counsel to the issuer, exempt from
Federal income tax. See "Appendix--Portfolio Securities."
From time to time, the Fund may invest more than
25% of
the value of its total assets in industrial development bonds
which, although issued by industrial development authorities, may
be backed only by the assets and revenues of the non-governmental
users. Interest on Municipal Obligations (including certain
industrial development bonds) which are specified private
activity bonds, as defined in the Internal Revenue Code of 1986,
as amended (the "Code"), issued after August 7, 1986, while
exempt from Federal income tax, is a preference item for the
purpose of the alternative minimum tax. Where a regulated
investment company receives such interest, a proportionate share
of any exempt-interest dividend paid by the investment company
may be treated as such a preference item to the shareholder. The
Fund may invest without limitation in such Municipal Obligations
if the Manager determines that their purchase is consistent with
the Fund's investment objective. See "Risk Factors--Fixed-Income
Securities" below.
From time to time, on a temporary basis other
than for
temporary defensive purposes (but not to exceed 20% of the value
of the Fund's net assets) or for temporary defensive purposes,
the Fund may invest in taxable money market instruments of the
type in which the Cash Management Fund may invest. Dividends
paid by the Fund that are attributable to income earned by it
from these securities will be taxable to investors. See
"Dividends, Distributions and Taxes." If the Fund purchases
taxable money market instruments the Trust will value them using
the amortized cost method and comply with the provisions of Rule
2a-7 relating to purchases of taxable instruments. Under normal
market conditions, the Trust anticipates that not more than 5% of
the value of the Fund's total assets will be invested in any one
category of these securities. See "Appendix--Portfolio
Securities."
- TREASURY PRIME CASH MANAGEMENT FUND invests
only in
securities issued or guaranteed as to principal or interest by
the U.S. Government. These securities include U.S. Treasury
securities, which differ in their interest rates, maturities and
times of issuance. See "Appendix--Portfolio Securities." The
Fund does not invest in repurchase agreements, securities issued
by agencies or instrumentalities of the Federal government that
are not guaranteed by the U.S. Government or any other type of
money market instrument or security.
- U.S. GOVERNMENT SECURITIES CASH MANAGEMENT
FUND
invests only in short-term securities issued or guaranteed as to
principal or interest by the U.S. Government, its agencies or
instrumentalities and may enter into repurchase agreements. See
"Appendix--Portfolio Securities." The Fund also may lend
securities from its portfolio as described under "Appendix--
Investment Practices."
CERTAIN FUNDAMENTAL POLICIES
Each Fund may (i) invest up to 25% of the value
of its
total assets in the securities of issuers in a single industry,
provided there is no limitation on the purchase of obligations
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities or, in the case of the Municipal Cash
Management Fund, Municipal Obligations; and (ii) pledge,
hypothecate, mortgage or otherwise encumber its assets, but only
to secure permitted borrowings (this policy, however, is not
fundamental in the case of the Municipal Cash Management Fund and
Treasury Prime Cash Management Fund). In addition, (i) each of
the Municipal Cash Management Fund and Treasury Prime Cash
Management Fund may borrow money to the extent permitted under
the 1940 Act; (ii) each of the Cash Management Fund and U.S.
Government Securities Cash Management Fund may borrow money from
banks, but only for temporary or emergency (not leveraging)
purposes, in an amount up to 15% of the value of the Fund's total
assets (including the amount borrowed) valued at the lesser of
cost or market, less liabilities (not including the amount
borrowed) at the time the borrowing is made. While borrowings
exceed 5% of the value of the Fund's total assets, the Fund will
not make any additional investments; (iii) each of the Cash
Management Fund and Municipal Cash Management Fund may invest up
to 5% of its total assets in the obligations of any one issuer,
except that up to 25% of the value of the Fund's total assets may
be invested (subject to the provisions of Rule 2a-7), and
obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities may be purchased, without regard to
any such limitation; and (iv) the Cash Management Fund will
invest, except when it has adopted a temporary defensive
position, at least 25% of its total assets in securities issued
by banks, including foreign banks and branches. This paragraph
describes, except as noted, fundamental policies that cannot be
changed as to a Fund without approval by the holders of a
majority (as defined in the 1940 Act) of such Fund's outstanding
voting shares. See "Investment Objective and Management
Policies--Investment Restrictions" in the Statement of Additional
Information.
CERTAIN ADDITIONAL NON-FUNDAMENTAL POLICY
Each Fund may invest up to 10% of the value of
its net
assets in illiquid securities. See "Investment Objective and
Management Policies--Investment Restrictions" in the Statement of
Additional Information.
RISK FACTORS
FOREIGN SECURITIES--(CASH MANAGEMENT FUND) Since the Cash
Management Fund's portfolio may contain securities issued by
foreign branches of domestic and foreign banks, domestic and
foreign branches of foreign banks and thrift institutions, and
commercial paper issued by foreign issuers, the Fund may be
subject to additional investment risks with respect to such
securities that are different in some respects from those
incurred by a fund which invests only in debt obligations of U.S.
domestic issuers, although such obligations may be higher
yielding when compared to the securities of U.S. domestic
issuers. Such risks include possible future political and
economic developments, the possible imposition of foreign
withholding taxes on interest income payable on the securities,
the possible establishment of exchange controls or the adoption
of other foreign governmental restrictions which might adversely
affect the payment of principal and interest on these securities
and the possible seizure or nationalization of foreign deposits.
FIXED-INCOME SECURITIES--(MUNICIPAL CASH MANAGEMENT FUND)
Certain provisions in the Code relating to the issuance of
Municipal Obligations may reduce the volume of Municipal
Obligations qualifying for Federal tax exemption. One effect of
these provisions could be to increase the cost of the Municipal
Obligations available for purchase by the Fund and thus reduce
the available yield. Shareholders of the Municipal Cash
Management Fund should consult their tax advisers concerning the
effect of these provisions on an investment in the Fund.
Proposals that may restrict or eliminate the income tax exemption
for interest on Municipal Obligations may be introduced in the
future. If any such proposal were enacted that would reduce the
availability of Municipal Obligations for investment by the Fund
so as to adversely affect the Fund's shareholders, the Trust
would reevaluate the Fund's investment objective and policies and
submit possible changes in the Fund's structure to shareholders
for their consideration. If legislation were enacted that would
treat a type of Municipal Obligation as taxable, the Trust would
treat such security as a permissible taxable investment within
the applicable limits set forth herein.
The Municipal Cash Management Fund may invest
more than
25% of the value of its total assets in Municipal Obligations
which are related in such a way that an economic, business or
political development or change affecting one such security also
would affect the other securities; for example, securities the
interest upon which is paid from revenues of similar types of
projects, or securities of issuers that are located in the same
state. As a result, the Fund may be subject to greater risk as
compared to a fund that does not follow this practice.
Certain municipal lease/purchase obligations in
which
the Municipal Cash Management Fund may invest may contain "non-
appropriation" clauses which provide that the municipality has no
obligation to make lease payments in future years unless money is
appropriated for such purpose on a yearly basis. Although "non-
appropriation" lease/purchase obligations are secured by the
leased property, disposition of the leased property in the event
of foreclosure might prove difficult. In evaluating the credit
quality of a municipal lease/purchase obligation that is unrated,
the Manager will consider, on an ongoing basis, a number of
factors including the likelihood that the issuing municipality
will discontinue appropriating funding for the leased property.
OTHER INVESTMENT CONSIDERATIONS--Each Fund will attempt to
increase yields by trading to take advantage of short-term market
variations. This policy is expected to result in high portfolio
turnover but should not adversely affect the Funds since each
Fund usually will not pay brokerage commissions on purchases of
short-term debt obligations, including U.S. Government
securities. The value of the securities held by each Fund will
vary inversely to changes in prevailing interest rates. Thus, if
interest rates have increased from the time a security was
purchased, such security, if sold, might be sold at a price less
than its cost. Similarly, if interest rates have declined from
the time a security was purchased, such security, if sold, might
be sold at a price greater than its purchase cost. In either
instance, if the security is held to maturity, no gain or loss
will be realized.
Each Fund may purchase 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, although any gain realized on such sale would
be taxable. The Fund will not accrue income in respect of a
when-issued security prior to its stated delivery date. No
additional when-issued commitments will be made by the Municipal
Cash Management Fund if more than 20% of the value of such Fund's
net assets would be so committed.
Securities purchased on a when-issued basis and
certain
other securities held in the Fund's portfolio 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, cash equivalents or U.S. Government
securities or other high quality liquid debt securities at least
equal at all times to the amount of the when-issued commitments
will be established and maintained at the Trust'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.
Investment decisions for each Fund are made
independently from those of other investment companies or
investment advisory accounts that may be advised by the Manager.
However, if such other investment companies or managed accounts
are prepared to invest in, or desire to dispose of, securities of
the type in which a Fund may invest at the same time as such
Fund, available investments or opportunities for sales will be
allocated equitably to each of them. In some cases, this
procedure may adversely affect the size of the position obtained
for or disposed of by the Fund or the price paid or received by
the Fund.
MANAGEMENT OF THE
TRUST
MANAGER
The Manager, located at Three First National
Plaza,
Chicago, Illinois 60670, is the Fund's investment adviser. The
Manager, a wholly-owned subsidiary of First Chicago Corporation,
a registered bank holding company, a commercial bank offering a
wide range of banking and investment services to customers
throughout the United States and around the world. As of June
30, 1994, the Manager was one of the largest commercial banks in
the United States and the largest in the mid-western United
States in terms of assets ($41.8 billion) and in terms of
deposits ($23.8 billion). As of June 30, 1994, the Manager
provided investment management services to portfolios containing
approximately $9.6 billion in assets. The Manager serves as
investment adviser for the Trust pursuant to a Management
Agreement dated as of ____________, 1994. Under the Management
Agreement, the Manager supervises and assists in the overall
management of the Trust's affairs, subject to the overall
authority of the Trust's Board of Trustees and in conformity with
Massachusetts law and the stated policies of the Trust. The
Manager is responsible for making investment decisions for the
Trust, placing purchase and sale orders (which may be allocated
to various dealers based on their sales of Fund shares) and
providing research, statistical analysis and continuous
supervision of each Fund's investment portfolio. The Manager has
advised the Trust that in making its investment decisions the
Manager does not obtain or use material inside information in the
possession of any other division or department of the Manager or
in the possession of any affiliate of the Manager.
The Manager has engaged Concord Holding
Corporation,
located at 125 West 55th Street, New York, New York 10019 (the
"Administrator"), to assist it in providing certain
administrative services for the Trust pursuant to a Master
Administration Agreement between the Manager and the
Administrator. The Administrator currently provides
administrative services or sub-administrative services to other
investment companies with over $33 billion in assets. The
Manager, from its own funds, will pay the Administrator for the
Administrator's services.
Under the terms of the Management Agreement, the
Trust
has agreed to pay the Manager a monthly fee at the annual rate of
.35 of 1% of the value of each Fund's average daily net assets.
GLASS-STEAGALL ACT
The Glass-Steagall Act and other applicable laws
prohibit Federally chartered or supervised banks from engaging in
certain aspects of the business of issuing, underwriting, selling
and/or distributing securities, although banks such as the
Manager are permitted to purchase and sell securities upon the
order and of the account of their customers. The Manager has
advised the Trust of its belief that, based on existing judicial
and regulatory interpretations of the Glass-Steagall Act, it may
perform the services for the Trust contemplated by the Management
Agreement and this Prospectus without violating the Glass-
Steagall Act or other applicable banking laws or regulations.
The Manager has pointed out, however, that future changes in
either Federal or state statutes and regulations relating to
permissible activities of banks and their subsidiaries and
affiliates, as well as future judicial or administrative
decisions or interpretations of present and future statutes and
regulations, could prevent the Manager from continuing to perform
such services for the Trust. If the Manager were to be prevented
from providing such services to the Trust, the Trust's Board of
Trustees would review the Trust's relationship with the Manager
and consider taking all actions necessary in the circumstances.
DISTRIBUTOR
Concord Financial Group, Inc. (the
"Distributor"),
located at 125 West 55th Street, New York, New York 10019, serves
as the Trust's principal underwriter and distributor of the
Funds' shares. The Distributor, a wholly-owned subsidiary of the
Administrator, was organized to distribute shares of mutual funds
to institutional and retail investors. The Distributor
distributes the shares of other investment companies with over
$21 billion in assets.
TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN
The Shareholder Services Group, Inc., is the
Trust's
Transfer and Dividend Disbursing Agent (the "Transfer Agent").
The Bank of New York is the Trust's Custodian.
EXPENSES
All expenses incurred in the operation of the
Trust are
borne by the Trust, except to the extent specifically assumed by
the Manager. The expenses borne by the Trust include:
organizational costs, taxes, interest, brokerage fees and
commissions, if any, fees of Trustees who are not officers,
directors, employees or holders of 5% or more of the outstanding
voting securities of the Manager, Securities and Exchange
Commission fees, state Blue Sky qualification fees, advisory
fees, charges of custodians, transfer and dividend disbursing
agents' fees, certain insurance premiums, industry association
fees, outside auditing and legal expenses, costs of maintaining
the Trust's existence, costs of independent pricing services,
costs attributable to investor services (including, without
limitation, telephone and personnel expenses), costs of
shareholders' reports and meetings, costs of preparing and
printing prospectuses and statements of additional information
for regulatory purposes and for distribution to existing
shareholders, and any extraordinary expenses. In addition,
Service shares are subject to an annual distribution and service
fee pursuant to a plan adopted in accordance with Rule 12b-1
under the 1940 Act. See "Service Plan." Expenses attributable
to a particular Fund are charged against the assets of that Fund;
other expenses of the Trust are allocated among the Funds on the
basis determined by the Board of Trustees, including, but not
limited to, proportionately in relation to the net assets of each
Fund.
The Manager has undertaken, as to each Fund,
until such
time as it gives investors at least 90 days' notice to the
contrary, that if, in any fiscal year the aggregate expenses of
the Fund, exclusive of taxes, brokerage, interest on borrowings
and (with the prior written consent of the necessary state
securities commissions) extraordinary expenses, but including the
management fee, exceed .35 and .60 of 1% of the value of the
average net assets of Institutional and Service, respectively,
for the fiscal year, the Trust may deduct from the payment to be
made to the Manager under the Management Agreement, or the
Manager will bear, such excess expense.
HOW TO BUY FUND SHARES
Each Fund is designed for institutional
investors,
including banks (such as the Manager), acting for themselves or
in a fiduciary, advisory, agency, custodial or similar capacity,
public agencies and municipalities. Fund shares may not be
purchased directly by individuals, although institutions may
purchase shares for accounts maintained by individuals.
Generally, each investor will be required to open a single master
account with the Fund for all purposes. In certain cases, the
Trust may request investors to maintain separate master accounts
for shares held by the investor (i) for its own account, for the
account of other institutions and for accounts for which the
institution acts as a fiduciary, and (ii) for accounts for which
the investor acts in some other capacity. An institution may
arrange with the Transfer Agent for sub-accounting services and
will be charged directly for the cost of such services. Certain
accounts may be eligible for an automatic investment privilege,
commonly called a "sweep," under which amounts in excess of a
certain minimum held in those accounts will be invested
automatically in shares at pre-determined intervals. Each
investor desiring to use this privilege should consult its bank
for details.
The minimum initial investment is $1,000,000 or
any
lesser amount if, in the Distributor's opinion, the investor has
adequate intent and availability of funds to reach a future level
of investment of $1,000,000. There is no minimum for subsequent
purchases. The initial investment must be accompanied by the
Account Application. The Trust does not impose any sales charges
in connection with purchases of Fund shares, although Service
Agents and other institutions may charge their clients fees in
connection with purchases for the accounts of their clients.
These fees would be in addition to any amounts which might be
received under the Service Plan. Service Agents may receive
different levels of compensation for selling different classes of
shares. Each Service Agent has agreed to transmit to its clients
a schedule of such fees. The Fund does not issue share
certificates. The Trust reserves the right to reject any
purchase order. It is not recommended that the Municipal Cash
Management Fund be used as a vehicle for Keogh, IRA or other
qualified retirement plans.
Fund shares may be purchased by wire, by
telephone or
through compatible computer facilities. All payments should be
made in U.S. dollars and, to avoid fees and delays, should be
drawn only on U.S. banks. Investors may telephone orders for
purchases of Fund shares by calling ____________. For
instructions concerning purchases and to determine whether their
computer facilities are compatible with the Trust's, investors
should call _________________________.
Fund shares are sold on a continuous basis at
the net
asset value per share next determined after an order in proper
form and Federal Funds (monies of member banks in the Federal
Reserve System which are held on deposit at a Federal Reserve
Bank) are received by the Transfer Agent. If an investor does
not remit Federal Funds, its payment must be converted into
Federal Funds. This usually occurs within one business day of
receipt of a bank wire and within two business days of receipt of
a check drawn on a member bank of the Federal Reserve System.
Checks drawn on banks which are not members of the Federal
Reserve System may take considerably longer to convert into
Federal Funds. Prior to receipt of Federal Funds, the investor's
money will not be invested.
Each Fund's net asset value per share is
determined as
of 2:00 p.m., Central Standard time, on each day that the New
York Stock Exchange is open for business, except Martin Luther
King, Jr. Day, Columbus Day and Veterans Day. Net asset value
per share of each Class is computed by dividing the value of the
Fund's net assets represented by such Class (i.e., the value of
its assets less liabilities) by the total number of shares of
such Class outstanding. See "Determination of Net Asset Value"
in the Statement of Additional Information.
Investors whose payments are received in or
converted
into Federal Funds by 2:00 p.m., Central Standard time, by the
Transfer Agent will receive the dividend declared that day.
Investors whose payments are received in or converted into
Federal Funds after 2:00 p.m., Central Standard time, by the
Transfer Agent will begin to accrue dividends on the following
business day.
Federal Regulations require that an investor
provide a
certified Taxpayer Identification Number ("TIN") upon opening or
reopening an account. See "Dividends, Distributions and Taxes"
and the Account Application for further information concerning
this requirement. Failure to furnish a certified TIN to the
Trust could subject an investor to a $50 penalty imposed by the
Internal Revenue Service (the "IRS").
EXCHANGE PRIVILEGE
The Exchange Privilege enables an investor to
purchase,
in exchange for shares of a Fund, shares of the other Funds
offered by this Prospectus. The Exchange Privilege may be
expanded to permit exchanges between the Funds and certain other
series or funds that, in the future, may be advised by the
Manager, to the extent the shares of such series or funds are
offered for sale in the investor's state of residence. If an
investor desires to use this Privilege, the investor should
consult the Manager or the Distributor to determine if it is
available and whether any conditions are imposed on its use.
To use this Privilege, an investor must give
exchange
instructions to the Transfer Agent in writing, by wire or by
telephone. If an investor previously has established the
Telephone Exchange Privilege, the investor may telephone exchange
instructions by calling _______________ or, if calling from
overseas, by calling ________________. See "How to Redeem Fund
Shares--Procedures." When establishing a new account by
exchange, the shares being exchanged must have a value of at
least $1,000,000.
Shares will be exchanged at the next determined
net
asset value. No fees currently are charged shareholders directly
in connection with exchanges, although the Trust reserves the
right, upon not less than 60 days' written notice, to charge
shareholders a nominal fee in accordance with rules promulgated
by the Securities and Exchange Commission. The Fund reserves the
right to reject any exchange request in whole or in part. The
Exchange Privilege may be modified or terminated at any time upon
notice to shareholders. See "Exchange Privilege" in the
Statement of Additional Information.
The exchange of shares of one series or fund for
shares
of another is treated for Federal income tax purposes as a sale
of the shares given in exchange by the shareholder and,
therefore, an exchanging shareholder may realize a taxable gain
or loss.
HOW TO REDEEM FUND SHARES
GENERAL
Investors may request redemption of shares at
any time
and the shares will be redeemed at the next determined net asset
value.
The Trust imposes no charges when shares are
redeemed.
Service Agents and other institutions may charge their clients a
nominal fee for effecting redemptions of Fund shares. The value
of the shares redeemed may be more or less than their original
cost, depending upon the relevant Fund's then-current net asset
value.
If a request for redemption is received in
proper form
by the Transfer Agent by 2:00 p.m., Central Standard time, the
proceeds of the redemption, if transfer by wire is requested,
ordinarily will be transmitted in Federal Funds on the same day
and the shares will not receive the dividend declared on that
day. If the request is received later that day by the Transfer
Agent, the shares will receive the dividend on the Fund's shares
declared on that day and the proceeds of redemption, if wire
transfer is requested, ordinarily will be transmitted in Federal
Funds on the next business day.
The Trust ordinarily will make payment for all
shares
redeemed within seven days after receipt by the Transfer Agent of
a redemption request in proper form, except as provided by the
rules of the Securities and Exchange Commission.
PROCEDURES
Investors may redeem shares by wire or
telephone, or
through compatible computer facilities as described below.
An investor may redeem or exchange shares by
telephone
if the investor has checked the appropriate box on the Account
Application or has filed a Shareholder Services Form with the
Transfer Agent. By selecting a telephone redemption or exchange
privilege, an investor authorizes the Transfer Agent to act on
telephone instructions from any person representing himself or
herself to be an authorized representative of the investor and
reasonably believed by the Transfer Agent to be genuine. The
Trust will require the Transfer Agent to employ reasonable
procedures, such as requiring a form of identification, to
confirm that instructions are genuine and, if it does not follow
such procedures, the Trust or the Transfer Agent may be liable
for any losses due to unauthorized or fraudulent instructions.
Neither the Trust nor the Transfer Agent will be liable for
following telephone instructions reasonably believed to be
genuine.
During times of drastic economic or market
conditions,
investors may experience difficulty in contacting the Transfer
Agent by telephone to request a redemption or exchange of Fund
shares. In such cases, investors should consider using the other
redemption procedures described herein.
REDEMPTION BY WIRE OR TELEPHONE--Investors may redeem Fund shares
by wire or telephone. The redemption proceeds will be paid by
wire transfer. Investors can redeem shares by telephone by
calling ________________. The Trust reserves the right to refuse
any request made by wire or telephone and may limit the amount
involved or the number of telephone redemptions. This procedure
may be modified or terminated at any time by the Transfer Agent
or the Trust. The Statement of Additional Information sets forth
instructions for redeeming shares by wire.
REDEMPTION THROUGH COMPATIBLE COMPUTER FACILITIES--The Trust
makes available to institutions the ability to redeem shares
through compatible computer facilities. Investors desiring to
redeem shares in this manner should call __________________ to
determine whether their computer facilities are compatible and to
receive instructions for redeeming shares in this manner.
SERVICE PLAN
(Service Shares Only)
Service shares are subject to a Service Plan
adopted
pursuant to Rule 12b-1 under the 1940 Act. Under the Service
Plan, each Fund pays the Distributor for advertising, marketing
and distributing the Fund's Service shares and for the provision
of certain services to the holders of Service shares a fee at the
annual rate of .25 of 1% of the value of the average daily net
assets of Service. The services provided may include personal
services relating to shareholder accounts, such as answering
shareholder inquiries regarding the Fund and providing reports
and other information, and services related to the maintenance of
such shareholder accounts. The fee payable for such services is
intended to be a "service fee" as defined in Article III, Section
26 of the NASD Rules of Fair Practice. Under the Service Plan,
the Distributor may make payments to Service Agents in respect of
these services. The Manager and its affiliates may act as
Service Agents and receive fees under the Service Plan. The
Distributor determines the amounts to be paid to Service Agents.
Each Service Agent is required to disclose to its clients any
compensation payable to it by the Fund pursuant to the Service
Plan and any other compensation payable by their clients in
connection with the investment of their assets in Fund shares.
From time to time, the Distributor may defer or waive receipt of
fees under the Service Plan while retaining the ability to be
paid by the Fund under the Service Plan thereafter. The fees
payable to the Distributor under the Service Plan for
advertising, marketing and distributing Service shares and for
payments to Service Agents are payable without regard to actual
expenses incurred.
DIVIDENDS, DISTRIBUTIONS AND
TAXES
Each Fund ordinarily declares dividends from net
investment income on each day the New York Stock Exchange is open
for business, except on Martin Luther King, Jr. Day, Columbus Day
and Veterans Day. Fund shares begin earning income dividends on
the day the purchase order is effective. Dividends usually are
paid on the last calendar day of each month, and are
automatically reinvested in additional shares of the Fund from
which they were paid at net asset value or, at the investor's
option, paid in cash. Each Fund's earnings for Saturdays,
Sundays and holidays are declared as dividends on the preceding
business day. If an investor redeems all shares in its account
at any time during the month, all dividends to which the investor
is entitled will be paid along with the proceeds of the
redemption. Distributions from net realized securities gains, if
any, generally are declared and paid once a year, but a Fund may
make distributions on a more frequent basis to comply with the
distribution requirements of the Code, in all events in a manner
consistent with the provisions of the 1940 Act. No Fund will
make distributions from net realized securities gains unless
capital loss carryovers, if any, have been utilized or have
expired. Investors may choose whether to receive distributions
in cash or to reinvest in additional shares of the Fund from
which they were paid at net asset value. All expenses are
accrued daily and deducted before declaration of dividends to
investors. Dividends paid by each Class will be calculated at
the same time and in the same manner and will be of the same
amount, except that the expenses attributable solely to
Institutional or Service will be borne exclusively by such Class.
Service shares will receive lower per share dividends than
Institutional shares because of the higher expenses borne by
Service. See "Annual Fund Operating Expenses."
Dividends paid by the Cash Management, Treasury
Prime
Cash Management and U.S. Government Securities Cash Management
Funds derived from net investment income and dividends paid by
the Municipal Cash Management Fund derived from taxable
investments, together with distributions from any net realized
short-term securities gains and all or a portion of any gain
realized from the sale or other disposition of certain market
discount bonds, will be taxable to U.S. investors as ordinary
income whether or not reinvested in additional Fund shares.
Distributions from net realized long-term securities gains, if
any, will be taxable as long-term capital gains for Federal
income tax purposes if the beneficial holder of Fund shares is a
citizen or resident of the United States, regardless of how long
investors have held shares and whether such distributions are
received in cash or reinvested in additional shares.
Except for dividends from taxable investments,
the
Trust anticipates that substantially all dividends paid by the
Municipal Cash Management Fund will not be subject to Federal
income tax. Dividends and distributions paid by the Fund may be
subject to certain state and local taxes. Although all or a
substantial portion of the dividends paid by the Municipal Cash
Management Fund may be excluded by shareholders of the Fund from
their gross income for Federal income tax purposes, the Fund may
purchase specified private activity bonds, the interest from
which may be (i) a preference item for purposes of the
alternative minimum tax, (ii) a component of the "adjusted
current earnings" preference item for purposes of the corporate
alternative minimum tax as well as a component in computing the
corporate environmental tax or (iii) a factor in determining the
extent to which the Social Security benefits of a beneficial
holder of the Fund's shares are taxable. If the Fund purchases
such securities, the portion of its dividends related thereto
will not necessarily be tax exempt to a beneficial holder of the
Fund's shares who is subject to the alternative minimum tax
and/or tax on Social Security benefits and may cause such
investor to be subject to such taxes.
Dividends and distributions attributable to
interest
from direct obligations of the United States and paid by the
Treasury Prime Cash Management Fund currently are not subject to
state personal income tax. The Trust intends to provide
shareholders of the Treasury Prime Cash Management Fund with a
statement which sets forth the percentage of dividends and
distributions paid by the Fund that is attributable to interest
income from direct obligations of the United States.
Dividends paid by a Fund derived from net
investment
income, together with distributions from net realized short-term
securities gains and all or a portion of any gain realized from
the sale or other disposition of certain market discount bonds,
paid by such Fund to a foreign investor who is the beneficial
owner of such Fund's shares generally are subject to U.S.
nonresident withholding taxes at the rate of 30%, unless the
foreign investor claims the benefit of a lower rate specified in
a tax treaty. Distributions from net realized long-term
securities gains paid by the Fund to such foreign investor
generally will not be subject to U.S. nonresident withholding
tax. However, such distributions may be subject to backup
withholding, as described below, unless the foreign investor
certifies his non-U.S. residency status.
Federal regulations generally require the Trust
to
withhold ("backup withholding") and remit to the U.S. Treasury
31% of dividends and distributions from net realized securities
gains paid to a shareholder if such shareholder fails to certify
either that the TIN furnished in connection with opening an
account is correct, or that such shareholder has not received
notice from the IRS of being subject to backup withholding as a
result of a failure to properly report taxable dividend or
interest income on a Federal income tax return. Furthermore, the
IRS may notify the Trust to institute backup withholding if the
IRS determines a shareholder's TIN is incorrect or if a
shareholder has failed to properly report taxable dividend and
interest income on a Federal income tax return.
A TIN is either the Social Security number or
employer
identification number of the record owner of the account. Any
tax withheld as a result of backup withholding does not
constitute an additional tax imposed on the record owner of the
account, and may be claimed as a credit on the record owner's
Federal income tax return.
Notice as to the tax status of dividends and
distributions will be mailed to investors annually. Each
investor also will receive periodic summaries of its account
which will include information as to dividends and distributions
from securities gains, if any, paid during the year. For the
Municipal Cash Management Fund, these statements will set forth
the dollar amount of income exempt from Federal tax and the
dollar amount, if any, subject to Federal tax. These dollar
amounts will vary depending on the size and length of time of the
investor's investment in the Municipal Cash Management Fund. If
the Municipal Cash Management Fund pays dividends derived from
taxable income, it intends to designate as taxable the same
percentage of the day's dividend as the actual taxable income
earned on that day bears to total income earned on that day.
Thus, the percentage of the dividend designated as taxable, if
any, may vary from day to day. No dividend will qualify for the
dividends received deduction allowable to certain U.S.
corporations.
It is expected that each Fund will qualify as a
"regulated investment company" under the Code so long as such
qualification is in the best interests of its shareholders.
Qualification as a regulated investment company relieves the Fund
of any liability for Federal income tax to the extent its
earnings are distributed in accordance with applicable provisions
of the Code. Each Fund is subject to a non-deductible 4% excise
tax, measured with respect to certain undistributed amounts of
taxable income and capital gains, if any.
Each investor and beneficial shareholder should
consult
its tax adviser regarding questions as to Federal, state or local
taxes.
YIELD INFORMATION
From time to time, each Fund will advertise its
yield
and effective yield. Both yield figures are based on historical
earnings and are not intended to indicate future performance. It
can be expected that these yields will fluctuate substantially.
The yield of a Fund refers to the income generated by an
investment in the Fund over a seven-day period (which period will
be stated in the advertisement). This income is then annualized.
That is, the amount of income generated by the investment during
that week is assumed to be generated each week over a 52-week
period and is shown as a percentage of the investment. The ef-
fective yield is calculated similarly, but, when annualized, the
income earned by an investment in the Fund is assumed to be rein-
vested. The effective yield will be slightly higher than the
yield because of the compounding effect of this assumed reinvest-
ment. Each Fund's yield and effective yield may reflect absorbed
expenses pursuant to any undertaking that may be in effect. See
"Management of the Trust." Both yield figures also take into
account any applicable distribution and service fees. As a
result, at any given time, the performance of Service should be
expected to be lower than that of Institutional. See "Service
Plan."
Tax equivalent yield for the Municipal Cash
Management
Fund is calculated by determining the pre-tax yield which, after
being taxed at a stated rate, would be equivalent to a stated
yield or effective yield calculated as described above.
Yield information is useful in reviewing a
Fund's per-
formance, but because yields will fluctuate, under certain
conditions such information may not provide a basis for
comparison with domestic bank deposits, other investments which
pay a fixed yield for a stated period of time, or other
investment companies which may use a different method of
computing yield.
Comparative performance information may be used
from
time to time in advertising or marketing Fund shares, including
data from Lipper Analytical Services, Inc., Bank Rate Monitor*,
N. Palm Beach, Fla. 33408, IBC/Donoghue's Money Fund Report and
other industry publications.
GENERAL INFORMATION
The Trust was organized as an unincorporated
business
trust under the laws of the Commonwealth of Massachusetts
pursuant to an Agreement and Declaration of Trust (the "Trust
Agreement") dated October 20, 1994, and has not engaged in active
business to the date of this Prospectus. The Trust is authorized
to issue an unlimited number of shares of beneficial interest,
par value $.001 per share. Each Fund's shares are classified
into two classes. Each share has one vote and shareholders will
vote in the aggregate and not by class except as otherwise
required by law or with respect to any matter which affects only
one class. Holders of Service shares only, however, will be
entitled to vote on matters submitted to shareholders pertaining
to the Service Plan. Investors have agreed to vote Fund shares
for which they are the record owners according to voting
instructions received from the beneficial holder of such shares.
To date, the Board of Trustees has authorized
the
creation of four separate portfolios of shares. The other
portfolios are not being offered by this Prospectus. All
consideration received by the Trust for shares of one of the
portfolios and all assets in which such consideration is invested
will belong to that portfolio (subject only to the rights of
creditors of the Trust) and will be subject to the liabilities
related thereto. The income attributable to, and the expenses
of, one portfolio (and as to classes within a portfolio) are
treated separately from those of the other portfolios (and
classes). The Trust has the ability to create, from time to
time, new portfolios without shareholder approval.
Rule 18f-2 under the 1940 Act provides that any
matter
required to be submitted under the provisions of the 1940 Act or
applicable state law or otherwise to the holders of the
outstanding voting securities of an investment company, such as
the Trust, will not be deemed to have been effectively acted upon
unless approved by the holders of a majority of the outstanding
shares of each Fund affected by such matter. Rule 18f-2 further
provides that a Fund shall be deemed to be affected by a matter
unless it is clear that the interests of such Fund in the matter
are identical or that the matter does not affect any interest of
such Fund. However, the Rule exempts the selection of
independent accountants and the election of Trustees from the
separate voting requirements of the Rule.
Under Massachusetts law, shareholders could,
under
certain circumstances, be held liable for the obligations of the
Trust. However, the Trust Agreement disclaims shareholder
liability for acts or obligations of the Trust and requires that
notice of such disclaimer be given in each agreement, obligation
or instrument entered into or executed by the Trust or a Trustee.
The Trust Agreement provides for indemnification from the Trust's
property for all losses and expenses of any shareholder held
personally liable for the obligations of the Trust. Thus, the
risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which the
Trust itself would be unable to meet its obligations, a
possibility which management believes is remote. Upon payment of
any liability incurred by the Trust, the shareholder paying such
liability will be entitled to reimbursement from the general
assets of the Trust. The Trustees intend to conduct the
operations of the Trust in such a way so as to avoid, as far as
possible, ultimate liability of the shareholders for liabilities
of the Trust. As described under "Management of the Trust" in
the Statement of Additional Information, the Trust ordinarily
will not hold shareholder meetings; however, shareholders under
certain circumstances may have the right to call a meeting of
shareholders for the purpose of voting to remove Trustees.
The Transfer Agent maintains a record of each
investor's ownership and sends confirmations and statements of
account.
Investor inquiries may be made by writing to the
Trust
at the address shown on the front cover or by calling the
telephone number shown on the front cover.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE
ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS
AND IN THE TRUST'S OFFICIAL SALES LITERATURE IN CONNECTION WITH
THE OFFER OF THE FUNDS' SHARES, AND, IF GIVEN OR MADE, SUCH OTHER
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE TRUST. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO
WHOM, SUCH OFFERING MAY NOT LAWFULLY BE MADE.
<PAGE>
APPENDIX
PORTFOLIO SECURITIES
To the extent set forth in this Prospectus and
except
as noted below, each Fund may invest in the following securities:
U.S. TREASURY SECURITIES--Each Fund may invest
in U.S.
Treasury securities which include Treasury Bills, Treasury Notes
and Treasury Bonds that differ in their interest rates,
maturities and times of issuance. Treasury Bills have initial
maturities of one year or less; Treasury Notes have initial
maturities of one to ten years; and Treasury Bonds generally have
initial maturities of greater than ten years.
U.S. GOVERNMENT SECURITIES--In addition to U.S.
Treasury securities, each Fund (the U.S. Treasury Prime Cash
Management Fund to a limited extent) may invest in securities
issued or guaranteed by the U.S. Government or its agencies or
instrumentalities. Some obligations issued or guaranteed by U.S.
Government agencies and instrumentalities, for example,
Government National Mortgage Association pass-through
certificates, are supported by the full faith and credit of the
U.S. Treasury; others, such as those of the Federal Home Loan
Banks, by the right of the issuer to borrow from the Treasury;
others, such as those issued by the Federal National Mortgage
Association, by discretionary authority of the U.S. Government to
purchase certain obligations of the agency or instrumentality;
and others, such as those issued by the Student Loan Marketing
Association, only by the credit of the agency or instrumentality.
These securities bear fixed, floating or variable rates of
interest. Interest may fluctuate based on generally recognized
reference rates or the relationship of rates. While the U.S.
Government provides financial support to such U.S. Government-
sponsored agencies or instrumentalities, no assurance can be
given that it will always do so, since it is not so obligated by
law. Each Fund will invest in such securities only when the
Trust is satisfied that the credit risk with respect to the
issuer is minimal.
REPURCHASE AGREEMENTS--Each Fund, except the
U.S.
Treasury Prime Cash Management Fund, may enter into repurchase
agreements, which involve the acquisition by a Fund of an
underlying debt instrument, subject to an obligation of the
seller to repurchase, and such Fund to resell, the instrument at
a fixed price usually not more than one week after its purchase.
The Trust's custodian or sub-custodian will have custody of, and
will hold in a segregated account, securities acquired by a Fund
under a repurchase agreement. Repurchase agreements are
considered by the staff of the Securities and Exchange Commission
to be loans by the Fund entering into them. In an attempt to
reduce the risk of incurring a loss on a repurchase agreement,
each of these Funds will enter into repurchase agreements only
with registered or unregistered securities dealers or banks with
total assets in excess of one billion dollars, with respect to
securities in which such Fund may invest and will require that
additional securities be deposited with it if the value of the
securities purchased should decrease below resale price. The
Manager will monitor on an ongoing basis the value of the
collateral to assure that it always equals or exceeds the
repurchase price. Certain costs may be incurred by a Fund in
connection with the sale of the securities if the seller does not
repurchase them in accordance with the repurchase agreement. In
addition, if bankruptcy proceedings are commenced with respect to
the seller of the securities, realization on the securities by
the Fund may be delayed or limited. Each of these Funds will
consider on an ongoing basis the creditworthiness of the
institutions with which it enters into repurchase agreements.
BANK OBLIGATIONS--The Cash Management Fund will,
and,
to a limited extent, the Municipal Cash Management Fund may,
invest in bank obligations, including certificates of deposit,
time deposits, bankers' acceptances and other short-term
obligations of domestic banks, foreign subsidiaries of domestic
banks, foreign branches of domestic banks, and domestic and
foreign branches of foreign banks and thrift institutions.
Certificates of deposit are negotiable certificates evidencing
the obligation of a bank to repay funds deposited with it for a
specified period of time. Time deposits are non-negotiable
deposits maintained in a banking institution for a specified
period of time at a stated interest rate. Time deposits which
may be held by the Fund will not benefit from insurance from the
Bank Insurance Fund or the Savings Association Insurance Fund
administered by the Federal Deposit Insurance Corporation.
Bankers' acceptances are credit instruments evidencing the
obligation of a bank to pay a draft drawn on it by a customer.
These instruments reflect the obligation both of the bank and of
the drawer to pay the face amount of the instrument upon
maturity. The other short-term obligations may include
uninsured, direct obligations, bearing fixed, floating or
variable interest rates.
COMMERCIAL PAPER AND OTHER SHORT-TERM CORPORATE
OBLIGATIONS--The Cash Management Fund and, to a limited extent,
the Municipal Cash Management Fund may invest in commercial
paper, which consists of short-term, unsecured promissory notes
issued to finance short-term credit needs. The commercial paper
purchased by these Series will consist only of direct obligations
issued by domestic and foreign entities. The other corporate
obligations in which these Funds may invest consist of high
quality, U.S. dollar denominated short-term bonds and notes
(including variable amount master demand notes) issued by
domestic and foreign corporations.
FLOATING AND VARIABLE RATE OBLIGATIONS--The Cash
Management Fund and the Municipal Cash Management Fund also may
purchase floating and variable rate demand notes and bonds, which
are obligations ordinarily having stated maturities in excess of
13 months, but which permit the holder to demand payment of
principal at any time, or at specified intervals not exceeding 13
months, in each case upon not more than 30 days' notice.
Variable rate demand notes include master demand notes which are
obligations that permit the Fund to invest fluctuating amounts,
which may change daily without penalty, pursuant to direct
arrangements between the Fund, as lender, and the borrower. The
interest rates on these notes fluctuate from time to time. The
issuer of such obligations normally has a corresponding right,
after a given period, to prepay in its discretion the outstanding
principal amount of the obligations plus accrued interest upon a
specified number of days' notice to the holders of such
obligations. The interest rate on a floating rate demand
obligation is based on a known lending rate, such as a bank's
prime rate, and is adjusted automatically each time such rate is
adjusted. The interest rate on a variable rate demand obligation
is adjusted automatically at specified intervals. Frequently,
such obligations are secured by letters of credit or other credit
support arrangements provided by banks. Because these
obligations are direct lending arrangements between the lender
and borrower, it is not contemplated that such instruments
generally will be traded, and there generally is no established
secondary market for these obligations, although they are
redeemable at face value. Accordingly, where these obligations
are not secured by letters of credit or other credit support
arrangements, the Fund's right to redeem is dependent on the
ability of the borrower to pay principal and interest on demand.
Such obligations frequently are not rated by credit rating
agencies and, if not so rated, each of these Funds may invest in
them only if the Manager determines that at the time of
investment the obligations are of comparable quality to the other
obligations in which the Fund may invest. The Manager, on behalf
of the Fund will consider on an ongoing basis the credit-
worthiness of the issuers of the floating and variable rate
demand obligations held by the Fund. Neither of these Funds will
invest more than 10% of the value of its net assets in floating
or variable rate demand obligations as to which it cannot
exercise the demand feature on not more than seven days' notice
if there is no secondary market available for these obligations,
and in other securities that are illiquid.
MUNICIPAL OBLIGATIONS--The Municipal Cash
Management
Fund will invest in Municipal Obligations. Municipal Obligations
generally include debt obligations issued to obtain funds for
various public purposes as well as certain industrial development
bonds issued by or on behalf of public authorities. Municipal
Obligations are classified as general obligation bonds, revenue
bonds and notes. General obligation bonds are secured by the
issuer's pledge of its faith, credit and taxing power for the
payment of principal and interest. Revenue bonds are payable
from the revenue derived from a particular facility or class of
facilities or, in some cases, from the proceeds of a special
excise or other specific revenue source, but not from the general
taxing power. Industrial development bonds, in most cases, are
revenue bonds and generally do not carry the pledge of the credit
of the issuing municipality, but generally are guaranteed by the
corporate entity on whose behalf they are issued. Notes are
short-term instruments which are obligations of the issuing
municipalities or agencies and are sold in anticipation of a bond
sale, collection of taxes or receipt of other revenues.
Municipal Obligations include municipal lease/purchase agreements
which are similar to installment purchase contracts for property
or equipment issued by municipalities. Municipal Obligations
bear fixed, floating or variable rates of interest. Certain
Municipal Obligations are subject to redemption at a date earlier
than their stated maturity pursuant to call options, which may be
separated from the related municipal obligation and purchased and
sold separately.
PARTICIPATION INTERESTS--The Municipal Cash
Management
Fund may purchase from financial institutions participation
interests in Municipal Obligations (such as industrial
development bonds and municipal lease/purchase agreements). A
participation interest gives the Fund an undivided interest in
the Municipal Obligation in the proportion that the Fund's
participation interest bears to the total principal amount of the
Municipal Obligation. These instruments may have fixed, floating
or variable rates of interest, with remaining maturities of 13
months or less. If the participation interest is unrated, or has
been given a rating below that which otherwise is permissible for
purchase by the Fund, the participation interest will be backed
by an irrevocable letter of credit or guarantee of a bank that
the Board of Trustees has determined meets the prescribed quality
standards for banks set forth above, or the payment obligation
otherwise will be collateralized by U.S. Government securities.
For certain participation interests, the Fund will have the right
to demand payment, on not more than seven days' notice, for all
or any part of the Fund's participation interest in the Municipal
Obligation, plus accrued interest. As to these instruments, the
Fund intends to exercise its right to demand payment only upon a
default under the terms of the Municipal Obligation, as needed to
provide liquidity to meet redemptions, or to maintain or improve
the quality of its investment portfolio. The Municipal Cash
Management Fund will not invest more than 10% of the value of its
net assets in participation interests that do not have this
demand feature, and in other illiquid securities.
TENDER OPTION BONDS--The Municipal Cash
Management Fund
may purchase tender option bonds. A tender option bond is a
Municipal Obligation (generally held pursuant to a custodial
arrangement) having a relatively long maturity and bearing
interest at a fixed rate substantially higher than prevailing
short-term tax exempt rates, that has been coupled with the
agreement of a third party, such as a bank, broker-dealer or
other financial institution, pursuant to which such institution
grants the security holders the option, at periodic intervals, to
tender their securities to the institution and receive the face
value thereof. As consideration for providing the option, the
financial institution receives periodic fees equal to the
difference between the Municipal Obligation's fixed coupon rate
and the rate, as determined by a remarketing or similar agent at
or near the commencement of such period, that would cause the
securities, coupled with the tender option, to trade at par on
the date of such determination. Thus, after payment of this fee,
the security holder effectively holds a demand obligation that
bears interest at the prevailing short-term tax exempt rate. The
Manager, on behalf of the Fund, will consider on an ongoing basis
the creditworthiness of the issuer of the underlying Municipal
Obligation, of any custodian and of the third party provider of
the tender option. In certain instances and for certain tender
option bonds, the option may be terminable in the event of a
default in payment of principal or interest on the underlying
Municipal Obligations and for other reasons. The Municipal Cash
Management Fund will not invest more than 10% of the value of its
net assets in securities that are illiquid, which would include
tender option bonds as to which it cannot exercise the tender
feature on not more than seven days' notice if there is no
secondary market available for these obligations.
STAND-BY COMMITMENTS--The Municipal Cash
Management
Fund may acquire "stand-by commitments" with respect to Municipal
Obligations held in its portfolio. Under a stand-by commitment,
the Fund obligates a broker, dealer or bank to repurchase, at the
Fund's option, specified securities at a specified price and, in
this respect, stand-by commitments are comparable to put options.
The exercise of a stand-by commitment therefore is subject to the
ability of the seller to make payment on demand. The Municipal
Cash Management Fund will acquire stand-by commitments solely to
facilitate portfolio liquidity and does not intend to exercise
its rights thereunder for trading purposes. The Municipal Cash
Management Fund may pay for stand-by commitments if such action
is deemed necessary, thus increasing to a degree the cost of the
underlying Municipal Obligation and similarly decreasing such
security's yield to investors.
INVESTMENT PRACTICES
LENDING PORTFOLIO SECURITIES--From time to time,
each
of the Cash Management Fund and U.S. Government Securities Cash
Management Fund may lend securities from its portfolio to
brokers, dealers and other financial institutions needing to
borrow securities to complete certain transactions. Such loans
may not exceed 33-1/3% of the value of the relevant Fund's total
assets. In connection with such loans, each of these Funds will
receive collateral consisting of cash or U.S. Government
securities or, with respect to the Cash Management Fund only,
irrevocable letters of credit issued by financial institutions.
Such collateral will be maintained at all times in an amount
equal to at least 100% of the current market value of the loaned
securities. Each of these Funds can increase its income through
the investment of such collateral. Each of these Funds continues
to be entitled to payments in amounts equal to the interest and
other distributions payable on the loaned security and receives
interest on the amount of the loan. Such loans will be
terminable at any time upon specified notice. A Fund might
experience risk of loss if the institution with which it has
engaged in a portfolio loan transaction breaches its agreement
with such Fund.
ILLIQUID SECURITIES--Each Fund may invest up to
10% of
the value of its net assets in securities as to which a liquid
trading market does not exist, provided such investments are
consistent with its investment objective. Such securities may
include securities that are not readily marketable, such as
certain securities that are subject to legal or contractual
restrictions on resale, participation interests that are not
subject to the demand feature described above, floating and
variable rate demand obligations as to which the Fund cannot
exercise the related demand feature described above on not more
than seven days' notice and as to which there is no secondary
market and repurchase agreements providing for settlement in more
than seven days after notice. However, if a substantial market
of qualified institutional buyers develops pursuant to Rule 144A
under the Securities Act of 1933, as amended, for certain
unregistered securities held by a Fund, the Trust intends to
treat such securities as liquid securities in accordance with
procedures approved by the Trust's Board of Trustees. Because it
is not possible to predict with assurance how the market for
restricted securities pursuant to Rule 144A will develop, the
Trust's Board of Trustees has directed the Manager to monitor
carefully the investments of the Funds in such securities with
particular regard to trading activity, availability of reliable
price information and other relevant information.
BORROWING MONEY--As a fundamental policy, each
of the
Municipal Cash Management Fund and Treasury Prime Cash Management
Fund is permitted to borrow money to the extent permitted under
the 1940 Act. However, each of these Funds currently intends to
borrow money from banks for temporary or emergency (not
leveraging) purposes in an amount up to 15% of the value of its
total assets (including the amount borrowed) valued at the lesser
of cost or market, less liabilities (not including the amount
borrowed) at the time the borrowing is made. While borrowings
exceed 5% of a Fund's total assets, such Fund will not make any
additional investments.
<PAGE>
PRAIRIE INSTITUTIONAL
FUNDS
Cash Management Funds
Institutional AND Service
SHARES
PART B
(STATEMENT OF ADDITIONAL
INFORMATION)
__________, 1994
This Statement of Additional Information, which
is not
a prospectus, supplements and should be read in conjunction with
the current Prospectus of Cash Management Fund, Municipal Cash
Management Fund, Treasury Prime Cash Management Fund and U.S.
Government Securities Cash Management Fund (each, a "Fund") of
Prairie Institutional Funds (the "Trust"), dated _________, 1994,
as it may be revised from time to time. To obtain a copy of the
Funds' Prospectus, please write to the Trust at
_______________________ or call toll free 1-800-________.
The First National Bank of Chicago (the
"Manager")
serves as each Fund's investment adviser.
Concord Financial Group, Inc. (the
"Distributor") is
the distributor of the Funds' shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies. . . . . . . . . . .
. . . . . . . . . . . . . . . . B-2
Management of the Trust . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . B-11
Management Agreement. . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . B-11
Purchase of Fund Shares . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . B-14
Service Plan. . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . B-15
Redemption of Fund Shares . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . B-16
Determination of Net Asset Value. . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . B-17
Portfolio Transactions. . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . B-18
Exchange Privilege. . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . B-19
Dividends, Distributions and Taxes. . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . B-19
Yield Information . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . B-20
Information About the Trust . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . B-21
Counsel and Independent Auditors. . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . B-21
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . B-22
Financial Statements. . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . B-27
Report of Independent Auditors. . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . B-__
<PAGE>
INVESTMENT OBJECTIVE AND
MANAGEMENT POLICIES
The following information supplements and should
be
read in conjunction with the section in the Funds' Prospectus
entitled "Description of the Funds."
Bank Obligations. (Cash Management Fund and, to
a
limited extent, Municipal Cash Management Fund) Domestic
commercial banks organized under Federal law are supervised and
examined by the Comptroller of the Currency and are required to
be members of the Federal Reserve System and to have their
deposits insured by the Federal Deposit Insurance Corporation
(the "FDIC"). Domestic banks organized under state law are
supervised and examined by state banking authorities but are
members of the Federal Reserve System only if the elect to join.
In addition, state banks whose certificates of deposit ("CDs")
may be purchased by the Fund are insured by the FDIC (although
such insurance may not be of material benefit to the Fund,
depending on the principal amount of the CDs of each bank held by
the Fund) and are subject to Federal examination and to a
substantial body of Federal law and regulation. As a result of
Federal or state laws and regulations, domestic branches of
domestic banks whose CDs may be purchased by the Fund generally
are required, among other things, to maintain specified levels of
reserves, are limited in the amounts which they can loan to a
single borrower and are subject to other regulation designed to
promote financial soundness. However, not all of such laws and
regulations apply to the foreign branches of domestic banks.
Obligations of foreign branches of domestic
banks,
foreign subsidiaries of domestic banks, and domestic and foreign
branches of foreign banks, such as CDs and time deposits ("TDs"),
may be general obligations of the parent banks in addition to the
issuing branch, or may be limited by the terms of a specific
obligation and governmental regulation. Such obligations are
subject to different risks than are those of domestic banks.
These risks include foreign economic and political developments,
foreign governmental restrictions that may adversely affect
payment of principal and interest on the obligations, foreign
exchange controls and foreign withholding and other taxes on
interest income. These foreign branches and subsidiaries are not
necessarily subject to the same or similar regulatory
requirements that apply to domestic banks, such as mandatory
reserve requirements, loan limitations, and accounting, auditing
and financial recordkeeping requirements. In addition, less
information may be publicly available about a foreign branch of a
domestic bank or about a foreign bank than about a domestic bank.
Obligations of United States branches of foreign
banks
may be general obligations of the parent bank in addition to the
issuing branch, or may be limited by the terms of a specific
obligation or by Federal or state regulation as well as
governmental action in the country in which the foreign bank has
its head office. A domestic branch of a foreign bank with assets
in excess of $1 billion may be subject to reserve requirements
imposed by the Federal Reserve System or by the state in which
the branch is located if the branch is licensed in that state.
In addition, Federal branches licensed by the
Comptroller of the Currency and branches licensed by certain
states ("State Branches") may be required to: (1) pledge to the
regulator, by depositing assets with a designated bank within the
state, a certain percentage of their assets as fixed from time to
time by the appropriate regulatory authority; and (2) maintain
assets within the state in an amount equal to a specified
percentage of the aggregate amount of liabilities of the foreign
bank payable at or through all of its agencies or branches within
the state. The deposits of Federal and State Branches generally
must be insured by the FDIC if such branches take deposits of
less than $100,000.
In view of the foregoing factors associated with
the
purchase of CDs and TDs issued by foreign branches of domestic
banks, by foreign subsidiaries of domestic banks, by foreign
branches of foreign banks or by domestic branches of foreign
banks, the Manager carefully evaluates such investments on a
case-by-case basis.
These Funds may purchase CDs issued by banks,
savings
and loan associations and similar thrift institutions with less
than $1 billion in assets, which are members of the FDIC,
provided the Fund purchases any such CD in a principal amount of
not more than $100,000, which amount would be fully insured by
the Bank Insurance Fund or the Savings Association Insurance Fund
administered by the FDIC. Interest payments on such a CD are not
insured by the FDIC. Neither of these Funds will own more than
one such CD per such issuer.
Foreign Securities. (Cash Management Fund)
Foreign
securities markets generally are not as developed or efficient as
those in the United States. Securities of some foreign issuers
are less liquid and more volatile than securities of comparable
U.S. issuers. Similarly, volume and liquidity in most foreign
securities markets are less than in the United States and, at
times, volatility of price can be greater than in the United
States.
Furthermore, some of these securities are
subject to
brokerage taxes levied by foreign governments, which have the
effect of increasing the cost of such investment and reducing the
realized gain or increasing the realized loss on such securities
at the time of sale. Custodial expenses for a portfolio of non-
U.S. securities generally are higher than for a portfolio of U.S.
securities. Income earned or received by the Cash Management
Fund from sources within foreign countries may be reduced by
withholding and other taxes.
Municipal Obligations. (Municipal Cash
Management
Fund) The term "Municipal Obligations" generally includes debt
obligations issued to obtain funds for various public purposes,
including the construction of a wide range of public facilities
such as airports, bridges, highways, housing, hospitals, mass
transportation, schools, streets and water and sewer works.
Other public purposes for which Municipal Obligations may be
issued include refunding outstanding obligations, obtaining funds
for general operating expenses and lending such funds to other
public institutions and facilities. In addition, certain types
of industrial development bonds are issued by or on behalf of
public authorities to obtain funds to provide for the
construction, equipment, repair or improvement of privately
operated housing facilities, sports facilities, convention or
trade show facilities, airport, mass transit, industrial, port or
parking facilities, air or water pollution control facilities and
certain local facilities for water supply, gas, electricity, or
sewage or solid waste disposal; the interest paid on such
obligations may be exempt from Federal income tax, although
current tax laws place substantial limitations on the size of
such issues. Such obligations are considered to be Municipal
Obligations if the interest paid thereon qualifies as exempt from
Federal income tax in the opinion of bond counsel to the issuer.
There are, of course, variations in the security of Municipal
Obligations, both within a particular classification and between
classifications.
Floating and variable rate demand notes and
bonds are
tax exempt obligations ordinarily having stated maturities in
excess of 13 months, but which permit the holder to demand
payment of principal at any time, or at specified intervals not
exceeding 13 months, in each case upon not more than 30 days'
notice. The issuer of such obligations ordinarily has a
corresponding right, after a given period, to prepay in its
discretion the outstanding principal amount of the obligations
plus accrued interest upon a specified number of days' notice to
the holders thereof. The interest rate on a floating rate demand
obligation is based on a known lending rate, such as a bank's
prime rate, and is adjusted automatically each time such rate is
adjusted. The interest rate on a variable rate demand obligation
is adjusted automatically at specified intervals.
For the purpose of diversification under the
Investment
Company Act of 1940 (the "1940 Act"), the identification of the
issuer of Municipal Obligations depends on the terms and
conditions of the security. When the assets and revenues of an
agency, authority, instrumentality or other political subdivision
are separate from those of the government creating the
subdivision and the security is backed only by the assets and
revenues of the subdivision, such subdivision would be deemed to
be the sole issuer. Similarly, in the case of an industrial
development bond, if that bond is backed only by the assets and
revenues of the non-governmental user, then such non-governmental
user would be deemed to be the sole issuer. If, however, in
either case, the creating government or some other entity
guarantees a security, such a guaranty would be considered a
separate security and will be treated as an issue of such
government or other entity.
The yields on Municipal Obligations are
dependent on a
variety of factors, including general economic and monetary
conditions, money market factors, conditions in the Municipal
Obligations market, size of a particular offering, maturity of
the obligation, and rating of the issue. The imposition of the
Fund's management fee, as well as other operating expenses, will
have the effect of reducing the yield to investors.
Municipal lease obligations or installment
purchase
contract obligations (collectively, "lease obligations") have
special risks not ordinarily associated with Municipal
Obligations. Although lease obligations do not constitute
general obligations of the municipality for which the
municipality's taxing power is pledged, a lease obligation
ordinarily is backed by the municipality's covenant to budget
for, appropriate and make the payments due under the lease
obligation. However, certain lease obligations contain "non-
appropriation" clauses which provide that the municipality has no
obligation to make lease or installment purchase payments in
future years unless money is appropriated for such purpose on a
yearly basis. Although "non-appropriation" lease obligations are
secured by the leased property, disposition of the property in
the event of foreclosure might prove difficult. The Municipal
Cash Management Fund will seek to minimize these risks by
investing only in those lease obligations that (1) are rated in
one of the two highest categories for debt obligations by at
least two nationally recognized statistical rating organizations
(or one rating organization if the lease obligation was rated by
only one such organization); or (2) if unrated, are purchased
principally from the issuer or domestic banks or other
responsible third parties, in each case only if the seller shall
have entered into an agreement with the Municipal Cash Management
Fund providing the seller or other responsible third party will
either remarket or repurchase the lease obligations within a
short period after demand by the Fund. Not more than 10% of the
value of the Fund's net assets will be invested in lease
obligations that are illiquid and in other illiquid securities.
See "Investment Restrictions" below.
The Municipal Cash Management Fund will not
purchase
tender option bonds unless (a) the demand feature applicable
thereto is exercisable by the Fund within 13 months of the date
of such purchase upon no more than 30 days' notice and thereafter
is exercisable by the Fund no less frequently than annually upon
no more than 30 days' notice and (b) at the time of such
purchase, the Manager reasonably expects (i) based upon its
assessment of current and historical interest rate trends, that
prevailing short-term tax exempt rates will not exceed the stated
interest rate on the underlying Municipal Obligations at the time
of the next tender option to terminate the tender option would
not occur prior to the time of the next tender opportunity. At
the time of each tender opportunity, the Fund will exercise the
tender option with respect to any tender option bonds unless the
Manager reasonably expects, (x) based upon its assessment of
current and historical interest rate trends, that prevailing
short-term tax exempt rates will not exceed the stated interest
rate on the underlying Municipal Obligations at the time of the
next tender fee adjustment, and (y) that the circumstances which
might entitle the grantor of a tender option to terminate the
tender option would not occur prior to the time of the next
tender opportunity. The Municipal Cash Management Fund will
exercise the tender feature with respect to tender option bonds,
or otherwise dispose of its tender option bonds, prior to the
time the tender option is scheduled to expire pursuant to the
terms of the agreement under which the tender option is granted.
The Municipal Cash Management Fund otherwise will comply with the
provisions of Rule 2a-7 in connection with the purchase of tender
option bonds, including, without limitation, the requisite
determination by the Board of Trustees that the tender option
bonds in question meet the quality standards described in Rule
2a-7, which, in the case of a tender option bond subject to a
conditional demand feature, would include a determination that
the security has received both the required short-term and long-
term quality rating or is determined to be of comparable quality.
In the event of a default of the Municipal Obligation underlying
a tender option bond, or the termination of the tender option
agreement, the Municipal Cash Management Fund would look to the
maturity date of the underlying security for purposes of
compliance with Rule 2a-7 and, if its remaining maturity was
greater than 13 months, the Fund would sell the security as soon
as would be practicable. The Municipal Cash Management Fund will
purchase tender option bonds only when it is satisfied that the
custodial and tender option arrangements, including the fee
payment arrangements, will not adversely affect the tax exempt
status of the underlying Municipal Obligations and that payment
of any tender fees will not have the effect of creating taxable
income for the Fund. Based on the tender option bond agreement,
the Municipal Cash Management Fund expects to be able to value
the tender option bond at par; however, the value of the
instrument will be monitored to assure that it is valued at fair
value.
If, subsequent to its purchase by the Municipal
Cash
Management Fund, (a) an issue of rated Municipal Obligations
ceases to be rated in the highest rating category by at least two
ratings organizations (or one rating organization if the
instrument was rated by only one such organization), or the
Trust's Board determines that it is no longer of comparable
quality; or (b) the Manager becomes aware that any portfolio
security not so highly rated or any unrated security has been
given a rating by any rating organization below the rating
organization's second highest rating category, the Trust's Board
will reassess promptly whether such security presents minimal
credit risk and will cause the Trust to take such action as it
determines is in the best interest of the Fund and its
shareholders, provided that the reassessment required by clause
(b) is not required if the portfolio security is disposed of or
matures within five business days of the Manager becoming aware
of the new rating and the Trust's Board is subsequently notified
of the Manager's actions.
To the extent that the ratings given by Moody's
Investors Service, Inc. ("Moody's"), Standard & Poor's
Corporation ("S&P") or Fitch Investors Service Inc. ("Fitch") for
Municipal Obligations may change as a result of changes in such
organizations or their rating systems, the Municipal Cash
Management Fund will attempt to use comparable ratings as
standards for its investments in accordance with the investment
policies contained in the Prospectus and this Statement of
Additional Information. The ratings of Moody's, S&P and Fitch
represent their opinions as to the quality of the Municipal
Obligations which they undertake to rate. It should be
emphasized, however, that ratings are relative and subjective and
are not absolute standards of quality. Although these ratings
may be an initial criterion for selection of portfolio
investments, the Manager will also evaluate these securities and
the creditworthiness of the issuers of such securities.
Lending Portfolio Securities. (Cash Management
Fund
and U.S. Government Securities Cash Management Fund) To a
limited extent, each of these Funds may lend its portfolio
securities to brokers, dealers and other financial institutions,
provided it receives cash collateral which at all times is
maintained in an amount equal to at least 100% of the current
market value of the securities loaned. By lending its portfolio
securities, the Fund can increase its income through the
investment of the cash collateral. For purposes of this policy,
the Trust considers collateral consisting of U.S. Government
securities or, in the case of the Cash Management Fund only,
irrevocable letters of credit issued by banks whose securities
meet the standards for investment by the Fund to be the
equivalent of cash. Such loans may not exceed 33-1/3% of the
Fund's total assets. From time to time, the Fund may return to
the borrower or a third party which is unaffiliated with the
Fund, and which is acting as a "placing broker," a part of the
interest earned from the investment of collateral received for
securities loaned.
The Securities and Exchange Commission currently
requires that the following conditions must be met whenever
portfolio securities are loaned: (1) the Fund must receive at
least 100% cash collateral from the borrower; (2) the borrower
must increase such collateral whenever the market value of the
securities rises above the level of such collateral; (3) the Fund
must be able to terminate the loan at any time; (4) the Fund must
receive reasonable interest on the loan, as well as any interest
or other distributions payable on the loaned securities, and any
increase in market value; and (5) the Fund may pay only
reasonable custodian fees in connection with the loan. These
conditions may be subject to future modification.
Investment Restrictions
Cash Management and U.S. Government Securities
Cash
Management Funds only. Each of the Cash Management Fund and U.S.
Government Securities Cash Management Fund has adopted investment
restrictions numbered 1 through 9 below as fundamental policies.
In addition, the Cash Management Fund has adopted investment
restrictions numbered 12 and 13 and the U.S. Government
Securities Cash Management Fund has adopted investment
restriction number 14 as additional fundamental policies. These
restrictions cannot be changed, as to a Fund, without approval by
the holders of a majority (as defined in the 1940 Act) of such
Fund's outstanding voting shares. Investment restrictions
numbered 10 and 11 below are not fundamental policies and may be
changed by vote of a majority of the Trust's Trustees at any
time. Neither of these Funds may:
1. Borrow money, except from banks for
temporary or
emergency (not leveraging) purposes in an amount up to 15% of the
value of the Fund's total assets (including the amount borrowed)
based on the lesser of cost or market, less liabilities (not
including the amount borrowed) at the time the borrowing is made.
While borrowings exceed 5% of the value of the Fund's total
assets, the Fund will not make any additional investments.
2. Pledge, hypothecate, mortgage or
otherwise
encumber its assets, except to secure borrowings for temporary or
emergency purposes.
3. Sell securities short or purchase
securities on
margin.
4. Write or purchase put or call options or
combinations thereof.
5. Act as an underwriter of securities of
other
issuers, except to the extent the Fund may be deemed an
underwriter under the Securities Act of 1933, as amended, by
virtue of disposing of portfolio securities.
6. Purchase or sell real estate, real
estate
investment trust securities, commodities or commodity contracts,
or oil and gas interests.
7. Make loans to others, except through the
purchase
of debt obligations referred to in the Fund's Prospectus, except
that the Fund may lend its portfolio securities in an amount not
to exceed 33-1/3% of the value of its total assets. Any loans of
portfolio securities will be made according to guidelines
established by the Securities and Exchange Commission and the
Trust's Trustees.
8. Invest in companies for the purpose of
exercising
control.
9. Invest in securities of other investment
companies, except as they may be acquired as part of a merger,
consolidation or acquisition of assets.
10. Enter into repurchase agreements
providing for
settlement in more than seven days after notice or purchase
securities which are illiquid, if, in the aggregate, more than
10% of the value of the Fund's net assets would be so invested.
11. Invest in oil, gas and other mineral
leases, or
real estate limited partnerships.
The following investment restrictions numbered
12 and
13 apply only to the Cash Management Fund. The Cash Management
Fund may not:
12. Invest more than 5% of its assets in the
obligations of any one issuer, except that up to 25% of the value
of the Cash Management Fund's total assets may be invested
(subject to Rule 2a-7 under the 1940 Act) without regard to any
such limitations.
13. Invest less than 25% of its total assets
in
securities issued by banks or invest more than 25% of its assets
in the securities of issuers in any other industry, provided that
there shall be no limitation on the purchase of obligations
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities. Notwithstanding the foregoing, for temporary
defensive purposes, the Cash Management Fund may invest less than
25% of its total assets in bank obligations.
The following investment restriction number 14
applies
only to the U.S. Government Securities Cash Management Fund. The
U.S. Government Securities Cash Management Fund may not:
14. Invest more than 25% of its total assets
in the
securities of issuers in any single industry, provided that there
shall be no such limitation on investments in obligations issued
or guaranteed by the U.S. Government, its agencies or
instrumentalities.
Municipal Cash Management and Treasury Prime
Cash
Management Funds only. Each of the Municipal Cash Management
Fund and Treasury Prime Cash Management Fund has adopted
investment restrictions numbered 1 through 7 below as fundamental
policies. In addition, the Municipal Cash Management Fund has
adopted investment restriction number 13 and the Treasury Prime
Cash Management Fund has adopted investment restriction number 14
as additional fundamental policies. These restrictions cannot be
changed, as to a Fund, without approval by the holders of a
majority (as defined in the 1940 Act) of such Fund's outstanding
voting shares. Investment restrictions numbered 8 through 12 are
not fundamental policies and may be changed by vote of a majority
of the Trust's Trustees at any time. Neither of these Funds may:
1. Invest in commodities, except that each
of these
Funds may purchase and sell options, forward contracts, futures
contracts, including those relating to indexes, and options on
futures contracts or indexes.
2. Purchase, hold or deal in real estate,
or oil, gas
or other mineral leases or exploration or development programs,
but each of these Funds may purchase and sell securities that are
secured by real estate or issued by companies that invest or deal
in real estate.
3. Borrow money, except to the extent
permitted under
the 1940 Act. For purposes of this investment restriction, a
Fund's entry into options, forward contracts, futures contracts,
including those relating to indexes, and options on futures
contracts or indexes shall not constitute borrowing.
4. Make loans to others, except through the
purchase
of debt obligations and the entry into repurchase agreements.
5. Act as an underwriter of securities of
other
issuers, except to the extent a Fund may be deemed an underwriter
under the Securities Act of 1933, as amended, by virtue of
disposing of portfolio securities, and except that the Municipal
Cash Management Fund may bid separately or as part of a group for
the purchase of Municipal Obligations directly from an issuer for
its own portfolio to take advantage of the lower purchase price
available.
6. Issue any senior security (as such term
is defined
in Section 18(f) of the 1940 Act), except to the extent the
activities permitted under Investment Restriction Nos. 1, 3, 9
and 10 may be deemed to give rise to senior securities.
7. Purchase securities on margin, but each
of these
Funds may make margin deposits in connection with transactions in
options, forward contracts, futures contracts, including those
relating to indexes, and options on futures contracts or indexes.
8. Invest in the securities of a company for
the
purpose of exercising management or control, but each of these
Funds will vote the securities it owns in its portfolio as a
shareholder in accordance with its views.
9. Pledge, mortgage or hypothecate its
assets, except
to the extent necessary to secure permitted borrowings and to the
extent related to the deposit of assets in escrow in connection
with writing covered put and call options and the purchase of
securities on a when-issued or forward commitment basis and
collateral and initial or variation margin arrangements with
respect to options, forward contracts, futures contracts,
including those relating to indexes, and options on futures
contracts or indexes.
10. Purchase, sell or write puts, calls or
combinations thereof, except as described in the Prospectus and
this Statement of Additional Information.
11. Enter into repurchase agreements providing
for
settlement in more than seven days after notice or purchase
securities which are illiquid, if, in the aggregate, more than
10% of the value of the Fund's net assets would be so invested.
12. Invest in securities of other investment
companies, except to the extent permitted under the Act.
The following investment restriction number 13
applies
only to the Municipal Cash Management Fund. The Municipal Cash
Management Fund may not:
13. Invest more than 25% of its total assets
in the
securities of issuers in any single industry, provided that there
shall be no such limitation on the purchase of Municipal
Obligations and, for temporary defensive purposes, obligations
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.
The following investment restriction number 14
applies
only to the Treasury Prime Cash Management Fund. The Treasury
Prime Cash Management Fund may not:
14. Invest more than 25% of its total assets
in the
securities of issuers in any single industry, provided that there
shall be no such limitation on investments in obligations issued
or guaranteed by the U.S. Government, its agencies or
instrumentalities.
For purposes of the Municipal Cash Management
Fund's
Investment Restriction No. 13, industrial development bonds,
where the payment of principal and interest is the ultimate
responsibility of companies within the same industry, are grouped
together as an "industry."
If a percentage restriction is adhered to at the
time
of investment, a later increase or decrease in percentage
resulting from a change in values or assets will not constitute a
violation of such restriction.
The Trust may make commitments more restrictive
than
the restrictions listed above so as to permit the sale of a
Fund's shares in certain states. Should the Trust determine that
a commitment is no longer in the best interests of a Fund and its
shareholders, the Trust reserves the right to revoke the
commitment by terminating the sale of such Fund's shares in the
state involved.
MANAGEMENT OF THE
TRUST
Trustees and officers of the Trust, together
with
information as to their principal business occupations during at
least the last five years, are shown below. Each Trustee who is
deemed to be an "interested person" of the Fund, as defined in
the 1940 Act, is indicated by an asterisk.
Trustees and Officers of the Trust
[TO BE PROVIDED]
For so long as a Fund's plan described in the
section
captioned "Service Plan" remains in effect, the Trustees of the
Trust who are not "interested persons" of the Trust, as defined
in the 1940 Act, will be selected and nominated by the Trustees
who are not "interested persons" of the Trust.
Officers of the Trust Not Listed Above
[TO BE PROVIDED]
MANAGEMENT AGREEMENT
The following information supplements and should
be
read in conjunction with the section in the Funds' Prospectus
entitled "Management of the Trust."
Management Agreement. The Manager provides
management
services pursuant to the Management Agreement (the "Agreement")
dated , 1994, with the Trust. As to each Fund, the
Agreement is subject to annual approval by (i) the Trust's Board
of Trustees or (ii) vote of a majority (as defined in the 1940
Act) of the outstanding voting securities of such Fund, provided
that in either event the continuance also is approved by a
majority of the Trustees who are not "interested persons" (as
defined in the 1940 Act) of the Trust or the Manager, by vote
cast in person at a meeting called for the purpose of voting on
such approval. As to each Fund, the Agreement is terminable
without penalty, on 60 days' notice, by the Trust's Board of
Trustees or by vote of the holders of a majority of such Fund's
shares, or, on not less than 90 days' notice, by the Manager.
The Agreement will terminate automatically, as to the relevant
Fund, in the event of its assignment (as defined in the 1940
Act).
The Manager is responsible for investment
decisions and
manages each Fund's portfolio of investments in accordance with
the stated policies of such Fund, subject to the approval of the
Trust's Board of Trustees. All purchases and sales are reported
for the Trustees' review at the meeting subsequent to such
transactions.
As compensation for the Manager's services to
the
Trust, the Trust has agreed to pay the Manager a monthly
management fee at the annual rate of .35 of 1% of the value of
each Fund's average daily net assets.
The Manager has engaged Concord Holding
Corporation
(the "Administrator") to assist it in providing certain
administrative services to the Trust. Pursuant to its agreement
with the Manager (the "Administration Agreement"), the
Administrator furnishes the Trust clerical help and accounting,
data processing, bookkeeping, internal auditing and legal
services and certain other services required by the Trust,
prepares reports to the Funds' shareholders, tax returns, reports
to and filings with the Securities and Exchange Commission and
state Blue Sky authorities, calculates the net asset value of
each Fund's shares and generally assists the Manager in providing
for all aspects of the Trust's operation, other than providing
investment advice. The fees payable to the Administrator for its
services are paid by the Manager.
The Trust has agreed that neither the Manager
nor the
Administrator will be liable for any error of judgment or mistake
of law or for any loss suffered by the Trust in connection with
the matters to which the Agreement or the Administration
Agreement relates, except for a loss resulting from wilful
misfeasance, bad faith or gross negligence on the part of the
Manager in the performance of its obligations or from reckless
disregard by it of its obligations and duties under the Agreement
or on the part of the Administrator in the performance of its
obligations or from reckless disregard by it of its obligations
and duties under the Administration Agreement. The
Administration Agreement contains a similar provision whereby the
Manager has agreed to limit the Administrator's liability.
Expenses and Expense Information. All expenses
incurred in the operation of the Trust are borne by the Trust,
except to the extent specifically assumed by the Manager. The
expenses borne by the Trust include: organizational costs, taxes,
interest, brokerage fees and commissions, if any, fees of
Trustees who are not officers, directors, employees or holders of
5% or more of the outstanding voting securities of the Manager or
the Administrator, Securities and Exchange Commission fees, state
Blue Sky qualification fees, advisory fees, charges of
custodians, transfer and dividend disbursing agents' fees,
certain insurance premiums, industry association fees, outside
auditing and legal expenses, costs of maintaining the Trust's
existence, costs of independent pricing services, costs
attributable to investor services (including, without limitation,
telephone and personnel expenses), costs of shareholders' reports
and meetings, costs of preparing and printing prospectuses and
statements of additional information for regulatory purposes and
for distribution to existing shareholders, and any extraordinary
expenses. In addition, Service of each Fund is subject to an
annual distribution and service fee. See "Service Plan."
Expenses attributable to a particular Fund are charged against
the assets of that Fund; other expenses of the Trust are
allocated among the Funds on the basis determined by the Board of
Trustees, including, but not limited to, proportionately in
relation to the net assets of each Fund.
The Manager has undertaken, as to each Fund,
until such
time as it gives investors at least 90 days' notice to the
contrary, that if, in any fiscal year the aggregate expenses of
the Fund, exclusive of taxes, brokerage, interest on borrowings
and (with the prior written consent of the necessary state
securities commissions) extraordinary expenses, but including the
management fee, exceed .35 and .60 of 1% of the value of the
average net assets of Institutional and Service, respectively,
for the fiscal year, the Trust may deduct from the payment to be
made to the Manager under the Agreement, or the Manager will
bear, such excess expense.
In addition, the Agreement provides that if, in
any
fiscal year, the aggregate expenses of a Fund, exclusive of
taxes, brokerage, interest on borrowings and (with the prior
written consent of the necessary state securities commissions)
extraordinary expenses, but including the management fee, exceed
the expense limitation of any state having jurisdiction over the
Fund, the Trust may deduct from the payment to be made to the
Manager under the Management Agreement, or the Manager will bear,
such excess expense to the extent required by state law. Such
deduction or payment, if any, will be estimated daily, and
reconciled and effected or paid, as the case may be, on a monthly
basis.
The aggregate of the fees payable to the Manager
is not
subject to reduction as the value of the Fund's net assets
increases.
PURCHASE OF FUND
SHARES
The following information supplements and should
be
read in conjunction with the section in the Funds' Prospectus
entitled "How to Buy Fund Shares."
The Distributor. The Distributor serves as the
Trust's
distributor pursuant to an agreement which is renewable annually.
Using Federal Funds. The Shareholder Services
Group,
Inc., the Trust's transfer and dividend disbursing agent (the
"Transfer Agent"), or the Trust may attempt to notify the
investor upon receipt of checks drawn on banks that are not
members of the Federal Reserve System as to the possible delay in
conversion into Federal Funds and may attempt to arrange for a
better means of transmitting the money. If the investor is a
customer of a securities dealer, bank or other financial
institution and his order to purchase Fund shares is paid for
other than in Federal Funds, the securities dealer, bank or other
financial institution, acting on behalf of its customer,
generally will complete the conversion into, or itself advance,
Federal Funds on the business day following receipt of the
customer order. The order is effective only when so converted
and received by the Transfer Agent. An order for the purchase of
Fund shares placed by an investor with a sufficient Federal Funds
or cash balance in his brokerage account with a securities
dealer, bank or other financial institution will become effective
on the day that the order, including Federal Funds, is received
by the Transfer Agent. In some states, banks or other
institutions effecting transactions in Fund shares may be
required to register as dealers pursuant to state law.
SERVICE PLAN
(Service Shares Only)
The following information supplements and should
be
read in conjunction with the section in the Funds' Prospectus
entitled "Service Plan."
Rule 12b-1 (the "Rule") adopted by the
Securities and
Exchange Commission under the 1940 Act provides, among other
things, that an investment company may bear expenses of
distributing its shares only pursuant to a plan adopted in
accordance with the Rule. The Trust's Board of Trustees has
adopted such a plan (the "Service Plan") with respect to each
Fund's Service shares, pursuant to which each Fund pays the
Distributor for advertising, marketing and distributing such
Fund's Service shares and for the provision of certain services
to the holders of Service shares. Under the Service Plan, the
Distributor may make payments to certain financial institutions,
securities dealers and other financial industry professionals
(collectively, "Service Agents") in respect to these services.
The Trust's Board of Trustees believes that there is a reasonable
likelihood that the Service Plan will benefit each Fund and the
holders of Service shares.
A quarterly report of the amounts expended under
the
Service Plan, and the purposes for which such expenditures were
incurred, must be made to the Trustees for their review. In
addition, the Service Plan provides that it may not be amended to
increase materially the costs which holders of Service shares may
bear pursuant to the Service Plan without the approval of the
holders of Service shares and that other material amendments of
the Service Plan must be approved by the Board of Trustees and by
the Trustees who are not "interested persons" (as defined in the
1940 Act) of the Trust and have no direct or indirect financial
interest in the operation of the Service Plan or in any
agreements entered into in connection with the Service Plan, by
vote cast in person at a meeting called for the purpose of
considering such amendments. The Service Plan is subject to
annual approval by such vote of the Trustees cast in person at a
meeting called for the purpose of voting on the Service Plan.
The Service Plan was so approved by the Trustees at a meeting
held on , 1994. As to each Fund, the Service Plan may be
terminated at any time by vote of a majority of the Trustees who
are not "interested persons" and have no direct or indirect
financial interest in the operation of the Service Plan or in any
agreements entered into in connection with the Service Plan or by
vote of the holders of a majority of such Fund's Service shares.
REDEMPTION OF FUND
SHARES
The following information supplements and should
be
read in conjunction with the section in the Funds' Prospectus
entitled "How to Redeem Fund Shares."
Redemption by Wire or Telephone. By using this
procedure, the investor authorizes the Transfer Agent to act on
wire or telephone redemption instructions from any person
representing himself or herself to an authorized representative
of the investor and reasonably believed by the Transfer Agent to
be genuine. Ordinarily, the Trust will initiate payment for
shares redeemed pursuant to this procedure on the same business
day if the Transfer Agent receives the redemption request in
proper form prior to 2:00 p.m., Central Standard time, on such
day; otherwise, the Trust will initiate payment on the next
business day. Redemption proceeds will be transferred by Federal
Reserve wire only to a bank that is a member of the Federal
Reserve System.
Investors with access to telegraphic equipment
may wire
redemption requests to the Transfer Agent by employing the
following transmittal code which may be used for domestic or
overseas transmission:
Transfer Agent's
Transmittal Code
Answer Back Sign
_______________
_________________
Investors who do not have direct access to telegraphic
equipment may have the wire transmitted by contacting a TRT
Cables operator at 1-800-654-7171, toll free. Investors should
advise the operator that the above transmittal code must be used
and should also inform the operator of the Transfer Agent's
answer back sign.
Redemption Commitment. The Trust has committed itself to
pay
in cash all redemption requests by any shareholder of record of a
Fund, limited in amount during any 90-day period to the lesser of
$250,000 or 1% of the value of such Fund's net assets at the
beginning of such period. Such commitment is irrevocable without
the prior approval of the Securities and Exchange Commission. In
the case of requests for redemption in excess of such amount, the
Board of Trustees reserves the right to make payments in whole or
in part in securities or other assets in case of an emergency or
any time a cash distribution would impair the liquidity of the
Fund to the detriment of the existing shareholders. In such
event, the securities would be valued in the same manner as the
Fund's securities are valued. If the recipient sold such
securities, brokerage charges would be incurred.
Suspension of Redemptions. The right of redemption may be
suspended or the date of payment postponed (a) during any period
when the New York Stock Exchange is closed (other than customary
weekend and holiday closing), (b) when trading in the markets the
Fund ordinarily utilizes is restricted, or when an emergency
exists as determined by the Securities and Exchange Commission so
that disposal of the Fund's investments or determination of its
net asset value is not reasonably practicable, or (c) for such
other periods as the Securities and Exchange Commission by order
may permit to protect the Fund's shareholders.
DETERMINATION OF NET ASSET
VALUE
The following information supplements and should be read
in
conjunction with the section in the Funds' Prospectus entitled
"How to Buy Fund Shares."
Amortized Cost Pricing. The valuation of each Fund's
portfolio securities is based upon their amortized cost which
does not take into account unrealized capital gains or losses.
This involves valuing an instrument at its cost and thereafter
assuming a constant amortization to maturity of any discount or
premium, regardless of the impact of fluctuating interest rates
on the market value of the instrument. While this method pro-
vides certainty in valuation, it may result in periods during
which value, as determined by amortized cost, is higher or lower
than the price the Fund would receive if it sold the instrument.
The Board of Trustees has established procedures, as a
particular responsibility within the overall duty of care owed to
each Fund's investors, reasonably designed to stabilize the
Fund's price per share as computed for purposes of purchases and
redemptions at $1.00. Such procedures include review of each
Fund's portfolio holdings by the Board of Trustees, at such
intervals as it deems appropriate, to determine whether the
Fund's net asset value calculated by using available market
quotations or market equivalents deviates from $1.00 per share
based on amortized cost. In such review of the portfolio of the
Cash Management Fund, Treasury Prime Cash Management Fund and
U.S. Government Securities Cash Management Fund, investments for
which market quotations are readily available will be valued at
the most recent bid price or yield equivalent for such securities
or for securities of comparable maturity, quality and type, as
obtained from one or more of the major market makers for the
securities to be valued. Other investments and assets of these
Funds will be valued at fair value as determined in good faith by
the Board of Trustees. Market quotations and market equivalents
used in such review of the Municipal Cash Management Fund are
obtained from an independent pricing service (the "Service")
approved by the Board of Trustees. The Service will value the
Municipal Cash Management Fund's investments based on methods
which include consideration of: yields or prices of municipal
obligations of comparable quality, coupon, maturity and type;
indications of values from dealers; and general market
conditions. The Service also may employ electronic data
processing techniques and/or a matrix system to determine
valuations.
The extent of any deviation between a Fund's net asset
value
based upon available market quotations or market equivalents and
$1.00 per share based on amortized cost will be examined by the
Board of Trustees. If such deviation exceeds 1/2 of 1%, the
Board of Trustees will consider what actions, if any, will be
initiated. In the event the Board of Trustees determines that a
deviation exists which may result in material dilution or other
unfair results to investors or existing shareholders, it has
agreed to take such corrective action as it regards as necessary
and appropriate, including: selling portfolio instruments prior
to maturity to realize capital gains or losses or to shorten
average portfolio maturity; withholding dividends or paying dis-
tributions from capital or capital gains; redeeming shares in
kind; or establishing a net asset value per share by using
available market quotations or market equivalents.
New York Stock Exchange Closings. The holidays (as
observed)
on which the New York Stock Exchange is closed currently are:
New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas.
PORTFOLIO TRANSACTIONS
Newly-issued portfolio securities of the Municipal Cash
Management Fund and portfolio securities of each other Fund
ordinarily are purchased directly from the issuer or from an
underwriter or a market maker for the securities. Other
purchases and sales for the Municipal Cash Management Fund
usually are placed with those dealers from which it appears that
the best price or execution will be obtained. Ordinarily, no
brokerage commissions are paid by the Fund for such purchases.
Purchases from underwriters of portfolio securities may include a
concession paid by the issuer to the underwriter and the purchase
price paid to, and sales price received from, market makers for
the securities may reflect the spread between the bid and asked
price. No brokerage commissions have been paid by any Fund to
date.
Transactions are allocated to various dealers by the
Trust's
investment personnel in their best judgment. The primary
consideration is prompt and effective execution of orders at the
most favorable price. Subject to that primary consideration,
dealers may be selected for research, statistical or other
services to enable the Manager to supplement its own research and
analysis with the views and information of other securities firms
and may be selected based upon their sales of Fund shares.
Research services furnished by brokers through which the
Fund
effects securities transactions may be used by the Manager in
advising other funds or accounts it advises and, conversely,
research services furnished to the Manager by brokers in
connection with other funds or accounts the Manager advises may
be used by the Manager in advising the Fund. Although it is not
possible to place a dollar value on these services, it is the
opinion of the Manager that the receipt and study of such
services should not reduce the Manager's overall research
expenses.
EXCHANGE PRIVILEGE
The following information supplements and should be read
in
conjunction with the section in the Funds' Prospectus entitled
"Exchange Privilege."
By using this Privilege, the investor authorizes the
Transfer
Agent to act on exchange instructions from any person
representing himself or herself to be an authorized
representative of the investor and reasonably believed by the
Transfer Agent to be genuine. Telephone exchanges may be subject
to limitations as to the amount involved or the number of
telephone exchanges permitted. Shares will be exchanged at the
net asset value next determined after receipt of an exchange
request in proper form.
The Trust reserves the right to reject any exchange
request
in whole or in part. The Exchange Privilege may be modified or
terminated at any time upon notice to investors.
DIVIDENDS, DISTRIBUTIONS AND
TAXES
The following information supplements and should be read
in
conjunction with the section in Funds' Prospectus entitled
"Dividends, Distributions and Taxes."
Ordinarily, gains and losses realized from portfolio
transactions will be treated as capital gain or loss. However,
all or a portion of the gain realized from the disposition of
certain market discount bonds will be treated as ordinary income
under Section 1276 of the Internal Revenue Code of 1986, as
amended.
YIELD INFORMATION
The following information supplements and should be read
in
conjunction with the section in the Funds' Prospectus entitled
"Yield Information."
Yield will be computed in accordance with a standardized
method which involves determining the net change in the value of
a hypothetical pre-existing Fund account having a balance of one
share at the beginning of a seven calendar day period for which
yield is to be quoted, dividing the net change by the value of
the account at the beginning of the period to obtain the base
period return, and annualizing the results (i.e., multiplying the
base period return by 365/7). The net change in the value of the
account reflects the value of additional shares purchased with
dividends declared on the original share and any such additional
shares and fees that may be charged to the shareholder's account,
in proportion to the length of the base period and the Fund's
average account size, but does not include realized gains and
losses or unrealized appreciation and depreciation. Effective
yield is computed by adding 1 to the base period return
(calculated as described above), raising that sum to a power
equal to 365 divided by 7, and subtracting 1 from the result.
Tax equivalent yield for the Municipal Cash Management
Fund
is computed by dividing that portion of the yield or effective
yield (calculated as described above) which is tax exempt by 1
minus a stated tax rate and adding the quotient to that portion,
if any, of the yield of the Fund that is not tax exempt.
The tax equivalent figure, however, does not include the
potential effect of any state or local (including, but not
limited to, county, district or city) taxes, including applicable
surcharges. In addition, there may be pending legislation which
could affect such stated tax rates or yields. Each investor
should consult its tax adviser, and consider its own factual
circumstances and applicable tax laws, in order to ascertain the
relevant tax equivalent yield.
Yields will fluctuate and are not necessarily
representative
of future results. Each investor should remember that yield is a
function of the type and quality of the instruments in the
portfolio, portfolio maturity and operating expenses. An
investor's principal in the Fund is not guaranteed. See
"Determination of Net Asset Value" for a discussion of the manner
in which the Fund's price per share is determined.
INFORMATION ABOUT THE
TRUST
The following information supplements and should be read
in
conjunction with the section in the Funds' Prospectus entitled
"General Information."
Each Fund share has one vote and, when issued and paid for
in
accordance with the terms of the offering, is fully paid and non-
assessable. Fund shares have no preemptive, subscription or
conversion rights and are freely transferable.
The Trust will send annual and semi-annual financial
statements to all its shareholders.
COUNSEL AND INDEPENDENT
AUDITORS
Stroock & Stroock & Lavan, 7 Hanover Square, New York, New
York 10004-2594, as counsel for the Trust, has rendered its
opinion as to certain legal matters regarding the due
authorization and valid issuance of the shares of beneficial
interest being sold pursuant to the Funds' Prospectus.
Ernst & Young LLP, 787 Seventh Avenue, New York, New York
10019, independent auditors, have been selected as auditors of
the Trust.
<PAGE>
APPENDIX
Description of the highest commercial paper, municipal
bond
and note and other short- and long-term rating categories
assigned by Standard & Poor's Corporation ("S&P"), Moody's
Investors Service, Inc. ("Moody's"), Fitch Investors Service,
Inc. ("Fitch"), Duff and Phelps, Inc. ("Duff"), IBCA Limited and
IBCA Inc. ("IBCA") and Thomson BankWatch, Inc. ("BankWatch"):
S&P
Commercial Paper and Short-Term Ratings
The designation A-1 by S&P indicates that the degree of
safety regarding timely payment is either overwhelming or very
strong. Those issues determined to possess overwhelming safety
characteristics are denoted with a plus sign (+) designation.
Municipal Bond Ratings
An S&P municipal bond rating is a current assessment of
the
creditworthiness of an obligor with respect to a specific
obligation.
The ratings are based on current information furnished by
the
issuer or obtained by S&P from other sources it considers
reliable, and will include: (1) likelihood of default-capacity
and willingness of the obligor as to the timely payment of
interest and repayment of principal in accordance with the terms
of the obligation; (2) nature and provisions of the obligation;
and (3) protection afforded by, and relative position of, the
obligation in the event of bankruptcy, reorganization or other
arrangement under the laws of bankruptcy and other laws affecting
creditors' rights.
AAA
Debt rated AAA has the highest rating assigned by S&P.
Capacity to pay interest and repay principal is extremely strong.
AA
Debt rated AA has a very strong capacity to pay interest
and
repay principal and differs from the highest rated issues only in
small degree. The AA ratings may be modified by the addition of
a plus (+) or a minus (-) sign, which is used to show relative
standing within the category.
Municipal Note Ratings
SP-1
The issuers of these municipal notes exhibit very strong
or
strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics are
given a plus (+) designation.
SP-2
The issuers of these municipal notes exhibit satisfactory
capacity to pay principal and interest.
Moody's
Commercial Paper and Short-Term Ratings
The rating Prime-1 (P-1) is the highest commercial paper
rating assigned by Moody's. Issuers of P-1 paper must have a
superior capacity for repayment of short-term promissory
obligations and ordinarily will be evidenced by leading market
positions in well established industries, high rates of return of
funds employed, conservative capitalization structures with
moderate reliance on debt and ample asset protection, broad
margins and earnings coverage of fixed financial charges and high
internal cash generation, and well established access to a range
of financial markets and assured sources of alternate liquidity.
Municipal Bond Ratings
Aaa
Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and
are generally referred to as "gilt edge." Interest payments are
protected by a large or by an exceptionally stable margin and
principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most
unlikely to impair the fundamentally strong position of such
issues.
Aa
Bonds which are rated Aa are judged to be of high quality
by
all standards. Together with the Aaa group they comprise what
generally are known as high grade bonds. They are rated lower
than the best bonds because margins of protection may not be as
large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger
than in Aaa securities.
Moody's applies the numerical modifiers 1, 2 and 3 to show
relative standing within the AA rating category. The modifier 1
indicates a ranking for the security in the higher end of a
rating category; the modifier 2 indicates a mid-range ranking;
and the modifier 3 indicates a ranking in the lower end of a
rating category.
Municipal Note Ratings
Moody's ratings for state and municipal notes and other
short-term loans are designated Moody's Investment Grade (MIG).
Such ratings recognize the difference between short-term credit
risk and long-term risk. Factors affecting the liquidity of the
borrower and short-term cyclical elements are critical in short-
term ratings, while other factors of major importance in bond
risk, long-term secular trends for example, may be less important
over the short run.
A short-term rating may also be assigned on an issue
having a
demand feature. Such ratings will be designated as VMIG or, if
the demand feature is not rated, as NR. Short-term ratings on
issues with demand features are differentiated by the use of the
VMIG symbol to reflect such characteristics as payment upon
periodic demand rather than fixed maturity dates and payment
relying on external liquidity. Additionally, investors should be
alert to the fact that the source of payment may be limited to
the external liquidity with no or limited legal recourse to the
issuer in the event the demand is not met.
Moody's short-term ratings are designated Moody's
Investment
Grade as MIG 1 or VMIG 1 through MIG 4 or VMIG 4. As the name
implies, when Moody's assigns a MIG or VMIG rating, all
categories define an investment grade situation.
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.
Fitch
Commercial Paper and Short-Term Ratings
The rating Fitch-1 (Highest Grade) is the highest
commercial
paper rating assigned by Fitch. Paper rated Fitch-1 is regarded
as having the strongest degree of assurance for timely payment.
Municipal Bond Ratings
The ratings represent Fitch's assessment of the issuer's
ability to meet the obligations of a specific debt issue or class
of debt. The ratings take into consideration special features of
the issue, its relationship to other obligations of the issuer,
the current financial condition and operative performance of the
issuer and of any guarantor, as well as the political and
economic environment that might affect the issuer's future
financial strength and credit quality.
AAA
Bonds rated AAA are considered to be investment grade and
of
the highest credit quality. The obligor has an exceptionally
strong ability to pay interest and repay principal, which is
unlikely to be affected by reasonably foreseeable events.
AA
Bonds rated AA are considered to be investment grade and
of
very high credit quality. The obligor's ability to apply
interest and repay principal is very strong, although not quite
as strong as bonds rated AAA. Because bonds rated in the AAA and
AA categories are not significantly vulnerable to foreseeable
future developments, short-term debt of these issuers is
generally rated F-1+. Plus (+) and minus (-) signs are used with
a rating symbol to indicate the relative position of a credit
within the rating category.
Duff
Commercial Paper and Short-Term Ratings
The rating Duff-1 is the highest commercial paper rating
assigned by Duff. Paper rated Duff-1 is regarded as having very
high certainty of timely payment with excellent liquidity factors
which are supported by ample asset protection. Risk factors are
minor.
AAA
Bonds rated AAA are considered highest credit quality.
The
risk factors are negligible, being only slightly more than for
risk-free U.S. Treasury debt.
AA
Bonds rated AA are considered high credit quality.
Protection factors are strong. Risk is modest but may vary
slightly from time to time because of economic conditions. Plus
(+) and minus (-) signs are used with a rating to indicate the
relative position of a credit within the AA rating category.
IBCA
Commercial Paper and Short-Term Ratings
The designation A-1 by IBCA indicates that the obligation
is
supported by a very strong capacity for timely repayment. Those
obligations rated A1+ are supported by the highest capacity for
timely repayment.
Bond and Long-Term Ratings
Obligations rated AAA by IBCA have the lowest expectation
of
investment risk. Capacity for timely repayment of principal and
interest is substantial, such that adverse changes in business,
economic or financial conditions are unlikely to increase
investment risk significantly.
IBCA also assigns a rating to certain international and
U.S.
banks. An IBCA bank rating represents IBCA's current assessment
of the strength of the bank and whether such bank would receive
support should it experience difficulties. In its assessment of
a bank, IBCA uses a dual rating system comprised of Legal Ratings
and Individual Ratings. In addition, IBCA assigns banks Long-
and Short-Term Ratings as used in the corporate ratings discussed
above. Legal Ratings, which range in gradation from 1 through 5,
address the question of whether the bank would receive support
provided by central banks or shareholders if it experienced
difficulties, and such ratings are considered by IBCA to be a
prime factor in its assessment of credit risk. Individual
Ratings, which range in gradations from A through E, represent
IBCA's assessment of a bank's economic merits and address the
question of how the bank would be viewed if it were entirely
independent and could not rely on support from state authorities
or its owners.
BankWatch
Commercial Paper and Short-Term Ratings
The rating TBW-1 is the highest short-term rating assigned
by
BankWatch; the rating indicates that the degree of safety
regarding timely repayment of principal and interest is very
strong.
In addition to ratings of short-term obligations,
BankWatch
assigns a rating to each issuer it rates, in gradations of A
through E. BankWatch examines all segments of the organization
including, where applicable, the holding company, member banks or
associations, and other subsidiaries. In those instances where
financial disclosure is incomplete or untimely, a qualified
rating (QR) is assigned to the institution. BankWatch also
assigns, in the case of foreign banks, a country rating which
represents an assessment of the overall political and economic
stability of the country in which the bank is domiciled.
<PAGE>
FINANCIAL STATEMENTS
[To Be Provided]
<PAGE>
PART C. OTHER
INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
(1) Statement of Assets
and Liabilities as
of
_________, 1994*
(2) Report of Ernst &
Young LLP, Indepen-
dent Auditors, dated
_________, 1994*
(b) Exhibits:
(1) Amended and Restated
Agreement and
Declaration of Trust*
(2) By-Laws*
(5) Management Agreement*
(6) Distribution Agreement*
(8) Custody Agreement*
(9) Master Administration
Agreement*
(10) Opinion (including consent)
of
Stroock & Stroock &
Lavan*
(11) Consent of Independent
Auditors*
(15) Service Plan*
Other Exhibit:
Secretary's
Certificate*
* To be filed by amendment.
<PAGE>
Item 25. Persons Controlled by or Under Common
Control
with Registrant
Not applicable.
Item 26. Number of Holders of Securities
(1) (2)
Number of Record
Title of Class Holders
Shares of beneficial interest,
par value $.001 per share
________
Cash Management Fund
________
Municipal Cash Management Fund
________
Treasury Prime Cash Management Fund
________
U.S. Government Securities Cash
Management Fund
________
Item 27. Indemnification
Reference is made to Article EIGHTH of
the
Registrant's Declaration of Trust to be filed as Exhibit 1
hereto. The application of these provisions is limited by
Article 10 of the Registrant's By-Laws to be filed as Exhibit 2
hereto and by the following undertaking set forth in the rules
promulgated by the Securities and Exchange Commission:
Insofar as indemnification for
liabilities arising under the
Securities Act of 1933 may be
permitted to trustees, officers
and controlling persons of the
registrant pursuant to the
foregoing provisions, or
otherwise, the registrant has
been advised that in the opinion
of the Securities and Exchange
Commission such indemnification
is against public policy as
expressed in such Act and is,
therefore, unenforceable. In the
event that a claim for
indemnification against such
liabilities (other than the
payment by the registrant of
expenses incurred or paid by a
trustee, officer or controlling
person of the registrant in the
successful defense of any action,
suit or proceeding) is asserted
by such trustee, officer or
controlling person in connection
with the securities being
registered, the registrant will,
unless in the opinion of its
counsel the matter has been
settled by controlling precedent,
submit to a court of appropriate
jurisdiction the question whether
such indemnification by it is
against public policy as
expressed in such Act and will be
governed by the final
adjudication of such issue.
Reference also is made to the
Distribution
Agreement to be filed as Exhibit 6 hereto.
Item 28. Business and Other Connections of Investment
Adviser
[To Be Provided]
Item 29. Principal Underwriters
(a) Other investment companies for
which
Registrant's principal underwriter (exclusive distributor) acts
as principal underwriter or exclusive distributor:
The Infinity Mutual Funds,
Inc.
Emerald Fund, Inc.
Pacific Horizon Funds,
Inc.
(b) The information required by this
Item 29(b)
regarding each director or officer of Concord Financial Group,
Inc. is incorporated by reference to Schedule A of Form BD filed
by Concord Financial Group, Inc. pursuant to the Securities
Exchange Act of 1934 (SEC File No. 8-37601).
Item 30. Location of Accounts and Records
1. The First National Bank of Chicago
Three First National Plaza
Chicago, Illinois 60670
2. Concord Financial Group, Inc.
125 West 55th Street
11th Floor
New York, New York 10019
Item 31. Management Services
Not Applicable
Item 32. Undertakings
Registrant hereby undertakes
(1) to file a post-effective
amendment, using
financial statements which
need not be
certified, within four to six
months from
the effective date of
Registrant's 1933 Act
Registration Statement.
(2) to call a meeting of
shareholders for the
purpose of voting upon the
question of
removal of a trustee or
trustees when
requested in writing to do so
by the
holders of at least 10% of
the Registrant's
outstanding shares of
beneficial interest
and in connection with such
meeting to
comply with the provisions of
Section 16(c)
of the Investment Company Act
of 1940
relating to shareholder
communications.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, the Registrant has duly
caused this Amendment to the Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of Chicago, and State of Illinois on the
28th day of October, 1994.
PRAIRIE INSTITUTIONAL FUNDS
BY: /s/Joseph F. Kissel
Joseph F. Kissel,
President
Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, this Amendment to the
Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
Signatures Title Date
/s/Joseph F. Kissel President (Principal
October 28,
1994 Joseph F. Kissel Executive Officer)
/s/ Richard A. Fabietti Treasurer (Principal
October 28,
1994
Richard A. Fabietti Financial and
Accounting Officer)
/s/John P. Gould Trustee
October 28,
1994
John P. Gould
/s/Marilyn McCoy Trustee
October 28,
1994
Marilyn McCoy
/s/Raymond D. Oddi Trustee
October 28,
1994
Raymond D. Oddi
