Cma Treasury Money Fund - Definitive materials filed by investment companies. (497)
04 July 2008 - 5:55AM
Edgar (US Regulatory)
MONEY MARKET FUNDS
SUPPLEMENT DATED JULY 3, 2008 TO THE
STATEMENT OF ADDITIONAL INFORMATION
Effective July 3,
2008, Part II of the Statement of Additional Information is amended as set forth below:
The section entitled Selective
Disclosure of Portfolio Holdings, beginning on page II-14, is revised as follows:
The fifth paragraph of
the section is deleted in its entirety and replaced with the following:
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The
Manager has entered into ongoing arrangements to provide monthly and quarterly selective
disclosure of Fund portfolio holdings to the following persons or entities:
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Funds
Board of Trustees and, if necessary, independent Trustees counsel and Fund counsel
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Funds
independent registered public accounting firm
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Funds
accounting services provider State Street Bank and Trust Company
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Independent
rating agencies Morningstar, Inc. and Lipper Inc.
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Information
aggregators Wall Street on Demand, Thomson Financial, eVestment Alliance and
Informa PSN Investment Solutions
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Sponsors
of 401(k) plans that include BlackRock-advised funds E.I. Dupont de Nemours
and Company, Inc.
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Consultants
for pension plans that invest in BlackRock-advised funds Rocaton Investment
Advisors, LLC; Mercer Investment Consulting; Watson Wyatt Investment Consulting;
Towers Perrin HR Services; Pinnacle West; Callan Associates; Brockhouse & Cooper;
Cambridge Associates; Mercer; Morningstar/Investorforce; Russell Investments
(Mellon Analytical Solutions) and Wilshire Associates
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Portfolio
Compliance Consultants i-Flex Solutions, Inc.
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The section entitled Potential
Conflicts of Interest, beginning on page II-16, is revised as follows:
The following is added
as a new paragraph after paragraph 17 of the section, which is found on page II-19:
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The
Manager may utilize certain electronic crossing networks (ECNs) in executing client
securities transactions for certain types of securities. These ECNs may charge fees
for their services, including access fees and transaction fees. The transaction
fees, which are similar to commissions or markups/markdowns, will generally be
charged to clients and, like commissions and markups/markdowns, would generally be
included in the cost of the securities purchased. Access fees may be paid by the Manager
even though incurred in connection with executing transactions on behalf of
clients, including the Funds. In certain circumstances, ECNs may offer volume
discounts that will reduce the access fees typically paid by the Manager. This
would have the effect of reducing the access fees paid by the Manager. The Manager will
only utilize ECNs consistent with its obligation to seek to obtain best execution
in client transactions.
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The following is added
as the penultimate paragraph of the section:
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A
Funds custody arrangements could give rise to a potential conflict of interest with the
Manager where the Manager has agreed to waive fees and/or reimburse ordinary
operating expenses in order to cap a Funds expenses. This is because a Funds
custody arrangements may provide for a reduction in custody fees as a result, for
example, of a Funds leaving cash balances uninvested. When a Funds actual operating
expense ratio exceeds a stated cap, a reduction in custody fees reduces the amount
of waivers and/or reimbursements the Manager would be required to make to the Fund.
This could be viewed as having the potential to provide the Manager with an
incentive to keep high positive cash balances for Funds with expense caps in order to
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offset
custody fees that the Manager might otherwise reimburse. However, the Managers portfolio
managers do not intentionally keep uninvested balances high, but rather make
investment decisions that they anticipate will be beneficial to Fund performance.
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The section entitled Determination
of Net Asset Value, beginning on page II-39, is deleted in its entirety and replaced
with the following:
DETERMINATION OF NET
ASSET VALUE
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Each
Fund seeks to maintain a net asset value of $1.00 per share for purposes of purchase and
redemptions and values their portfolio securities on the basis of the amortized
cost method of valuation.
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Under
this method portfolio securities are valued at cost when purchased and thereafter, a
constant proportionate accretion of any discount or amortization of premium is
recorded until the maturity of the security. The effect of changes in the market
value of a security as a result of fluctuating interest rates is not taken into
account.
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As
indicated, the amortized cost method of valuation may result in the value of a security
being higher or lower than its market price, the price a Fund would receive if the
security were sold prior to maturity. Each Funds Board has established procedures
for the purpose of maintaining a constant net asset value of $1.00 per share for
each Fund, however, there can be no assurance that a constant net asset value will be
maintained for any Fund. Such procedures include a review of the extent of any
deviation of net asset value per share, based on available market quotations, from
the $1.00 amortized cost per share. Should that deviation exceed
1
/
2
of 1% for a
Fund, the Funds Board will promptly consider whether any action should be
initiated to eliminate or reduce material dilution or other adverse impact to
shareholders. Such action may include redeeming shares in kind, selling portfolio
securities prior to maturity, reducing or withholding dividends, shortening the
average portfolio maturity, reducing the number of outstanding shares without
monetary consideration, and utilizing a net asset value per share as determined by using
available market quotations.
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Each
Fund will maintain a dollar-weighted average portfolio maturity of 90 days or less, will
not purchase any instrument with a deemed maturity under Rule 2a-7 of the
Investment Company Act greater than 397 days, and will limit portfolio investments,
including repurchase agreements, to those instruments that the adviser or
sub-adviser determines present minimal credit risks pursuant to guidelines adopted by the
Funds Boards.
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Code# MM-SAI-0708
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