Company: MYI
Filing Date: 2025-09-08
Form Type: DEF 14A
Source: 0001193125-25-198172
Chunk: 176

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-09-08
Form: DEF 14A
Chunk 176
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 a futures contract to hedge MVT’s portfolio against the risk of rising interest rates.

The writing of a put option on a futures contract constitutes a partial hedge against increasing prices of the securities which are
deliverable upon exercise of the futures contract. If the futures price at expiration is higher than the exercise price, MVT will retain the full amount of the option premium which provides a partial hedge against any increase in the price of
securities which MVT intends to purchase.

The writer of an option on a futures contract is required to deposit initial and variation
margin pursuant to requirements similar to those applicable to futures contracts. Premiums received from the writing of an option will be included in initial margin. The writing of an option on a futures contract involves risks similar to those
relating to futures contracts.

The CFTC subjects advisers to registered investment companies to regulation by the CFTC if a fund that is
advised by the investment adviser either (i) invests, directly or indirectly, more than a prescribed level of its liquidation value in CFTC Derivatives, or (ii) markets itself as providing investment exposure to such instruments. To the
extent MVT uses CFTC Derivatives, it intends to do so below such prescribed levels and will not market itself as a “commodity pool” or a vehicle for trading such instruments. Accordingly, the Investment Advisor has claimed an exclusion
from the definition of the term “commodity pool operator” under the CEA pursuant to Rule 4.5 under the

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CEA. The Investment Advisor is not, therefore, subject to registration or regulation as a “commodity pool operator” under the CEA in respect of MVT.

Interest Rate Swap Transactions. In order to seek to hedge the value of MVT against interest rate fluctuations, to hedge against
increases in MVT’s costs associated with the dividend payments on any preferred shares, including the VMTP Shares, or to seek to increase MVT’s return, MVT may enter into interest rate swap transactions such as MMD Swaps or SIFMA Swaps.
To the extent that MVT enters into these transactions, MVT expects to do so primarily to preserve a return or spread on a particular investment or portion of its portfolio as a duration management technique or to protect against any increase in the
price of securities MVT anticipates purchasing at a later date. MVT may enter into these transactions primarily as a hedge or for duration or risk management rather than as a speculative investment.