Company: MYI
Filing Date: 2025-09-08
Form Type: DEF 14A
Source: 0001193125-25-198172
Chunk: 197

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-09-08
Form: DEF 14A
Chunk 197
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 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 CEA. The Investment Advisor is not, therefore, subject to registration or regulation as a “commodity pool operator” under
the CEA in respect of MIY.

Interest Rate Transactions.

MIY may enter into interest rate swaps and the purchase or sale of interest rate caps and floors. MIY expects to enter into these transactions
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 MIY anticipates purchasing at a later date. MIY will
ordinarily use these transactions as a hedge or for duration or risk management although it is permitted to enter into them to enhance income or gain. MIY may not sell interest rate caps or floors that it does not own. Interest rate swaps involve
the exchange by MIY with another party of their respective commitments to pay or receive interest, e.g., an exchange of floating rate payments for fixed rate

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payments with respect to a notional amount of principal. The purchase of an interest rate cap entitles the purchaser, to the extent that a specified index exceeds a predetermined interest rate,
to receive payments of interest on a notional principal amount from the party selling such interest rate cap. The purchase of an interest rate floor entitles the purchaser, to the extent that a specified index falls below a predetermined interest
rate, to receive payments of interest on a notional principal amount from the party selling such interest rate floor.

MIY may enter into
interest rate swaps, caps and floors on either an asset-based or liability-based basis, and will usually enter into interest rate swaps on a net basis, i.e., the two payment streams are netted out, with MIY receiving or paying, as the case may be,
only the net amount of the two payments on the payment dates. MIY will accrue the net amount of the excess, if any, of MIY’s obligations over its entitlements with respect to each interest rate swap on a daily basis and will segregate with a
custodian an amount of cash or liquid high grade securities having an aggregate net asset value at all times at least equal to the accrued excess. If there is a default by the other party to such a transaction, MIY will have contractual remedies
purs