Company: MYI
Filing Date: 2025-08-08
Form Type: PRE 14A
Source: 0001193125-25-176952
Chunk: 198

Company: BLACKROCK MUNIYIELD QUALITY FUND III, INC.
Filing Date: 2025-08-08
Form: PRE 14A
Chunk 198
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 contracts have been designed by boards of trade which have been designated “contracts markets” by the
CFTC.

The purchase or sale of a futures contract differs from the purchase or sale of a security in that no price or premium is paid or
received. Instead, an amount of cash or securities acceptable to the broker and the relevant contract market, which varies, but is generally about 5% of the contract amount, must be deposited with the broker. This amount is known as “initial
margin” and represents a “good faith” deposit assuring the performance of both the purchaser and seller under the futures contract. Subsequent payments to and from the broker, called “variation margin,” are required to be
made on a daily basis as the price of the futures contract fluctuates making the long and short positions in the futures contract more or less valuable, a process known as “marking to the market.” At any time prior to the settlement date
of the futures contract, the position may be closed out by taking an opposite position that will operate to terminate the position in the futures contract. A final determination of variation margin is then made, additional cash is required to be
paid to or released by the broker and the purchaser realizes a loss or gain. In addition, a nominal commission is paid on each completed sale transaction.

MIY may also purchase and sell financial futures contracts on U.S. Government securities as a hedge against adverse changes in interest rates
as described below. With respect to U.S. Government securities, currently there are financial futures contracts based on long-term U.S. Treasury bonds, U.S. Treasury notes, Government National Mortgage

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Association Certificates and three-month U.S. Treasury bills. MIY may purchase and write call and put options on futures contracts on U.S. Government securities and purchase and sell Municipal
Bond Index futures contracts in connection with its hedging strategies.

MIY also may engage in other futures contracts transactions such
as futures contracts on other municipal bond indices that may become available if the Investment Advisor should determine that there is normally a sufficient correlation between the prices of such futures contracts and MIY Municipal Bonds in which
MIY invests to make such hedging appropriate.

Futures Strategies. MIY may sell a financial futures contract (i.e., assume a short
position) in anticipation of a decline in the value of its investments resulting from an increase in interest rates or otherwise. The risk of decline could be reduced without employing futures as a hedge by selling investments and either reinvesting