U.S. COMMODITY FUTURES TRADING COMMISSION 

Three Lafayette Centre 

1155 21st Street, NW, Washington, DC 20581 

Telephone: (202) 418-5430 

Facsimile: (202) 418-5536 

......., 0 

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Division of Clearing and 

Intermediary Oversight 

MEMORANDUM 

TO: Public Comment File 

FROM: Jon DeBord 

DATE: March 31,2010 

SUBJECT: Meeting with Federated Investors, Inc. relating to Advance Notice of 

Proposed Rulemaking for Regulations 1.25 and 30.7 (74 FR 23962) 

On March 29, 2010, members of the CFTC's Division of Clearing and Intermediary Oversight 

met with Eugene Maloney, Executive Vice President and Corporate Counsel of Federated 

Investors, Inc. (Federated), to discuss Federated's positions on possible Rule 1.25 rule 

amendments with regards to money market mutual funds (MMMFs). Federated expressed its 

views on the stability of MMMFs and likely industry responses to various potential 1.25 

amendments. Prior to the meeting, Mr. Maloney provided the attached documents. Present from 

the CFTC were Ananda Radhakrishnan, John Lawton, Tom Smith, Phyllis Dietz, Sarah 

Josephson, Chul Park and Jon DeBord. 

Attachments 

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P1 0 C) • 
Feder<tted Investors, Inc. 

Federated Investors Tower 

1001 Liberty Avenue 

Pittsburgh, PA 15222-3779 

412-288-1941 Phone 

412-992-3008 Fax 

gmaloney@federatedinv.com 

March 24, 2010 

Phyllis Dietz, Counsel 

Eugene F. Maloney, Esq. 

Exewti11e Vice Presidmt 

Commodity Futmes Trading Commission 

Three Lafayette Centre 

115 5 21st Street, NW 

Washington, DC 20581 

Dear Ms. Dietz: 

. ·. : .. ~ : 

derated WORLD-CLASS INVESTMENT MANAGER /\)1:58 ® 

Thank you for taking the time to visit by phone with me this morning on our interest in having 

money market mutual funds continue to be eligible under Rule 1.25 ofthe CFTC. As I made 

mention, I worked successfully with Andy Norton at The Options Clearing Corporation ("the 

OCC") in responding to certain requirements that they felt money market mutual funds should 

adhere to in order to constitute eligible collateral under their rules. A copy of a bulletin issued 

by the OCC setting forth the eligibility of the requirements for money market mutual funds is 

enclosed. Please note, in particular, the information set forth under "Redemption." Because of 

the necessity of a fund to waive certain rights regarding the availability of redemption proceeds, 

only those large money fund sponsors who regularly work with institutional investors chose to 

comply with the requirements of the OCC. 

We are aware of concems expressed by the CFTC with respect to recent amendments to Rule 

2a-7 under the Investment Company Act having to do with the suspension of redemptions given 

the occurrence of certain conditions. More specifically, as you are aware, new Rule 22e~3 

permits a money fund to susp.end redemptions and payments of redemption proceeds if (a) the 

fund's board determines that the deviation between the f1md's amortized cost price per share and 

the market~ based net asset value per share may result in material dilution or other unfair results, 

and (b) the board irrevocably approves the liquidation ofthe fund. Being mindful ofthe 

concerns of the CFTC about liquidity but at the same time being sensitive to the permissive 

nature of new Rule 22e-3 and the responsibilities of a fund's board, outside counsel to our firm 

has suggested the following disclosure in the prospectuses of Prime Obligations Fund ("POF") 

and Govermnent Obligations Fund ("GOP"), two money market mutual funds sponsored by 

Federated Investors that are currently eligible mtcl used by members under Rule 1.25: 

While the Fund has no current intention to do so, [GOF] [POF] may suspend the 

right of redemption and delay the payment of redemption proceeds as a part ofthe 

liquidation of the Fund. Prior to suspending the redemptions, the Fund's Board 

must notify the SEC of its intent to liquidate and suspend redemptions. 
March 24, 2010 

Page2 

On a historic note, when the undersigned was responsible for qualifying shares of our funds for 

sale in various states, oftentimes prospectus language would be inconsistent with a rule or statute 

under which securities activities could be conducted on a state~ by-state basis. It was not 

uncommon for us to provide an undertaking not to exercise a reserved right as a condition 

precedent to doing business in a particular state. The language I have suggested with respect to 

Rule 22e-3 reflects such an approach. 

We have evaluated the "circuit breakers" in place for POF and GOF relating to liquidity; I 

thought it might be useful to share them with you and your colleagues. (See enclosed 

"Remedies That Will be Relied Upon Prior to Suspension of Redemptions: Why Rule 22e-3 Will 

be the Option of Last Resort.") The purpose is to illustrate sources of liquidity for large 

institutional funds, such as POF and GOF, prior to a fund's board even considering invoking the 

provisions of Rule 22e-3. 

I have taken the Iibetiy of enclosing a description' of my responsibilities at Federated along with 

the fact sheets on our two presently eligible money market mutual funds (POF and GOF) and 

their sponsor, Federated Investors. I look forward to meeting with you and your colleagues. 

Eugene F. Maloney 

Executive Vice President and 

Corporate Counsel 

lmc 

Enclosures: 

OCC Bulletin; OCC press release 

Remedies/lmllet points 

EFM-bio 

Fact sheets- POF, GOF 

Federated Investors info 
Feb 12 02 01:56p CORPORATE ff:2 (312) 322-2689 

The Options Clearing Corporation Volume 29, Number 1 January 18, 2002 

Rule 604 specifies the forms of collateral that may be deposited as margin. Permitted fonns include cash, 

Government securities. letters of credit, and certain equiiy and debt securitles.6 OCC regularly reviews these forms 

of collateral for suitability, with the intent of addressing Clearing Members· desire for a diverse combination of re<3dily 

available and cost·effective forms of collateral while ensuring that collateral is limited to instruments that are relatively 

stable in value and easily converted to cash. OCC believes that shares in certain money market funds meet these 

criteria and that it is appropriate for OCC to expand its categories of acceptable collateral to include such Instruments. 

OCC believes that the professional asset management, liquidity, and stable principal value typically associated with 

money market funds mal<e shares in such funds an attractive collateral alternative for all OCC clearing accounts. As 

a result of recent amendments to the regulations of the Commodity Futures Trading Commission (the "CFTC"), 

Clearing Members that are registered as futures commission merchants are now permitted to invest customer funds 

of their futures customers in money market fund shares. 7 Accordingly, Clearing Members want to be able to 

hypothecate shares in such funds as margin for their "non-proprietary" cross·margining accounts. OCC believes that 

such deposits are appropriate collateral not only for cross-margining accounts, but for all accounts. 

Requirements for Eligibility of Funds 

OCC proposes to define acceptable money market funds as those complying with SEC Rule 2a-7 under the 

Investment Company Act of 1940 (jhe "iCA"), subject to certain additional criteria. The ICA sets the standards by 

which mutual funds and other investment vehicles operate, and Rwle 2a-7 thereunder requires a qua!ffying money 

market fund to meet certain portfolio maturity, quality and diversification criteria. Instruments which may qualify as 

permitted investments for money market funds typically Include: U.S. Treasury securities, repurchase agreements, 

Federal agency securities, commerdal paper, certificates of deposit, lime deposits, corporate notes, asset-bacl<ed 

securities, and municipal securities. To minimize credit risk, OCC will accept only money market funds that limit their 

investments to "First Tler Securities~ as defined in Rule 2a-7 under the ICA.8 Although certain types of instruments 

that qualify as First Tier Securities would not qualify to be pledged directly as margin collateral under Rule 604,9 the 

rating requirements and maturity prerequisites, combined with inherent diversification of the funds, is deemed to 

provide sufficient protection to warrant acceptance of shares of money market funds containing such instruments. 

A 10% limit on stock ownership by any one investor has been included fn proposed Rule 604(b}(3) to ensure a 

diverse group of fund investors so that the actlons of any one shareholder (e.g., redeeming a large number of shares) 

do not materially disrupt the ability of lhe fund to redeem shares in an orderly manner. 

In order for its shares to be acceptable as margin deposits, a fund (and/or its sponsor, transfer agent, or other agents 

lls appropriate) will be required to represent to OCC that it meets the foregoing requirements and to agree that it will 

continue to do so. In addition, OCC will require the fund to make certain other agreements intended to further ensure 

OCC's ability to convert fund shares promptly to cash if necessary. 

Redemption 

While the ICA generally prohibits mutual funds from suspending the right of redemption, the ICA does allow funds to 

postpone the payment of redemption proceeds for up to seven days in emergency situations. The ICA also <JIIows for 

the suspension or postponement of redemption in certain emergency situations. In addition, while the intent of a 

money marl<et fund is to redeem shares in cash, most issuers retain U1e right to redeem their shares in kind. In lhe 

6 In a rule filing currently pending With the Commission, occ has also proposed to accept non-callable securities 

issued by the Federal Home Loan Mortgage Corporation (Freddie Mac} within its Reference Debt Program and 

securities Issued by the Federal National Mortgage Association (Fannie Mae} within lts Benchmark Debt Program. 

See SR·OCC·2001·04. 

7 ln Dec.ember 2000, the CFTC amended its Regu!a!!on 1.25 to expand tht~ range of instruments in which FCMs and 

clearing organizations may invest cu~tomer segregated funds to Include such highly liquid instruments as money 

market mutual funds. See CFTC release at 65 FR 77993 (December 12, 2000). 

8 In general, a First Tier security is a security with a remaining maturity of 397 calendar days or less that (i) has 

received a short·term rating from at least two nationally recognized stalfslical rating organizations in the highest shortterm rating category for debt obligations; (ii) is unrated but is deemed to be of comparable quality to securities 

Identified in (i) a~ detennined by the fund's board of directors; (ill) is issued by a registered investment company that 

is itself a money market fund; or (lv} is a government security. 

9 For example, OCC does not currently accept Federal agency securities, commercial paper, certificates of deposit. 

time deposits, corporate notes, asset-backed securities or mur~i_cipal securities. 

27 
Feb 12 02 01:56p CORPORATE ~t2 (312) 322-2689 

?t 

Volume 29, Number 1 January 18, 2002 ?A p ¥ F y # 

event of an in-l<ind redemption, the ~edeeming shareholder would receive portfolio securities rather than cash. Any 

such action would introduce a liquidation risk as well as additional costs associated with the sale of such securities. 

Rule 604(b)(3)(i)(H) will require each fund to waive its rights under the ICA to delay redemption or redeem in kind. 

The fund must instead agree to redeem fund shares in cash not later than the business day following a redemption 

request by OCC, with limited exceptions for unscheduled closings of Federal Reserve Banks or the New York Stock 

Exchange or such other similar emergency situations as OCC might agree to. These waivers of redemption · 

restrictions along with the next day payment requirement have been established to maintain adequate liquidity of 

margin collateral, but are also intended to be consistent with the redemption conditions contained in CFTC Rule 1.25. 

See CFTC Regulation 1.25(c)(5) and CFTC Interpretive Letter No. 01-31 dated April12, 2001 (stating that funds will 

be deemed in compliance with Regulation 1,25(c)(5) even though they provide for delayed redemption In specified 

emergency situations). 

Valuation 

OCC will require funds to perfonn a net asset value computation at least once per day with the dissemination of such 

computation to be made available to OCC no later than 9:00AM Central Time the following day. Given the 

dfversilled nature of eligible fund Investments as well as the investment duration limitations, a daily computation of net 

asset value appears reasonable. OCC nevertheless proposes, under proposed Rule 604{d){4), a 2% haircut on the 

net asset value of fund shares. The 2% haircut was selected for consistency with the treatment of similar assets 

under the net capital rule. See Rule 15c3·1 (c)(2)(vi)(D)(1). 

OCC's Security Interest 

As in the case of other securities held as collateral, OCC will require that Clearing Members give OCC a first priority 

perfected security Interest In deposited fund shares. Because shares in money market funds are typically not issued 

in certificated fonn, ownership Is established by registration of the securities on the books of the fund or its transfer 

agent. OCC can ordinarily obtain a perfected security interest in fund shares registered in the name of a Clearing 

Member by execution of the fund's standard three-party agreement among OCC, the Clearing Member and the fund 

or its transfer agent. 

In addition, to preclude a situation whereby a Clearing Member secures Its obligations to OCC with collateral 

managed and within the control of that Clearing Member or a related party. an association restriction is proposed in 

Rule 604(b)(3)(iii). This standard may be waived if the Issuing Institution can demonstrate that an acceptable 

arrangement has been made for the control of underlying portfolio investments and the processing of OCC 

redemption requests by a third party. This restriction is consistent with current OCC rules regarding the deposit of 

government securitie::~, debt or equity Issues or issuance of letters of credit as margin collateral. See Rule 604, 

lnterpretatron and Policy .07 and .1 0. 

One additional point is worth noting, though not related specifically to money fund shares. The provisions formerly in 

Rule 604(d)(2), which require compliance with the Commission's Rule 151::3-3 when applicable, have been moved so 

that they apply not only to equity and debt securities but to all securities deposited as margin under Rule 604(b). A 

sentence has been added to require compliance with the CFTC's customer protection regime when securities are 

deposited in respect of futures accounts. 

The proposed rule change is consistent with the requirements of Section 17A of the Securities Exchange Act of 1934, 

as amended, because it enhances the efficiency of the clearing system while safeguarding funds and securities by 

permlt'Jng Clearing Member !o collateralize their obligations to OCC with an additional form of highly liquid assets of 

stable value. 

28 

p.5 

'" 
THE O!?TUOn\!JS 

C IL, fE tii\ lR ~IN G C 0 R. If» 0 IRA 1i"'" ~ 0 IN! 

#20371 

TO: ALL CLEARING MEMBERS 

FROM: ANDREW NAUGHTON, EXECUTIVE VICE PRESIDENT, 

CHIEF FINANCIAL OFFICER & TREASURER 

DATE: FEBRUARY18,2005 

SUBJECT: EXPANDED FORMS OF MARGIN COLLATERAL 

Effective February 22, 2005 OCC will begin accepting pledges of shares in 

qualifying Federated Investors, Inc. money market funds (MMF) as margin collateral 

pursuant to OCC Rule 604(b )(3). The qualifying funds are as follows: 

FUND NAME CUSIP SYMBOL 

Federated Prime Obligations Fund 60934N203 POI XX 

-

Federated Prime Cash Obligations Fund 60934N625 PCOXX 

Federated Prime Management Obligations Fund 60934Nl 12 PMOXX 

Federated Government Obligations Fund 60934Nl 04 GOIXX 

Federated Treasury Obligations Fund 60934N500 TOIXX 

An OCC Clearing Member desiring to pledge qualifYing MMF shares to OCC 

must first establish an account with the issuing fund (see Federated Investors contact 

information below) and arrange for that issuer, through its Fast Automated Securities 

Transfer (FAST) agent, to deposit fund shares into its free account at the Depository 

Trust Company (DTC). The Clearing Member then follows the same PTS procedures for 

pledging any other securities held in a fi·ee position at DTC to OCC. 1 . 

Similarly, a partial or full release of shares unencumbered by a margin 

requirement may be accomplished by following the same PTS procedures currently in 

place for releasing any other securities from a pledge position. Once OCC has approved 

1 Eligible OCC Pledgee accounts are 981 (all securities accounts and non-customer commodity accounts) 

and 939 (segregated customer commodities accounts). Eligible Account Types are Customer (C), Firm (F) 

and Market Maker (M). Pledge Comments field should be completed as follows: 3-digit OCC Clearing 

Member Number, toll owed by backs! ash(/), 1 character Collateral Typ€ for MMF (tv!), followed by a 

backs lash (/), 1 character Account Type (C,F or !VI). Example: 999/M/C. 
a release request the fund shares will be held in a free position in the Clearing Member's 

DTC account at which point the Clearing Member may elect to withdraw the shares 

through instructions to the issuer's FAST transfer agent. 

No more than 5% of the total number of outstanding shares of any one fund will 

be accepted for deposit from a given Clearing Member. In determining whether a 

Clearing Member's deposit of a fund's shares exceeds the following limitation, OCC will 

aggregate the Clearing Member's deposit of such fund's shares across all of its accounts. 

MMF shares deposited by a Clearing Member will be valued by OCC at 98% of the 

current market value or such lower value as the Membership/Margin Committee may 

prescribe from time to time. 

A Clearing Member may not deposit MMF shares ln any fund if such fund or its 

sponsor controls, is controlled by, or under common control with the Clearing Member. 

In the case ofMMF shares, a person shall be deemed to control another person if the 

person has an equity interest of20% or more in such other person. In addition, MMF 

shares are not acceptable collateral for Cross Margin or Clearing Fund accounts. 

CONTACT INFORMATION 

Federated Investors Inc. - Karin Friday ( 412) 358-2452 

OCC- Andrew Naughton (312) 322-2007 

DTCC- Robin Bainlardi (212) 855-3793 
Remedies That Will be Relied Upon Prior to Suspension of Redemptions: 

Why Rule 22e-3 Will be the Option of Last Resort 

G Lines of Credit. The Funds participate in a $100,000,000 unsecured, uncommitted 

revolving line of credit (LOC) agreement with PNC Bank. The LOC was made available 

for extraordinary or emergency purposes, primarily for financing redemption payments. 

During the year ended July 31, 2009, the Funds did not utilize the LOC. 

o Interfund Lending Facility. Pursuant to an exemptive order issued by the SEC, the 

Funds, along with other funds advised by subs~diaries of Federated Investors, Inc., may 

participate in an interfund lending program. This program provides an alternative credit 

facility allowing the funds to bonow from or lend money to other patticipating affiliated 

funds. As of July 31, 2009, there were no outstanding loans. During the year ended July 

31, 2009, the program was not utilized. 

o Expanded Ability to Buy Out Troubled Securities. The Money Market Fund Reform 

rules have expanded the circumstances under which affiliated persons of a money market 

fund can purchase securities from the fund. Previously, affiliates were only permitted to 

buy out securities that had become ineligible under Rule 2a-7. Now, affiliated persons 

may purchase any security out of a money market fund, so long as the affiliated person 

pays a purchase price, in cash, that is equal to the greater of the security's ammtized cost 

or its market value, including accrued interest. 

e> Obtain Capital Support from Investment Adviser or Other Affiliate. "All but one of 

the funds that were exposed to losses from SIV and Lehman Brothers securities obtah1ed 

support of some type from their advisers or other affiliated persons, which absorbed the 

losses or provided a guarantee ... to prevent the fund from breaking a buck." Money 

Market Fund Reform, Rei. IC-29132 at p.5. 

e Industry~ Developed Liquidity Facility. The ICI and other industry patticipants are 

working to finalize a plan for a liquidity facility "to act as a backstop for money-market 

funds facing liquidity issues. As envisioned, the facility would be a state-chartered bank 

or trust company, organized and capitalized by the prime money-market fund industry ... 

The facility would be managed and governed in accordance with applicable banking 

laws." (Remarks of Paul Schott Stevens- 2010 ICI Mutual Funds Conference). 

e Suspension of Redemptions (Rule 22e-3). A registered money market fund can rely on 

Rule 22e-3 to suspend redemptions only after it has irrevocably decided (and approved) 

that the liquidation of the fund is the only available option to mitigate the potential harm 

to its shareholders caused by a deviation between the fund's amottized cost per share and 

its cut1·ent N A V. 
EUGENE F. MALONEY 

Executive Vice President and 

Corporate Counsel 

Federated Investors, Inc. 

Pittsburgh, PA 

Mr. Maloney is Executive Vice President and Corporate Counsel of Federated Investors, 

Inc., a member of the Executive Committee, and has been employed by the firm for thirty-eight 

years. Through Mr. Maloney's efforts, Federated Investors is responsible for virtually all of the state 

legislation permitting public entities to use money market funds to manage their liquidity. He has 

also participated on a consultative basis in state legislative efforts to more precisely define and 

circumscribe those investments that are eligible and suitable for acquisition by public agencies. In 

two instances, significant sums of money had been lost either through hypothecation and/or the 

abuse or lack of understanding of strategies designed to ameliorate interest rate risk. In the former, 

Mr. Maloney was appointed to a commission chaired by the state's Supreme Court Chief Justice to 

deconstruct a scheme that defrauded a state investment pool of over $100 million. 

Mr. Maloney was a member of the Board of Directors of the Foundation for Fiduciary 

Studies and was appointed by the U.S. House of Representatives and Senate as a member of the 

Industry Sector Working Group on Financial Services. He is an instructor in trust and securities law 

at Boston University School of Law, has been a visiting instructor at the Federal Financial 

Institutions Examination Council and the American Bankers Association's National Graduate Trust 

School at Northwestern University, and participates in programs leading to the designation of 

Certified Trust and Financial Advisor. Mr. Maloney has also served as an expert witness in both 

judicial and legislative settings on matters relating to fiduciaty compensation, will construction, and 

prudent investing. 

Mr. Maloney has appeared as a speal<er at American Banl<ers Association gatherings and is 

a frequent speaker at State Banl<ers Association meetings on the following subjects: the GrammLeach-Biiley Act and Regulation R, the deregulation of the financial services industry, the Uniform 

Prudent Investor Act and the investment management process it contemplates, fiduciary 

compensation, revisions to Regulation Q, pension reform and asset allocation as a means of 

optimizing return and minimizing risk. 

Mr. Maloney has authored and co-authored a number of articles appearing in various 

financial and legal publications regarding the investment responsibilities of corporate fiduciaries. He 

has also been the architect of various educational videos and memoranda having to do with the 

Uniform Prudent Investor Act, the implications for trust banl<s of functional regulation under the 

Gramm-Leach-Biiley Act, asset allocation in a trust context, the prudence of international investing, 

fiduciary compensation, and the propriety of a corporate fiduciary utilizing a mutual fund to which it 

provides discrete services. 

Mr. Maloney received his B.A. from Holy Cross College in Worcester, Massachusetts, and 

his J.D. from Fordham Law School in NewYorl< City. He attended Wharton School of the University 

of Pennsylvania focusing on the financial management of commercial banl<s. He was an officer in 

the United States Army from 1969 to 1972 and served as an infantry officer for one year in the 

Republic of Vietnam. 
derated® 

•. Aaa ilit9at6t:s · AM F/tcll . ·' ·. NAIC A.ppnJ.ved' .. · · 

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·. ·-.Pqi'f.foiii>.Ass.ets.: · .. ···. ···.·:: ·. s5s:i bun on·· · · · · · · .... ·.:·· ... 

. ·. · .. · .. ·.' 

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· .. :· 

·IIi Ag~n,i;l~s i,:J·.o · · 

> ~~ Repurci1ase _: ·.· .··. .• ·. · · · . ,'\greerrwnts 54.6 

.- ; ii tre.as8r)ts 2;4 · · · 

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• ErtectJu~. M:t;tJrity· Scll~d~Jle (<voJ ·. 

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lll3.i~9o qays 2z.:o ~~~~; JSo oays ~.7· .· ·; t:ilBJ.:t Ddys s:7 

· HfC:cti.~~ Ay~i~9a M~~Qfit~r 

·. 36 Days: 

Not FDIC lnsiirecf · May Lose Value.• No l3~Hik Guaranh3e . 

lnvE>.stor Goal 

The fund seel<s to provide conservative Investors with current income consistent with stability of principal. The fund 

pursues its objective by investing primarily in a portfolio of short-tenn U.S. Treasury and government agency securities, including repurchase agreements collateralized fully by U.S. Treasury and government agency securities. 

Fund Features 

ll Highest possible ratings from Standard & Poor's, Moody's and Fitch underscore the portfolio's high credit quality 

and relative safety. 

ll Approved by the National Association of Insurance Commissioners (NAIC).• 

ll High asset levels give fund shareholders the benefit of economies of scale. 

l!lil As compared to a fund that holds only Treasury securities, the fund seeks potentially higher yields through Investment in short-term government agency and repurchase agreements . 

ll Tile 5 p.m. EST cut-off time for purchases and redemptions gives institutional investors more time to complete daily 

cash processing and initiate late day deposit transactions . 

Fund Perfomwnce 

Vleld History (<Vo) 

7-Day 

Net yields are based art the average daily Income dividend and average net asset value for the 7 days ended on tile date 

of calculation. 

RilQi!l@.!Jilft\WJt\~f«11~111:f~:~~~l:2i,~;:::Si.i~tU1f!~Jl!'~,t}~J~cilltlfli~illl:f\l!Ri~T?1i1~t::lixtrti~§Yi[~fgil1\1!t~iftf.ili'lliJ 

: 7oDay . . . 0.67' 0.48 o:39 0.26 0,22 0.19. 0.1 G 0.1.1 . O.i.J _Mo 0.06 0,04 

Performance data quoted repre..~ents past performance w/Jicft is no guarantee of future results. Investment 

return will vmy. An investor's sflares; wflen redeemed, may be wort11 more or less than tlw original cost 

Current perfonnance may be lower or higher tlmn w!Jat is stated. To view performance current to the most 

recent molltfl-end, contact us or visit our Web sffe at FederatedhwestoTS.com. 

'This fund tws been designated as an NAIC U.S. Direct Obligations/Full Faith,~ Credit Exempt listing and is 

subject to an annual review. Those funds designated as U.S. Direct Obligations/Full Faith & Credit Exempt 

listings are exempt from NA!C rese!Ve requirements. 
Share Class Statistics 

Portfolio Manager(s) 

Susan Hill 

Deborah Cunningham 

Inception Date 

:3/30/90 

Federated Fund Number(s) 

5 

Cusip Number 

60934N-104 

Nasdaq Symbol 

GO lXX 

Newspaper Listing 

GovObiS 

Cut-Off Times 

5:00 p.m. EST- Purchases 

5:00 p.m. EST- Redemptions 

Dividends 

Declared Daily/Paid Monthly 

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·• ·, Re~eryel$• ¢~ptlnyillg JqJjqlq t9 its ··•el\9ilP\ion'ally',loWJ~ve.l~'! for·~n(''e~tfilri.((~?q p~rro:ct,'! ;:• · ·· .· .. ·Po.licywhen 1toomes to 1ts. benchrnarkshorbJermnne:.Th!l money;markets•ar,(:) taking.· •. . ,: ttHli(cu~ :from the FeCl. a(l'd urgil it ~hifts cqlli·$~,.we pQ.n~t .se~. flionay ·m~tl~et.yielfl$ : ·,··· •. 

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• yielcJ c~rve a[ready arE) rising on b~;Jtt()r ecooomic. pr0sP¢9ts,. We, ?I so expect the. Fed.\A/ill · 

.. ·• fr%Wig~~&~~~·~.~~11r~~~~sutnlil8f; So lop I~ fgrs6t~fl,f.ild,P.Ei$tj~1Pf9Y~ri1ent, an.~li~.)i,i,~ld(> 

•.· ;~J.san.;~~~r .. :~< ··• · · · · · ... · F(I~dfvfan<Jg$r & Seniot0ce Pa~sident 

An investment in the fund is neither insured nor guaranteed by the Federal Deposit Insurance 

Corporation (FDIC) or any other government agency. Although the fund seel{s to preserve the value 

of your investment at $1.00 per share, it is possible to lose money by investing in the fund. 

Performance shown is for Institutional Shares. The fund HATINGS AND RATING AGENCIES 

offers additional share classes whose performance will 

val}' due to differences in charges and expenses. Please 

consult your financial institution regarding your eligibility to purchase these classes. 

Although not contractually obligated to clo so. the 

adviser and/or certain fund service providers waived all or a portion of their fees or reimbursed the fund for 

certain operating expenses. These voluntary waivers 

ancl reimbursements may be modified or terminated at 

any time; accordingly, the fund's expenses may val}' (i.e., 

increase or decrease) during the fund's fiscal yea1: 

TI1ese waivers increase income to the fund and results 

in a higher return to investors. 

Otherwise, the 7-clay yield would have been 0.00% and 

total return would have been lower. 

Total return represents the change in value of an investment after reinvesting all income and capital gains. 

Yield quotations more closely reflect the current 

earnings of the fund than the total return quotation. 

A WORD ABOUT RISK 

Fund shares are not guaranteed by the U.S. government. 

Current and future portfolio holdings are subject to risk 

DEFINITIONS 

Net yields are based on the average daily income 

dividend and average net asset value for the 7 days 

ended on the date of calculation. The 7-day net annualized yield is based on the average net income per share 

for the 7 days ended on the date of calculation and the 

offering price on that date. 

The fund is a managed portfolio and its holdings are subject to change. 

TI1e holdings percentages are based on net assets at the 

close of business on 12/31/09 and may not necessarily 

reflect adjustments that are routinely made when presenting 

net assets for fonnal financial statement purposes. 

Repurchase agreements consist of a financial institution 

selling securities to a fund and agreeing to repurchase 

them at a mutually agreed upon price and time. 

Money market ratings are an assessment of the safety 

of Invested principal and the ability to maintain a stable 

market value of the fund's shares. Ratings are based on an evaluation of several factors, including credit quality, 

diversification and maturity of assets in the portfolio, as well as management strength and operational capabilities. A money market fund rated AAAm by Standard & 

Poor's is granted after evaluating a number of factors, 

including credit quality, market price, exposure and 

management. Money marl<et funds rated Aaa by 

Moody's are judged to be of an investment quality 

similar to Aaa-rated fixed income obligations, that is, 

they ore judged to be of the best quality. Fitch's money 

market fund ratings are an assessment of the safety of 

invested principal and the ability to maintain a stable 

market value of the fund's shares. 

Ratings are subject to change and do not remove market risk. 

The securities in which a fund invests are also rated. Shortterm ratings are opinions of the abili1;y of issuers to honor 

short-tem1 financial obligations. Ratings may be assigned 

to Issuers, short-tenn programs or to individual short-tenn 

debt instruments. Such obligations generally have an 

original maturity not exceeding thirteen months. unless 

explichly noted, First Tier securities are those rated in the 

highest short-teml rating categol)l by one or more Nationally Recognized Statistical Rating Organizations (NRSROs), 

such as Standard & Poor's, Moody's and Fitch or deemed 

by the Adviser to be of comparable quality to securities 

having such ratings. 

Securities are considered to be "first tiel" as follows: 

Standard & Poor's: A-1 +and A-1, based on the obligor's 

capacity to meet its financial commitment on the obligation; Moody's: P-1, based on the issuer's ability to repay 

short-term obligations; Fitch: F-1+ and H, based on the issuer's liquidity necessal}' to meet financial 

commitments in a timely manner. 

Credit ratings do not provide assuranoe against default 

or otller loss of money and can change. 

This must be preceded or accompanied by a current prospectus. 

Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA 15222-3779, 1-800-341·7400, Federatedlnvestors.com G011 04-77 (7170) 

Federated Securities Corp., Distributor Federated is a registered trademark of Federated Investors, Inc. 2010 ©Federated Investors, Inc.