As filed with the Securities and Exchange Commission on April 29, 2009

 

Securities Act File No. 2-52711

Investment Company Act File No. 811-2556

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

 

 

 

 

 

MERRILL LYNCH READY ASSETS TRUST*

(Exact Name of Registrant as Specified in Charter)

 

100 Bellevue Parkway, Wilmington, DE 19809

United States of America

(Address of Principal Executive Offices)

 

Registrant’s Telephone Number, including Area Code: (800) 221-7210

 

Donald C. Burke

Merrill Lynch Ready Assets Trust*

800 Scudders Mill Road, Plainsboro, New Jersey 08536

Mailing Address: P.O. Box 9011, Princeton, New Jersey 08543-9011

United States of America

(Name and Address of Agent for Service)

 

 

 

 

 

 

 

 

It is proposed that this filing will become effective (check appropriate box)

 

 

If appropriate, check the following box:

 

 

Title of Securities Being Registered: Shares of beneficial interest, par value $.10 per share.

 

 

*  To be renamed Ready Assets Prime Money Fund effective May 4, 2009.

 

MERRILL LYNCH READY ASSETS TRUST
(the “Fund”)

 

SUPPLEMENT DATED APRIL 29, 2009 TO THE PROSPECTUS AND STATEMENT OF ADDITIONAL
INFORMATION, EACH DATED APRIL 29, 2009

 

The Fund’s prospectus and statement of additional information are amended as set forth below:

 

Until May 4, 2009, the Fund’s name will remain “Merrill Lynch Ready Assets Trust”.
Effective May 4, 2009, the Fund’s name will change to “Ready Assets Prime Money Fund”.

 

 

Code #: PRO-10053-0409-SUP

 

Ready Assets Prime Money Fund

 

PROSPECTUS  ï  APRIL 29, 2009

 

This Prospectus contains information you should know before investing, including information about risks. Please read it before you invest and keep it for future reference.

 

NOT FDIC INSURED  ï  MAY LOSE VALUE  ï  NO BANK GUARANTEE

 

The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense.

 

 

Fund Overview

 

Key Facts About Ready Assets Prime Money Fund

 

This prospectus provides information about Ready Assets Prime Money Fund (formerly Merrill Lynch Ready Assets Trust), which is referred to in this prospectus as the “Fund.”

 

The Fund’s manager is BlackRock Advisors, LLC (“BlackRock”). Where applicable in this prospectus, BlackRock refers also to the Fund’s sub-adviser, BlackRock Institutional Management Corporation.

 

Included in this prospectus are sections that tell you about buying and selling shares, management information, shareholder features of the Fund and your rights as a shareholder. Terms in bold face type in the text are defined in the Glossary section.

 

What is the Fund’s investment objective?

The investment objective of the Fund is to seek preservation of capital, liquidity and the highest possible current income consistent with this objective available from investing in a diversified portfolio of short-term money market securities.

 

What are the Fund’s main investment strategies?

The Fund tries to achieve its objective by investing in a diversified portfolio of short-term money market securities. These securities are generally debt securities and other instruments that mature within 13 months. Other than U.S. Government securities and certain U.S. Government agency securities and certain securities issued by U.S. Government sponsored enterprises and U.S. Government instrumentalities, the Fund only invests in money market instruments of issuers with one of the two highest short-term ratings from a nationally recognized credit rating organization or in unrated instruments that, in the opinion of Fund management, are of similar credit quality.

 

In seeking to achieve the Fund’s objective, Fund management varies the kinds of money market securities in the portfolio and the average maturity of the portfolio. Fund management decides which securities to buy and sell based on its assessment of the relative values of different securities and future interest rates. The Fund’s dollar-weighted average maturity will not exceed 90 days.

 

What are the main risks of investing in the Fund?

The Fund cannot guarantee that it will achieve its investment objective.

 

An investment in the Fund is not a deposit in any bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund. Notwithstanding the preceding statements, Fund shareholders will be guaranteed to receive $1.00 net asset value per share for amounts that they held in the Fund as of September 19, 2008 subject to the terms of the U.S. Treasury Department’s Temporary Guarantee Program for Money Market Funds (the “Treasury Guarantee Program”), which is set to expire on September 18, 2009. According to the U.S. Treasury, the Treasury Guarantee Program will not be extended beyond that date.

 

The Fund may invest in securities issued by U.S. Government agencies, U.S. Government instrumentalities , and U.S. Government sponsored enterprises , such as the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”). These securities, including but not limited to those issued by Fannie Mae and Freddie Mac, may not be guaranteed by the U.S. government or backed by the full faith and credit of the United States.

 

For additional information about the Fund’s risks, see “Investment Risks” below.

 

Who should invest?

The Fund may be an appropriate investment for you if you:

 

 

 

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Risk/Return Information

 

The chart and table shown below give you a picture of the Fund’s long-term performance. The information shows you how the Fund’s performance has varied year by year and provides some indication of the risks of investing in the Fund. As with all such investments, past performance is not an indication of future results. The information for the Fund in the chart and the table assumes reinvestment of dividends and distributions.

 

 

Yield Information

 

The yield on the Fund’s shares normally will fluctuate on a daily basis. Therefore, yields for any given past periods are not an indication or representation of future yields. The Fund’s yield is affected by changes in interest rates, average portfolio maturity, the types and quality of portfolio securities held and operating expenses. Current yield information may not provide the basis for a comparison with bank deposits or other investments, which pay a fixed yield over a stated period of time and may not be comparable to the yield on shares of other money market funds. To obtain the Fund’s current 7-day yield, call (800) 221-7210.

 

 

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Expenses and Fees

 

As a shareholder you pay certain fees and expenses.  Annual Fund Operating Expenses are paid out of Fund assets. The “Annual Fund Operating Expenses” table below describes the fees and expenses that you may pay if you buy and hold shares of the Fund. The table is based on expenses for the most recent fiscal year (restated to reflect current fees).

 

 

 

Example:

This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other money market funds. We are assuming an initial investment of $10,000 and a 5% total return each year with no changes in operating expenses. Although your actual cost may be higher or lower, based on these assumptions your costs would be:

 

 

 

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Details About the Fund

 

How the Fund Invests

 

 

Floating Rate Obligations  — Obligations of government agencies, corporations, depository institutions or other issuers which periodically or automatically reset their interest rate to reflect a current market rate, such as the Federal funds rate or a bank’s prime rate, or the level of an interest rate index, such as LIBOR (a well-known short-term interest rate index).

 

Insurance Company Obligations  — Short-term funding agreements and guaranteed insurance contracts with fixed or floating interest rates.

 

Master Notes  — Variable principal amount demand instruments issued by securities firms and other corporate issuers.

 

Other Eligible Investments  — Other money market instruments permitted by Securities and Exchange Commission rules governing money market funds.

 

Other Strategies:

In addition to the primary strategies discussed above, the Fund may also invest or engage in the following investments/strategies.

 

Repurchase Agreements  — In a repurchase agreement, the Fund buys a security from another party, which agrees to buy it back at an agreed upon time and price. The Fund may invest in repurchase agreements involving the money market securities described above.

 

Reverse Repurchase Agreements  — In a reverse repurchase agreement, the Fund sells a security to another party and agrees to buy it back at a specific time and price. The Fund may invest in reverse repurchase agreements involving the money market securities described above.

 

Forward Commitments  — The Fund may buy or sell money market securities on a forward commitment basis. In these transactions, the Fund buys the securities at an established price with payment and delivery taking place in the future. The value of the security on the delivery date may be more or less than its purchase price.

 

Securities Lending  — The Fund may lend its portfolio securities.

 

Foreign Securities  — The Fund may invest in obligations of foreign issuers, including both Eurodollar and Yankeedollar obligations.

 

 

 

The Fund may also be subject to certain other risks associated with its investments and investment strategies, including:

 

Borrowing Risk  — The Fund may borrow only to meet redemptions. Borrowing may exaggerate changes in the net asset value of Fund shares and in the yield on the Fund’s portfolio. Borrowing will cost the Fund interest expense and other fees. The cost of borrowing money may reduce the Fund’s return.

 

Illiquid Securities Risk  — The Fund may invest up to 10% of its net assets in illiquid securities that it cannot sell within seven days at approximately current value. If the Fund buys illiquid securities it may be unable to quickly sell them or may be able to sell them only at a price below current value.

 

Restricted Securities Risk  — Restricted securities are securities that cannot be offered for public resale unless registered under the applicable securities laws or that have a contractual restriction that prohibits or limits their resale. They may include private placement securities that have not been registered under the applicable securities laws. Restricted securities may not be listed on an exchange and may have no active trading market.

 

Restricted securities may be illiquid. The Fund may be unable to sell them on short notice or may be able to sell them only at a price below current value. Also, the Fund may get only limited information about the issuer of a restricted security, so it may be less able to predict a loss. In addition, if Fund management receives material nonpublic information about the issuer, the Fund may as a result be unable to sell the securities.

 

Securities Lending Risk  — The Fund may lend securities with a value up to 33 1 / 3 % of its total assets to financial institutions that provide cash or securities issued or guaranteed by the U.S. Government as collateral. Securities lending involves the risk that the borrower may fail to return the securities in a timely manner or at all. As a result, the Fund may lose money and there may be a delay in recovering the loaned securities. The Fund could also lose money if it does not recover the securities and/or the value of the collateral, including the value of investments made with cash collateral, falls. These events could trigger adverse tax consequences for the Fund.

 

Repurchase Agreements and Purchase and Sale Contracts Risk  — The Fund may enter into certain types of repurchase agreements or purchase and sale contracts. Under a repurchase agreement, the seller agrees to repurchase a security at a mutually agreed-upon time and price. A purchase and sale contract is similar to a repurchase agreement, but purchase and sale contracts also provide that the purchaser receives any interest on the security paid during the period. If the other party to a repurchase agreement or purchase and sale contract defaults on its obligation under the agreement, the Fund may suffer delays and incur costs or lose money in exercising its rights under the agreement. If the seller fails to repurchase the security in either situation and the market value of the security declines, the Fund may lose money.

 

Reverse Repurchase Agreements Risk  — Reverse repurchase agreements involve the sale of securities held by the Fund with an agreement to repurchase the securities at an agreed-upon price, date and interest payment. Reverse repurchase agreements involve the risk that the other party to the agreement may fail to return the securities in a timely manner or at all. The Fund could lose money if it is unable to recover the securities and the value of the collateral held by the Fund, including the value of investments made with cash collateral, is less than the value of the securities. These events could also trigger adverse tax consequences to the Fund.

 

Foreign Securities Risk  — The Fund may invest in U.S. dollar denominated money market instruments and other U.S. dollar denominated short-term debt obligations issued by foreign banks and similar institutions. Although the Fund will invest in these securities only if Fund management determines they are of comparable quality to the Fund’s U.S. investments, investing in securities of foreign issuers involves some additional risks that can increase the chances that the Fund will lose money. These risks include the possibly higher costs of foreign investing, the possibility of adverse political, economic or other developments, and the often smaller size of foreign markets, which may make it difficult for the Fund to buy and sell securities in those markets. In addition, prices of foreign securities may go up and down more than prices of securities traded in the United States.

 

When-Issued and Delayed Delivery Securities and Forward Commitments Risk  — The Fund may purchase or sell securities that it is entitled to receive on a when-issued basis. The Fund may also purchase or sell securities on a delayed delivery basis or through a forward commitment. When-issued and delayed delivery securities and forward commitments involve the risk that the security the Fund buys will lose value prior to its delivery. There also is the risk that the security will not be issued or that the other party to the transaction will not meet its obligation. If this occurs, the Fund loses both the investment opportunity for the assets it set aside to pay for the security and any gain in the security’s price.

 

 

9

 

 

Account Information

 

 

 

11

 

 

12

 

Fund’s Rights

 

The Fund may:

 

 

 

 

 

Note on Low Balance Accounts. Because of the high cost of maintaining smaller shareholder accounts, the Fund may redeem shares in your account if the net asset value of your account falls below $500 due to redemptions you have made. You will be notified that the value of your account is less than $500 before the Fund makes an involuntary redemption. You will then have 60 days to make an additional investment to bring the value of your account to at least $500 before the Fund takes any action. This involuntary redemption does not apply to accounts of authorized qualified employee benefit plans, selected fee-based programs or accounts established under the Uniform Gifts or Transfers to Minors Acts.

 

Short-Term Trading Policy

 

Market timing is an investment technique involving frequent short-term trading of mutual fund shares designed to exploit market movements or inefficiencies in the way a mutual fund prices its shares. The Board of Trustees of the Fund (the “Board”) has evaluated the risks of market timing activities by the Fund’s shareholders and has determined that due to (i) the Fund’s policy of seeking to maintain the Fund’s net asset value per share at $1.00 each day, (ii) the

 

 

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nature of the Fund’s portfolio holdings and (iii) the nature of the Fund’s shareholders, it is unlikely that (a) market timing would be attempted by the Fund’s shareholders or (b) any attempts to market time the Fund by shareholders would result in a negative impact to the Fund or its shareholders. As a result, the Board has not adopted policies and procedures to deter short-term trading in the Fund. There can be no assurances, however, that the Fund may not, on occasion, serve as a temporary or short-term investment vehicle for those who seek to market time funds offered by other investment companies.

 

Distribution and Service Plan

 

The Fund has adopted a plan (the “Plan”) that allows the Fund to pay fees for the sale of its shares under Rule 12b-1 of the Investment Company Act.

 

Plan Payments

Under the Plan, Fund shares pay a fee to the Distributor, and/or its affiliates, including The PNC Financial Services Group, Inc. (“PNC”) and its affiliates and to Merrill Lynch and/or Bank of America Corporation (“BAC”) and their affiliates for account maintenance, sales and promotional activities and services. The fee may be used to pay the Distributor and affiliates of BlackRock and PNC or Merrill Lynch and BAC for sales support services provided in connection with the sale of shares. The fee may also be used to pay financial intermediaries (including BlackRock, PNC, Merrill Lynch, BAC and their respective affiliates) for sales support services and related expenses. Fund shares pay a maximum fee per year that is a percentage of the average daily net asset value of the Fund attributable to such shares.

 

Because the fees paid by the Fund under the Plan are paid out of Fund assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges. For more information on the Plan, including a complete list of services provided thereunder, see the SAI.

 

Other Payments by the Fund

In addition to, rather than in lieu of, distribution and shareholder servicing fees that the Fund may pay to a financial intermediary pursuant to the Plan and fees the Fund pays to its Transfer Agent, BlackRock, on behalf of the Fund, may enter into non-Plan agreements with a financial intermediary pursuant to which the Fund will pay a financial intermediary for administrative, networking, recordkeeping, sub-transfer agency and shareholder services. These non-Plan payments are generally based on either (1) a percentage of the average daily net assets of Fund shareholders serviced by a financial intermediary or (2) a fixed dollar amount for each account serviced by a financial intermediary. The aggregate amount of these payments may be substantial.

 

Other Payments by BlackRock

The Plan permits BlackRock, the Distributor and their affiliates to make payments relating to distribution and sales support activities out of their past profits or other sources available to them (and not as an additional charge to the Fund). From time to time, BlackRock, the Distributor or their affiliates also may pay a portion of the fees for administrative, networking, recordkeeping, sub-transfer agency and shareholder services described above at its or their own expense and out of its or their legitimate profits. BlackRock, the Distributor and their affiliates may compensate affiliated and unaffiliated financial intermediaries for the sale and distribution of shares of the Fund or for these other services to the Fund and shareholders. These payments would be in addition to the Fund payments described in this prospectus and may be a fixed dollar amount, may be based on the number of customer accounts maintained by the financial intermediary, or may be based on a percentage of the value of shares sold to, or held by, customers of the financial intermediary. The aggregate amount of these payments by BlackRock, the Distributor and their affiliates may be substantial. Payments by BlackRock may include amounts that are sometimes referred to as “revenue sharing” payments. In some circumstances, these revenue sharing payments may create an incentive for a financial intermediary, its employees or associated persons to recommend or sell shares of the Fund to you. Please contact your financial intermediary for details about payments it may receive from the Fund or from BlackRock, the Distributor or their affiliates. For more information, see the SAI.

 

 

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Management of the Fund

 

BlackRock

 

BlackRock, the Fund’s manager, manages the Fund’s investments and its business operations subject to the oversight of the Board. While BlackRock is ultimately responsible for the management of the Fund, it is able to draw upon the trading, research and expertise of its asset management affiliates for portfolio decisions and management with respect to certain portfolio securities. BlackRock is an indirect, wholly-owned subsidiary of BlackRock, Inc.

 

BlackRock, a registered investment adviser, was organized in 1994 to perform advisory services for investment companies. BlackRock Institutional Management Corporation, the Fund’s sub-adviser (the “Sub-Adviser”), is a registered investment adviser organized in 1977. BlackRock and its affiliates had approximately $1.283 trillion in investment company and other portfolio assets under management as of March 31, 2009.

 

BlackRock serves as manager to the Fund pursuant to a management agreement (the “Management Agreement”). Pursuant to the Management Agreement, BlackRock is entitled to fees computed daily and payable monthly. The maximum annual management fee rate that can be paid to BlackRock (as a percentage of average daily net assets) is calculated as follows:

 

 

For the fiscal year ended December 31, 2008, the Manager received a fee at the annual rate of 0.368% of the Fund’s average daily net assets.

 

BlackRock has entered into a sub-advisory agreement with the Sub-Adviser, an affiliate of BlackRock, under which BlackRock pays the Sub-Adviser for services it provides a fee equal to a percentage of the management fee paid to BlackRock under the Management Agreement. The Sub-Adviser is responsible for the day-to-day management of the Fund’s portfolio.

 

A discussion of the basis for the Board’s approval of the Management Agreement with BlackRock and the sub-advisory agreement between BlackRock and the Sub-Adviser is included in the Fund’s semi-annual shareholder report for the fiscal period ended June 30, 2008.

 

From time to time, a manager, analyst, or other employee of BlackRock or its affiliates may express views regarding a particular asset class, company, security, industry, or market sector. The views expressed by any such person are the views of only that individual as of the time expressed and do not necessarily represent the views of BlackRock or any other person within the BlackRock organization. Any such views are subject to change at any time based upon market or other conditions and BlackRock disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for the Fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of the Fund.

 

Conflicts of Interest

 

The investment activities of BlackRock and its affiliates (including BlackRock, Inc. and PNC and their affiliates, directors, partners, trustees, managing members, officers and employees (collectively, the “Affiliates”)) and of BlackRock, Inc.’s significant shareholder, Merrill Lynch & Co., Inc., and its affiliates, including BAC (each a “BAC

 

 

15

Entity”) in the management of, or their interest in, their own accounts and other accounts they manage, may present conflicts of interest that could disadvantage the Fund and its shareholders. BlackRock and its Affiliates or BAC Entities provide investment management services to other funds and discretionary managed accounts that follow an investment program similar to that of the Fund. BlackRock and its Affiliates or BAC Entities are involved worldwide with a broad spectrum of financial services and asset management activities and may engage in the ordinary course of business in activities in which their interests or the interests of their clients may conflict with those of the Fund. One or more Affiliates or BAC Entities act or may act as an investor, investment banker, research provider, investment manager, financier, advisor, market maker, trader, prime broker, lender, agent and principal, and have other direct and indirect interests, in securities, currencies and other instruments in which the Fund directly and indirectly invests. Thus, it is likely that the Fund will have multiple business relationships with and will invest in, engage in transactions with, make voting decisions with respect to, or obtain services from entities for which an Affiliate or a BAC Entity performs or seeks to perform investment banking or other services. One or more Affiliates or BAC Entities may engage in proprietary trading and advise accounts and funds that have investment objectives similar to those of the Fund and/or that engage in and compete for transactions in the same types of securities, currencies and other instruments as the Fund. The trading activities of these Affiliates or BAC Entities are carried out without reference to positions held directly or indirectly by the Fund and may result in an Affiliate or BAC Entity having positions that are adverse to those of the Fund. No Affiliate or BAC Entity is under any obligation to share any investment opportunity, idea or strategy with the Fund. As a result, an Affiliate or BAC Entity may compete with the Fund for appropriate investment opportunities. The results of the Fund’s investment activities, therefore, may differ from those of an Affiliate or a BAC Entity and of other accounts managed by an Affiliate or a BAC Entity, and it is possible that the Fund could sustain losses during periods in which one or more Affiliates or BAC Entities and other accounts achieve profits on their trading for proprietary or other accounts. The opposite result is also possible. In addition, the Fund may, from time to time, enter into transactions in which an Affiliate or a BAC Entity or its other clients have an adverse interest. Furthermore, transactions undertaken by Affiliate- or BAC Entity-advised clients may adversely impact the Fund. Transactions by one or more Affiliate- or BAC Entity-advised clients or BlackRock may have the effect of diluting or otherwise disadvantaging the values, prices or investment strategies of the Fund. The Fund’s activities may be limited because of regulatory restrictions applicable to one or more Affiliates or BAC Entities, and/or their internal policies designed to comply with such restrictions. In addition, the Fund may invest in securities of companies with which an Affiliate or a BAC Entity has or is trying to develop investment banking relationships or in which an Affiliate or a BAC Entity has significant debt or equity investments. The Fund also may invest in securities of companies for which an Affiliate or a BAC Entity provides or may some day provide research coverage. An Affiliate or a BAC Entity may have business relationships with and purchase or distribute or sell services or products from or to distributors, consultants or others who recommend the Fund or who engage in transactions with or for the Fund, and may receive compensation for such services. The Fund may also make brokerage and other payments to Affiliates or BAC Entities in connection with the Fund’s portfolio investment transactions.

 

Under a securities lending program approved by the Board, the Fund has retained an affiliate of BlackRock to serve as the securities lending agent for the Fund to the extent that the Fund participates in the securities lending program. For these services, the lending agent may receive a fee from the Fund, including a fee based on the returns earned on the Fund’s investment of the cash received as collateral for the loaned securities. In addition, one or more Affiliates or BAC Entities may be among the entities to which the Fund may lend its portfolio securities under the securities lending program.

 

The activities of Affiliates or BAC Entities may give rise to other conflicts of interest that could disadvantage the Fund and its shareholders. BlackRock has adopted policies and procedures designed to address these potential conflicts of interest. See the SAI for further information.

 

Valuation of Fund Investments

 

When you buy shares, you pay the net asset value (normally $1.00 per share) without a sales charge. This is the offering price. Shares are also redeemed at their net asset value. The Fund calculates the net asset value each day the Exchange or New York banks are open, as of the close of business on the Exchange (generally 4:00 p.m. Eastern time) or, on days when the Exchange is closed but New York banks are open, as of 4:00 p.m. Eastern time. The net asset value used in determining your share price is the next one calculated after your purchase or redemption order becomes effective. Share purchase orders are effective on the date Federal funds become available to the Fund.

 

 

16

 

The amortized cost method is used in calculating net asset value, meaning that the calculation is based on a valuation of the assets held by the Fund at cost, with an adjustment for any discount or premium on a security at the time of purchase.

 

Generally, trading in foreign securities, U.S. government securities and money market instruments and certain fixed income securities is substantially completed each day at various times prior to the close of business on the Exchange. The values of such securities used in computing the net asset value of a fund’s shares are determined as of such times.

 

The Fund may accept orders from certain authorized financial intermediaries or their designees. The Fund will be deemed to receive an order when accepted by the intermediary or designee and the order will receive the net asset value next computed by the Fund after such acceptance. If the payment for a purchase order is not made by a designated later time, the order will be canceled and the financial intermediary could be held liable for any losses.

 

The Fund has been accepted into the U.S. Treasury Department’s Temporary Guarantee Program for Money Market Funds (previously defined as the “Treasury Guarantee Program”), which terminates on September 18, 2009.

 

The Treasury Guarantee Program provides a guarantee to shareholders of the Fund up to the amount held in the Fund as of the close of business on September 19, 2008. If the number of shares an investor holds fluctuates, the investor will be covered for either the number of shares held as of the close of business on September 19, 2008, or the current amount, whichever is less. This means that any increase in the number of shares an investor holds over the amount held after the close of business on September 19, 2008 is not covered under the Treasury Guarantee Program. It also means that if an investor’s balance is below its September 19, 2008 level, the investor can bring it back up to that level and it will be covered. Note that the Treasury Guarantee Program applies only to the account in which the shares were held on September 19, 2008. If an investor closes an account and reinvests in the Fund through a new account, the new balance would not be covered.

 

The Treasury Guarantee Program is temporary and set to expire on September 18, 2009. According to the U.S. Treasury Department, the Treasury Guarantee Program will not be extended beyond that date. The Fund has paid to be covered under the Treasury Guarantee Program. For the initial three months of the Treasury Guarantee Program (ended December 18, 2008), the Fund paid a participation fee of 0.01% of the Fund’s net asset value as of September 19, 2008 and for the extension periods beginning December 19, 2008 and ending September 18, 2009, the Fund paid participation fees totalling 0.03% of the Fund’s net asset value as of September 19, 2008. The Treasury Guarantee Program is implemented under the U.S. Treasury Department’s Exchange Stabilization Fund (“ESF”), and guarantee payments under the Treasury Guarantee Program will not exceed the amount available within the ESF at the date of payment. Currently, ESF assets are about $50 billion. For additional information on the Treasury Guarantee Program, you can visit the U.S. Treasury Department’s website at www.ustreas.gov.

 

 

If you are neither a tax resident nor a citizen of the United States or if you are a foreign entity, the Fund’s ordinary income dividends (which include distributions of net short-term capital gain) will generally be subject to a 30% U.S. withholding tax, unless a lower treaty rate applies. However, for taxable years of the Fund beginning before January 1, 2010, certain distributions designated by the Fund as either interest related dividends or short-term capital gain dividends and paid to a foreign shareholder would be eligible for an exemption from U.S. withholding tax.

 

Dividends and interest received by the Fund may give rise to withholding and other taxes imposed by foreign countries. Tax conventions between certain countries and the United States may reduce or eliminate such taxes.

 

By law, your dividends will be subject to a withholding tax if you have not provided a taxpayer identification number or social security number or the number you have provided is incorrect.

 

This Section summarizes some of the consequences under current Federal tax law of an investment in the Fund. It is not a substitute for personal tax advice. Consult your personal tax adviser about the potential tax consequences of an investment in the Fund under all applicable tax laws.

 

 

General Information

 

Shareholder Documents

 

Electronic Access to Annual Reports, Semi-Annual Reports and Prospectuses

Electronic copies of most financial reports and prospectuses are available on BlackRock’s website. Shareholders can sign up for e-mail notifications of quarterly statements, annual and semi-annual reports and prospectuses by enrolling in the Fund’s electronic delivery program. To enroll:

 

Shareholders Who Hold Accounts with Investment Advisers, Banks or Brokerages: Please contact your financial professional. Please note that not all investment advisers, banks or brokerages may offer this service.

 

Shareholders Who Hold Accounts Directly With BlackRock:

 

 

 

Delivery of Shareholder Documents

The Fund delivers only one copy of shareholder documents, including prospectuses, shareholder reports and proxy statements, to shareholders with multiple accounts at the same address. This practice is known as “householding” and is intended to eliminate duplicate mailings and reduce expenses. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact the Fund at (800) 221-7210.

 

Certain Fund Policies

 

Anti-Money Laundering Requirements

The Fund is subject to the USA PATRIOT Act (the “Patriot Act”). The Patriot Act is intended to prevent the use of the U.S. financial system in furtherance of money laundering, terrorism or other illicit activities. Pursuant to requirements under the Patriot Act, the Fund may request information from shareholders to enable it to form a reasonable belief that it knows the true identity of its shareholders. This information will be used to verify the identity of investors or, in some cases, the status of financial advisers; it will be used only for compliance with the requirements of the Patriot Act.

 

The Fund reserves the right to reject purchase orders from persons who have not submitted information sufficient to allow the Fund to verify their identity. The Fund also reserves the right to redeem any amounts in the Fund from persons whose identity it is unable to verify on a timely basis. It is the Fund’s policy to cooperate fully with appropriate regulators in any investigations conducted with respect to potential money laundering, terrorism or other illicit activities.

 

BlackRock Privacy Principles

BlackRock is committed to maintaining the privacy of its current and former fund investors and individual clients (collectively, “Clients”) and to safeguarding their nonpublic personal information. The following information is provided to help you understand what personal information BlackRock collects, how we protect that information and why in certain cases we share such information with select parties.

 

If you are located in a jurisdiction where specific laws, rules or regulations require BlackRock to provide you with additional or different privacy-related rights beyond what is set forth below, then BlackRock will comply with those specific laws, rules or regulations.

 

BlackRock obtains or verifies personal nonpublic information from and about you from different sources, including the following: (i) information we receive from you or, if applicable, your financial intermediary, on applications, forms or other documents; (ii) information about your transactions with us, our affiliates, or others; (iii) information we receive from a consumer reporting agency; and (iv) from visits to our website.

 

BlackRock does not sell or disclose to nonaffiliated third-parties any nonpublic personal information about its Clients, except as permitted by law, or as is necessary to respond to regulatory requests or to service Client accounts. These

 

 

19

nonaffiliated third-parties are required to protect the confidentiality and security of this information and to use it only for its intended purpose.

 

We may share information with our affiliates to service your account or to provide you with information about other BlackRock products or services that may be of interest to you. In addition, BlackRock restricts access to nonpublic personal information about its Clients to those BlackRock employees with a legitimate business need for the information. BlackRock maintains physical, electronic and procedural safeguards that are designed to protect the nonpublic personal information of its Clients, including procedures relating to the proper storage and disposal of such information.

 

 

Glossary

 

Glossary of Investment Terms

 

Dollar-Weighted Average Maturity  — The average maturity of the Fund is the average amount of time until the organizations that issued the debt securities in the Fund’s portfolio must pay off the principal amount of the debt. “Dollar-weighted” means the larger the dollar value of a debt security in the Fund, the more weight it gets in calculating this average.

 

Eurodollar  — obligations issued by foreign branches or subsidiaries of U.S. banks.

 

Total Return  — a way of measuring Fund performance based on a calculation that takes into account income dividends, capital gains distributions and the increase or decrease in share price.

 

U.S. Government Instrumentalities  — supranational entities sponsored by the U.S. and other governments, such as the World Bank or the Inter-American Development Bank whose securities are not backed by the full faith and credit of the United States.

 

U.S. Government Sponsored Enterprises  — private corporations sponsored by the federal government that have the legal status of government agencies such as the Federal Home Loan Mortgage Corporation, the Student Loan Marketing Association or the Federal National Mortgage Association. Securities issued by such entities are not backed by the full faith and credit of the United States.

 

Yankeedollar  — obligations issued by U.S. branches or subsidiaries of foreign banks.

 

Yield  — the income generated by an investment in the Fund.

 

Glossary of Expense Terms

 

Annual Fund Operating Expenses  — expenses that cover the costs of operating the Fund.

 

Distribution Fees  — fees used to support the Fund’s marketing and distribution efforts, such as compensating financial professionals and other financial intermediaries, advertising and promotion.

 

Management Fee  — a fee paid to BlackRock for managing the Fund.

 

Other Expenses  — include transfer agency, custody, professional and registration fees.

 

Service Fees  — fees used to compensate securities dealers and other financial intermediaries for certain shareholder servicing activities.

 

Glossary of Other Terms

 

Dividends  — includes ordinary income and capital gains paid to shareholders. Dividends may be reinvested in additional Fund shares as they are paid.

 

Net Asset Value  — the market value of the Fund’s total assets after deducting liabilities, divided by the number of shares outstanding.

 

 

21

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For More Information

 

Fund and Service Providers

 

Fund

Ready Assets Prime Money Fund

100 Bellevue Parkway

Wilmington, Delaware 19809

(800) 221-7210

 

Written Correspondence:

c/o Financial Data Services, Inc.

PO Box 45290

Jacksonville, Florida 32231-5290

 

Overnight Mail:

c/o Financial Data Services, Inc.

4800 Deer Lake Drive East

Jacksonville, Florida 32246-6484

 

MANAGER

BlackRock Advisors, LLC

100 Bellevue Parkway

Wilmington, Delaware 19809

 

SUB-ADVISER

BlackRock Institutional Management Corporation

100 Bellevue Parkway

Wilmington, Delaware 19809

 

TRANSFER AGENT

Financial Data Services, Inc.

4800 Deer Lake Drive East

Jacksonville, Florida 32246-6484

 

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Deloitte & Touche LLP

750 College Road East

Princeton, New Jersey 08540

 

ACCOUNTING SERVICES PROVIDER

State Street Bank and Trust Company

600 College Road East

Princeton, New Jersey 08540

 

DISTRIBUTOR

BlackRock Investments, LLC

40 East 52nd Street

New York, New York 10022

 

CUSTODIAN

The Bank of New York Mellon

One Wall Street

New York, New York 10286

 

Additional Information

 

Code # PRO-10053-0409

 

STATEMENT OF ADDITIONAL INFORMATION

 

Ready Assets Prime Money Fund

 

100 Bellevue Parkway, Wilmington, Delaware 19809 • Phone No. (800) 221-7210

 

 

This Statement of Additional Information of Ready Assets Prime Money Fund (formerly Merrill Lynch Ready Assets Trust) (the “Fund”) is not a prospectus and should be read in conjunction with the Prospectus of the Fund, dated April 29, 2009, which has been filed with the Securities and Exchange Commission (the “SEC”) and can be obtained, without charge, by calling 1-800-221-7210 or by writing to the Fund at the above address. The Fund’s Prospectus is incorporated by reference into this Statement of Additional Information, and Part I of this Statement of Additional Information and the portions of Part II of this Statement of Additional Information that relate to the Fund have been incorporated by reference into the Fund’s Prospectus. The portions of Part II of this Statement of Additional Information that do not relate to the Fund do not form a part of the Fund’s Statement of Additional Information, have not been incorporated by reference into the Fund’s Prospectus and should not be relied upon by investors in the Fund. The Fund’s audited financial statements are incorporated into this Statement of Additional Information by reference to the Fund’s 2008 Annual Report. You may request a copy of the Annual Report at no charge by calling 1-800-221-7210 between 8:00 a.m. and 6:00 p.m. Eastern time Monday through Friday.

 

 

BlackRock Advisors, LLC — Manager
BlackRock Investments, LLC — Distributor

 

 

The date of this Statement of Additional Information is April 29, 2009

TABLE OF CONTENTS

 

 

PART I: INFORMATION ABOUT READY ASSETS PRIME MONEY FUND

 

Part I of this Statement of Additional Information sets forth information about Ready Assets Prime Money Fund (the “Fund”). It includes information about the Fund’s Board of Trustees (the “Board”), the advisory services provided to and the management fees paid by the Fund, performance data for the Fund, and information about other fees paid by and services provided to the Fund. This Part I should be read in conjunction with the Fund’s Prospectus and those portions of Part II of this Statement of Additional Information that pertain to the Fund.

 

 

The investment objective of the Fund is preservation of capital, liquidity and the highest possible current income consistent with this objective available from investing in a diversified portfolio of short-term money market securities. The investment objective is a fundamental policy of the Fund that may not be changed without a vote of the majority of the outstanding shares of the Fund. The Fund is classified as a diversified open-end investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). There can be no assurance that the Fund’s investment objective will be realized.

 

The Fund’s investments will be in instruments with a remaining maturity of 397 days (13 months) or less. Other than its investments in “Government Securities” (as defined by applicable laws, regulations or interpretations of the Securities and Exchange Commission (the “SEC”)) the Fund will invest only in securities and other instruments that have received a short-term rating, or that have been issued by issuers that have received a short-term rating with respect to a class of debt obligations that are comparable in priority and security with the instruments, from the requisite nationally recognized statistical rating organizations (“NRSROs”) in one of the two highest short-term rating categories or, if neither the instrument nor its issuer is so rated, will be of comparable quality as determined by the Board, BlackRock Advisors, LLC (“BlackRock” or the “Manager”) or BlackRock Institutional Management Corporation, the Fund’s sub-adviser (the “Sub-Adviser” or “BIMC”), pursuant to delegated authority. The Fund will determine the remaining maturity of its investments in accordance with SEC regulations. The dollar-weighted average maturity of the Fund’s portfolio will not exceed 90 days.

 

Investment in Fund shares offers several potential benefits. The Fund seeks to provide as high a yield potential as is available through investment in short-term money market securities using professional money market management, block purchases of securities and yield improvement techniques. It provides high liquidity because of its redemption features and seeks the reduced risk that generally results from diversification of assets. There can be no assurance that the Fund’s investment objective will be realized.

 

In managing the Fund, the Manager will employ a number of professional money management techniques, including varying the composition of investments and the average maturity of the portfolio based on its assessment of the relative values of the various securities and future interest rate patterns. These assessments will respond to changing economic and money market conditions and to shifts in fiscal and monetary policy.

 

 

The Fund has adopted restrictions and policies relating to the investment of its assets and its activities. Certain of the restrictions are fundamental policies of the Fund and may not be changed without the approval of the holders of a majority of the Fund’s outstanding voting securities (which for this purpose and under the Investment Company Act means the lesser of (i) 67% of the shares represented at a meeting at which more than 50% of the outstanding shares are represented or (ii) more than 50% of the outstanding shares). The Fund has also adopted certain non-fundamental investment restrictions, which may be changed by the Board without shareholder approval.

 

Set forth below are the Fund’s fundamental and non-fundamental investment restrictions. Unless otherwise provided, all references below to the assets of the Fund are in terms of current market value.

 

Under its fundamental investment restrictions, the Fund may not:

 

(1) Issue senior securities to the extent such issuance would violate applicable law.

 

(2) Borrow money, except that (i) the Fund may borrow in amounts up to 33 1 / 3 % of its total assets (including the amount borrowed), (ii) the Fund may borrow up to an additional 5% of its total assets for temporary purposes, (iii) the Fund may obtain such short-term credit as may be necessary for the clearance of

purchases and sales of portfolio securities, and (iv) the Fund may purchase securities on margin to the extent permitted by applicable law. These restrictions on borrowing shall not apply to reverse repurchase agreements as described in the Prospectus and Statement of Additional Information. The Fund may not pledge its assets other than to secure such borrowings or to the extent permitted by the Fund’s investment policies as set forth in its Prospectus and Statement of Additional Information, as they may be amended from time to time, in connection with hedging transactions, short sales, when-issued, reverse repurchase and forward commitment transactions and similar investment strategies.

 

(3) Underwrite securities of other issuers except insofar as the Fund may be deemed an underwriter under the Securities Act of 1933 (the “Securities Act”) in selling portfolio securities.

 

(4) Invest more than 25% of its total assets, taken at market value, in the securities of issuers in any particular industry (excluding securities issued by the U.S. Government and its agencies and instrumentalities, and instruments issued by domestic banks).

 

(5) Purchase or sell real estate, except that, to the extent permitted by applicable law, the Fund may invest in securities directly or indirectly secured by real estate or interests therein or issued by companies which invest in real estate or interests therein.

 

(6) Purchase or sell commodities or contracts on commodities, except to the extent that the Fund may do so in accordance with applicable law and the Fund’s Prospectus and Statement of Additional Information, as they may be amended from time to time, and without registering as a commodity pool operator under the Commodity Exchange Act.

 

(7) Make loans to other persons, except (i) that the acquisition of bonds, debentures or other debt securities and investment in government obligations, commercial paper, pass-through instruments, certificates of deposit, bankers’ acceptances, repurchase agreements or any similar instruments shall not be deemed to be the making of a loan, (ii) that the Fund may lend its portfolio securities, provided that the lending of portfolio securities may be made only in accordance with applicable law and the guidelines set forth in the Fund’s Prospectus and Statement of Additional Information, as they may be amended from time to time and (iii) as may otherwise be permitted by an exemptive order issued to the Fund by the SEC.

 

(8) Make any investment inconsistent with the Fund’s classification as a diversified company under the Investment Company Act.

 

Under its non-fundamental investment restrictions, the Fund may not:

 

(a) Purchase any securities on margin, except for the use of short-term credit as may be necessary for the clearance of purchases and sales of portfolio securities.

 

(b) Make short sales of securities or maintain a short position.

 

(c) Write, purchase or sell puts, calls or combinations thereof.

 

Except with respect to restriction (2), if a percentage restriction on the investment or use of assets set forth above is adhered to at the time a transaction is effected, later changes in percentages resulting from changing values will not be considered a violation.

 

 

The Board of Trustees of the Fund consists of thirteen individuals, eleven of whom are not “interested persons” of the Fund as defined in the Investment Company Act (the “non-interested Trustees”). The Trustees are responsible for the oversight of the operations of the Fund and perform the various duties imposed on the directors of investment companies by the Investment Company Act. The non-interested Trustees have retained independent legal counsel to assist them in connection with their duties.

 

The Board has five standing committees:  an Audit Committee, a Governance and Nominating Committee, a Compliance Committee, a Performance Oversight Committee and an Executive Committee.

 

The members of the Audit Committee (the “Audit Committee”) are Kenneth L. Urish (chair), Herbert I. London and Frederick W. Winter, all of whom are non-interested Trustees. The principal responsibilities of the

Audit Committee are to approve the selection, retention, termination and compensation of the Fund’s independent registered public accounting firm (the “independent auditors”) and to oversee the independent auditors’ work. The Audit Committee’s responsibilities include, without limitation, to (1) evaluate the qualifications and independence of the independent auditors; (2) approve all audit engagement terms and fees for the Fund; (3) review the conduct and results of each independent audit of the Fund’s financial statements; (4) review with the independent auditors any audit problems or difficulties encountered during or related to the conduct of the audit; (5) review the internal controls of the Fund and its service providers with respect to accounting and financial matters; (6) oversee the performance of the Fund’s internal audit function provided by its investment adviser, administrator, pricing agent or other service provider; (7) oversee policies, procedures and controls regarding valuation of the Fund’s investments; and (8) resolve any disagreements between Fund management and the independent auditors regarding financial reporting. The Board has adopted a written charter for the Audit Committee. During the fiscal year ended December 31, 2008, the Audit Committee met four times.

 

The members of the Governance and Nominating Committee (the “Governance Committee”) are Dr. Matina Horner (chair), Cynthia A. Montgomery and Robert C. Robb, Jr., all of whom are non-interested Trustees. The principal responsibilities of the Governance Committee are to (1) identify individuals qualified to serve as non-interested Trustees of the Fund and recommend non-interested Trustee nominees for election by shareholders or appointment by the Board; (2) advise the Board with respect to Board composition, procedures and committees (other than the Audit Committee); (3) oversee periodic self-assessments of the Board and committees of the Board (other than the Audit Committee); (4) review and make recommendations regarding non-interested Trustee compensation; and (5) monitor corporate governance matters and develop appropriate recommendations to the Board. The Governance Committee may consider nominations for the office of Trustee made by Fund shareholders as it deems appropriate. Fund shareholders who wish to recommend a nominee should send nominations to the Secretary of the Fund that include biographical information and set forth the qualifications of the proposed nominee. The Board has adopted a written charter for the Governance Committee. During the fiscal year ended December 31, 2008, the Governance Committee met four times.

 

The members of the Compliance Committee (the “Compliance Committee”) are Joseph P. Platt, Jr. (chair), Cynthia A. Montgomery and Robert C. Robb, Jr., all of whom are non-interested Trustees. The Compliance Committee’s purpose is to assist the Board in fulfilling its responsibility to oversee regulatory and fiduciary compliance matters involving the Fund, the fund-related activities of BlackRock and the Fund’s third-party service providers. The Compliance Committee’s responsibilities include, without limitation, to (1) oversee the compliance policies and procedures of the Fund and its service providers; (2) review information on and, where appropriate, recommend policies concerning the Fund’s compliance with applicable law; and (3) review reports from and make certain recommendations regarding the Fund’s Chief Compliance Officer. The Board has adopted a written charter for the Compliance Committee. During the fiscal year ended December 31, 2008, the Compliance Committee met five times.

 

The members of the Performance Oversight Committee (the “Performance Committee”) are David O. Beim (chair), Toby Rosenblatt (vice chair), Ronald W. Forbes and Rodney D. Johnson, all of whom are non-interested Trustees, and Richard S. Davis, who is an interested Trustee. The Performance Committee’s purpose is to assist the Board in fulfilling its responsibility to oversee the Fund’s investment performance relative to its agreed-upon performance objectives. The Performance Committee’s responsibilities include, without limitation, to (1) review the Fund’s investment objectives, policies and practices; (2) recommend to the Board specific investment tools and techniques employed by BlackRock; (3) recommend to the Board appropriate investment performance objectives based on its review of appropriate benchmarks and competitive universes; (4) review the Fund’s investment performance relative to agreed-upon performance objectives; and (5) review information on unusual or exceptional investment matters. The Board has adopted a written charter for the Performance Committee. During the fiscal year ended December 31, 2008, the Performance Committee met four times.

 

The members of the Executive Committee (the “Executive Committee”) are Ronald W. Forbes, Rodney D. Johnson and Richard S. Davis. Messrs. Forbes and Johnson are non-interested Trustees and Mr. Davis is an interested Trustee. The principal responsibilities of the Executive Committee are to (1) act on routine matters between meetings of the Board of Trustees; (2) act on such matters as may require urgent action between meetings of the Board of Trustees; and (3) exercise such other authority as may from time to time be delegated to the Committee by the Board of Trustees. The Board has adopted a written charter for the Executive Committee. The

Executive Committee was formed on December 3, 2008 and did not meet during the period from December 3, 2008 to December 31, 2008.

 

 

 

 

Certain biographical and other information relating to the officers of the Fund is set forth below, including their year of birth, their principal occupations for at least the last five years, the length of time served, the total number of BlackRock-advised funds overseen and any public directorships:

 

 

Share Ownership

 

Information relating to each Trustee’s share ownership in the Fund and in all BlackRock-advised funds that are overseen by the respective Trustee (“Supervised Funds”) as of December 31, 2008 is set forth in the chart below:

 

 

 

As of April 3, 2009, the Trustees and officers of the Fund as a group owned an aggregate of less than 1% of the outstanding shares of the Fund. As of December 31, 2008, none of the non-interested Trustees of the Fund then in office or their immediate family members owned beneficially or of record any securities of affiliates of the Manager.

 

Compensation of Trustees

 

Each Trustee who is a non-interested Trustee is paid as compensation an annual retainer of $150,000 per year for his or her services as Trustee to the BlackRock-advised funds, including the Fund, and a $25,000 Board meeting fee for each in-person Board meeting attended up to five Board meetings held in a calendar year (compensation for meetings in excess of this number to be determined on a case-by-case basis), together with out-of-pocket expenses in accordance with a Board policy on travel and other business expenses relating to attendance at meetings. In addition, the Co-Chairs of the Board of Trustees are each paid an additional annual retainer of $45,000. The Chairs of the Audit Committee, Compliance Committee, Governance Committee and Performance Committee are paid an additional annual retainer of $25,000. The Vice-Chair of the Performance Committee is paid an additional annual retainer of $25,000.

The following table sets forth the compensation earned by the non-interested Trustees for the fiscal year ended December 31, 2008, and the aggregate compensation paid to them by all BlackRock-advised funds for the calendar year ended December 31, 2008.

 

 

 

The Fund compensates the Chief Compliance Officer for his services as its Chief Compliance Officer. The Fund may also pay a portion of the compensation of certain members of the staff of the Chief Compliance Officer. For the fiscal year ended December 31, 2008, Mr. Kindelan received $1,714 from the Fund for his services as Chief Compliance Officer.

 

 

The Fund has entered into a management agreement with BlackRock Advisors, LLC (the “Management Agreement”) pursuant to which the Manager receives for its services to the Fund monthly compensation calculated as follows: 0.50% of the Fund’s average daily net assets not exceeding $500 million; 0.40% of the average daily net assets exceeding $500 million but not exceeding $1 billion; 0.35% of the average daily net assets exceeding $1 billion but not exceeding $5 billion; 0.325% of the average daily net assets exceeding $5 billion but not exceeding $10 billion; 0.30% of the average daily net assets exceeding $10 billion but not exceeding $15 billion; 0.275% of the average daily net assets exceeding $15 billion but not exceeding $20 billion; and 0.25% of the average daily net assets exceeding $20 billion.

 

Prior to September 29, 2006, Merrill Lynch Investment Managers, LP (“MLIM”), an indirect wholly owned subsidiary of Merrill Lynch & Co., Inc., acted as the Fund’s manager and was compensated at the same fee rates.

 

The table below sets forth information about the total management fees paid by the Fund to the Manager and to MLIM, the Fund’s previous manager, for the past three fiscal years:

 

 

 

Pursuant to the Management Agreement, the Manager may from time to time, in its sole discretion to the extent permitted by applicable law, appoint one or more sub-advisers, including, without limitation, affiliates of the Manager, to perform management services with respect to the Fund. In addition, the Manager may delegate certain

of its management functions under the Management Agreement to one or more of its affiliates to the extent permitted by applicable law. The Manager may terminate any or all sub-advisers or such delegation arrangements in its sole discretion at any time to the extent permitted by applicable law.

 

Effective September 29, 2006, the Manager has entered into a sub-advisory agreement (the “Sub-Advisory Agreement”) with the Sub-Adviser, pursuant to which the Sub-Adviser receives for the services it provides a monthly fee at an annual rate equal to a percentage of the management fee paid to the Manager under the Management Agreement. The Sub-Adviser is responsible for the day-to-day management of the Fund’s portfolio.

 

Set forth below are the sub-advisory fees paid by the Manager to the Sub-Adviser for the periods indicated:

 

 

 

 

 

 

 

 

Prior to September 29, 2006, FAM Distributors, Inc. (“FAMD”) acted as the Fund’s sole distributor. Effective September 29, 2006 through September 30, 2008, FAMD and BlackRock Distributors, Inc. (“BDI”), each an affiliate of the Manager, acted as the Fund’s co-distributors (collectively, the “Previous Distributors”). Effective October 1, 2008, BlackRock Investments, LLC (“BI” or the “Distributor”), an affiliate of the Manager, acts as the Fund’s sole distributor.

 

Effective October 1, 2008, the Fund adopted a Distribution and Service Plan (the “Plan”) in compliance with Rule 12b-1 under the Investment Company Act pursuant to which the Fund is authorized to pay the Distributor a fee at the annual rate of 0.125% of the average daily net asset value of Fund shares. Prior to October 1, 2008, the Previous Distributors served as distributors to the Fund under a similar plan and were compensated at the same rate.

 

The Trustees believe that the Fund’s expenditures under the Plan benefit the Fund and its shareholders by providing better shareholder services and by affecting positively the sale and distribution of Fund shares.

 

The following table reflects the fees paid pursuant to the applicable plan by the Fund to the Previous Distributors and BI for the fiscal year ended December 31, 2008:

 

Paid to the Previous Distributors 1		Paid to BI 2
$4,760,310		$	1,507,669

 

 

 

The yield on the Fund’s shares normally will fluctuate on a daily basis. Therefore, the yield for any given past period is not an indication or representation by the Fund of future yields or rates of return on its shares. The yield is affected by such factors as changes in interest rates on the Fund’s portfolio securities, average portfolio maturity, the types and quality of portfolio securities held and operating expenses. The yield on Fund shares for various reasons may not be comparable to the yield on bank deposits, shares of other money market funds or other investments.

 

Seven-Day Period Ended

December 31, 2008

1.38%

 

 

An illustration of the computation of the offering price for shares of the Fund based on the value of the Fund’s net assets and number of shares outstanding on December 31, 2008 is set forth below:

 

 

VIII. Portfolio Transactions

 

See Part II “Portfolio Transactions” in this Statement of Additional Information for more information.

 

The SEC has issued exemptive orders permitting the Fund to conduct principal transactions with Merrill Lynch Government Securities, Inc. (“GSI”) in U.S. Government securities, and with Merrill Lynch Money Markets Inc. (“MMI”) and, together with Merrill Lynch and GSI (the “Affiliated Dealers”) in short term bank money instruments.

 

The number and dollar value of transactions engaged in by the Fund pursuant to these exemptive orders are set forth in the following table:

 

 

The value of the Fund’s aggregate holdings of the securities of its regular brokers or dealers (as defined in Rule 10b-1 of the Investment Company Act) if any portion of such holdings were purchased during the fiscal year ended December 31, 2008 are as follows:

 

 

 

Description of Shares

 

The Fund was organized on May 14, 1987 under the laws of the Commonwealth of Massachusetts as a successor to a Massachusetts business trust of the same name organized on January 21, 1975. Effective May 4, 2009, the Fund will change its name from Merrill Lynch Ready Assets Trust to Ready Assets Prime Money Fund. It is a diversified open-end investment company. The Declaration of Trust of the Fund permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest, par value $.10 per share, of a single class and to divide or combine the shares into a greater or lesser number of shares without thereby changing the proportionate beneficial interests in the Fund. Each share represents an equal proportionate interest in the Fund with each other share. Upon liquidation of the Fund, shareholders are entitled to share pro rata in the net assets of the Fund available for distribution to shareholders. Shares are fully paid and non-assessable by the Fund.

 

PART II

Part II of this statement of additional information contains information about the following funds: CMA ^® Arizona Municipal Money Fund (“CMA Arizona”), CMA ^® California Municipal Money Fund (“CMA California”), CMA Connecticut Municipal Money Fund (“CMA Connecticut”), CMA ^® Florida Municipal Money Fund (“CMA Florida”), CMA ^® Massachusetts Municipal Money Fund (“CMA Massachusetts”), CMA ^® Michigan Municipal Money Fund (“CMA Michigan”), CMA ^® New Jersey Municipal Money Fund (“CMA New Jersey”), CMA ^® New York Municipal Money Fund (“CMA New York”), CMA ^® North Carolina Municipal Money Fund (“CMA North Carolina”), CMA ^® Ohio Municipal Money Fund (“CMA Ohio”), and CMA ^® Pennsylvania Municipal Money Fund (“CMA Pennsylvania”), each a series of the CMA ^® Multi-State Municipal Series Trust (collectively, the “CMA State Funds”); CMA ^® Government Securities Fund (“CMA Government Securities”); CMA ^® Money Fund (“CMA Money”); CMA ^® Tax-Exempt Fund (“CMA Tax-Exempt”); CMA ^® Treasury Fund (“CMA Treasury”); WCMA ^® Government Securities Fund (“WCMA Government Securities”); WCMA ^® Money Fund (“WCMA Money”); WCMA ^® Tax-Exempt Fund (“WCMA Tax-Exempt”); WCMA ^® Treasury Fund (“WCMA Treasury”); Ready Assets Prime Money Fund (“Ready Assets Prime”); Merrill Lynch Retirement Reserves Money Fund of Merrill Lynch Retirement Series Trust (“Retirement Reserves”); Merrill Lynch U.S.A. Government Reserves (“U.S.A. Government Reserves”); and Ready Assets U.S. Treasury Money Fund (“U.S. Treasury Money”).

Throughout this Statement of Additional Information, each of the above listed funds may be referred to as a “Fund” or collectively as the “Funds.” The CMA State Funds, CMA Money, CMA Government Securities, CMA Tax-Exempt and CMA Treasury may be collectively referred to herein as the “CMA Funds.” The CMA State Funds and CMA Tax-Exempt may be collectively referred to herein as the “CMA Tax-Exempt Funds.” WCMA Government Securities, WCMA Money, WCMA Tax-Exempt and WCMA Treasury may be collectively referred to herein as the “WCMA Funds.”

Each Fund is organized as a Massachusetts business trust. For ease and clarity of presentation, common shares of beneficial interest are referred to herein as “shares” and the trustees of each Fund are referred to herein as “Trustees.” BlackRock Advisors, LLC is the manager of each Fund and is referred to as “BlackRock” or the “Manager,” and the management agreement applicable to each Fund is referred to as the “Management Agreement.” The Investment Company Act of 1940, as amended, is referred to herein as the “Investment Company Act.” The Securities Act of 1933, as amended, is referred to herein as the “Securities Act”. The Securities and Exchange Commission is referred to herein as the “Commission.”

CMA Money, CMA Government Securities, CMA Tax-Exempt and CMA Treasury as well as all of the WCMA Funds are “feeder” funds (each, a “Feeder Fund”) that invest all of their assets in a corresponding “master” portfolio (each, a “Master Portfolio”) of a master limited liability company organized in Delaware (each, a “Master LLC”), a fund that has the same objective and strategies as the applicable Feeder Fund. All investments will be made at the level of the Master LLC. This structure is sometimes called a “master/feeder” structure. A Feeder Fund’s investment results will correspond directly to the investment results of the underlying Master LLC in which it invests. For simplicity, unless the context otherwise requires, this Statement of Additional Information uses the terms “Fund” or “Feeder Fund” to include both a Feeder Fund and its Master LLC.

In addition to containing information about the Funds, Part II of this Statement of Additional Information contains general information about all funds in the BlackRock-advised fund complex. Certain information contained herein may not be relevant to the Funds.

U.S.

CMA

WCMA

Ready

Retirement

U.S.A.

Treasury

CMA

CMA

CMA

CMA

CMA

CMA

CMA

CMA

CMA

CMA

CMA

Government

CMA

CMA

CMA

Government

WCMA

WCMA

WCMA

Assets

Reserves

Government

Money

Arizona

California

Connecticut

Florida

Massachusetts

Michigan

New Jersey

New York

North Carolina

Ohio

Pennsylvania

Securities

Money

Tax-Exempt

Treasury

Securities

Money

Tax-Exempt

Treasury

Prime

Money Fund

Reserves

Fund

Rule 2a-7 Requirements

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

Bank Money Instruments

X

X

X

X

Commercial Paper and Other Short Term Obligations

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

Foreign Bank Money Instruments

X

X

X

X

Foreign Short Term Debt Instruments

X

X

X

X

Forward Commitments

X

X

X

X

X

X

X

X

X

X

Municipal Investments

X

X

X

X

X

X

X

X

X

X

X

X

X

Municipal Securities

X

X

X

X

X

X

X

X

X

X

X

X

X

Municipal Securities – Derivative Products

X

X

X

X

X

X

X

X

X

X

X

X

X

Municipal Notes

X

X

X

X

X

X

X

X

X

X

X

X

X

Municipal Commercial Paper

X

X

X

X

X

X

X

X

X

X

X

X

X

Municipal Lease Obligations

X

X

X

X

X

X

X

X

X

X

X

X

X

Municipal Securities – Short Term Maturity Standards

X

X

X

X

X

X

X

X

X

X

X

X

X

Municipal Securities – Quality Standards

X

X

X

X

X

X

X

X

X

X

X

X

X

Municipal Securities – Other Factors

X

X

X

X

X

X

X

X

X

X

X

X

X

Single State Risk

X

X

X

X

X

X

X

X

X

X

X

Variable Rate Demand Obligations (“VRDOs”) and Participating VRDOs

X

X

X

X

X

X

X

X

X

X

X

X

X

Purchase of Securities with Fixed Price “Puts”

X

X

Taxable Money Market Securities

X

X

X

X

X

X

X

X

X

X

X

X

Repurchase Agreements

X

X

X

X

X

X

X

X

X

X

X

Repurchase Agreements and Purchase and Sale Contracts

X

X

X

X

X

X

X

Reverse Repurchase Agreements

X

X

X

X

Securities Lending

X

X

X

X

X

When-Issued Securities and Delayed Delivery Securities and Forward Commitments

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X