Money Market Obligations Trust, et al.; Notice of Application

AGENCY:

Securities and Exchange Commission (“Commission”).

ACTION:

Notice of an application under section 17(b) of the Investment Company Act of 1940 (the “Act”) for an exemption from section 17(a) of the Act.

SUMMARY OF APPLICATION:

Applicants seek an order under section 17(b) of the act in connection with the transfer of certain assets of Tax-Free Instruments Trust (“TFIT”), a series of Money Market Obligations Trust (the “Trust”), to Edward Jones Tax Free Money Market Fund (the “Jones Fund”) in exchange for shares of the Jones Fund.

Applicants:

The Trust and the Jones Fund.

Filing Dates:

The application was filed on May 1, 2002 and amended on March 1, 2004.

Hearing or Notification of Hearing:

An order granting the application will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission's Secretary and serving applicants with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on March 26, 2004, and should be accompanied by proof of service on applicants, in the form of an affidavit or, for lawyers, a certificate of service. Hearing requests should state the nature of the writer's interest, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission's Secretary.

ADDRESSES:

Secretary, Commission, 450 5th Street, NW., Washington, DC 20549-0609. Applicants, c/o Leslie K. Ross, Esq., Reed Smith LLP, Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA 15222-3779.

FOR FURTHER INFORMATION CONTACT:

Marilyn Mann, Senior Counsel, at (202) 942-0582, or Mary Kay Frech, Branch Chief, at (202) 942-0564 (Division of Investment Management, Office of Investment Company Regulation).

SUPPLEMENTARY INFORMATION:

The following is a summary of the application. The complete application may be obtained for a fee at the Commission's Public Reference Branch, 450 5th Street, NW., Washington, DC 20549-0102 (tel. (202) 942-8090).

Applicants' Representations

1. The Trust, established in 1988, is organized as a Massachusetts business trust and is registered under the Act as an open-end management investment company. The Trust currently offers forty series, including TFIT. TFIT has two classes of shares, “Investment Shares” and “Institutional Service Shares.” The Jones Fund is organized as a Massachusetts business trust and is registered under the Act as an open-end management investment company. The Jones Fund was established on January 25, 2001 and has not conducted any business other than that incident to its organization. TFIT and the Jones Fund (the “Funds”) are both money market funds whose investment objective is to provide current income exempt from federal income tax consistent with stability of principal.

2. Federated Investment Management Company (“FIMCO”), a wholly-owned subsidiary of Federated Investors, Inc. (“Federated”), serves as investment adviser to TFIT. Passport Research Ltd. (the “Jones Adviser”), a Pennsylvania limited partnership, serves as investment adviser to the Jones Fund. The sole general partner of the Jones Adviser is FIMCO and the sole limited partner is Edward Jones & Co. L.P. (“Edward Jones”), a broker-dealer registered under the Securities Exchange Act of 1934. FIMCO and the Jones Adviser are registered as investment advisers under the Investment Advisers Act of 1940. Edward Jones brokerage customers (the “Jones Shareholders”) hold almost eighty percent of TFIT's outstanding shares in connection with their brokerage accounts. All of the Jones Shareholders own Investment Shares. Applicants propose to transfer the Jones Shareholders from TFIT to the Jones Fund.

3. Rule 2510(d) of the Conduct Rules of the National Association of Securities Dealers, Inc. (“NASD Rule 2510(d)”) provides an exception to the general rule prohibiting the exercise of discretionary power in a customer's account for which the customer has not given prior written authorization. NASD rule 2510(d) permits the use of negative response letters in connection with bulk exchanges at net asset value of money market funds in sweep accounts. A negative response letter would be provided to all Jones Shareholders at least 30 days in advance of the consummation of the Exchange (as defined below). The letter would contain a tabular comparison of the nature and amount of fees charged by the Funds as well as a comparative description of the investment objectives of each Fund. In addition, a prospectus for the Jones Fund would accompany the letter. Any shareholder objecting to the Exchange within the allotted time period would not have his or her shares exchanged and instead would remain a shareholder of TFIT. Following completion of the proposed Exchange, Jones Shareholders who elect to remain shareholders of TFIT will no longer be able to use it as a sweep vehicle in connection with their brokerage accounts.

4. Applicants propose that TFIT would transfer a pro rata portion of its assets (the “Assets”) to the Jones Fund in exchange (the “Exchange”) for shares of the Jones Fund (the “Jones Shares”). The Exchange will not be a taxable event. Immediately after the Exchange, the Jones Shares received by TFIT in exchange for the transferred Assets will be distributed to the Jones Shareholders pro rata in exchange for their TFIT shares (the “Redemption”).

5. The investment objective and policies, as well as the fee structure, of the Investment Shares class of TFIT and the Jones Fund are identical. In addition, applicants expect the expense ratios of the Investment Shares class of TFIT and the Jones Fund will be the same as TFIT's current expense ratio for the Investment Shares class after the Exchange and Redemption. Both the Jones Fund and the Investment Shares class of TFIT have a management fee of .50%, shareholder services fee of .25%, and other expenses of .15%, resulting in total gross expenses of .90%. After voluntary fee waivers and/or assumptions of expenses, the total annual operating expenses for the Investment Shares class of TFIT currently are, and the Jones Fund will be, .75%.

6. The Assets will be valued at their amortized cost value on the date of the Exchange so that the number of shares issued will equal the number of shares of TFIT held by Jones Shareholders. After the Exchange, each Jones Shareholder will hold the same number of Jones Shares as he or she held in TFIT prior to the Exchange. No brokerage commission, fee (except customary transfer fees) or remuneration will be paid in connection with the Exchange and Redemption.

Applicants' Legal Analysis

1. Section 17(a) of the Act prohibits any affiliated person of a registered investment company, or any affiliated person of such person, acting as principal, knowingly to sell any security or other property to such registered investment company, or to purchase from such registered investment company any security or other property (except securities of which the seller is the issuer). Section 2(a)(3) of the Act defines the term “affiliated person” of another person to include any person controlling, controlled by, or under common control with, the other person.

2. Applicants state that TFIT and the Jones Fund may be viewed as being under the common control of FIMCO, and thus affiliated persons of each other. Applicants further state that to the extent that the Exchange and Redemption may be deemed to constitute a purchase and sale of securities between TFIT and the Jones Fund, the Exchange and Redemption would be prohibited by section 17(a).

3. Rule 17a-8 exempts certain mergers, consolidations, and purchases or sales of substantially all of the assets of affiliated registered investment companies from the provisions of section 17(a) of the Act provided, among other requirements, that the board of directors of each affiliated investment company determines that the transaction is in the best interests of the company and the interests of the existing shareholders will not be diluted as a result of the transaction. Applicants state that the relief provided by rule 17a-8 is unavailable for the Exchange and Redemption because the transaction does not involve substantially all of the assets of TFIT.

4. Section 17(b) provides that the Commission shall exempt a transaction from section 17(a) if evidence establishes that the terms of the proposed transaction, including the consideration to be paid, are reasonable and fair and do not involve overreaching, the proposed transaction is consistent with the policy of each registered investment company concerned, and the proposed transaction is consistent with the general purposes of the Act. Applicants request relief under section 17(b) to allow the Exchange and Redemption.

5. Applicants state that the board of trustees of TFIT and the board of trustees of the Jones Fund have approved the Exchange and Redemption in the manner required by rule 17a-8. In approving the Exchange and Redemption, the boards considered that (a) The Funds will not directly or indirectly bear any fees or expenses in connection with the proposed transactions; (b) the proposed transactions will not have any effect on the Funds' annual operating expenses, shareholder fees or services; (c) the proposed transactions will not result in a change to the investment objectives, restrictions and policies of the Funds; and (d) the proposed transactions will not result in direct or indirect federal income tax consequences to shareholders of the Funds. A majority of the trustees of TFIT and the Jones Fund are independent trustees and the independent trustees select and nominate other independent trustees. Persons who act as legal counsel to the independent trustees are independent legal counsel.

Applicants' Conditions

Applicants agree that any order granting the requested relief will be subject to the following conditions:

1. The Exchange and Redemption will be effected by the transfer of a pro rata portion of the assets of TFIT to the Jones Fund; provided, however, securities restricted on disposition, certificated securities, odd lots and fractional shares will be excluded from the pro rata transfer.

2. The Assets will be valued for purposes of the Exchange and Redemption using the amortized cost method so long as the board of trustees of each of TFIT and the Jones Fund makes the findings required in rule 2a-7(c)(1) under the Act.

3. No brokerage commission, fee (except for customary transfer fees), or other remuneration will be paid in connection with the Exchange and Redemption.

4. TFIT will maintain and preserve for a period of not less than six years from the end of the fiscal year in which the Exchange and Redemption occurs, the first two years in an easily accessible place, a written record of the transaction setting forth a description of each security transferred, the terms of the distribution, and the information or materials upon which the valuation was made.