NOTES TO FINANCIAL STATEMENTS(Unaudited)
NOTE 1—Significant Accounting Policies:
Dreyfus Cash Management, Dreyfus Government Cash Management, Dreyfus Government Securities Cash Management, Dreyfus Treasury Obligations Cash Management, Dreyfus Treasury Securities Cash Management, Dreyfus AMT-Free Municipal Cash Management Plus, Dreyfus AMT-Free New York Municipal Cash Management and Dreyfus AMT-Free Tax Exempt Cash Management (each, a “fund” and collectively, the “funds”) are open-end management investment companies registered under the Investment Company Act of 1940, as amended (the “Act”). Dreyfus Cash Management, Dreyfus Government Cash Management, Dreyfus Government Securities Cash Management, Dreyfus Treasury Obligations Cash Management, Dreyfus Treasury Securities Cash Management, Dreyfus AMT-Free Municipal Cash Management Plus and Dreyfus AMT-Free Tax Exempt Cash Management are diversified funds. Dreyfus AMT-Free New York Municipal Cash Management is non-diversified. Dreyfus Government Cash Management and Dreyfus Government Securities Cash Management are each a separate series of Dreyfus Government Cash Management Funds (the “Company”) and Dreyfus AMT-Free Tax Exempt Cash Management is sole series of Dreyfus Tax Exempt Cash Management Funds (the “Trust”).
Each fund’s investment objective is to provide investors with as high a level of current income as is consistent with the preservation of capital and the maintenance of liquidity. Dreyfus AMT-Free Municipal Cash Management Plus and Dreyfus AMT-Free Tax Exempt Cash Management seek to provide income exempt from federal income taxes and the federal alternative minimum tax. Dreyfus AMT-Free New York Municipal Cash Management seeks to provide income exempt from federal, New York state and New York city income taxes and the federal alternative minimum tax. BNY Mellon Investment Adviser, Inc. (the “Adviser”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as each fund’s investment adviser.
Effective June 3, 2019, The Dreyfus Corporation, the fund’s investment adviser and administrator, changed its name to “BNY Mellon Investment Adviser, Inc.”, MBSC Securities Corporation, the fund’s distributor, changed its name to “BNY Mellon Securities Corporation” and Dreyfus Transfer, Inc., the fund’s transfer agent, changed its name to “BNY Mellon Transfer, Inc.”
The funds’ Board of Trustees (the “Board”) approved, effective July 1, 2019, a change in the fund’s name from “Dreyfus Treasury & Agency Cash Management” to “Dreyfus Treasury Obligations Cash Management”.
On May 31, 2019,Dreyfus AMT-Free Municipal Cash Management Plus and Dreyfus AMT-Free New York Municipal Cash Management each commenced offering Participant shares.
BNY Mellon Securities Corporation (the “Distributor”), a wholly-owned subsidiary of the Adviser, is the distributor of each fund’s shares, which are sold to the public without a sales charge. Each fund is authorized to issue an unlimited number of $.001 par value shares of Beneficial Interest. As of July 31, 2019, each fund offered Institutional Shares, Investor Shares, Administrative Shares and Participant Shares, with the following exceptions: Dreyfus Cash Management did not offer Participant Shares; Dreyfus AMT-Free Municipal Cash Management Plus and Dreyfus AMT-Free New York Municipal Cash Management did not offer Administrative Shares; and Dreyfus AMT-Free Tax Exempt Cash Management did not offer Administrative and Participant Shares. Effective May 31, 2019, each share class of the funds, except Institutional Shares, became subject to a Shareholder Services Plan, and the Participant Shares of the funds became subject to an Administrative Services Plan (the “Plans”). The Plans replaced the Service Plan adopted pursuant to Rule 12b-1 under the Act which had been in place for each share class of the funds, except Institutional Shares, prior to May 31, 2019. The aggregate fees paid by each fund pursuant to the Plans will continue to be the same as the fees that were payable under the prior Service Plan. Other differences between the classes include the services offered to and the expenses borne by each class, the allocation of certain transfer agency costs, and certain voting rights. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.
Dreyfus AMT-Free Municipal Cash Management Plus and Dreyfus AMT-Free New York Municipal Cash Management each operate as a “retail money market fund” as that term is defined in Rule 2a-7 under the Act (a “Retail Fund”). Dreyfus Government Cash Management, Dreyfus Government Securities Cash Management, Dreyfus Treasury Obligations Cash Management and Dreyfus Treasury Securities Cash Management each operate as a “government money market fund” as that term is defined in Rule 2a-7 under the Act (a “Government Fund”). It is the policy of each Government Fund and Retail Fund to maintain a constant NAV of $1.00 per share, and each Government Fund and Retail Fund has
55
NOTES TO FINANCIAL STATEMENTS (Unaudited)(continued)
adopted certain investment, portfolio valuation and dividend and distribution policies to enable it to do so. There is no assurance, however, that a Government Fund or Retail Fund will be able to maintain a constant NAV of $1.00 per share.
Dreyfus Cash Management and Dreyfus AMT-Free Tax Exempt Cash Management each operate as an “institutional prime fund” as that term is defined in Rule 2a-7 under the Act (an “Institutional Fund”).
Each Retail Fund and Institutional Fund may, or in certain circumstances, must impose a fee upon the sale of shares or may temporarily suspend redemptions if the fund’s weekly liquid assets fall below required minimums because of market conditions or other factors.Government Funds arenot subject to liquidity fees or temporary suspensions of redemptions due to declines in the Funds’ weekly liquid assets.
As of July 31, 2019, MBC Investments Corp., an indirect subsidiary of BNY Mellon, held all of the outstanding Participant shares of Dreyfus AMT-Free Municipal Cash Management Plus and Dreyfus AMT-Free New York Municipal Cash Management of the fund.
The Company and the Trust account separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series’ operations; expenses which are applicable to all series are allocated among them on a pro rata basis.
The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification is the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The fund’s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions. Actual results could differ from those estimates.
The funds enter into contracts that contain a variety of indemnifications. The funds’ maximum exposure under these arrangements is unknown. The funds do not anticipate recognizing any loss related to these arrangements.
(a) Portfolio valuation: The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value. This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods.
Various inputs are used in determining the value of each fund’s investments relating to fair value measurements. These inputs are summarized in the three broad levels listed below:
Level 1—unadjusted quoted prices in active markets for identical investments.
Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).
Level 3—significant unobservable inputs (including the funds’ own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. Valuation techniques used to value each fund’s investments are as follows:
Retail and Government Funds: Investments in securities are valued at amortized cost in accordance with Rule 2a-7 under the Act. If amortized cost is determined not to approximate market value, the fair value of the portfolio securities will be determined by procedures established by and under the general supervision of the Board.
Institutional Funds:Investments in securities are valued each business day by an independent pricing service (the “Service”) approved by the Board. Investments for which quoted bid prices are readily available and are representative of the bid side of the market in the judgment of the Service are valued at the mean between the quoted bid prices (as obtained by the Service from dealers in such securities) and asked prices (as calculated by the Service based upon its evaluation of the market for such securities). Other investments (which constitute a majority of the portfolio securities) are carried at fair value as determined by the Service, based on methods which include consideration of the following: yields or prices of municipal securities of comparable quality, coupon, maturity and type; indications as
56
to values from dealers; and general market conditions. All of the preceding securities are generally categorized within Level 2 of the fair value hierarchy.
The Service is engaged under the general oversight of the Board.
When market quotations or official closing prices are not readily available, or are determined not to reflect accurately fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded, but before the funds calculate their net asset value, the funds may value these investments at fair value as determined in accordance with the procedures approved by the Board. Certain factors may be considered when fair valuing investments such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers. These securities are either categorized within Level 2 or 3 of the fair value hierarchy depending on the relevant inputs used.
For restricted securities where observable inputs are limited, assumptions about market activity and risk are used and are generally categorized within Level 3 of the fair value hierarchy.
At July 31, 2019, all of the securities in each fund were considered Level 2 within the fair value hierarchy.
At July 31, 2019, there were no transfers between levels of the fair value hierarchy.
(b) Securities transactions and investment income:Securities transactions are recorded on a trade date basis. Interest income, adjusted for accretion of discount and amortization of premium on investments, is earned from settlement date and is recognized on the accrual basis. Realized gains and losses from securities transactions are recorded on the identified cost basis.
Dreyfus AMT-Free New York Municipal Cash Management follows an investment policy of investing primarily in municipal obligations of one state. Economic changes affecting the state and certain of its public bodies and municipalities may affect the ability of issuers within the state to pay interest on, or repay principal of, municipal obligations held by the fund.
Dreyfus Cash Management, Dreyfus Government Cash Management and Dreyfus Treasury Obligations Cash Management may enter into repurchase agreements with financial institutions, deemed to be creditworthy by the Adviser, subject to the seller’s agreement to repurchase and each fund’s agreement to resell such securities at a mutually agreed upon price. Pursuant to the terms of the repurchase agreement, such securities must have an aggregate market value greater than or equal to the terms of the repurchase price plus accrued interest at all times. If the value of the underlying securities falls below the value of the repurchase price plus accrued interest, each fund will require the seller to deposit additional collateral by the next business day. If the request for additional collateral is not met, or the seller defaults on its repurchase obligation, each fund maintains its right to sell the underlying securities at market value and may claim any resulting loss against the seller. The collateral is held on behalf of the fund by the tri-party administrator with respect to any tri-party agreement. Each fund may also jointly enter into one or more repurchase agreements with other funds managed by the Adviser in accordance with an exemptive order granted by the SEC pursuant to section 17(d) and Rule 17d-1 under the Act. Any joint repurchase agreements must be collateralized fully by U.S. Government securities.
(c) Dividends and distributions to shareholders:It is the policy of each fund to declare dividends daily from investment income-net. Such dividends are paid monthly. Dividends from net realized capital gains, if any, are normally declared and paid annually, but each fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”). To the extent that net realized capital gains can be offset by capital loss carryovers, it is the policy of each fund not to distribute such gains.
(d) Federal income taxes:It is the policy of Dreyfus Cash Management, Dreyfus Government Cash Management, Dreyfus Government Securities Cash Management, Dreyfus Treasury Obligations Cash Management and Dreyfus Treasury Securities Cash Management to continue to qualify as a regulated investment company if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code and to make distributions of taxable income sufficient to relieve it from substantially all federal income and excise taxes.
It is the policy of Dreyfus AMT-Free Municipal Cash Management Plus, Dreyfus AMT-Free New York Municipal Cash Management and Dreyfus AMT-Free Tax Exempt Cash Management to continue to qualify as a regulated investment company, which can distribute tax-exempt dividends, by complying with the applicable provisions of the Code and to make distributions of income and net realized capital gain sufficient to relieve it from substantially all federal income and excise taxes.
57
NOTES TO FINANCIAL STATEMENTS (Unaudited)(continued)
For federal income tax purposes, each fund is treated as a separate entity for the purpose of determining such qualification.
As of and during the period ended July 31, 2019, the funds did not have any liabilities for any uncertain tax positions. Each fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statements of Operations. During the period ended July 31, 2019, the funds did not incur any interest or penalties.
Each tax year in the three-year period ended January 31, 2019 remains subject to examination by the Internal Revenue Service and state taxing authorities.
Under the Regulated Investment Company Modernization Act of 2010, each fund is permitted to carry forward capital losses for an unlimited period. Furthermore, capital loss carryovers retain their character as either short-term or long-term capital losses.
Table 1summarizes each relevant fund’s unused capital loss carryover available for federal income tax purposes to be applied against future net realized capital gains, realized subsequent to January 31, 2019.
Table 2 summarizes each fund’s tax character of distributions paid to shareholders during the fiscal year ended January 31, 2019. The tax character of current year distributions will be determined at the end of the current fiscal year.
At July 31, 2019, the cost of investments for federal income tax purposes for each fund was substantially the same as the cost for financial reporting purposes (see the Statements of Investments).
| | | | | | | |
Table 1—Capital Loss Carryover | | | | | | |
| | | | | | | Short-Term Losses($)† |
Dreyfus Government Cash Management | | | | | | 1,423,603 |
Dreyfus Government Securities Cash Management | | | | | | 425,084 |
Dreyfus Treasury Obligations Cash Management | | | | | | 2,022,427 |
Dreyfus Treasury Securities Cash Management | | | | | | 1,163,341 |
Dreyfus AMT-Free Municipal Cash Management Plus | | | | | | 3,268 |
† Short-term capital losses can be carried forward for an unlimited period.
| | | | | | | | | | | | | | | | | | | | |
Table 2—Tax Character of Distributions Paid | | | | | | | | | |
| | | | | 2019 |
| | | | | | | Tax-Exempt Income ($) | Ordinary
Income ($) | Long-Term
Capital
Gains ($) | |
Dreyfus Cash Management | | | | | | | - | 167,055,050 | - | |
Dreyfus Government Cash Management | | | | | | | - | 1,104,498,393 | - | |
Dreyfus Government Securities
Cash Management | | | | | | | - | 80,442,180 | - | |
Dreyfus Treasury Obligations
Cash Management | | | | | | | - | 369,841,558 | - | |
Dreyfus Treasury Securities
Cash Management | | | | | | | - | 548,510,754 | - | |
Dreyfus AMT-Free Municipal
Cash Management Plus | | | | | | | 987,114 | - | - | |
Dreyfus AMT-Free New York Municipal
Cash Management | | | | | | | 1,602,436 | - | 8,233 | |
Dreyfus AMT-Free Tax Exempt
Cash Management | | | | | | | 7,082,287 | 4,053 | - | |
(e) New Accounting Pronouncements: Effective June 1, 2019, the fund adopted Accounting Standards Update 2017-08, Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization On Purchased Callable Debt Securities (“ASU 2017-08”). The update shortens the amortization period for the premium on certain purchased callable debt securities to the earliest call date.
Also effective June 1, 2019, the fund adopted Accounting Standards Update 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”).
58
The update provides guidance that modifies certain disclosure requirements for fair value measurements.
NOTE 2—Management Fee and Other Transactions with Affiliates:
(a)Pursuant to separate management agreements (the “Agreements”) with the Adviser, the management fee of each fund is computed at the annual rate of .20% of the value of each fund’s average daily net assets and is payable monthly. For Dreyfus Cash Management, Dreyfus Government Cash Management, Dreyfus Government Securities Cash Management, Dreyfus Treasury Obligations Cash Management and Dreyfus AMT-Free Tax Exempt Cash Management, the Agreements provide that if in any full fiscal year the aggregate expenses, excluding taxes, brokerage fees and extraordinary expenses exceed 1.5% of the value of each relevant fund’s average daily net assets, the Adviser will reimburse the relevant fund, or bear any excess expense over 1.5%. During the period ended July 31, 2019, there were no reimbursements pursuant to the Agreements.
For certain funds, the Adviser agreed to waive receipt of its fees or limit the fund’s direct expenses during period ended July 31, 2019, as described below. To the extent that it is necessary for the Adviser to waive receipt of its management fee (or reimburse the fund’s common expenses) for any share class, the amount of the waiver or reimbursement will be applied equally to each share class of the fund in order to facilitate a daily yield at or above a certain level which may change from time to time. These expense limitations and waivers are voluntary, not contractual, and may be terminated by the Adviser at any time. For Dreyfus Cash Management and Dreyfus AMT-Free Municipal Cash Management Plus, Dreyfus agreed to waive receipt of its fee and/or assume the fund’s expenses to the extent necessary to reduce the direct expenses of all classes of the fund. For Dreyfus Government Cash Management, Dreyfus Treasury Obligations Cash Management, Dreyfus Treasury Securities Cash Management and Dreyfus AMT-Free Tax Exempt Cash Management, the Adviser agreed to waive receipt of its fee and/or assume the fund’s expenses to the extent necessary to reduce the direct expenses of the fund’s Institutional shares.Table 3 summarizes the reduction in expenses for each fund, pursuant to these undertakings, during the period ended July 31, 2019.
| | |
Table 3—Fee Waivers | |
| | |
Dreyfus Cash Management | $5,813,563 |
Dreyfus Government Cash Management | 10,817,977 |
Dreyfus Treasury Obligations Cash Management | 3,161,535 |
Dreyfus Treasury Securities Cash Management | 2,967,983 |
Dreyfus AMT-Free Municipal Cash Management Plus | 32,532 |
Dreyfus AMT-Free Tax Exempt Cash Management | 190,680 |
(b)Under each fund’s Shareholder Services Plan, with respect to each fund’s applicable Investor Shares, Administrative Shares and Participant Shares, each fund pays the Distributor for advertising, marketing and for providing certain services relating to shareholders of the respective class of shares. Investor Shares, Administrative Shares and Participant Shares pay the Distributor at annual rates of .25%, .10% and .25%, respectively, of the value of the applicable share class’ average daily net assets. These services include answering shareholder inquiries regarding the funds and providing reports and other information and services related to the maintenance of shareholder accounts. Under the Shareholder Services Plan, the Distributor may make payments to Service Agents with respect to these services. Generally, the Service Agent may provide holders of Investor Shares, Administrative Shares and Participant Shares a consolidated statement. The Service Agent will generally also provide the holders of Investor Shares and/or Participant Shares automated teller check writing privileges and, in the case of Participant Shares, automated teller machine access and bill paying services. The amount paid under the Shareholder Services Plan for Servicing is intended to be a “service fee” as defined under the Conduct Rules of the Financial Industry Regulatory Authority (“FINRA”), and at no time will such amount exceed the maximum amount permitted to be paid under the FINRA Conduct Rules as a service fee. The fees payable under the Service Plan are payable without regard to actual expenses occurred. Additionally, with respect to each fund’s applicable Participant Shares, each fund will pay the Distributor for the provision of certain types of recordkeeping and other related services pursuant to the Administrative Services Plan. Participant Shares pay the Distributor at an annual rate of .15% of the value of the applicable Participant Shares class’ average daily net assets. Neither the Shareholder Services Plan nor the Administrative Services Plan provides for payments related to the distribution of fund shares. Under the Plans, as to each class, the Distributor would be able to pay financial intermediaries from the fees it receives from the Plans for the provision of the respective services by the intermediaries to their clients who are beneficial owners of fund shares.Table 4summarizes the amount each fund was charged pursuant to
59
NOTES TO FINANCIAL STATEMENTS (Unaudited)(continued)
theShareholder Services Plan and Administrative Shareholder Services Plan during the period ended July 31, 2019.
Prior to May 31, 2019, each fund was subject to a Service Plan adopted pursuant to Rule 12b-1 under the Act (the “Service Plan”), which was in place for each share class of the funds except Institutional Shares. Under the Service Plan, each fund paid the Distributor for distributing such classes of shares, for advertising and marketing, and for providing certain services relating to shareholders of the respective classes of shares. Investor Shares, Administrative Shares and Participant Shares paid the Distributor at annual rates of .25%, .10% and .40%, respectively, of the value of the applicable share class’ average daily net assets.Table 5 summarizes the amount each fund was charged pursuant to the Service Plan prior to May 31, 2019 and under the Plans effective as of that date.
| | | | | |
| | | |
Table 4—Shareholder Services Plan Fees & Administrative Services Plan fee | | |
| | | | | |
| | Investor
Shares ($) | Administrative
Shares ($) | Participant
Shares ($) |
Dreyfus Cash Management | | | | |
Shareholder Service Pan fees | | 56,980 | 15,723 | - |
Dreyfus Government Cash Management | | | | |
Shareholder Service Pan fees | | 986,976 | 300,729 | 60,177 |
Administrative Service Pan fees | | - | - | 36,106 |
Dreyfus Government Securities Cash Management | | | | |
Shareholder Service Pan fees | | 169,073 | 84,251 | 126,837 |
Administrative Service Pan fees | | - | - | 76,102 |
Dreyfus Treasury Obligations Cash Management | | | | |
Shareholder Service Pan fees | | 597,514 | 111,154 | 590,036 |
Administrative Service Pan fees | | - | - | 354,022 |
Dreyfus Treasury Securities Cash Management | | | | |
Shareholder Service Pan fees | | 780,490 | 416,872 | 790,818 |
Administrative Service Pan fees | | - | - | 474,491 |
Dreyfus AMT-Free Municipal Cash Management Plus | | | | |
Shareholder Service Pan fees | | 22,369 | - | 17 |
Administrative Service Pan fees | | - | - | 10 |
Dreyfus AMT-Free New York Municipal Cash Management | | | | |
Shareholder Service Pan fees | | 10,369 | - | 17 |
Administrative Service Pan fees | | - | - | 10 |
Dreyfus AMT-Free Tax Exempt Cash Management | | | | |
Shareholder Service Pan fees | | 15,234 | - | - |
| | | | | |
| | | | | |
Table 5—Service Plan Fees | | | | |
| | | | | |
| | Investor
Shares ($) | Administrative
Shares ($) | Participant
Shares ($) |
Dreyfus Cash Management | | 105,609 | 35,843 | - |
Dreyfus Government Cash Management | | 1,876,097 | 550,374 | 123,917 |
Dreyfus Government Securities Cash Management | | 370,390 | 136,070 | 391,730 |
Dreyfus Treasury Obligations Cash Management | | 1,259,495 | 223,035 | 1,696,104 |
Dreyfus Treasury Securities Cash Management | | 1,501,655 | 766,811 | 2,543,988 |
Dreyfus AMT-Free Municipal Cash Management Plus | | 50,055 | - | |
Dreyfus AMT-Free New York Municipal Cash Management | | 22,276 | - | - |
Dreyfus AMT-Free Tax Exempt Cash Management | | 29,877 | - | - |
| | | | | |
60
(c)Each fund has adopted a Reimbursement Shareholder Services Plan with respect to its Institutional Shares. Each fund reimburses the Distributor at an amount not to exceed an annual rate of .25% of the value of each fund’s average daily net assets for the provision of certain services. The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding the funds and providing reports and other information, and services related to the maintenance of shareholder accounts. The Adviser has agreed to waive receipt of Shareholder Services Plan fees for Dreyfus AMT-Free Municipal Cash Management Plus. During the period ended July 31, 2019, the fees waived a total of $2,084 within the reduction in expenses, pursuant to the undertaking. This waiver is voluntary, not contractual, and may be terminated at any time.Table 6summarizes the amount each fund’s Institutional Shares were charged pursuant to the Reimbursement Shareholder Services Plan during the period ended July 31, 2019.
| | |
Table 6—Reimbursement Shareholder Services Plan Fees | |
| |
Dreyfus Cash Management | $135,548 |
Dreyfus Government Cash Management | 471,818 |
Dreyfus Government Securities Cash Management | 19,182 |
Dreyfus Treasury Obligations Cash Management | 160,259 |
Dreyfus Treasury Securities Cash Management | 167,206 |
Dreyfus AMT-Free Municipal Cash Management Plus | 2,084 |
Dreyfus AMT-Free New York Municipal Cash Management | 4,778 |
Dreyfus AMT-Free Tax Exempt Cash Management | 65,455 |
The funds have an arrangement with the transfer agent whereby the funds may receive earnings credits when positive cash balances are maintained, which are used to offset transfer agency Dreyfus Government Cash Management, Dreyfus Treasury Obligations Cash Management, Dreyfus Cash Management and Dreyfus Treasury Securities Cash Management has arrangement with the custodian whereby Dreyfus Cash Management, Dreyfus Government Cash Management, Dreyfus Treasury Securities Cash Management, Dreyfus Treasury Obligations Cash Management will receive interest income or be charged an overdraft fees when cash balances are maintained. Dreyfus AMT-Free Municipal Cash Management Plus, Dreyfus AMT-Free New York Municipal Cash Management and Dreyfus AMT-Free Tax Exempt Cash Management has arrangement with the custodian to receive earnings credits when positive cash balance are maintained, which were used to offset custody fees. For financial reporting purposes, the funds include net earnings credits, if any, as expense offsets in the Statements of Operations.
Each fund compensates BNY Mellon Transfer, Inc., a wholly-owned subsidiary of the Adviser, under a transfer agency agreement for providing transfer agency and cash management services for the funds. The majority of transfer agency fees are comprised of amounts paid on a per account basis, while cash management fees are related to fund subscriptions and redemptions.Table 7 summarizes the amount each fund was charged during the period ended July 31, 2019, which is included in Shareholder servicing costs in the Statements of Operations.
| | | | | |
Table 7—Transfer Agency Agreement Fees | | |
| | | | Transfer Agency
Fees ($) |
Dreyfus Cash Management | | | | 6,029 |
Dreyfus Government Cash Management | | | | 17,791 |
Dreyfus Government Securities Cash Management | | | | 1,128 |
Dreyfus Treasury Obligations Cash Management | | | | 3,999 |
Dreyfus Treasury Securities Cash Management | | | | 4,250 |
Dreyfus AMT-Free Municipal Cash Management Plus | | | | 335 |
Dreyfus AMT-Free New York Municipal Cash Management | | | | 764 |
Dreyfus AMT-Free Tax Exempt Cash Management | | | | 1,043 |
61
NOTES TO FINANCIAL STATEMENTS (Unaudited)(continued)
Each fund compensates The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of the Adviser, under a custody agreement for providing custodial services for each fund. These fees are determined based on net assets, geographic region and transaction activity.Table 8 summarizes the amount each fund was charged during the period ended July 31, 2019 pursuant to the custody agreement. These fees were offset by earnings credits for each relevant fund, also summarized inTable 8.
During the period ended July 31, 2019, each fund was charged $5,602 for services performed by the Chief Compliance Officer and his staff. These fees are included in Miscellaneous in the Statements of Operations.
Table 9summarizes the components of “Due to BNY Mellon Investment Adviser, Inc. and affiliates” in the Statements of Assets and Liabilities for each fund.
(d) Each Board member also serves as a Board member of other funds in the BNY Mellon Family of Funds complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets.
| | | | | |
Table 8—Custody Agreement Fees | | | |
| Custody Fees ($) | | Earnings Credits ($) |
Dreyfus Cash Management | 109,610 | | - |
Dreyfus Government Cash Management | 442,949 | | - |
Dreyfus Government Securities Cash Management | 46,960 | | - |
Dreyfus Treasury Obligations Cash Management | 197,682 | | - |
Dreyfus Treasury Securities Cash Management | 217,392 | | - |
Dreyfus AMT-Free Municipal Cash Management Plus | 5,682 | | (723) |
Dreyfus AMT-Free New York Municipal Cash Management | 4,755 | | (4,755) |
Dreyfus AMT-Free Tax Exempt Cash Management | 4,283 | | (2,848) |
| | | | | | | | | | | |
Table 9—Due to BNY Mellon Investment Adviser, Inc. and Affiliates | | |
| Management
Fees ($) | Shareholder Service Plans
Fees ($) | Administrative
Services Pan | Custodian
Fees ($) | Chief
Compliance
Officer
Fees ($) | Transfer
Agency
Fees ($) | Less Expense
Reimbursement ($) |
Dreyfus Cash Management | 2,157,234 | 37,069 | - | 71,715 | 3,861 | 2,331 | (1,078,617) |
Dreyfus Government Cash Management | 9,185,472 | 698,968 | 21,706 | 276,294 | 3,861 | 2,992 | (1,837,094) |
Dreyfus Government Securities Cash Management | 855,174 | 197,220 | 40,991 | 28,343 | 3,861 | 632 | - |
Dreyfus Treasury Obligations Cash Management | 3,215,609 | 661,138 | 175,453 | 120,425 | 3,861 | 1,693 | (482,341) |
Dreyfus Treasury Securities Cash Management | 5,170,935 | 1,017,590 | 243,989 | 158,278 | 3,861 | 1,972 | (517,093) |
Dreyfus AMT-Free Municipal Cash Management Plus | 10,259 | 11,440 | 5 | 2,320 | 3,861 | 113 | (5,325) |
Dreyfus AMT-Free New York
Municipal Cash Management | 25,167 | 5,364 | 5 | 1,692 | 3,861 | 253 | - |
Dreyfus AMT-Free Tax Exempt Cash Management | 86,061 | 8,746 | - | 10,236 | 3,861 | 398 | (37,798) |
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NOTE 3—Securities Transactions:
The funds are permitted to purchase or sell securities from or to certain affiliated funds under specified conditions outlined in procedures adopted by the Board. The procedures have been designed to ensure that any purchase or sale of securities by the funds from or to another fund or portfolio that are, or could be, considered an affiliate by virtue of having a common investment adviser (or affiliated investment adviser), common Trustees and/or common officers, complies with Rule 17a-7 under the Act.Table 10 summarizes the amounts of purchases and sales of securities engaged in by each relevant fund pursuant to Rule 17a-7 under the Act during the period ended July 31, 2019.
Table 11 summarizes gross appreciation, gross depreciation and accumulated net unrealized appreciation (depreciation) on investments for relevant each fund at July 31, 2019.
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At July 31, 2019, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statements of Investments).
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Table 10—Affiliated Portfolio Holdings Transactions | |
| Purchases ($) | Sales ($) |
Dreyfus AMT-Free Municipal Cash Management Plus | 39,355,000 | 47,920,000 |
Dreyfus AMT-Free New York Municipal Cash Management | 75,670,000 | 51,065,000 |
Dreyfus AMT-Free Tax Exempt Cash Management | 385,595,000 | 247,280,000 |
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Table 11—Accumulated Net Unrealized Appreciation (Depreciation) | | | |
| | Gross
Appreciation ($) | Gross
Depreciation ($) | Net ($) |
Dreyfus Cash Management | | 1,951,095 | (76,169) | 1,874,926 |
Dreyfus AMT-Free Tax-Exempt Cash Management | | 9,498 | (2,700) | 6,798 |
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INFORMATION ABOUT THE OF EACH FUND’S MANGEMENT AGREEMENT (Unaudited)
At a meeting of the funds’ Boards of Trustees (the “Board”) held on May 1, 2019, the Board considered the renewalof each fund’s Management Agreement pursuant to which the Adviser provides the fund with investment advisory and administrative services (each, the “Agreement”). The Board members, a majority of whom are not “interested persons” (as defined in the Investment Company Act of 1940, as amended) of the funds, were assisted in their review by independent legal counsel and met with counsel in executive session separate from representatives of the Adviser. In considering the renewal of each Agreement, the Board considered all factors that it believed to be relevant, including those discussed below. The Board did not identify any one factor as dispositive, and each Board member may have attributed different weights to the factors considered.
Analysis of Nature, Extent, and Quality of Services Provided to the Funds. The Board considered information provided in connection with the meeting and in previous presentations from representatives of the Adviser regarding the nature, extent, and quality of the services provided to funds in the BNY Mellon fund complex. For each fund, the Adviser provided the number of open accounts in the fund, the fund’s asset size and the allocation of fund assets among distribution channels. The Adviser also had previously provided information regarding the diverse intermediary relationships and distribution channels of funds in the BNY Mellon fund complex (such as retail direct or intermediary, in which intermediaries typically are paid by the fund and/or the Adviser) and the Adviser’s corresponding need for broad, deep, and diverse resources to be able to provide ongoing shareholder services to each intermediary or distribution channel, as applicable to the funds.
The Board also considered research support available to, and portfolio management capabilities of, each fund’s portfolio management personnel and that the Adviser also provides oversight of day-to-day fund operations, including fund accounting and administration and assistance in meeting legal and regulatory requirements. The Board also considered the Adviser’s extensive administrative, accounting and compliance infrastructures.
Comparative Analysis of the Funds’ Performance and Management Fee and Expense Ratio. For each fund, the Board reviewed reports prepared by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent provider of investment company data, which included information comparing (1) the fund’s performance with the performance of a group of comparable funds (the “Performance Group”) and with a broader group of funds (the “Performance Universe”), all for various periods ended March 31, 2019, and (2) the fund’s actual and contractual management fees and total expenses with those of a group of comparable funds (the “Expense Group”) and with a broader group of funds (the “Expense Universe”), the information for which was derived in part from fund financial statements available to Broadridge as of the date of its analysis. Performance Group and Performance Universe comparisons were provided based on both “gross” (i.e.,without including fees and expenses) and “net” (i.e., including fees and expenses) total returns. The Adviser previously had furnished the Board with a description of the methodology Broadridge used to select the Performance Groups and Performance Universes and the Expense Groups and Expense Universes.
Representatives of the Adviser stated that the usefulness of performance comparisons may be affected by a number of factors, including different investment limitations and policies that may be applicable to each fund and its comparison funds. The Board discussed with representatives of the Adviser and/or its affiliates the results of the comparisons for each fund and considered that the following:
ForDreyfus Cash Management, the fund’s gross total return performance was below the Performance Group and Performance Universe medians by one to four basis points for the various periods and the net total return performance was above the Performance Group and Performance Universe medians for all periods except for the three-, four-, five- and ten-year periods when it was below the Performance Group median by two or three basis points.
ForDreyfus Government Cash Management, the fund’s gross total return performance was at, above or within one basis point of the Performance Group and Performance Universe medians for all periods. The fund’s net total return performance was at, above or within one basis point of the Performance Group median and above the Performance Universe median for all periods.
ForDreyfus Government Securities Cash Management, the fund’s gross total return performance was at, above or within four basis points of the Performance Group and Performance Universe medians for all periods. The fund’s net total return performance was at, above or within two basis points of the Performance Group median and above the Performance Universe median for all periods.
ForDreyfus Treasury and Agency Cash Management, the fund’s gross total return performance was at or above the Performance Group median and above the Performance Universe median for all periods.
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The fund’s net total return performance was at or within one basis point of the Performance Group median for all periods and above the Performance Universe median for all periods.
ForDreyfus Treasury Securities Cash Management, the fund’s gross total return performance was at or within two basis points of the Performance Group and Performance Universe medians for all periods. The fund’s net total return performance was at or within one basis point of the Performance Group median and above the Performance Universe median for all periods.
ForDreyfus AMT-Free Tax Exempt Cash Management,the fund’s gross total return performance was above or within four basis points of the Performance Group median for all periods and above or one or two basis points below the Performance Universe medians for the periods. The fund’s net total return performance was below the Performance Group median for all periods and above or within two basis point of the Performance Universe median for the periods.
ForDreyfus AMT-Free Municipal Cash Management Plus, the fund’s gross total return performance was at or above the Performance Group and Performance Universe medians for all periods except for the most recent one-year period when performance was below the medians. The fund’s net total return performance was above the Performance Group and Performance Universe medians for the periods.
ForDreyfus AMT-Free New York Municipal Cash Management, the fund’s gross total return performance was at, above or one basis point below the Performance Group and Performance Universe medians. The fund’s net total return performance was at or within two basis points of the Performance Group median for all periods and above the Performance Universe median for all periods.
For each fund, the Board also reviewed the range of actual and contractual management fees and total expenses of the fund’s Expense Group and Expense Universe funds and discussed the results of the comparisons.
ForDreyfus Cash Management, the fund’s contractual management fee was within two basis points of the Expense Group median, the fund’s actual management fee was below the Expense Group and Expense Universe medians and the fund’s total expenses were below the Expense Group and Expense Universe medians (lowest in the Expense Group).
ForDreyfus Government Cash Management, the fund’s contractual management fee was within one basis point of the Expense Group median, the fund’s actual management fee was within one basis point of the Expense Group median and at the Expense Universe median and the fund’s total expenses were within one basis point of the Expense Group median and below the Expense Universe median.
ForDreyfus Government Securities Cash Management, the fund’s contractual management fee was at the Expense Group median, the fund’s actual management fee was slightly above the Expense Group and Expense Universe medians and the fund’s total expenses were approximately equal to the Expense Group median and below the Expense Universe median;
ForDreyfus Treasury and Agency Cash Management, the fund’s contractual management fee was slightly above the Expense Group median, the fund’s actual management fee was within one basis point of the Expense Group and Expense Universe medians and the fund’s total expenses were less than one basis point above the Expense Group median and below the Expense Universe median.
ForDreyfus Treasury Securities Cash Management, the fund’s contractual management fee was within one basis point of the Expense Group median, the fund’s actual management fee was above the Expense Group and Expense Universe medians and the fund’s total expenses were within one basis point of the Expense Group median and below the Expense Universe median.
ForDreyfus AMT-Free Tax Exempt Cash Management, the fund’s contractual management fee was below the Expense Group median (lowest in the Expense Group), the fund’s actual management fee was within one basis point of the Performance Group and Performance Universe medians and total expenses were within two basis points of the Expense Group and Expense Universe medians.
ForDreyfus AMT-Free Municipal Cash Management Plus, the fund’s contractual management fee was below the Expense Group median and the fund’s actual management fee and total expenses were below the Expense Group and Expense Universe medians.
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INFORMATION ABOUT THE OF EACH FUND’S MANGEMENT AGREEMENT (Unaudited) (continued)
ForDreyfus AMT-Free New York Municipal Cash Management, the fund’s contractual management fee was below the Expense Group median, the fund’s actual management fee was above the Expense Group and Expense Universe medians and the fund’s total expenses were below the Expense Group and Expense Universe medians.
For certain funds, the Board also considered the current fee waiver and expense reimbursement arrangement undertaken by the Adviser.
For each fund, representatives of the Adviser reviewed with the Board the management or investment advisory fees paid by funds advised or administered by the Adviser that are in the same Lipper category as the fund (the “Similar Funds”), and explained the nature of the Similar Funds. They discussed differences in fees paid and the relationship of the fees paid in light of any differences in the services provided and other relevant factors. The Board considered the relevance of the fee information provided for the Similar Funds to evaluate the appropriateness of each fund’s management fee.
Analysis of Profitability and Economies of Scale. Representatives of the Adviser reviewed the expenses allocated and profit received by the Adviser and its affiliates and the resulting profitability percentage for managing each fund and the aggregate profitability percentage to the Adviser and its affiliates for managing the funds in the BNY Mellon fund complex, and the method used to determine the expenses and profit. The Board concluded that the profitability results were not unreasonable, given the services rendered and service levels provided by the Adviser. The Board also considered the fee waiver and expense reimbursementarrangement for certain funds and its effect on the profitability of the Adviser and its affiliates. The Board also had been provided with information prepared by an independent consulting firm regarding the Adviser’s approach to allocating costs to, and determining the profitability of, individual funds and the entire BNY Mellon fund complex. The consulting firm also had analyzed where any economies of scale might emerge in connection with the management of a fund.
The Board considered, on the advice of its counsel, the profitability analysis (1) as part of its evaluation of whether the fees under each Agreement, considered in relation to the mix of services provided by the Adviser, including the nature, extent and quality of such services, supported the renewal of the Agreement and (2) in light of the relevant circumstances for each fund and the extent to which economies of scale would be realized if the fund grows and whether fee levels reflect these economies of scale for the benefit of fund shareholders. Representatives of the Adviser stated that a discussion of economies of scale is predicated on a fund having achieved a substantial size with increasing assets and that, if a fund’s assets had been stable or decreasing, the possibility that the Adviser may have realized any economies of scale would be less. Representatives of the Adviser also stated that, as a result of shared and allocated costs among funds in the BNY Mellon fund complex, the extent of economies of scale could depend substantially on the level of assets in the complex as a whole, so that increases and decreases in complex-wide assets can affect potential economies of scale in a manner that is disproportionate to, or even in the opposite direction from, changes in the fund’s asset level. The Board also considered potential benefits to the Adviser from acting as investment adviser and took into consideration that there were no soft dollar arrangements in effect for trading the funds’ investments.
At the conclusion of these discussions, the Board agreed that it had been furnished with sufficient information to make an informed business decision with respect to the renewal of each Agreement. Based on the discussions and considerations as described above, the Board concluded and determined, as to each fund, as follows.
· The Board concluded that the nature, extent and quality of the services provided by the Adviser are adequate and appropriate.
· For Dreyfus Cash Management and Dreyfus Government Securities Cash Management, the Board was satisfied with the fund’s net performance.
· For Dreyfus AMT-Free Tax Exempt Cash Management, while the Board expressed some concern about the fund’s net total return performance relative to its applicable Performance Group, the Board generally was satisfied with the fund’s overall performance.
· For the other funds, the Board generally was satisfied with the funds’ performance.
· The Board concluded that the fee paid to the Adviser continued to be appropriate under the circumstances and in light of the factors and the totality of the services provided as discussed above.
· The Board determined that the economies of scale which may accrue to the Adviser and its affiliates in connection with the management of the fund had been adequately considered by the Adviser in connection with the fee rate charged to the fund
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pursuant to the Agreement and that, to the extent in the future it were determined that material economies of scale had not been shared with the fund, the Board would seek to have those economies of scale shared with the fund.
In evaluating each Agreement, the Board considered these conclusions and determinations and also relied on its previous knowledge, gained through meetings and other interactions with the Adviser and its affiliates, of the Adviser and the services provided to the relevant fund by the Adviser. The Board also relied on information received on a routine and regular basis throughout the year relating to the operations of each fund and the investment management and other services provided under its Agreement, including information on the investment performance of the fund in comparison to similar mutual funds and benchmark performance measures; general market outlook as applicable to the fund; and compliance reports. In addition, the Board’s consideration of the contractual fee arrangements for each fund had the benefit of a number of years of reviews of the relevant Agreement for the fund, or substantially similar agreements for other BNY Mellon funds that the Board oversees, during which lengthy discussions took place between the Board and representatives of the Adviser. Certain aspects of the arrangements may receive greater scrutiny in some years than in others, and the Board’s conclusions may be based, in part, on their consideration of each fund’s arrangements, or substantially similar arrangements for other BNY Mellon funds that the Board oversees, in prior years. The Board determined to renew each Agreement.
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Dreyfus Cash Management Funds
240 Greenwich Street
New York, NY 10286
Adviser
BNY Mellon Investment Adviser, Inc.
240 Greenwich Street
New York, NY 10286
Custodian
The Bank of New York Mellon
240 Greenwich Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
BNY Mellon Transfer, Inc.
240 Greenwich Street
New York, NY 10286
Distributor
BNY Mellon Securities Corporation
240 Greenwich Street
New York, NY 10286
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Ticker Symbols: | Institutional | Investor | Administrative | Participant |
Dreyfus Cash Management | DICXX | DVCXX | DSCXX | |
Dreyfus Government Cash Management | DGCXX | DGVXX | DAGXX | DPGXX |
Dreyfus Government Securities Cash Management | DIPXX | DVPXX | DAPXX | DGPXX |
Dreyfus Treasury Obligations Cash Management | DTRXX | DTVXX | DTAXX | DTPXX |
Dreyfus Treasury Securities Cash Management | DIRXX | DVRXX | DARXX | DPRXX |
Dreyfus AMT-Free Municipal Cash Management Plus | DIMXX | DVMXX | | DMUXX |
Dreyfus AMT-Free New York Municipal Cash Management | DIYXX | DVYXX | | DMDXX |
Dreyfus AMT-Free Tax Exempt Cash Management | DEIXX | DEVXX | | |
Telephone Call your representative or 1-800-346-3621
Mail BNY Mellon Family of Funds to: BNY Mellon Institutional Services, 144 Glenn
Curtiss Boulevard, Uniondale, NY 11556-0144
E-mailSend your request toinstserv@bnymellon.com
Internet Dreyfus Money Market Funds atwww.dreyfus.com
Each fund will disclose daily, onwww.dreyfus.com, the fund’s complete schedule of holdings as of the end of the previous business day. The schedule of holdings will remain on the website for a period of five months. The fund files a monthly schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) on Form N-MFP. The fund’s Forms N-MFP are available on the SEC’s website atwww.sec.gov.
Information regarding how the fund voted proxies related to portfolio securities for the most recent 12-month period ended June 30 is available atwww.dreyfus.com and on the SEC’s website at www.sec.gov and without charge, upon request, by calling 1-800-373-9387.
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© 2019 BNY Mellon Securities Corporation
CMGTSA0719 
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