Merrill Lynch Institutional Fund (the “Institutional Fund”), Merrill Lynch Institutional Tax-Exempt Fund (the “Institutional Tax-Exempt Fund”), Merrill Lynch Premier Institutional Fund (the “Premier Institutional Fund”) and Merrill Lynch Select Institutional Fund (the “Select Institutional Fund”) (each, a “Feeder Fund”), each a series of Merrill Lynch Funds for Institutions Series (the “Series Fund”), currently invest all of their investable assets in the portfolios (each a “Master Portfolio”) of Master Institutional Money Market LLC (the “Master LLC”) as follows: the Institutional Fund and the Select Institutional Fund in Merrill Lynch Institutional Portfolio, the Institutional Tax-Exempt Fund in Merrill Lynch Institutional Tax-Exempt Portfolio and the Premier Institutional Fund in Merrill Lynch Premier Institutional Portfolio. Accordingly, the Feeder Funds do not require investment advisory services, since all investments are made at the Master Portfolio level.
The Board of Directors of the Master LLC (the “Master LLC Board”) met in person in April and June 2008 to consider the approval of the Master LLC’s investment advisory agreement with BlackRock Advisors, LLC (the “Advisor”) on behalf of each Master Portfolio (the “Master LLC Advisory Agreement”). The Master LLC Board also considered the approval of the subadvisory agreement between the Advisor and BlackRock Institutional Management Corporation (the “Subadvisor”) with respect to each Master Portfolio (the “Master LLC Subadvisory Agreement” and, together with the Master LLC Advisory Agreement, the “Master LLC Agreements”). Since each Feeder Fund invests all of its investable assets in the corresponding Master Portfolio, the Board of Directors of the Series Fund (the “Series Fund Board”) also considered (but was not required to approve) the continuation of the Master LLC Agreements.
The Series Fund Board also considered the approval of the investment advisory agreement (the “Government Fund Advisory Agreement”) between the Advisor and the Series Fund on behalf of Merrill Lynch Government Fund (the “Government Fund”), a series of the Series Fund, and the investment advisory agreement (the “Treasury Fund Advisory Agreement”) between the Advisor and the Series Fund on behalf of Merrill Lynch Treasury Fund (the “Treasury Fund”), also a series of the Series Fund. The Series Fund Board also considered the approval of the separate subadvisory agreements between the Advisor and the Subadvisor with respect to the Government Fund (the “Government Fund Subadvisory Agreement”) and the Treasury Fund (the “Treasury Fund Subadvisory Agreement” and, together with the Government Fund Advisory Agreement, the Treasury Fund Advisory Agreement and the Government Fund Subadvisory Agreement, the “Series Fund Agreements”).
The Advisor and the Subadvisor are referred to herein as “BlackRock.” The Master LLC Agreements and the Series Fund Agreements are referred to herein as the “Agreements.” For ease and clarity of presentation, the Master LLC Board and the Series Fund Board, which are comprised of the same thirteen individuals, are herein referred to collectively as the “Boards,” the members of which are referred to as “Directors,” and the Feeder Funds and corresponding Master Portfolios, the Government Fund and the Treasury Fund are sometimes referred to collectively as “the Funds.”
The Boards each consist of thirteen individuals, eleven of whom are not “interested persons” of either the Series Fund or the Master LLC as defined in the Investment Company Act of 1940, as amended (the “1940 Act”) (the “Independent Directors”). The Boards are responsible for the oversight of the operations of the Series Fund and the Master LLC, as pertinent, and perform the various duties imposed on the directors of investment companies by the 1940 Act. The Independent Directors have retained independent legal counsel to assist them in connection with their duties. The Co-Chairs of each Board are both Independent Directors. The Boards established four standing committees: an Audit Committee, a Governance and Nominating Committee, a Compliance Committee and a Performance Oversight Committee, each of which is composed of, and chaired by Independent Directors.
Upon the consummation of the combination of BlackRock’s investment management business with Merrill Lynch & Co., Inc.’s investment management business, including Merrill Lynch Investment Managers, L.P. and certain affiliates, the Master LLC entered into the Master LLC Advisory Agreement with the Advisor on behalf of each Master Portfolio and the Advisor entered into the Master LLC Subadvisory Agreement with the Subadvisor with respect to each Master Portfolio. The Series Fund entered separately into the Government Fund Advisory Agreement with the Advisor on behalf of the Government Fund and the Treasury Fund Advisory Agreement with the Advisor on behalf of the Treasury Fund, and the Advisor entered separately into the Government Fund Subadvisory Agreement with the Subadvisor with respect to the Government Fund and the Treasury Fund Subadvisory Agreement with the Subadvisor with respect to the Treasury Fund. Each Agreement had an initial two-year term.
Consistent with the 1940 Act, prior to the expiration of each Master LLC Agreement’s initial two-year term, the Master LLC Board is required to consider the approval of the Master LLC Advisory Agreement and the Master LLC Subadvisory Agreement on an annual basis. The Series Fund Board also considers (but is not required to approve) the continuation of the Master LLC Advisory Agreement and the Master LLC Subadvisory Agreement on an annual basis. Additionally, consistent with the 1940 Act, prior to the expiration of each Series Fund Agreement’s initial two-year term, the Series Fund Board is required to consider the approval of the Government Fund Advisory Agreement, the Government Fund Subadvisory Agreement, the Treasury Fund Advisory Agreement and the Treasury Fund Subadvisory Agreement on an annual basis. In connection with this process, the Boards assessed, among other things and as pertinent, the nature, scope and quality of the services provided to the Funds by the personnel of BlackRock and its affiliates, including investment management, administrative services, shareholder services, oversight of fund accounting and custody, marketing services and assistance in meeting legal and regulatory requirements. The Boards also received and assessed information regarding the services provided to the Funds by certain unaffiliated service providers.
Disclosure of Investment Advisory Agreement and Subadvisory Agreement Approval
Throughout the year, the Boards, acting directly and through their committees, consider at each of their meetings factors that are relevant to their annual consideration and/or approval, as pertinent, of the renewal of the Agreements, including the services and support provided to the Funds and their shareholders. Among the matters the Boards considered, as pertinent, were: (a) investment performance for one, three and five years, as applicable, against peer funds, as well as senior management’s and portfolio managers’ analysis of the reasons for underperformance, if applicable; (b) fees, including advisory, administration, if applicable, and other fees paid to BlackRock and its affiliates by the Funds, such as transfer agency fees and fees for marketing and distribution; (c) Fund operating expenses; (d) the resources devoted to and compliance reports relating to the investment objective, policies and restrictions of each Fund; (e) the compliance of each Fund with its respective Code of Ethics and compliance policies and procedures; (f) the nature, cost and character of non-investment management services provided by BlackRock and its affiliates; (g) BlackRock’s and other service providers’ internal controls; (h) BlackRock’s implementation of the proxy voting guidelines approved by the Boards; (i) valuation and liquidity procedures; and (j) periodic overview of BlackRock’s business, including BlackRock’s response to the increasing scale of its business.
Board Considerations in Approving the Agreements
The Approval and Consideration Process. Prior to the April 16, 2008 meeting at which continuation of the Agreements was to be considered, the Boards requested and received materials specifically relating to the Agreements. The Boards are engaged in an ongoing process with BlackRock to continuously review the nature and scope of the information provided to better assist their deliberations. These materials included (a) information independently compiled and prepared by Lipper, Inc. (“Lipper”) on the fees and expenses and the investment performance of each Feeder Fund (other than the Select Institutional Fund) as compared with a peer group of funds as determined by Lipper (“Peers”); (b) information on the profitability of the Agreements to BlackRock and certain affiliates, including their other relationships with the Funds, and a discussion of fall-out benefits; (c) a general analysis provided by BlackRock concerning investment advisory fees charged to other clients, such as institutional and closed-end funds, under similar investment mandates, as well as the performance of such other clients; (d) a report on economies of scale; (e) sales and redemption data regarding shares of the Feeder Funds, the Government Fund and the Treasury Fund; and (f) an internal comparison of management fees classified by Lipper, if applicable. At the April 16, 2008 meeting, the Boards requested and subsequently received from BlackRock (i) comprehensive analysis of total expenses on a fund-by-fund basis; (ii) further analysis of investment performance; (iii) further data regarding the profitability, size and fee levels of the Funds; and (iv) additional information on sales and redemptions. Because the Select Institutional Fund did not commence operations until February 2008, specific comparative information listed in (i) through (iv) above in this paragraph was not provided by Lipper.
The Boards also considered, as pertinent, other matters they deemed important to the consideration and approval process, such as payments made to BlackRock or its affiliates relating to the distribution of the shares of the Feeder Funds, the Government Fund and the Treasury Fund, services related to the valuation and pricing of portfolio holdings of the Master Portfolios, the Government Fund and the Treasury Fund, and direct and indirect benefits to BlackRock and its affiliates from their relationship with the Funds. The Boards did not identify any particular information as controlling, and each Director may have attributed different weights to the various items considered.
At an in-person meeting held on April 16, 2008, the Boards discussed and considered the proposed renewal of the Agreements. As a result of the discussions, the Boards requested and BlackRock provided additional information, as detailed above, in advance of the June 3-4, 2008 Board meeting. At the in-person meeting held on June 3-4, 2008, the Master LLC Board, including the Master LLC Independent Directors, unanimously approved the continuation, for a one-year term ending June 30, 2009, of (a) the Master LLC Advisory Agreement between the Advisor and the Master LLC with respect to each Master Portfolio and (b) the Master LLC Subadvisory Agreement between the Advisor and the Subadvisor with respect to each Master Portfolio. The Series Fund Board, including the Series Fund Independent Directors, also considered the continuation of the Master LLC Advisory Agreement and the Master LLC Subadvisory Agreement and found the Master LLC Advisory Agreement and the Master LLC Subadvisory Agreement to be satisfactory. At the June 3-4, 2008 meeting, the Series Fund Board, including the Series Fund Independent Directors, also unanimously approved the continuation, for a one-year term ending June 30, 2009, of (i) the Government Fund Advisory Agreement between the Advisor and the Series Fund on behalf of the Government Fund, (ii) the Government Fund Subadvisory Agreement between the Advisor and the Subadvisor with respect to the Government Fund, (iii) the Treasury Fund Advisory Agreement between the Advisor and the Series Fund on behalf of the Treasury Fund and (iv) the Treasury Fund Subadvisory Agreement between the Advisor and the Subadvisor with respect to the Treasury Fund. The Boards considered all factors they believed relevant with respect to each Fund, as applicable, including, among other factors: (i) the nature, extent and quality of the services provided by BlackRock; (ii) the investment performance of the Funds and BlackRock portfolio management; (iii) the advisory fee and the cost of the services and profits to be realized by BlackRock and certain affiliates from the relationships with the Funds; and (iv) economies of scale.
A. Nature, Extent and Quality of the Services
The Boards, including the Independent Directors, reviewed, as pertinent, the nature, extent and quality of services provided by BlackRock, including the investment advisory services and the resulting performance of the Funds. The Boards compared the performance of each Feeder Fund (other than the Select Institutional Fund) to the performance of a comparable group of mutual funds as classified by Lipper and the performance of at least one relevant index or combination of
MERRILL LYNCH FUNDS FOR INSTITUTIONS SERIES OCTOBER 31, 2008 67
Disclosure of Investment Advisory Agreement and Subadvisory Agreement Approval
indices. The Boards met with BlackRock’s senior management personnel responsible for investment operations, including the senior investment officers. The Boards also reviewed the materials provided by the portfolio management team of each Master Portfolio, the Government Fund and the Treasury Fund discussing the Fund’s performance, investment objective, strategies and outlook.
The Boards considered, among other factors and as pertinent, the number, education and experience of BlackRock’s investment personnel generally, and of the portfolio management teams of the Master Portfolios, the Government Fund and the Treasury Fund; BlackRock’s portfolio trading capabilities; BlackRock’s use of technology; BlackRock’s commitment to compliance; and BlackRock’s approach to training and retaining portfolio managers and other research, advisory and management personnel. The Boards also reviewed BlackRock’s compensation structure with respect to the portfolio management teams of the Master Portfolios, the Government Fund and the Treasury Fund and BlackRock’s ability to attract and retain high-quality talent.
In addition to advisory services, the Boards considered, as pertinent, the quality of the administrative and non-investment advisory services provided to the Funds. BlackRock and its affiliates provide the Funds with certain administrative, transfer agency, shareholder and other services (in addition to any such services provided to the Funds by third parties) and officers and other personnel as are necessary for the operations of the Funds. In addition to investment advisory services, BlackRock and its affiliates provide the Funds with other services, including, as pertinent, (a) preparing disclosure documents, such as the prospectus, the statement of additional information and shareholder reports; (b) assisting with daily accounting and pricing; (c) overseeing and coordinating the activities of other service providers; (d) organizing Board meetings and preparing the materials for such Board meetings; (e) providing legal and compliance support; and (f) performing other administrative functions necessary for the operation of the Funds, such as tax reporting and fulfilling regulatory filing requirements. The Boards reviewed the structure and duties of BlackRock’s fund administration, accounting, legal and compliance departments.
B. | | The Investment Performance of the Funds and BlackRock |
The Boards, as pertinent, including the Independent Directors, also reviewed and considered the performance history of each Feeder Fund (other than the Select Institutional Fund), the Government Fund and the Treasury Fund. In preparation for the April 16, 2008 meeting, the Boards were provided with reports, independently prepared by Lipper, which included a comprehensive analysis of the performance of each Feeder Fund (other than the Select Institutional Fund), the Government Fund and the Treasury Fund. The Boards also reviewed a narrative and statistical analysis of the Lipper data that was prepared by BlackRock, which analyzed various factors that affect Lipper’s rankings. In connection with their review, the Boards received and reviewed information regarding the investment performance of each Feeder Fund (other than the Select Institutional Fund) (and the related performance of the corresponding Master Portfolio), the Government Fund and the Treasury Fund as compared to a representative group of similar funds as determined by Lipper and to all funds in the Fund’s applicable Lipper category. The Boards were provided with a description of the methodology used by Lipper to select peer funds. The Boards, as pertinent, regularly review the performance of each Fund throughout the year. The Boards attach more importance to performance over relatively long periods of time, typically three to five years.
The Boards noted with favor that the Advisor had generally avoided significant credit quality and liquidity issues in the challenging fixed-income market that prevailed during the past 18 months.
The Boards, as pertinent, noted that (a) the performance of each of the Feeder Funds for which Lipper data was provided and of the Government Fund was at or above the median of their respective Peers during each of the one-, three- and five-year periods reported and (b) the performance of the Treasury Fund was at or above the median of its Peers during the three- and five-year periods reported.
The Boards noted that performance information for the Select Institutional Fund was not included in the Lipper materials, since the Select Institutional Fund only commenced operations in February 2008. The Boards noted, however, that Merrill Lynch Institutional Portfolio serves as the Master Portfolio for both the Institutional Fund and the Select Institutional Fund; and Merrill Lynch Institutional Portfolio and the Institutional Fund have over five years of operation. The Boards thus considered Lipper information provided regarding the performance of the Institutional Fund.
C. | | Consideration of the Advisory Fees and the Cost of the Services and Profits to be Realized by BlackRock and its Affiliates from the Relationship with the Funds |
The Boards, as pertinent, including the Independent Directors, reviewed contractual advisory fee rates of each Master Portfolio, the Government Fund and the Treasury Fund compared with the other funds in the Lipper category of the corresponding Fund. They also compared the total expenses of each Feeder Fund (other than the Select Institutional Fund), the Government Fund and the Treasury Fund to those of other comparable funds. The Boards considered the services provided and the fees charged by BlackRock to other types of clients with similar investment mandates, including separately managed institutional accounts.
The Boards, as pertinent, received and reviewed statements relating to BlackRock’s financial condition and profitability with respect to the services it provided to the Funds. The Boards were also provided with a profitability analysis that detailed the revenues earned and the expenses incurred by BlackRock and certain affiliates that provide services to the Funds. The Boards reviewed BlackRock’s profitability with respect to each Fund and each fund the Boards currently oversee for the year ended December 31, 2007 compared to aggregate profitability data provided for the year ended December 31, 2005.
In addition, the Boards, as pertinent, considered the cost of the services provided to the Funds by BlackRock, and BlackRock’s and its
68 MERRILL LYNCH FUNDS FOR INSTITUTIONS SERIES OCTOBER 31, 2008
Disclosure of Investment Advisory Agreement and Subadvisory Agreement Approval
affiliates’ profits relating to the management and distribution of the Funds and the other funds advised by BlackRock and its affiliates. As part of their analysis, the Boards reviewed BlackRock’s methodology in allocating its costs to the management of each Fund and concluded that there was a reasonable basis for the allocation. The Boards also considered whether BlackRock has the financial resources necessary to attract and retain high quality investment management personnel to perform its obligations under the Agreements and to continue to provide the high quality of services that are expected by the Boards.
The Series Fund Board noted that the Government Fund and the Treasury Fund each paid contractual advisory fees higher than the median of their respective Peers. The Series Fund Board also took into account that the advisory fee arrangement of each of the Government Fund and the Treasury Fund includes breakpoints that adjust the fee rate downward as its respective size increases, thereby allowing shareholders the potential to participate in economies of scale.
The Boards noted that each Master Portfolio paid contractual advisory fees that were lower than or equal to the median of the Peers of their corresponding Feeder Funds.
Because the Select Institutional Fund, a feeder into the Merrill Lynch Institutional Portfolio, did not commence operations until February 2008, specific comparative information regarding the Select Institutional Fund’s expenses could not be provided by Lipper.
D. Economies of Scale
The Boards, including the Independent Directors, considered, as pertinent, the extent to which economies of scale might be realized as the assets of the Funds increase and whether there should be changes in the advisory fee rate or structure in order to enable the Funds to participate in these economies of scale. The Boards, including the Independent Directors, considered whether the shareholders would benefit from economies of scale and whether there was potential for future realization of economies with respect to the Funds. The Boards considered that the funds in the BlackRock fund complex share common resources and, as a result, an increase in the overall size of the complex could permit each fund to incur lower expenses than it would otherwise as a stand-alone entity. The Boards also considered the anticipated efficiencies in the processes of BlackRock’s overall operations as it continues to add personnel and commit capital to expand the scale of operations. The Boards found, based on their review of comparable funds, that the management fee of each Master Portfolio, the Government Fund and the Treasury Fund is appropriate in light of the scale of each respective Fund.
E. Other Factors
The Boards, as pertinent, also took into account other ancillary or “fall-out” benefits that BlackRock may derive from its relationship with the Funds, both tangible and intangible, such as BlackRock’s ability to leverage its investment professionals who manage other portfolios, an increase in BlackRock’s profile in the investment advisory community, and the engagement of BlackRock’s affiliates as service providers to the Funds, including for administrative, transfer agency and distribution services. The Boards also noted that BlackRock may use third party research, obtained by soft dollars generated by certain mutual fund transactions, to assist itself in managing all or a number of its other client accounts.
In connection with their consideration of the Agreements, the Boards also received information regarding BlackRock’s brokerage and trade execution practices throughout the year.
Conclusion. The Master LLC Board approved the continuation, for a one-year term ending June 30, 2009, of (a) the Master LLC Advisory Agreement between the Advisor and the Master LLC on behalf of each Master Portfolio and (b) the Master LLC Subadvisory Agreement between the Advisor and the Subadvisor with respect to each Master Portfolio. Based upon its evaluation of all these factors in their totality, the Master LLC Board, including the Master LLC Independent Directors, was satisfied that the terms of the Master LLC Agreements were fair and reasonable and in the best interest of each Master Portfolio and its shareholders. In arriving a decision to approve the Master LLC Agreements, the Master LLC Board did not identify any single factor or group of factors as all-important or controlling, but considered all factors together. The Master LLC Independent Directors were also assisted by the advice of independent legal counsel in making this determination. The Series Fund Board, including the Series Fund Independent Directors, also considered the continuation of the Master LLC Agreements and found the Master LLC Agreements to be satisfactory.
The Series Fund Board also approved the continuation, for a one-year term ending June 30, 2009, of (a) the Government Fund Advisory Agreement between the Advisor and the Series Fund on behalf of the Government Fund, (b) the Government Fund Subadvisory Agreement between the Advisor and the Subadvisor with respect to the Government Fund, (c) the Treasury Fund Advisory Agreement between the Advisor and the Series Fund on behalf of the Treasury Fund and (d) the Treasury Fund Subadvisory Agreement between the Advisor and the Subadvisor with respect to the Treasury Fund. Based upon its evaluation of all these factors in their totality, the Series Fund Board, including the Series Fund Independent Directors, was satisfied that the terms of the Series Fund Agreements were fair and reasonable and in the best interest of the Government Fund and the Treasury Fund and the shareholders of the Government Fund and the Treasury Fund. In arriving at a decision to approve the Series Fund Agreements, the Series Fund Board did not identify any single factor or group of factors as all-important or controlling, but considered all factors together. The Series Fund Independent Directors were also assisted by the advice of independent legal counsel in making this determination.
The contractual fee arrangements for the Master Portfolios, the Government Fund and the Treasury Fund reflect the results of several years of review by the pertinent Directors and predecessor Directors, and discussions between the pertinent Directors (and predecessor Directors) and BlackRock (and predecessor advisors). Certain aspects of the arrangements may be the subject of more attention in some years than in others, and the Directors’ conclusions may be based in part on their consideration of these arrangements in prior years.
MERRILL LYNCH FUNDS FOR INSTITUTIONS SERIES OCTOBER 31, 2008 69
Officers and Trustees/Directors of Merrill Lynch Funds for
Institutions Series/Master Institutional Money Market LLC
Ronald W. Forbes, Co-Chair of the Board and Trustee/Director
Rodney D. Johnson, Co-Chair of the Board and Trustee/Director
David O. Beim, Trustee/Director
Richard S. Davis, Trustee/Director
Henry Gabbay, Trustee/Director
Dr. Matina Horner, Trustee/Director
Herbert I. London, Trustee/Director
Cynthia A. Montgomery, Trustee/Director
Joseph P. Platt, Jr., Trustee/Director
Robert C. Robb, Jr., Trustee/Director
Toby Rosenblatt, Trustee/Director
Kenneth L. Urish, Trustee/Director
Frederick W. Winter, Trustee/Director
Donald C. Burke, Chief Executive Officer/President and Chief Executive Officer
Anne F. Ackerley, Vice President
Neal J. Andrews, Chief Financial Officer
Jay M. Fife, Treasurer
Brian P. Kindelan, Chief Compliance Officer
Howard B. Surloff, Secretary
Fund Address
Merrill Lynch Funds For Institutions Series
One Financial Center
Boston, MA 02111
Custodian & Accounting Agent
State Street Bank & Trust Company
Boston, Massachusetts 02266
Transfer Agent
State Street Bank & Trust Company
Boston, Massachusetts 02266
Legal Counsel
Sidley Austin LLP
New York, New York 10019
Independent Registered Public Accounting Firm
Deloitte & Touche LLP
Boston, Massachusetts 02116
70 MERRILL LYNCH FUNDS FOR INSTITUTIONS SERIES OCTOBER 31, 2008
Additional Information
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BlackRock Privacy Principles
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BlackRock is committed to maintaining the privacy of its current and former fund investors and individual clients (collectively, “Clients”) and to safeguarding their non-public 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 and regulations.
BlackRock obtains or verifies personal non-public 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 websites.
BlackRock does not sell or disclose to non-affiliated third parties any non-public 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 non-affiliated 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 non-public 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 non-public personal information of its Clients, including procedures relating to the proper storage and disposal of such information.
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Availability of Quarterly Schedule of Investments
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The Trust files the complete schedule of portfolio holdings of the Funds with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. The Trust’s Forms N-Q are available on the SEC’s website at http://www.sec.gov.
The Trust’s Forms N-Q may also be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
The Funds will mail only one copy of shareholder documents, including annual and semi-annual reports and proxy statements, to shareholders with multiple accounts at the same address. This practice is commonly called “householding” and it is intended to reduce expenses and eliminate duplicate mailings of shareholder documents. 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 Funds at (800) 225-1576.
MERRILL LYNCH FUNDS FOR INSTITUTIONS SERIES OCTOBER 31, 2008 71
This report is transmitted to shareholders only. It is not authorized for use as an offer of sale or a solicitation of an offer to buy shares of the Funds unless accompanied or preceded by the Trust’s current prospectus. An investment in the Funds is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Funds. Notwithstanding the preceding statements, Fund shareholders will be guaranteed to receive $1.00 net asset value for amounts that they held as of September 19, 2008 subject to the terms of the U.S. Treasury Department’s Temporary Guarantee Program for Money Market Funds. Total return information assumes reinvestment of all distributions. Past performance results shown in this report should not be considered a representation of future performance. For current month-end performance information, call (800) 225-1576. The Funds’ current seven-day yields more closely reflect the current earnings of the Funds than do the total returns quoted. Statements and other information herein are as dated and are subject to change.
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available (1) without charge, upon request, by calling toll-free (800) 225-1576; (2) on www.blackrock.com; and (3) on the Securities and Exchange Commission’s website at http://www.sec.gov. Information about how the Funds voted proxies relating to securities held in the Fund’s portfolios during the most recent 12-month period ended June 30 is available (1) at www.blackrock.com or by calling (800) 441-7762 and (2) on the Securities and Exchange Commission’s website at http://www.sec.gov.
Item 2 –
Code of Ethics – Not Applicable to this semi-annual report
Item 3 –
Audit Committee Financial Expert – Not Applicable to this semi-annual report
Item 4 –
Principal Accountant Fees and Services – Not Applicable to this semi-annual report
Item 5 –
Audit Committee of Listed Registrants – Not Applicable
Item 6 –
Investments
(a) The registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this form.
(b) Not Applicable due to no such divestments during the semi-annual period covered since the previous Form N-CSR filing.
Item 7 –
Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – Not Applicable
Item 8 –
Portfolio Managers of Closed-End Management Investment Companies – Not Applicable
Item 9 –
Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not Applicable
Item 10 – Submission of Matters to a Vote of Security Holders – The registrant’s Nominating and Governance Committee will consider nominees to the board of directors recommended by shareholders when a vacancy becomes available. Shareholders who wish to recommend a nominee should send nominations that include biographical information and set forth the qualifications of the proposed nominee to the registrant’s Secretary. There have been no material changes to these procedures.
Item 11 – Controls and Procedures
11(a) –
The registrant’s principal executive and principal financial officers or persons performing similar functions have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 15d-15(b) under the Securities Exchange Act of 1934, as amended.
11(b) –
There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12 – Exhibits attached hereto
12(a)(1) – Code of Ethics – Not Applicable to this semi-annual report
12(a)(2) – Certifications – Attached hereto
12(a)(3) – Not Applicable
12(b) –
Certifications – Attached hereto
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Merrill Lynch Funds for Institutions Series and Master Institutional Money Market LLC
By:
/s/ Donald C. Burke
Donald C. Burke
Chief Executive Officer of
Merrill Lynch Funds for Institutions Series and Master Institutional Money Market LLC
Date: December 19, 2008
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By:
/s/ Donald C. Burke
Donald C. Burke
Chief Executive Officer (principal executive officer) of
Merrill Lynch Funds for Institutions Series and Master Institutional Money Market LLC
Date: December 19, 2008
By:
/s/ Neal J. Andrews
Neal J. Andrews
Chief Financial Officer (principal financial officer) of
Merrill Lynch Funds for Institutions Series and Master Institutional Money Market LLC
Date: December 19, 2008
