INFORMATION ABOUT THE OF EACH FUND’S MANGEMENT AGREEMENT (Unaudited)
At a meeting of the funds’ Boards of Trustees (the “Board”) held on May 2, 2018, the Board considered the renewal of each fund’s Management Agreement pursuant to which Dreyfus 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 Dreyfus representatives. 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 to them at the meeting and in previous presentations from Dreyfus representatives regarding the nature, extent, and quality of the services provided to funds in the Dreyfus fund complex. For each fund, Dreyfus provided the number of open accounts in the fund, the fund’s asset size and the allocation of fund assets among distribution channels. Dreyfus also had previously provided information regarding the diverse intermediary relationships and distribution channels of funds in the Dreyfus fund complex (such as retail direct or intermediary, in which intermediaries typically are paid by the fund and/or Dreyfus) and Dreyfus’ 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 Dreyfus 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 Dreyfus’ 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, 2018, 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. Dreyfus 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.
Dreyfus representatives stated that the usefulness of performance comparisons may be affected by a number of factors, including different investment limitations that may be applicable to each fund and its comparison funds. The Board discussed with representatives of Dreyfus and/or its affiliates the results of the comparisons for each fund and considered the following:
For Dreyfus Cash Management, the fund’s total return performance was below the Performance Group median for all periods, except for the one-year period when it was above the median, and above the Performance Universe median for all periods;
For Dreyfus Government Cash Management, the fund’s 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;
For Dreyfus Government Securities Cash Management, the fund’s total return performance was at or within two basis points of the Performance Group median for all periods and above the Performance Universe for all periods;
For Dreyfus Treasury & Agency Cash Management, the fund’s 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 Dreyfus Treasury Securities Cash Management, the fund’s 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;
For Dreyfus AMT-Free Tax Exempt Cash Management, the fund’s total return performance was below the Performance Group median for all periods (within two or three basis points of the median in most periods) and below the Performance Universe median for all periods except for the ten-year period when it was above the median;
For Dreyfus AMT-Free Municipal Cash Management Plus, the fund’s total return performance was above the Performance Group and Performance Universe medians
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INFORMATION ABOUT THE OF EACH FUND’S MANGEMENT AGREEMENT (Unaudited) (continued)
for all periods (ranking in the first quartile of the Performance Group and Performance Universe in all periods);
For Dreyfus AMT-Free New York Municipal Cash Management, the fund’s total return performance was above or at the Performance Group median for all periods and above the Performance Universe median for all periods (ranking in the first quartile of the Performance Universe in 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.
For Dreyfus 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 within two basis points of the Expense Group and Expense Universe medians and the fund’s total expense ratio was above the Expense Group median and below the Expense Universe median;
For Dreyfus Government Cash Management, the fund’s contractual management fee was slightly above the Expense Group median, the fund’s actual management fee was within two basis points of the Expense Group and Expense Universe medians and the fund’s total expense ratio was within one basis point of the Expense Group median and below the Expense Universe median;
For Dreyfus 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 expense ratio was below the Expense Group and Expense Universe medians;
For Dreyfus Treasury & Agency Cash Management, the fund’s contractual management fee was less than two basis points above 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 expense ratio was less than one basis point above the Expense Group median and below the Expense Universe median;
For Dreyfus Treasury Securities 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 within two basis points of the Expense Group and Expense Universe medians and the fund’s total expense ratio was below the Expense Group and Expense Universe medians;
For Dreyfus AMT-Free Tax Exempt Cash Management, the fund’s contractual management fee was below the Expense Group median (lowest in the Expense Group) and the fund’s actual management fee and total expense ratio were above the Expense Group and Expense Universe medians;
For Dreyfus AMT-Free Municipal Cash Management Plus, the fund’s contractual management fee was below the Expense Group median, the fund’s actual management fee was below the Expense Group and Expense Universe medians and the fund’s total expense ratio was below the Expense Group median and above the Expense Universe median;
For Dreyfus 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 slightly above the Expense Group and Expense Universe medians and the fund’s total expense ratio was slightly above the Expense Group median and below the Expense Universe median.
For certain funds, the Board also considered the current fee waiver and expense reimbursement arrangement undertaken by Dreyfus.
For each fund, Dreyfus representatives reviewed with the Board the management or investment advisory fees paid by funds advised or administered by Dreyfus that are in the same Broadridge 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. Dreyfus representatives reviewed the expenses allocated and profit received by Dreyfus and its affiliates and the resulting profitability percentage for managing each fund and the aggregate profitability percentage to Dreyfus and its affiliates for managing the funds in the Dreyfus 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 Dreyfus. The Board also considered the fee waiver and expense reimbursement arrangement for certain funds and its effect on the profitability of Dreyfus and its affiliates. The Board also had been provided with information prepared by an independent consulting firm regarding Dreyfus’ approach to allocating costs to, and determining the profitability of, individual funds and the
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entire Dreyfus 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 Dreyfus, 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. Dreyfus representatives 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 Dreyfus may have realized any economies of scale would be less. Dreyfus representatives also stated that, as a result of shared and allocated costs among funds in the Dreyfus 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 Dreyfus 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 Dreyfus are adequate and appropriate.
· The Board generally was satisfied with the fund’s performance, except that the Board was somewhat concerned with the performance of Dreyfus Cash Management and Dreyfus AMT-Free Tax Exempt Cash Management relative to their respective Performance Groups and agreed to closely monitor performance.
· The Board concluded that the fee paid to Dreyfus 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 Dreyfus and its affiliates in connection with the management of the fund had been adequately considered by Dreyfus in connection with the fee rate charged to the fund 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 Dreyfus and its affiliates, of Dreyfus and the services provided to the fund by Dreyfus. 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 the relevant 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 Dreyfus funds that the Board oversees, during which lengthy discussions took place between the Board and Dreyfus representatives. 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 Dreyfus funds that the Board oversees, in prior years. The Board determined to renew each Agreement.
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Dreyfus Cash Management Funds
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York Mellon
240 Greenwich Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
200 Park Avenue
New York, NY 10166
Distributor
MBSC Securities Corporation
200 Park Avenue
New York, NY 10166
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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 & Agency Cash Management | DTRXX | DTVXX | DTAXX | DTPXX |
Dreyfus Treasury Securities Cash Management | DIRXX | DVRXX | DARXX | DPRXX |
Dreyfus AMT-Free Municipal Cash Management Plus | DIMXX | DVMXX | | |
Dreyfus AMT-Free New York Municipal Cash Management | DIYXX | DVYXX | | |
Dreyfus AMT-Free Tax Exempt Cash Management | DEIXX | DEVXX | | |
Telephone Call your Dreyfus Cash Investment Services Division representative or 1-800-346-3621
Mail Dreyfus Investments Division, 144 Glen Curtiss Boulevard, Uniondale, NY 11556-0144
Internet Access Dreyfus Investments Division at www.dreyfus.com
You can obtain product information and e-mail requests for information or literature
Each fund will disclose daily, on www.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 until the fund files its Form N-Q or Form N-CSR for the period that includes the date of the posted holdings.
Each fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at http://www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
A description of the policies and procedures that each fund uses to determine how to vote proxies relating to portfolio securities, and information regarding how the fund voted these proxies for the most recent 12-month period ended June 30 is available at http://www.dreyfus.com and on the SEC’s website at http://www.sec.gov. The description of the policies and procedures is also available without charge, upon request, by calling 1-800-DREYFUS.
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© 2018 MBSC Securities Corporation
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