Statement
of Additional Information
September
30, 2023
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Federated Hermes Institutional Prime Obligations Fund
A Portfolio of Federated Hermes Money Market Obligations Trust
This Statement of
Additional Information (SAI) is not a Prospectus. Read this SAI in conjunction
with the Prospectus for Federated Hermes Institutional Prime Obligations Fund
(the “Fund”), dated September 30, 2023.
This SAI
incorporates by reference the Fund’s Annual Report. Obtain the Prospectus or the
Annual Report without charge by calling 1-800-341-7400.
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How is the
Fund Organized?
The
Fund is a diversified portfolio of Federated Hermes Money Market Obligations
Trust (“Trust”). The Trust is an open-end, management
investment company that was established under the laws of the Commonwealth of
Massachusetts on October 3, 1988. The Trust may offer separate series of shares
representing interests in separate portfolios of securities.
The
Board of Trustees (“Board”) has established two classes of shares of
the Fund, known as Institutional Shares and Service Shares (“Shares”). This SAI
relates to Institutional Shares.
The
Fund’s Capital Shares were
liquidated as of August 18, 2023.
Effective
June 26, 2020, the Trust changed its name from Money Market Obligations Trust to
Federated Hermes Money Market
Obligations Trust, and the Fund changed its name from Federated Institutional
Prime Obligations Fund to Federated Hermes Institutional Prime Obligations
Fund.
The
Fund’s investment adviser is Federated Investment Management Company
(“Adviser”). Federated Hermes Institutional Prime
Value Obligations Fund, an affiliated institutional money market fund with
substantially similar investment objectives and strategies as the Fund, invests
all or substantially all of its net assets in the Institutional Shares of the
Fund.
Securities
in Which the Fund Invests
The
principal securities or other investments in which the Fund invests are
described in the Fund’s Prospectus. The Fund also may invest
in securities or other investments as non-principal investments for any purpose
that is consistent with its investment objective. The following information is
either additional information in respect of a principal security or other
investment referenced in the Prospectus or information in respect of a
non-principal security or other investment (in which case there is no related
disclosure in the Prospectus).
Securities
Descriptions And Techniques
Government
Securities (A Type of Fixed-Income Security)
Government
securities are issued or guaranteed by a federal agency or instrumentality
acting under federal authority. Some government
securities, including those issued by the Government National Mortgage
Association (“Ginnie Mae”), are supported by the full faith and credit of the
United States, and are guaranteed only as to the timely payment of interest and
principal.
Other
government securities receive support through federal subsidies, loans or other
benefits, but are not backed by the full faith and
credit of the United States. For example, the U.S. Treasury is authorized to
purchase specified amounts of securities issued by (or otherwise make funds
available to) the Federal Home Loan Bank System, Federal Home Loan Mortgage
Corporation (“Freddie Mac”), Federal National Mortgage Association (“Fannie
Mae”) and Tennessee Valley Authority in support of such obligations.
Some
government agency securities have no explicit financial support, and are
supported only by the credit of the applicable agency,
instrumentality or corporation. The U.S. government has provided financial
support to Freddie Mac and Fannie Mae, but there is no assurance that it will
support these or other agencies in the future.
The
Fund treats mortgage-backed securities guaranteed by a federal agency or
instrumentality as government securities. Although
such a guarantee helps protect against credit risk, it does not eliminate it
entirely or reduce other risks.
Additional
Information Related to Freddie Mac and Fannie Mae. The
extreme and unprecedented volatility and disruption that impacted the capital
and credit markets beginning in 2008 led to market concerns regarding the
ability of Freddie Mac and Fannie Mae to withstand future credit losses
associated with securities held in their investment portfolios, and on which
they provide guarantees, without the direct support of the federal government.
On September 7, 2008, Freddie Mac and Fannie Mae were placed under the
conservatorship of the Federal Housing Finance Agency (FHFA). Under the plan of
conservatorship, the FHFA assumed control of, and generally has the power to
direct, the operations of Freddie Mac and Fannie Mae, and is empowered to
exercise all powers collectively held by their respective shareholders,
directors and officers, including the power to: (1) take over the assets of and
operate Freddie Mac and Fannie Mae with all the powers of the shareholders, the
directors and the officers of Freddie Mac and Fannie Mae and conduct all
business of Freddie Mac and Fannie Mae; (2) collect all obligations and money
due to Freddie Mac and Fannie Mae; (3) perform all functions of Freddie Mac and
Fannie Mae which are consistent with the conservator’s appointment; (4) preserve
and conserve the assets and property of Freddie Mac and Fannie Mae; and (5)
contract for assistance in fulfilling any function, activity, action or duty of
the conservator.
1
In
connection with the actions taken by the FHFA, the Treasury has entered into
certain preferred stock purchase agreements (SPAs)
with each of Freddie Mac and Fannie Mae which establish the Treasury as the
holder of a new class of senior preferred stock in each of Freddie Mac and
Fannie Mae. The senior preferred stock was issued in connection with financial
contributions from the Treasury to Freddie Mac and Fannie Mae. Although the SPAs
are subject to amendment from time to time, currently the Treasury is obligated
to provide such financial contributions up to an aggregate maximum amount
determined by a formula set forth in the SPAs, and until such aggregate maximum
amount is reached, there is not a specific end date to the Treasury’s
obligations.
The
future status and role of Freddie Mac and Fannie Mae could be impacted by (among
other things) the actions taken and restrictions
placed on Freddie Mac and Fannie Mae by the FHFA in its role as conservator, the
restrictions placed on Freddie Mac’s and Fannie Mae’s operations and activities
under the SPAs, market responses to developments at Freddie Mac and Fannie Mae,
downgrades or upgrades in the credit ratings assigned to Freddie Mac and Fannie
Mae by nationally recognized statistical rating organizations (NRSROs) or
ratings services, and future legislative and regulatory action that alters the
operations, ownership, structure and/or mission of these institutions, each of
which may, in turn, impact the value of, and cash flows on, any securities
guaranteed by Freddie Mac and Fannie Mae.
In
addition, the future of Freddie Mac and Fannie Mae, and other U.S.
government-sponsored enterprises that are not backed by the
full faith and credit of the U.S. government (GSEs), remains in question as the
U.S. government continues to consider options ranging from structural reform,
nationalization, privatization or consolidation, to outright elimination. The
issues that have led to significant U.S. government support for Freddie Mac and
Fannie Mae have sparked serious debate regarding the continued role of the U.S.
government in providing mortgage loan liquidity.
Zero-Coupon
Securities (A Type of Fixed-Income Security)
Certain
fixed-income securities in which the Fund invests are zero-coupon securities.
Zero-coupon securities do not pay interest
or principal until final maturity unlike debt securities that provide periodic
payments of interest (referred to as a coupon payment). Investors buy
zero-coupon securities at a price below the amount payable at maturity. The
difference between the purchase price and the amount paid at maturity represents
interest on the zero-coupon security. Investors must wait until maturity to
receive interest and principal, which increases the interest rate and credit
risks of a zero-coupon security.
Mortgage-Backed
Securities (MBS) (A Type of Fixed-Income Security)
An
MBS is a type of pass-through security, which is a pooled debt obligation
repackaged as interests that pass principal and interest
through an intermediary to investors. In the case of MBS, the ownership interest
is issued by a trust and represents participation interests in pools of
adjustable and fixed-rate mortgage loans. MBS are most commonly issued or
guaranteed by the U.S. government (or one of its agencies or instrumentalities)
(“agency MBS”), but also may be issued or guaranteed by private entities
(“non-agency MBS”). Unlike conventional debt obligations, MBS provide monthly
payments derived from the monthly interest and principal payments (including any
prepayments) made by the individual borrowers on the pooled mortgage loans. Most
MBS make these payments monthly; however, certain MBS are backed by mortgage
loans which do not generate monthly payments but rather generate payments less
frequently.
The
mortgage loan collateral for non-agency MBS consists of residential mortgage
loans that do not conform to GSEs underwriting
guidelines. Non-agency MBS generally offer a higher yield than agency MBS
because there are no direct or indirect government guarantees of
payment.
Investments
in MBS expose the Fund to interest rate, prepayment and credit
risks.
Insurance
Contracts (A Type of Fixed-Income Security)
Insurance
contracts include guaranteed investment contracts, funding agreements and
annuities. Insurance contracts generally provide
that the purchaser will deposit money with the insurance company and the
insurance company will pay interest for the life of the contract and return the
principal at maturity. The Fund treats these contracts as fixed-income
securities.
Other
Investments, Transactions, Techniques
Reverse
Repurchase Agreements
Reverse
repurchase agreements (which are considered a type of special transaction for
asset segregation or asset coverage purposes)
are repurchase agreements in which the Fund is the seller (rather than the
buyer) of the securities, and agrees to repurchase them at an agreed-upon time
and price. A reverse repurchase agreement may be viewed as a type of borrowing
by the Fund. Reverse repurchase agreements are subject to credit risks. In
addition, reverse repurchase agreements create leverage risks because the Fund
must repurchase the underlying security at a higher price, regardless of the
market value of the security at the time of repurchase.
2
Delayed
Delivery Transactions
Delayed
delivery transactions, including when-issued transactions, are arrangements in
which the Fund buys securities for a set
price, with payment and delivery of the securities scheduled for a future time.
During the period between purchase and settlement, no payment is made by the
Fund to the issuer and no interest accrues to the Fund. The Fund records the
transaction when it agrees to buy the securities and reflects their value in
determining the price of its Shares. Settlement dates may be a month or more
after entering into these transactions so that the market values of the
securities bought may vary from the purchase prices. Therefore, delayed delivery
transactions create interest rate risks for the Fund. Delayed delivery
transactions also involve credit risks in the event of a counterparty
default.
Asset
Coverage
In
accordance
with the requirements of Section
18
of
the
Investment Company Act of
1940, as
amended (the “1940 Act”),
any
borrowings by
the Fund,
including reverse repurchase agreements,
will be made
only to the extent the value of its assets,
less
its
liabilities other than borrowings,
is equal to
at least 300%
of all
of
its
borrowings.
Inter-Fund
Borrowing and Third-Party Lending Arrangements
Inter-Fund
Borrowing
The
Securities and Exchange Commission (SEC) has granted an exemption that permits
the Fund and all other funds advised by
subsidiaries of Federated Hermes, Inc. (formerly, Federated Investors, Inc.)
(“Federated Hermes funds”) to lend and borrow money for certain temporary
purposes directly to and from other Federated Hermes funds. Participation in
this inter-fund lending program is voluntary for both borrowing and lending
Federated Hermes funds, and an inter-fund loan is only made if it benefits each
participating Federated Hermes fund. Federated Hermes, Inc. (“Federated Hermes”)
administers the program according to procedures approved by the Fund’s Board,
and the Board monitors the operation of the program. Any inter-fund loan must
comply with certain conditions set out in the exemption, which are designed to
assure fairness and protect all participating Federated Hermes
funds.
For
example, inter-fund lending is permitted only: (a) to meet shareholder
redemption requests; (b) to meet commitments arising
from “failed” trades; and (c) for other temporary purposes. All inter-fund loans
must be repaid in seven days or less. The Fund’s participation in this program
must be consistent with its investment policies and limitations, and must meet
certain percentage tests. Inter-fund loans may be made only when the rate of
interest to be charged is more attractive to the lending Federated Hermes fund
than market-competitive rates on overnight repurchase agreements (“Repo Rate”)
and more
attractive to the borrowing Federated Hermes fund than the rate of interest that
would be charged by an unaffiliated bank for short-term borrowings (“Bank Loan
Rate”), as determined by the Board. The interest rate imposed on inter-fund
loans is the average of the Repo Rate and the Bank Loan Rate.
Third-Party
Line of Credit
The
Fund participates with certain other Federated Hermes funds, on a several basis,
in an up to $500,000,000 unsecured, 364-day,
committed, revolving line of credit (LOC) agreement. The LOC was made available
to temporarily finance the repurchase or redemption of shares of the Fund,
failed trades, payment of dividends, settlement of trades and for other
short-term, temporary or emergency general business purposes. The Fund cannot
borrow under the LOC if an inter-fund loan is outstanding. The Fund’s ability to
borrow under the LOC also is subject to the limitations of the Investment
Company Act of 1940, as amended (“1940 Act”) and various conditions precedent
that must be satisfied before the Fund can borrow. Loans under the LOC are
charged interest at a fluctuating rate per annum equal to (a) the highest, on
any day, of: (i) the federal funds effective rate; (ii) the published secured
overnight financing rate plus an assigned percentage; and (iii) 0.0%; plus (b) a
margin. Any fund eligible to borrow under the LOC pays its pro rata share of a
commitment fee based on the amount of the lenders’ commitment that has not been
utilized, quarterly in arrears and at maturity. As of the date of this Statement
of Additional Information, there were no outstanding loans. During the most
recently ended fiscal year, the Fund did not utilize the LOC.
Minimal
Credit Risk
Under
Rule 2a-7 under the 1940 Act, money market funds, such as the Fund, may
generally invest in “Eligible Securities” which
include securities issued by another money market fund, government securities or
securities that have a remaining maturity of no more than 397 calendar days and
are determined by the fund’s board or its delegate to present minimal credit
risk based on an assessment of the issuer’s credit quality, including the
capacity of the issuer or guarantor to meet its financial obligations. The
Fund’s Board has adopted procedures by which the Adviser will conduct this
initial and ongoing assessment, as required. Such analysis of whether a security
presents minimal credit risk will include, to the extent appropriate:
consideration of the security’s issuer or guarantor’s financial condition,
sources of liquidity, ability to react to future market-wide and issuer or
guarantor-specific events, including the ability to repay debt in a highly
adverse situation; and strength of the issuer or guarantor’s industry
3
within the
economy and relative to economic trends, as well as the issuer or guarantor’s
competitive position within its industry. In addition, a minimal credit risk
evaluation may also include consideration of whether the price and/or yield of
the security itself is similar to that of other securities in the Fund’s
portfolio. The Adviser will perform an ongoing review of whether each security
(other than a government security) continues to present minimal credit
risks.
Investment
Risks
There
are many risk factors which may affect an investment in the Fund. The Fund’s
principal risks are described in its Prospectus.
The following information is either additional information in respect of a
principal risk factor referenced in the Prospectus or information in respect of
a non-principal risk factor applicable to the Fund (in which case there is no
related disclosure in the Prospectus).
leverage
Risk
Leverage
risk is created when an investment exposes the Fund to a level of risk that
exceeds the amount invested. Changes in the value
of such an investment magnify the Fund’s risk of loss and potential for
gain.
RISK
ASSOCIATED WITH THE INVESTMENT ACTIVITIES OF OTHER ACCOUNTS
Investment
decisions for the Fund are made independently from those of other accounts
managed by the Adviser and accounts managed by
affiliates of the Adviser. Therefore, it is possible that investment-related
actions taken by such other accounts could adversely impact the Fund with
respect to, for example, the value of Fund portfolio holdings, and/or prices
paid to or received by the Fund on its portfolio transactions, and/or the Fund’s
ability to obtain or dispose of portfolio securities. Related considerations are
discussed elsewhere in this SAI under “Brokerage Transactions and Investment
Allocation.”
CYBERSECURITY
AND OPERATIONAL RISK
Like
other funds and business enterprises, Federated Hermes’ business relies on the
security and reliability of information and
communications technology, systems and networks. Federated Hermes uses digital
technology, including, for example, networked systems, email and the Internet,
as well as mobile devices and “cloud”-based service offerings, to conduct
business operations and engage clients, customers, employees, products,
accounts, shareholders and relevant service providers, among others. Federated
Hermes, as well as its funds and certain service providers, also generate,
compile and process information for purposes of preparing and making filings or
reports to governmental agencies, or providing reports or statements to
customers, and a cybersecurity attack or incident that impacts that information,
or the generation and filing processes, can prevent required regulatory filings
and reports from being made, or reports or statements from being delivered, or
cause the inadvertent release of confidential information (possibly resulting in
the violation of applicable privacy laws). The use of the Internet and other
electronic media and technology exposes the Fund, the Fund’s shareholders, and
the Fund’s service providers, and their respective operations, to potential
risks from cybersecurity attacks or incidents (collectively, “cyber-events”).
The work-from-home environment necessitated by the novel coronavirus
(“COVID-19”) pandemic has increased the risk of cyber incidents given the
increase in cyber attack surface stemming from the use of personal devices and
non-office or personal technology.
Cyber-events
can result from intentional (or deliberate) attacks or unintentional events by
insiders (e.g., employees) or third parties,
including cybercriminals, competitors, nation-states and “hacktivists,” among
others. Cyber-events can include, for example, phishing, credential harvesting
or use of stolen access credentials, unauthorized access to systems, networks or
devices (such as, for example, through “hacking” activity), structured query
language attacks, infection from or spread of malware, ransomware, computer
viruses or other malicious software code, corruption of data, exfiltration of
data to malicious sites, the dark web or other locations or threat actors, and
attacks (including, but not limited to, denial of service attacks on websites)
which shut down, disable, slow, impair or otherwise disrupt operations, business
processes, technology, connectivity or website or Internet access, functionality
or performance. Like other funds and business enterprises, the Fund and its
service providers have experienced, and will continue to experience,
cyber-events on a daily basis. In addition to intentional cyber-events,
unintentional cyber-events can occur, such as, for example, the inadvertent
release of confidential information. Cyber-events can also be carried out in a
manner that does not require gaining unauthorized access, such as causing
denial-of-service attacks on the service providers’ systems or websites
rendering them unavailable to intended users or via “ransomware” that renders
the systems inoperable until appropriate actions are taken. To date,
cyber-events have not had a material adverse effect on the Fund’s business
operations or performance.
Cyber-events
can affect, potentially in a material way, Federated Hermes’ relationships with
its customers, employees, products,
accounts, shareholders and relevant service providers. Any cyber-event could
adversely impact the Fund and its shareholders and cause the Fund to incur
financial loss and expense, as well as face exposure to regulatory penalties,
reputational damage, damage to employee perceptions of the company, and
additional compliance costs associated with corrective measures
4
and credit
monitoring for impacted individuals. A cyber-event can cause the Fund, or its
service providers, to lose proprietary information, suffer data corruption, lose
operational capacity (such as, for example, the loss of the ability to process
transactions, generate or make filings or deliver reports or statements,
calculate the Fund’s NAV, or allow shareholders to transact business or other
disruptions to operations), and/or fail to comply with applicable privacy and
other laws. Among other potentially harmful effects, cyber-events also can
result in theft, unauthorized monitoring and failures in the physical
infrastructure or operating systems that support the Fund and its service
providers. In addition, cyber-events affecting issuers in which the Fund invests
could cause the Fund’s investments to lose value.
The
Fund’s Adviser and its relevant affiliates have established risk management
systems reasonably designed to seek to reduce the risks
associated with cyber-events. The Fund’s Adviser employs various measures aimed
at mitigating cybersecurity risk, including, among others, use of firewalls,
system segmentation, system monitoring, virus scanning, periodic penetration
testing, employee phishing training and an employee cybersecurity awareness
campaign. Among other service provider management efforts, Federated Hermes also
conducts due diligence on key service providers relating to cybersecurity.
Federated Hermes has established a committee to oversee Federated Hermes’
information security and data governance efforts, and updates on cyber-events
and risks are reviewed with relevant committees, as well as Federated Hermes’
and the Fund’s Boards of Directors or Trustees (or a committee thereof), on a
periodic (generally quarterly) basis (and more frequently when circumstances
warrant) as part of risk management oversight responsibilities. However, there
is no guarantee that the efforts of Federated Hermes, the Fund’s Adviser or its
affiliates, or other service providers, will succeed, either entirely or
partially as there are limits on Federated Hermes’ and the Fund’s ability to
prevent, detect or mitigate cyber-events. Among other reasons, the cybersecurity
landscape is constantly evolving, the nature of malicious cyber-events is
becoming increasingly sophisticated and the Fund’s Adviser, and its relevant
affiliates, cannot control the cyber systems and cybersecurity systems of
issuers or third-party service providers.
The
Fund can be exposed to operational risk arising from a number of factors,
including, but not limited to, human error, processing
and communication errors, errors of the Fund’s service providers,
counterparties, or other third parties, failed or inadequate processes and
technology or system failures. In addition, other disruptive events, including,
but not limited to, natural disasters and public health crises (such as the
COVID-19 pandemic), can adversely affect the Fund’s ability to conduct business,
in particular if the Fund’s employees or the employees of its service providers
are unable or unwilling to perform their responsibilities as a result of any
such event. Even if the Fund’s employees and the employees of its service
providers are able to work remotely, those remote work arrangements could result
in the Fund’s business operations being less efficient than under normal
circumstances, could lead to delays in its processing of transactions, and could
increase the risk of cyber-events.
Investment
Objective and Investment Limitations
The
Fund’s investment objective is to provide current income consistent with
stability of principal. The investment objective may not be
changed by the Board without shareholder approval.
INVESTMENT
LIMITATIONS
Diversification
of Investments
With
respect to securities comprising 75% of the value of its total assets, the Fund
will not purchase securities of any one issuer
(other than cash; cash items; securities issued or guaranteed by the government
of the United States or its agencies or instrumentalities and repurchase
agreements collateralized by such U.S. government securities; and securities of
other investment companies) if, as a result, more than 5% of the value of its
total assets would be invested in securities of that issuer, or the Fund would
own more than 10% of the outstanding voting securities of that
issuer.
Borrowing
Money and Issuing Senior Securities
The
Fund may borrow money, directly or indirectly, and issue senior securities to
the maximum extent permitted under the Investment
Company Act of 1940 (“1940 Act”).
Investing
in Real Estate
The
Fund may not purchase or sell real estate, provided that this restriction does
not prevent the Fund from investing in issuers which
invest, deal or otherwise engage in transactions in real estate or interests
therein, or investing in securities that are secured by real estate or interests
therein. The Fund may exercise its rights under agreements relating to such
securities, including the right to enforce security interests and to hold real
estate acquired by reason of such enforcement until that real estate can be
liquidated in an orderly manner.
5
Investing
in Commodities
The
Fund may not purchase or sell physical commodities, provided that the Fund may
purchase securities of companies that deal in
commodities.
Underwriting
The
Fund may not underwrite the securities of other issuers, except that the Fund
may engage in transactions involving the acquisition,
disposition or resale of its portfolio securities under circumstances where it
may be considered to be an underwriter under the Securities Act of
1933.
Lending
Cash or Securities
The
Fund may not make loans, provided that this restriction does not prevent the
Fund from purchasing debt obligations, entering
into repurchase agreements, lending its assets to broker/dealers or
institutional investors and investing in loans, including assignments and
participation interests.
Concentration
of Investments
The
Fund may not purchase the securities of any issuer (other than securities issued
or guaranteed by the U.S. government or any of its
agencies or instrumentalities) if, as a result, more than 25% of the Fund’s
total assets would be invested in the securities of companies whose principal
business activities are in the same industry, except that the Fund will invest
more than 25% of its total assets in the financial services
industry.
The
above limitations are
fundamental and cannot be changed unless authorized by the Board and by the
“vote of a majority of the Fund’s outstanding voting securities,” as defined by
the 1940 Act,
which
means the lesser of (a) 67% of the shares of the Fund present or represented by
proxy at a meeting if the holders of more than 50% of the outstanding shares are
present or represented at the meeting or (b) more than 50% of outstanding shares
of the Fund. The following limitations, however, may be changed by the Board
without shareholder approval. Shareholders will be notified before any material
change in these limitations becomes effective.
Pledging
Assets
The
Fund will not mortgage, pledge or hypothecate any of its assets, provided that
this shall not apply to the transfer of securities
in connection with any permissible borrowing or to collateral arrangements in
connection with permissible activities.
Purchases
on Margin
The
Fund will not purchase securities on margin, provided that the Fund may obtain
short-term credits necessary for the clearance
of purchases and sales of securities.
Illiquid
Securities
The
Fund will not acquire securities that cannot be sold or disposed of in the
ordinary course of business within seven days at approximately
the value ascribed to them by the Fund if, immediately after the acquisition,
the Fund would have invested more than 5% of its total assets in such
securities.
Additional
Information
Except
with respect to borrowing money, if a percentage limitation is adhered to at the
time of investment, a later increase or decrease
in percentage resulting from any change in value or net assets will not result
in a violation of such limitation.
For
purposes of the diversification limitation, the Fund considers certificates of
deposit and demand and time deposits issued by a U.S.
branch of a domestic bank or savings association having capital, surplus and
undivided profits in excess of $100,000,000 at the time of investment to be
“cash items.”
In
applying the concentration limitation, the Adviser: (a) deems the financial
services industry to include the group of industries
in the financial services sector, and the financial services sector to include
banks, broker-dealers and financial companies; (b) divides utility companies
according to their services (for example, gas, gas transmission, electric and
telephone); (c) classifies financial companies according to the end users of
their services (for example, automobile finance, bank finance and diversified
finance); (d) classifies asset-backed securities according to the underlying
assets securing such securities; and (e) deems investment in certain industrial
development bonds funded by activities in a single industry to constitute
investment in an industry. The Adviser may analyze the characteristics of a
particular issuer and security and assign an industry or sector classification
consistent with those characteristics in the event that the third-party provider
used by the Adviser does not assign a classification.
6
REGULATORY
COMPLIANCE
The
Fund may follow non-fundamental operational policies that are more restrictive
than its fundamental investment limitations,
as set forth in the Prospectus and this SAI, in order to comply with applicable
laws and regulations, including the provisions of and regulations under the 1940
Act. In particular, the Fund will comply with the various requirements of Rule
2a-7 (the “Rule”), which regulates money market mutual funds. The Fund may
change these operational policies to reflect changes in the laws and regulations
without the approval of its shareholders.
In July
2023, the SEC adopted a number of requirements, including the ability to impose
discretionary liquidity fees for money market funds based on a
determination by the Fund’s Board that the imposition of such a liquidity fee
would be in the Fund’s best interests.
Pursuant
to rules adopted by the SEC in July
2023,
the
Fund,
beginning
on
October
2,
2023,
will be
able
to impose
discretionary liquidity fees on redemptions, subject to a determination by the
Fund’s Board that such a liquidity fee is in the Fund’s best interests. If the
Board, including a majority of the independent Trustees, determines that
imposing a liquidity fee is in the Fund’s best interests, the Fund may impose
discretionary liquidity fees of up
to
2%
of the
value
of the shares
redeemed. In the event that a liquidity fee is imposed, the Board may take
certain other actions based on the particular facts and circumstances,
including, but not limited to, modifying the timing and frequency of the Fund’s
NAV determinations.
If
liquidity fees are imposed, the Fund will notify
shareholders on the Fund’s website or by press release. In addition to
identifying the Fund, such notifications will include the time of implementation
of the liquidity fee and
details
regarding the amount of the liquidity fee. If the Board, including a majority of
the independent Trustees, changes or removes a liquidity fee, the Fund will
notify shareholders in the same manner as described above. The imposition and
termination of a liquidity fee will also be reported by the Fund to the SEC on
Form N-CR.
All
liquidity fees payable by shareholders of the Fund would be
payable to the Fund and can be used to offset any losses realized by the Fund
when seeking to honor redemption requests during times of market stress. The
Fund expects to treat such liquidity fees as not constituting income to the
Fund. A liquidity fee imposed by the Fund will reduce the amount you will
receive upon the redemption of your shares, and will decrease the amount of any
capital gain or increase the amount of any capital loss you will recognize from
such redemption. Although there is some degree of uncertainty with respect to
the tax treatment of liquidity fees received by money market funds, it is
anticipated at this time that a liquidity fee will have no tax effect on the
Fund. As the tax treatment will likely be the subject of future guidance issued
by the Internal Revenue Service, the Fund will re-visit the applicable treatment
of liquidity fees when they are received.
Pursuant
to rules under Section 22(e) of the 1940 Act, if the Fund’s weekly liquid assets
fall below 10% and the Board determines that it would
not be in the best interests of the Fund to continue operating, the Board may
suspend redemption in the Fund and may approve the liquidation of the Fund. The
Board may also suspend redemptions and liquidate the Fund if the Board
determines that the deviation between its amortized cost price per share and its
market-based NAV may result in material dilution or other unfair results to
investors or existing shareholders. Prior to suspending redemptions, the Fund
would be required to notify the SEC of its decision to liquidate and suspend
redemptions. If the Fund ceases honoring redemptions and determines to
liquidate, the Fund expects that it would notify shareholders on the Fund’s
website or by press release. Distributions to shareholders of liquidation
proceeds may occur in one or more disbursements.
Purchase
orders received after the last NAV determination of a given day, but
prior to
notification of the imposition of liquidity fees will be cancelled unless
re-confirmed. Under certain circumstances, the Fund may honor redemption orders
(or pay redemptions without adding a liquidity fee to the redemption amount) if
the Fund can verify that the redemption order was received in good order by the
Fund or by the Fund’s agent before the Fund imposed liquidity fees.
What Do
Shares Cost?
DETERMINING
MARKET VALUE OF SECURITIES
The NAV
per share is based on the market value of the investments held by the Fund. The
Fund calculates the NAV of each class by valuing the
assets allocated to the Share’s class, subtracting the liabilities allocated to
each class, and dividing the balance by the number of Shares of the class
outstanding. The NAV for each class of Shares may differ due to the variance
between the amount of accrued investment income and capital gains or losses
allocated to each class and the amount actually distributed to shareholders of
each class. The Fund’s current NAV and/or public offering price may be found at
FederatedHermes.com/us, via online news sources and in certain
newspapers.
7
You
can purchase or redeem Shares any day the NYSE is open, except for days on which
the Federal Reserve Bank is closed for
holidays. In addition to weekends, the Federal Reserve is generally closed on
the following national holidays (or on business days on which such holidays are
observed): New Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day,
Memorial Day, Juneteenth National Independence Day, Independence Day, Labor Day,
Columbus Day, Veterans Day, Thanksgiving Day and Christmas Day. You may also be
able to purchase and redeem Shares on certain days that the NYSE is closed on an
unscheduled basis due to unforeseen or emergency circumstances, if the Fund’s
Board determines to allow Fund Share transactions on such days.
Pursuant
to Rule 2a-5 under the 1940 Act, the Board has designated the Adviser as the
Fund’s valuation designee to perform any fair
value determinations for securities and other assets held by the Fund. The
Adviser, acting through its “Valuation Committee,” is responsible for
determining the fair value of investments for which market quotations are not
readily available. The Valuation Committee is comprised of officers of the
Adviser and certain of the Adviser’s affiliated companies and determines fair
value and oversees the calculation of the NAV. The Valuation Committee is
subject to Board oversight and certain reporting and other requirements intended
to provide the Board the information it needs to oversee the Adviser’s fair
value determinations.
When
the Fund holds securities that trade principally in foreign markets on days the
NYSE is closed, the value of the Fund’s assets may
change on days you cannot purchase or redeem Shares. This may also occur when
the U.S. markets for fixed-income securities are open on a day the NYSE is
closed.
In
calculating its NAV, the Fund generally values investments as
follows:
◾ Fixed-income
securities with remaining maturities greater than 60 days are fair valued using
price evaluations provided by a pricing service approved by the
Adviser.
◾ Fixed-income
securities with remaining maturities of 60 days or less are valued at their cost
(adjusted for the accretion of any discount or amortization of any premium) in
accordance with “Use of Amortized Cost” below.
A
low or negative interest rate environment impacts, in a negative way, the Fund’s
ability to provide a positive return, or yield, to its
shareholders, pay expenses out of current income, and/or achieve its investment
objective.
USE
OF AMORTIZED COST
In
accordance with SEC guidance, the Fund will price securities with remaining
maturities of 60 days or less at amortized cost, provided the amortized
cost price is approximately the same as the fair market price (“shadow price”)
of such security. The
amortized
cost method of
valuation
generally prescribes that an investment is valued at its acquisition
cost
as adjusted
daily for amortization of premium or accretion of discount to the specified
redemption value on the nearest call, demand or maturity date, as appropriate.
The Fund uses this adjusted cost to value the investment.
In
response to SEC guidance that institutional money market funds may only use the
amortized cost method to value a portfolio security with a
remaining maturity of 60 days or less when it can reasonably conclude, at each
time it makes a valuation determination, that the amortized cost price of the
portfolio security is approximately the same as the fair value of the security
as determined without the use of amortized cost valuation, the Board has adopted
certain procedures to perform a comparison between the amortized cost price and
the shadow price of a portfolio security that utilizes amortized cost to value
the security to insure that amortized cost is
used to value
the security only where it is “approximately the same” as the security’s shadow
price. If the shadow price of such security is not approximately the same as the
amortized cost price,
generally the
shadow price of the security will be used,
unless
otherwise permitted under the procedures. Shadow prices for individual
securities are generally provided by an independent pricing service unless
otherwise authorized by the procedures approved by the Board.
How is the
Fund Sold?
Under
the Distributor’s Contract with the Fund, the Distributor (“Federated Securities
Corp.”) offers Shares on a continuous, best-efforts
basis.
Additional
Payments To Financial Intermediaries
The
Distributor may pay out of its own resources amounts to certain financial
intermediaries, including broker-dealers, banks, registered
investment advisers, independent financial planners and retirement plan
administrators. In some cases, such payments may be made by, or funded from the
resources of, companies affiliated with the Distributor (including the Adviser).
While Financial Industry Regulatory Authority, Inc. (FINRA) regulations limit
the sales charges that you may bear, there are no limits with regard to the
amounts that the Distributor may pay out of its own resources. In addition to
the payments which are generally described herein and in the Prospectus, the
financial intermediary also may receive Service Fees. In connection with these
payments, the financial intermediary may elevate the prominence or profile of
the Fund and/or other Federated Hermes funds within the financial intermediary’s
organization by, for example, placement on a list of preferred or recommended
funds and/or
8
granting
the Distributor preferential or enhanced opportunities to promote the funds in
various ways within the financial intermediary’s organization. The same
financial intermediaries may receive payments under more than one or all
categories. These payments assist in the Distributor’s efforts to support the
sale of Shares. These payments are negotiated and may be based on such factors
as: the number or value of Shares that the financial intermediary sells or may
sell; the value of client assets invested; the level and types of services or
support furnished by the financial intermediary; or the Fund’s and/or other
Federated Hermes funds’ relationship with the financial intermediary. Not all
financial intermediaries receive such payments and the amount of compensation
may vary by intermediary. You should ask your financial intermediary for
information about any payments it receives from the Distributor or the Federated
Hermes funds and any services it provides, as well as the fees and/or
commissions it charges.
Regarding
the Fund’s Institutional Shares, the Institutional Shares of the Fund currently
do not accrue, pay or incur any shareholder
services/account administration fees, although the Board of Trustees has
approved the Institutional Shares of the Fund to accrue, pay and incur such fees
in amounts up to a maximum amount of 0.25%, or some lesser amount as the Board
of Trustees shall approve from time to time. The Institutional Shares of the
Fund will not accrue, pay or incur such fees until such time as approved by the
Fund’s Board of Trustees.
The
categories of additional payments are described below.
Supplemental
Payments
The
Distributor may make supplemental payments to certain financial intermediaries
that are holders or dealers of record for accounts
in one or more of the Federated Hermes funds. These payments may be based on
such factors as: the number or value of Shares the financial intermediary sells
or may sell; the value of client assets invested; or the type and nature of
services or support furnished by the financial intermediary.
Processing
Support Payments
The
Distributor may make payments to certain financial intermediaries that
offer
Federated Hermes investment companies to help offset their costs associated with
client account maintenance support, statement processing and transaction
processing. The types of payments that the Distributor may make under this
category include, but are not limited to: payment of ticket charges on a
per-transaction basis; payment of networking fees; and payment for ancillary
services such as setting up funds on the financial intermediary’s mutual fund
trading system.
Retirement
Plan Program Servicing Payments
The
Distributor may make payments to certain financial intermediaries who sell
Federated Hermes fund shares through retirement
plan programs. A financial intermediary may perform retirement plan program
services itself or may arrange with a third party to perform retirement plan
program services. In addition to participant recordkeeping, reporting or
transaction processing, retirement plan program services may include: services
rendered to a plan in connection with fund/investment selection and monitoring;
employee enrollment and education; plan balance rollover or separation; or other
similar services.
Marketing
Support Payments
From
time to time, the Distributor, at its expense, may provide additional
compensation to financial intermediaries that sell or arrange for the sale of
Shares. Such compensation, provided by the Distributor, may include
reimbursement of transaction costs, and financial assistance to financial
intermediaries that enable the Distributor to participate in or present at
conferences or seminars, sales or training programs for invited registered
representatives and other employees, client entertainment, client and investor
events and other financial intermediary-sponsored events. The Distributor may
also provide additional compensation to financial intermediaries for services
rendered in connection with technology and programming set-up, platform
development and maintenance or similar services and for the provision of
sales-related data to the Adviser and/or its affiliates.
The
Distributor also may hold or sponsor, at its expense, sales events, conferences
and programs for employees or associated persons of
financial intermediaries and may pay the travel and lodging expenses of
attendees. The Distributor also may provide, at its expense, meals and
entertainment in conjunction with meetings with financial intermediaries. Other
compensation may be offered to the extent not prohibited by applicable federal
or state law or regulations, or the rules of any self-regulatory agency, such as
FINRA. These payments may vary depending on the nature of the event or the
relationship.
For the
year ended December 31, 2022, the following is a
list of FINRA member firms that received additional payments from the
Distributor or an affiliate. Additional payments may also be made to certain
other financial intermediaries that are not FINRA member firms that sell
Federated Hermes fund shares or provide services to the Federated Hermes funds
and shareholders. These firms are not included in this list. Any additions,
modifications or deletions to the member firms identified in this list that have
occurred since December 31, 2022, are not reflected. You should ask your
financial intermediary for information about any additional payments it receives
from the Distributor.
9
ADP Broker-Dealer,
Inc.
American Enterprise Investment Services Inc.
American Portfolios Advisors, Inc.
Aspyre Wealth Partners
Avidian Wealth Solutions LLC
B. C. Ziegler And Company
Beam Wealth Advisors, Inc.
Benjamin F. Edwards & Company, Inc.
BMO Harris Financial Advisors, Inc.
BofA Securities, Inc.
Bolton Global Capital, Inc.
Broadridge Business Process Outsourcing, LLC
Brown Investment Advisory & Trust Company
Cadaret, Grant & Co., Inc.
Cambridge Financial Group, Inc.
CBIZ Financial Solutions, Inc.
Cetera Advisor Networks LLC
Cetera Advisors LLC
Cetera Investment Services LLC
Charles Schwab & Company, Inc.
Citigroup Global Markets Inc.
Citizens Securities, Inc.
Comerica Securities, Inc.
Commonwealth Financial Network
D A Davidson & Co.
Davenport & Company LLC
Deutsche Bank Securities Inc.
Edward D. Jones & Co., LP
Emerald Advisors, LLC
Empower Financial Services, Inc.
Envestnet PMC
FBL Marketing Services, LLC
Fidelity Investments Institutional Operations Company, Inc. (FIIOC)
Fifth Third Securities, Inc.
FIS Brokerage & Securities Services LLC
Gerber Kawasaki Wealth & Investment Management
Goldman Sachs & Co. LLC
Hancock Whitney Investment Services Inc.
HighTower Securities, LLC
Hilltop Securities, Inc.
HUB International Investment Services Inc.
The Huntington Investment Company
Huntington Securities, Inc.
IFP Securities, LLC
Insigneo Securities, LLC
Institutional Cash Distributors, LLC
Interactive Brokers LLC
J.P. Morgan Securities LLC
Janney Montgomery Scott LLC
Jefferies LLC
KeyBanc Capital Markets Inc.
Kowal Investment Group, LLC
Leafhouse Financial Advisors, LLC
American Enterprise Investment Services Inc.
American Portfolios Advisors, Inc.
Aspyre Wealth Partners
Avidian Wealth Solutions LLC
B. C. Ziegler And Company
Beam Wealth Advisors, Inc.
Benjamin F. Edwards & Company, Inc.
BMO Harris Financial Advisors, Inc.
BofA Securities, Inc.
Bolton Global Capital, Inc.
Broadridge Business Process Outsourcing, LLC
Brown Investment Advisory & Trust Company
Cadaret, Grant & Co., Inc.
Cambridge Financial Group, Inc.
CBIZ Financial Solutions, Inc.
Cetera Advisor Networks LLC
Cetera Advisors LLC
Cetera Investment Services LLC
Charles Schwab & Company, Inc.
Citigroup Global Markets Inc.
Citizens Securities, Inc.
Comerica Securities, Inc.
Commonwealth Financial Network
D A Davidson & Co.
Davenport & Company LLC
Deutsche Bank Securities Inc.
Edward D. Jones & Co., LP
Emerald Advisors, LLC
Empower Financial Services, Inc.
Envestnet PMC
FBL Marketing Services, LLC
Fidelity Investments Institutional Operations Company, Inc. (FIIOC)
Fifth Third Securities, Inc.
FIS Brokerage & Securities Services LLC
Gerber Kawasaki Wealth & Investment Management
Goldman Sachs & Co. LLC
Hancock Whitney Investment Services Inc.
HighTower Securities, LLC
Hilltop Securities, Inc.
HUB International Investment Services Inc.
The Huntington Investment Company
Huntington Securities, Inc.
IFP Securities, LLC
Insigneo Securities, LLC
Institutional Cash Distributors, LLC
Interactive Brokers LLC
J.P. Morgan Securities LLC
Janney Montgomery Scott LLC
Jefferies LLC
KeyBanc Capital Markets Inc.
Kowal Investment Group, LLC
Leafhouse Financial Advisors, LLC
Lincoln Financial Advisors
Corporation
Lincoln Financial Distributors, Inc.
Lincoln Investment Planning, LLC
LPL Financial LLC
Lyrical Partners, L.P.
MML Investors
Materetsky Financial Group
Merrill Lynch, Pierce, Fenner and Smith Incorporated
Moneta Group Investment Advisors, LLC
Morgan Stanley Smith Barney LLC
National Financial Services LLC
Nationwide Investment Services Corporation
NewEdge Securities, Inc.
Northwestern Mutual Investment Services, LLC
NYLIFE Distributors LLC
Open Range Financial Group, LLC
Oppenheimer & Company, Inc.
Paychex Securities Corp
Pensionmark Financial Group, LLC
Pershing LLC
PNC Capital Markets, LLC
PNC Investments LLC
Private Client Services, LLC
Raymond James & Associates, Inc.
Raymond James Financial Services, Inc.
RBC Capital Markets, LLC
Rise Consulting, LLC
Robert W Baird & Co. Incorporated
Rockefeller Capital Management
Royal Alliance Associates, Inc.
Sagepoint Financial, LLC
Sageview Advisory Group, LLC
Sanford C. Bernstein & Company, LLC
SBC Wealth Management
Securian Financial Services, Inc.
Securities America, Inc.
Security Distributors, LLC
Spire Securities, LLC
State Street Global Markets, LLC
Stephens Inc.
Steward Partners Investment Advisory, LLC
Stifel, Nicolaus & Company, Incorporated
Strategic Financial Partners, Ltd
TD Ameritrade, Inc.
Teachers Insurance and Annuity Association of America
The London Company of Virginia LLC
Towerpoint Wealth, LLC
Truist Investment Services, Inc.
Truist Securities, Inc.
U.S. Bancorp Investments, Inc.
UBS Financial Services Inc.
UBS Securities LLC
UMB Financial Services, Inc.
United Planners Financial Services of America, L.P.
Lincoln Financial Distributors, Inc.
Lincoln Investment Planning, LLC
LPL Financial LLC
Lyrical Partners, L.P.
MML Investors
Materetsky Financial Group
Merrill Lynch, Pierce, Fenner and Smith Incorporated
Moneta Group Investment Advisors, LLC
Morgan Stanley Smith Barney LLC
National Financial Services LLC
Nationwide Investment Services Corporation
NewEdge Securities, Inc.
Northwestern Mutual Investment Services, LLC
NYLIFE Distributors LLC
Open Range Financial Group, LLC
Oppenheimer & Company, Inc.
Paychex Securities Corp
Pensionmark Financial Group, LLC
Pershing LLC
PNC Capital Markets, LLC
PNC Investments LLC
Private Client Services, LLC
Raymond James & Associates, Inc.
Raymond James Financial Services, Inc.
RBC Capital Markets, LLC
Rise Consulting, LLC
Robert W Baird & Co. Incorporated
Rockefeller Capital Management
Royal Alliance Associates, Inc.
Sagepoint Financial, LLC
Sageview Advisory Group, LLC
Sanford C. Bernstein & Company, LLC
SBC Wealth Management
Securian Financial Services, Inc.
Securities America, Inc.
Security Distributors, LLC
Spire Securities, LLC
State Street Global Markets, LLC
Stephens Inc.
Steward Partners Investment Advisory, LLC
Stifel, Nicolaus & Company, Incorporated
Strategic Financial Partners, Ltd
TD Ameritrade, Inc.
Teachers Insurance and Annuity Association of America
The London Company of Virginia LLC
Towerpoint Wealth, LLC
Truist Investment Services, Inc.
Truist Securities, Inc.
U.S. Bancorp Investments, Inc.
UBS Financial Services Inc.
UBS Securities LLC
UMB Financial Services, Inc.
United Planners Financial Services of America, L.P.
10
Validus Capital LLC
Vanguard Marketing Corporation
Veridian Capital Partners
Vining-Sparks IBG, LLC
Vision Financial Markets, LLC
Voya Financial Advisors, Inc.
Vanguard Marketing Corporation
Veridian Capital Partners
Vining-Sparks IBG, LLC
Vision Financial Markets, LLC
Voya Financial Advisors, Inc.
Wells Fargo Clearing
Services LLC
Wells Fargo Securities, LLC
Woodbury Financial Services, Inc.
WR Wealth Planners LLC
XML Financial Group
Wells Fargo Securities, LLC
Woodbury Financial Services, Inc.
WR Wealth Planners LLC
XML Financial Group
In-Kind Purchase and
Redemption
You
may contact the Distributor to request a purchase of Shares using securities you
own. The Fund reserves the right to determine
whether to accept your securities and the minimum market value to accept. The
Fund will value your securities in the same manner as it values its assets in
determining the market value of the portfolio for purposes of its comparison
with amortized cost valuation. An in-kind purchase may be treated as a sale of
your securities for federal tax purposes; please consult your tax adviser
regarding potential tax liability.
The
Fund intends to pay Share redemptions in cash. Because the Fund has elected to
be governed by Rule 18f-1 under the 1940 Act, the Fund is
obligated to pay Share redemptions in cash to any one shareholder up to the
lesser of $250,000 or 1% of its NAV during any 90-day period.
The
Fund will generally also pay redemptions over these amounts in cash.
Nevertheless, the Fund continues to reserve the right to pay redemptions
over these amounts partially or entirely in-kind. If the Fund determines to pay
redemptions in-kind, the Fund will pay all or a portion of the remainder of the
redemption in portfolio securities, which will be valued in the same way as the
Fund determines its NAV.
Massachusetts
Partnership Law
Under
Massachusetts law, shareholders could, under certain circumstances, be held
personally liable for the obligations of the Trust. The
Declaration of Trust provides that no shareholder or former shareholder, merely
by reason of his or her being or having been a shareholder, will be subject to
any personal liability in connection with Trust property or the affairs of the
Trust.
In
the unlikely event a shareholder or former shareholder is held personally liable
for the Trust’s obligations, such shareholder will be
entitled, out of the assets belonging to the applicable series, to be
indemnified against all claims and reimbursed for all reasonably incurred
expenses in connection with such claims. On request, the Trust will defend any
claim made and pay any judgment against a shareholder from the assets belonging
to the relevant series.
Share
Information
ORGANIZATION,
CAPITALIZATION, VOTING RIGHTS AND OTHER MATTERS
The
Trust is a Massachusetts business trust established under a Declaration of Trust
dated October 3, 1988, as amended and restated
November 11, 2015. The Trust’s Declaration of Trust may be amended at any time
by a majority of the Trustees. Under the Declaration of Trust, the Trustees have
the authority to create and classify shares of beneficial interest in separate
series and classes without further action by shareholders. Each series and class
thereof may issue an unlimited number of shares of beneficial interest, with no
par value. Shares of each series represent equal proportionate interests in the
assets of that series only and have identical voting, dividend, redemption,
liquidation and other rights of shares in the same series except that expenses
allocated to a class may be borne solely by such class as determined by the
Trustees and a class may have exclusive voting rights with respect to matters
affecting only that class. Shares entitle their holders to one vote per share
(and fractional votes for fractional shares), are freely transferable and,
except as specifically provided by the Trustees, have no preference, preemptive,
appraisal, exchange, subscription or conversion rights. All shares issued are
fully paid and non-assessable. In the event of a liquidation or termination of a
series, each shareholder is entitled to receive his pro rata share of the net
assets of that series.
It
is not anticipated that the Trust will hold shareholders’ meetings unless
required by law or the Declaration of Trust. The Board will
call special meetings of shareholders of the Trust, a series or class thereof
only if required under the 1940 Act, in their discretion, or upon the written
request of holders of 10% or more of the outstanding shares of the Trust or of
the relevant series or class, entitled to vote at such meeting.
11
The
Declaration of Trust provides that the Trustees may redeem shares in certain
circumstances, such as when a shareholder does not
meet the qualifications for ownership of a particular series or class, or when
such redemptions are required to comply with applicable laws and regulations.
The Declaration of Trust also provides that the Board may, without shareholder
approval unless required by the 1940 Act, cause the Trust or any series or class
to dissolve, convert, merge, consolidate, reorganize, sell all or any part of
its assets, provided that the surviving or resulting entity is an open-end
management investment company under the 1940 Act, or a series thereof. The Trust
or any series or class may be terminated at any time by the Trustees by written
notice to the shareholders.
SHAREHOLDERS
OF THE FUND
As of
September 5,
2023, the following shareholders owned of record, beneficially, or both, 5% or
more of outstanding Institutional Shares: Federated Hermes Institutional Prime
Value Obligations Fund, Warrendale, PA, owned approximately 13,839,254,563
Shares (70.61%); JPMS
–
Chase
Processing, Brooklyn, NY, owned approximately 999,800,040 Shares (5.10%); and
Morgan Stanley Smith Barney, Jersey City, NJ, owned approximately 992,474,989
Shares (5.06%).
As of
September 5,
2023, the following shareholders owned of record, beneficially, or both, 5% or
more of outstanding Service Shares: The Brattleboro Savings & Loan Assoc.,
Brattleboro, VT, owned approximately 2,568,527 Shares
(28.99%);
First
American Bank, Elk Grove Vlg., IL, owned approximately 2,025,328 Shares
(22.85%); Wells Fargo Clearing Services,
St.
Louis, MO,
owned approximately 784,192 Shares
(8.85%);
Wells Fargo Clearing Services, St. Louis, MO, owned approximately 559,074 Shares
(6.31%); and Wells Fargo Clearing Services, St. Louis, MO, owned approximately
551,427 Shares (6.22%).
Shareholders
owning 25% or more of outstanding Shares may be in control and be able to affect
the outcome of certain matters presented
for a vote of shareholders.
Federated
Hermes Institutional Prime Value Obligations Fund is a portfolio of Federated
Hermes Money Market Obligations Trust, a
Massachusetts business trust.
Brattleboro
Savings and Loan Association is a mutual savings bank, owned by its depositors,
and is organized in the State of
Vermont.
Tax
Information
Federal
Income Tax
The
Fund intends to meet requirements of Subchapter M of the Internal Revenue Code
(the “Code”) applicable to regulated investment
companies. If these requirements are not met, it will not receive special tax
treatment and will be subject to federal corporate income tax.
The
Fund is entitled to a loss carryforward, which may reduce the taxable income or
gain that the Fund would realize, and to which the
shareholder would be subject, in the future.
The
Fund will be treated as a single, separate entity for federal income tax
purposes so that income earned and capital gains and losses
realized by the Trust’s other portfolios will be separate from those realized by
the Fund.
When
the NAV of the Fund’s shares varies from $1.0000 per share, shareholders will
realize a gain or loss upon the sale or redemption
of the Fund’s shares. The IRS has issued final regulations, on which taxpayers
may rely, that permit a simplified method of accounting (the “NAV method”) for
gains and losses realized upon the disposition of shares of a regulated
investment company that is a so-called money market fund, such as the Fund. Very
generally, rather than realizing gain or loss upon each redemption of a share, a
shareholder using such method of accounting will recognize gain or loss with
respect to the Fund’s shares for a given computation period (the shareholder’s
taxable year or shorter period selected by the shareholder) equal to the value
of all the Fund shares held by the shareholder on the last day of the
computation period, less the value of all Fund shares held by the shareholder on
the last day of the preceding computation period, less the shareholder’s net
investment in the Fund (generally, purchases minus redemptions) made during the
computation period. The final regulation notes a shareholder can choose to use
the NAV method for only certain accounts, including only specific accounts
within the same fund. The IRS has also published guidance providing that the
“wash-sale” of the Code–disallowing
losses on taxable dispositions of Fund shares where
other substantially identical shares are purchased, including by means of
dividend reinvestment, within 30 days before or after the
disposition–will
not apply to redemptions of shares in a money market fund subject to the
floating NAV amendments. Shareholders
of the Fund are urged to consult their own tax advisors regarding their
investment in the Portfolio.
12
FOREIGN
INVESTMENTS
If
the Fund purchases foreign securities, their investment income may be subject to
foreign withholding or other taxes that could
reduce the return on these securities. Tax treaties between the United States
and foreign countries, however, may reduce or eliminate the amount of foreign
taxes to which the Fund would be subject. The effective rate of foreign tax
cannot be predicted since the amount of Fund assets to be invested within
various countries is uncertain. However, the Fund intends to operate so as to
qualify for treaty-reduced tax rates when applicable.
Who
Manages and Provides Services to the Fund?
Board
of Trustees
The
Board of Trustees is responsible for managing the Trust’s business affairs and
for exercising all the Trust’s powers except those reserved for the
shareholders. The following tables give information about each Trustee and the
senior officers of the Fund. Where required, the tables separately list Trustees
who are “interested persons” of the Fund (i.e., “Interested” Trustees) and those
who are not (i.e., “Independent” Trustees). Unless otherwise noted, the address
of each person listed is 1001 Liberty Avenue, Pittsburgh, PA 15222-3779. The
address of all Independent Trustees listed is 4000 Ericsson Drive, Warrendale,
PA 15086-7561; Attention: Mutual Fund Board. As of December 31, 2022, the Trust
comprised 16 portfolios, and the Federated Hermes Complex consisted of 33
investment companies (comprising 102 portfolios). Unless otherwise noted, each
Officer is elected annually. Unless otherwise noted, each Trustee oversees all
portfolios in the Federated Hermes Complex and serves for an indefinite
term.
As of
September 5,
2023, the Fund’s Board and Officers as a group owned less than 1% of each class
of the Fund’s outstanding Shares.
qualifications
of Independent Trustees
Individual
Trustee qualifications are noted in the “Independent Trustees Background and
Compensation” chart. In addition, the
following characteristics are among those that were considered for each existing
Trustee and will be considered for any Nominee Trustee.
◾ Outstanding
skills in disciplines deemed by the Independent Trustees to be particularly
relevant to the role of Independent Trustee and to the Federated Hermes funds,
including legal, accounting, business management, the financial industry
generally and the investment industry particularly.
◾ Desire and
availability to serve for a substantial period of time, taking into account the
Board’s current mandatory retirement age of 75 years.
◾ No
conflicts which would interfere with qualifying as independent.
◾ Appropriate
interpersonal skills to work effectively with other Independent
Trustees.
◾ Understanding
and appreciation of the important role occupied by Independent Trustees in the
regulatory structure governing regulated investment companies.
◾ Diversity
of background.
Interested
Trustees Background and Compensation
|
Name
Birth
Date
Positions
Held with Trust
Date
Service Began |
Principal
Occupation(s) for Past Five Years,
Other
Directorships Held and Previous Position(s) |
Aggregate
Compensation
From
Fund
(past
fiscal year) |
Total
Compensation
From
Fund and
Federated
Hermes Complex
(past
calendar year) |
|
J.
Christopher Donahue*
Birth
Date: April 11, 1949
President
and
Trustee
Indefinite
Term
Began
serving: April 1989 |
Principal
Occupations:
Principal Executive Officer and President of certain
of
the Funds in the Federated Hermes Complex; Director or Trustee of the
Funds
in the Federated Hermes Complex; President, Chief Executive
Officer
and Director, Federated Hermes, Inc.; Chairman and Trustee,
Federated
Investment Management Company; Trustee, Federated
Investment
Counseling; Chairman and Director, Federated Global
Investment
Management Corp.; Chairman and Trustee, Federated Equity
Management
Company of Pennsylvania; Trustee, Federated Shareholder
Services
Company; Director, Federated Services Company.
Previous
Positions:
President, Federated Investment Counseling; President
and
Chief Executive Officer, Federated Investment Management Company,
Federated
Global Investment Management Corp. and Passport
Research,
Ltd.; Chairman, Passport Research, Ltd. |
$0 |
$0
|
13
|
Name
Birth
Date
Positions
Held with Trust
Date
Service Began |
Principal
Occupation(s) for Past Five Years,
Other
Directorships Held and Previous Position(s) |
Aggregate
Compensation
From
Fund
(past
fiscal year) |
Total
Compensation
From
Fund and
Federated
Hermes Complex
(past
calendar year) |
|
Thomas
R. Donahue*
Birth
Date: October 20, 1958
Trustee
Indefinite
Term
Began
serving: May 2016 |
Principal
Occupations:
Director or Trustee of certain funds in the
Federated
Hermes Complex; Chief Financial Officer, Treasurer, Vice
President
and Assistant Secretary, Federated Hermes, Inc.; Chairman and
Trustee,
Federated Administrative Services; Chairman and Director,
Federated
Administrative Services, Inc.; Trustee and Treasurer, Federated
Advisory
Services Company; Director or Trustee and Treasurer, Federated
Equity
Management Company of Pennsylvania, Federated Global
Investment
Management Corp., Federated Investment Counseling, and
Federated
Investment Management Company; Director, MDTA LLC;
Director,
Executive Vice President and Assistant Secretary, Federated
Securities
Corp.; Director or Trustee and Chairman, Federated Services
Company
and Federated Shareholder Services Company; and Director and
President,
FII Holdings, Inc.
Previous
Positions:
Director, Federated Hermes, Inc.; Assistant Secretary,
Federated
Investment Management Company, Federated Global
Investment
Management Company and Passport Research, LTD; Treasurer,
Passport
Research, LTD; Executive Vice President, Federated Securities
Corp.;
and Treasurer, FII Holdings, Inc. |
$0 |
$0 |
*
Family
relationships and reasons for “interested” status: J. Christopher Donahue and
Thomas R. Donahue are brothers. Both are “interested” due to their beneficial
ownership of shares of Federated Hermes, Inc. and the positions they hold with
Federated Hermes, Inc. and its subsidiaries.
Independent
Trustees Background, Qualifications and Compensation
|
Name
Birth
Date
Positions
Held with Trust
Date
Service Began |
Principal
Occupation(s) and Other Directorships Held for
Past
Five Years, Previous Position(s) and Qualifications |
Aggregate
Compensation
From
Fund
(past
fiscal year) |
Total
Compensation
From
Fund and
Federated
Hermes Complex
(past
calendar year) |
|
John
T. Collins
Birth
Date: January 24, 1947
Trustee
Indefinite
Term
Began
serving: September 2013 |
Principal
Occupations:
Director or Trustee and Chair of the Board of
Directors
or Trustees, of the Federated Hermes Complex; formerly,
Chairman
and CEO, The Collins Group, Inc. (a private equity firm)
(Retired).
Other
Directorships Held:
Director, KLX Energy Services Holdings, Inc.
(oilfield
services); former Director of KLX Corp (aerospace).
Qualifications: Mr.
Collins has served in several business and financial
management
roles and directorship positions throughout his career.
Mr.
Collins previously served as Chairman and CEO of The Collins Group,
Inc.
(a private equity firm) and as a Director of KLX Corp. Mr. Collins serves
as
Chairman Emeriti, Bentley University. Mr. Collins previously served as
Director
and Audit Committee Member, Bank of America Corp.; Director,
FleetBoston
Financial Corp.; and Director, Beth Israel Deaconess Medical
Center
(Harvard University Affiliate Hospital). |
$12,752.48 |
$385,000 |
|
G.
Thomas Hough
Birth
Date: February 28, 1955
Trustee
Indefinite
Term
Began
serving: August 2015 |
Principal
Occupations:
Director or Trustee, Chair of the Audit Committee
of the
Federated Hermes Complex; Retired.
Other
Directorships Held:
Director, Chair of the Audit Committee,
Equifax,
Inc.; Lead Director, Member of the Audit and Nominating and
Corporate
Governance Committees, Haverty Furniture Companies, Inc.;
formerly,
Director, Member of Governance and Compensation Committees,
Publix
Super Markets, Inc.
Qualifications: Mr.
Hough has served in accounting, business management
and
directorship positions throughout his career. Mr. Hough most recently
held
the position of Americas Vice Chair of Assurance with Ernst &
Young
LLP (public accounting firm). Mr. Hough serves on the President’s
Cabinet
and Business School Board of Visitors for the University of
Alabama.
Mr. Hough previously served on the Business School Board of
Visitors
for Wake Forest University, and he previously served as an
Executive
Committee member of the United States Golf
Association. |
$12,090.01 |
$365,000
|
14
|
Name
Birth
Date
Positions
Held with Trust
Date
Service Began |
Principal
Occupation(s) and Other Directorships Held for
Past
Five Years, Previous Position(s) and Qualifications |
Aggregate
Compensation
From
Fund
(past
fiscal year) |
Total
Compensation
From
Fund and
Federated
Hermes Complex
(past
calendar year) |
|
Maureen
Lally-Green
Birth
Date: July 5, 1949
Trustee
Indefinite
Term
Began
serving: August 2009 |
Principal
Occupations:
Director or Trustee of the Federated Hermes
Complex;
Adjunct Professor Emerita of Law, Duquesne University School of
Law;
formerly, Dean of the Duquesne University School of Law and
Professor
of Law and Interim Dean of the Duquesne University School of
Law;
formerly, Associate General Secretary and Director, Office of Church
Relations,
Diocese of Pittsburgh.
Other
Directorships Held:
Director, CNX Resources Corporation
(natural
gas).
Qualifications: Judge
Lally-Green has served in various legal and business
roles
and directorship positions throughout her career. Judge Lally-Green
previously
held the position of Dean of the School of Law of Duquesne
University
(as well as Interim Dean). Judge Lally-Green previously served as
Associate
General Secretary for the Diocese of Pittsburgh, a member of the
Superior
Court of Pennsylvania and as a Professor of Law, Duquesne
University
School of Law. Judge Lally-Green was appointed by the Supreme
Court
of Pennsylvania to serve on the Supreme Court’s Board of Continuing
Judicial
Education and the Supreme Court’s Appellate Court Procedural
Rules
Committee. Judge Lally-Green also currently holds the positions on
not
for profit or for profit boards of directors as follows: Director and
Chair,
UPMC
Mercy Hospital; Regent, Saint Vincent Seminary; Member,
Pennsylvania
State Board of Education (public); Director, Catholic Charities,
Pittsburgh;
and Director, CNX Resources Corporation (natural gas). Judge
Lally-Green
has held the positions of: Director, Auberle; Director, Epilepsy
Foundation
of Western and Central Pennsylvania; Director, Ireland Institute
of
Pittsburgh; Director, Saint Thomas More Society; Director and Chair,
Catholic
High Schools of the Diocese of Pittsburgh, Inc.; Director,
Pennsylvania
Bar Institute; Director, Saint Vincent College; Director and
Chair,
North Catholic High School, Inc.; Director and Vice Chair, Our
Campaign
for the Church Alive!, Inc.; and Director and Vice Chair, Saint
Francis
University. |
$10,930.69 |
$330,000 |
|
Thomas
M. O’Neill
Birth
Date: June 14, 1951
Trustee
Indefinite
Term
Began
serving: August 2006 |
Principal
Occupations:
Director or Trustee of the Federated Hermes
Complex;
Sole Proprietor, Navigator Management Company (investment
and
strategic consulting).
Other
Directorships Held:
None.
Qualifications: Mr.
O’Neill has served in several business, mutual fund and
financial
management roles and directorship positions throughout his
career.
Mr. O’Neill serves as Director, Medicines for Humanity. Mr. O’Neill
previously
served as Chief Executive Officer and President, Managing
Director
and Chief Investment Officer, Fleet Investment Advisors; President
and
Chief Executive Officer, Aeltus Investment Management, Inc.; General
Partner,
Hellman, Jordan Management Co., Boston, MA; Chief Investment
Officer,
The Putnam Companies, Boston, MA; Credit Analyst and Lending
Officer,
Fleet Bank; Director and Consultant, EZE Castle Software
(investment
order management software); Director, Midway Pacific
(lumber);
and Director, The Golisano Children’s Museum of Naples,
Florida. |
$10,930.69 |
$330,000 |
|
Madelyn
A. Reilly
Birth
Date: February 2, 1956
Trustee
Indefinite
Term
Began
serving: November 2020 |
Principal
Occupations:
Director or Trustee of the Federated Hermes
Complex;
formerly, Senior Vice President for Legal Affairs, General Counsel
and
Secretary of Board of Directors, Duquesne University
(Retired).
Other
Directorships Held:
None.
Qualifications: Ms.
Reilly has served in various business and legal
management
roles throughout her career. Ms. Reilly previously served as
Senior
Vice President for Legal Affairs, General Counsel and Secretary of
Board
of Directors and Director of Risk Management and Associate General
Counsel,
Duquesne University. Prior to her work at Duquesne University,
Ms.
Reilly served as Assistant General Counsel of Compliance and
Enterprise
Risk as well as Senior Counsel of Environment, Health and
Safety,
PPG Industries. Ms. Reilly currently serves as a member of the Board
of
Directors of UPMC Mercy Hospital. |
$9,937.02 |
$300,000
|
15
|
Name
Birth
Date
Positions
Held with Trust
Date
Service Began |
Principal
Occupation(s) and Other Directorships Held for
Past
Five Years, Previous Position(s) and Qualifications |
Aggregate
Compensation
From
Fund
(past
fiscal year) |
Total
Compensation
From
Fund and
Federated
Hermes Complex
(past
calendar year) |
|
P.
Jerome Richey
Birth
Date: February 23, 1949
Trustee
Indefinite
Term
Began
serving: September 2013 |
Principal
Occupations:
Director or Trustee of the Federated Hermes
Complex;
Retired; formerly, Senior Vice Chancellor and Chief Legal Officer,
University
of Pittsburgh and Executive Vice President and Chief Legal
Officer,
CONSOL Energy Inc. (split into two separate publicly traded
companies
known as CONSOL Energy Inc. and CNX Resources Corp.).
Other
Directorships Held:
None.
Qualifications: Mr.
Richey has served in several business and legal
management
roles and directorship positions throughout his career.
Mr.
Richey most recently held the positions of Senior Vice Chancellor and
Chief
Legal Officer, University of Pittsburgh. Mr. Richey previously served as
Chairman
of the Board, Epilepsy Foundation of Western Pennsylvania and
Chairman
of the Board, World Affairs Council of Pittsburgh. Mr. Richey
previously
served as Chief Legal Officer and Executive Vice President,
CONSOL
Energy Inc. and CNX Gas Company; and Board Member, Ethics
Counsel
and Shareholder, Buchanan Ingersoll & Rooney PC (a law
firm). |
$10,930.69 |
$330,000 |
|
John
S. Walsh
Birth
Date: November 28, 1957
Trustee
Indefinite
Term
Began
serving: January 1999 |
Principal
Occupations:
Director or Trustee of the Federated Hermes
Complex;
President and Director, Heat Wagon, Inc. (manufacturer of
construction
temporary heaters); President and Director, Manufacturers
Products,
Inc. (distributor of portable construction heaters); President,
Portable
Heater Parts, a division of Manufacturers Products, Inc.
Other
Directorships Held:
None.
Qualifications: Mr.
Walsh has served in several business management roles
and
directorship positions throughout his career. Mr. Walsh previously
served
as Vice President, Walsh & Kelly, Inc. (paving
contractors). |
$9,937.02 |
$300,000 |
OFFICERS*
|
Name
Birth
Date
Positions
Held with Trust
Date
Service Began |
Principal
Occupation(s) and Previous Position(s) |
|
Lori
A. Hensler
Birth
Date: January 6, 1967
Treasurer
Officer
since: April 2013 |
Principal
Occupations:
Principal Financial Officer and Treasurer of the Federated Hermes Complex;
Senior Vice President,
Federated
Administrative Services; Financial and Operations Principal for Federated
Securities Corp.; and Assistant Treasurer,
Federated
Investors Trust Company. Ms. Hensler has received the Certified Public
Accountant designation.
Previous
Positions:
Controller of Federated Hermes, Inc.; Senior Vice President and Assistant
Treasurer, Federated Investors
Management
Company; Treasurer, Federated Investors Trust Company; Assistant
Treasurer, Federated Administrative Services,
Federated
Administrative Services, Inc., Federated Securities Corp., Edgewood
Services, Inc., Federated Advisory Services
Company,
Federated Equity Management Company of Pennsylvania, Federated Global
Investment Management Corp.,
Federated
Investment Counseling, Federated Investment Management Company, Passport
Research, Ltd. and Federated MDTA,
LLC;
Financial and Operations Principal for Federated Securities Corp.,
Edgewood Services, Inc. and Southpointe Distribution
Services,
Inc. |
|
Peter
J. Germain
Birth
Date: September 3, 1959
CHIEF
LEGAL OFFICER,
SECRETARY
and EXECUTIVE
VICE
PRESIDENT
Officer
since: January 2005 |
Principal
Occupations:
Mr. Germain is Chief Legal Officer, Secretary and Executive Vice President
of the Federated Hermes
Complex.
He is General Counsel, Chief Legal Officer, Secretary and Executive Vice
President, Federated Hermes, Inc.; Trustee
and
Senior Vice President, Federated Investors Management Company; Trustee and
President, Federated Administrative
Services;
Director and President, Federated Administrative Services, Inc.; Director
and Vice President, Federated Securities
Corp.;
Director and Secretary, Federated Private Asset Management, Inc.;
Secretary, Federated Shareholder Services Company;
and
Secretary, Retirement Plan Service Company of America. Mr. Germain joined
Federated Hermes, Inc. in 1984 and is a
member
of the Pennsylvania Bar Association.
Previous
Positions:
Deputy General Counsel, Special Counsel, Managing Director of Mutual Fund
Services, Federated Hermes,
Inc.;
Senior Vice President, Federated Services Company; and Senior Corporate
Counsel, Federated Hermes, Inc. |
|
Stephen
Van Meter
Birth
Date: June 5, 1975
CHIEF
COMPLIANCE OFFICER
AND
SENIOR VICE PRESIDENT
Officer
since: July 2015 |
Principal
Occupations:
Senior Vice President and Chief Compliance Officer of the Federated Hermes
Complex; Vice President
and
Chief Compliance Officer of Federated Hermes, Inc. and Chief Compliance
Officer of certain of its subsidiaries.
Mr.
Van Meter joined Federated Hermes, Inc. in October 2011. He holds FINRA
licenses under Series 3, 7, 24 and 66.
Previous
Positions:
Mr. Van Meter previously held the position of Compliance Operating
Officer, Federated Hermes, Inc. Prior to
joining
Federated Hermes, Inc., Mr. Van Meter served at the United States
Securities and Exchange Commission in the positions
of
Senior Counsel, Office of Chief Counsel, Division of Investment Management
and Senior Counsel, Division of Enforcement.
|
16
|
Name
Birth
Date
Positions
Held with Trust
Date
Service Began |
Principal
Occupation(s) and Previous Position(s) |
|
Deborah
A. Cunningham
Birth
Date: September 15, 1959
CHIEF
INVESTMENT OFFICER
Officer
since: May 2004
Portfolio
Manager since: July 1991 |
Principal
Occupations:
Deborah A. Cunningham has been the Fund’s Portfolio Manager since July
1991. Ms. Cunningham was
named
Chief Investment Officer of Federated Hermes’ money market products in
2004. She joined Federated Hermes in 1981
and
has been a Senior Portfolio Manager since 1997 and an Executive Vice
President of the Fund’s Adviser since 2009.
Ms.
Cunningham has received the Chartered Financial Analyst designation and
holds an M.S.B.A. in Finance from Robert
Morris
College. |
*
Officers
do not receive any compensation from the Fund.
In
addition, the Fund has appointed an Anti-Money Laundering Compliance
Officer.
DIRECTOR/TRUSTEE
EMERITUS PROGRAM
The
Board has created a position of Director/Trustee Emeritus, whereby an incumbent
Director/Trustee who has attained the age of 75
and completed a minimum of five years of service as a director/trustee, may, in
the sole discretion of the Committee of Independent Directors/Trustees
(“Committee”), be recommended to the full Board of Directors/Trustees of the
Fund to serve as Director/Trustee Emeritus.
A
Director/Trustee Emeritus that has been approved as such receives an annual fee
in an amount equal to a percent of the annual
base compensation paid to a Director/Trustee. In the case of a Director/Trustee
Emeritus who had previously served at least five years but less than 10 years as
a Director/Trustee, the percent will be 10%. In the case of a Director/Trustee
Emeritus who had previously served at least 10 years as a Director/Trustee, the
percent will be 20%. The Director/Trustee Emeritus will be reimbursed for any
expenses incurred in connection with their service, including expenses of travel
and lodging incurred in attendance at Board meetings. Director/Trustee Emeritus
will continue to receive relevant materials concerning the Funds, will be
expected to attend at least one regularly scheduled quarterly meeting of the
Board of Directors/Trustees each year and will be available to consult with the
Committees or its representatives at reasonable times as requested by the
Chairman; however, a Director/Trustee Emeritus does not have any voting rights
at Board meetings and is not subject to election by shareholders of the
Funds.
The
Director/Trustee Emeritus will be permitted to serve in such capacity at the
pleasure of the Committee, but the annual fee will cease
to be paid at the end of the calendar year during which he or she has attained
the age of 80 years, thereafter the position will be honorary.
The
following table shows the fees paid to each Director/Trustee Emeritus for the
Fund’s most recently ended fiscal year and the
portion of that fee paid by the Fund or Corporation/Trust.1
EMERITUS
Trustees and Compensation
|
Director/Trustee
Emeritus |
Compensation
From
Trust
(past
fiscal year) |
Total
Compensation
Paid
to
Director/Trustee
Emeritus1
|
|
Charles
F. Mansfield, Jr. |
$2,190.87 |
$60,000.00 |
1
The
fees paid to a Director/Trustee are allocated among the funds that were in
existence at the time the Director/Trustee elected Emeritus status, based on
each fund’s net assets at that time.
BOARD
LEADERSHIP STRUCTURE
As
required under the terms of certain regulatory settlements, the Chairman of the
Board is not an interested person of the Fund and
neither the Chairman, nor any firm with which the Chairman is affiliated, has a
prior relationship with Federated Hermes or its affiliates or (other than his
position as a Trustee) with the Fund.
17
Committees
of the Board
|
Board
Committee |
Committee
Members |
Committee
Functions |
Meetings
Held
During
Last
Fiscal
Year |
|
Executive |
J.
Christopher Donahue
John
T. Collins
G.
Thomas Hough |
In
between meetings of the full Board, the Executive Committee generally may
exercise
all the powers of the full Board in the management and direction of the
business
and conduct of the affairs of the Trust in such manner as the Executive
Committee
shall deem to be in the best interests of the Trust. However, the
Executive
Committee cannot elect or remove Board members, increase or decrease
the
number of Trustees, elect or remove any Officer, declare dividends, issue
shares
or
recommend to shareholders any action requiring shareholder
approval. |
One |
|
Audit |
G.
Thomas Hough
Maureen
Lally-Green
Thomas
M. O’Neill
P.
Jerome Richey |
The
purposes of the Audit Committee are to oversee the accounting and
financial
reporting
process of the Fund, the Fund’s internal control over financial reporting
and
the quality, integrity and independent audit of the Fund’s financial
statements.
The
Committee also oversees or assists the Board with the oversight of
compliance
with
legal requirements relating to those matters, approves the engagement and
reviews
the qualifications, independence and performance of the Fund’s
independent
registered public accounting firm, acts as a liaison between the
independent
registered public accounting firm and the Board and reviews the Fund’s
internal
audit function. |
Seven |
|
Nominating |
John
T. Collins
G.
Thomas Hough
Maureen
Lally-Green
Thomas
M. O’Neill
Madelyn
A. Reilly
P.
Jerome Richey
John
S. Walsh |
The
Nominating Committee, whose members consist of all Independent Trustees,
selects
and nominates persons for election to the Fund’s Board when vacancies
occur.
The Committee will consider candidates recommended by shareholders,
Independent
Trustees, officers or employees of any of the Fund’s agents or service
providers
and counsel to the Fund. Any shareholder who desires to have an
individual
considered for nomination by the Committee must submit a
recommendation
in writing to the Secretary of the Fund, at the Fund’s address
appearing
on the back cover of this SAI. The recommendation should include the
name
and address of both the shareholder and the candidate and detailed
information
concerning the candidate’s qualifications and experience. In identifying
and
evaluating candidates for consideration, the Committee shall consider such
factors
as it deems appropriate. Those factors will ordinarily include: integrity,
intelligence,
collegiality, judgment, diversity, skill, business and other experience,
qualification
as an “Independent Trustee,” the existence of material relationships
which
may create the appearance of a lack of independence, financial or
accounting
knowledge
and experience and dedication and willingness to devote the time and
attention
necessary to fulfill Board responsibilities. |
One |
BOARD’S
ROLE IN RISK OVERSIGHT
The
Board’s role in overseeing the Fund’s general risks includes receiving
performance reports for the Fund and risk management
reports from Federated Hermes’ Chief Risk Officer at each regular Board meeting.
The Chief Risk Officer is responsible for enterprise risk management at
Federated Hermes, which includes risk management committees for investment
management and for investor services. The Board also receives regular reports
from the Fund’s Chief Compliance Officer regarding significant compliance
risks.
On
behalf of the Board, the Audit Committee plays a key role overseeing the Fund’s
financial reporting and valuation risks. The Audit
Committee meets regularly with the Fund’s Principal Financial Officer and
outside auditors, as well as with Federated Hermes’ Chief Audit Executive to
discuss financial reporting and audit issues, including risks relating to
financial controls.
18
Board
Ownership Of Shares In The Fund And In The Federated Hermes Family Of Investment
Companies As Of December 31, 2022
|
Interested
Board
Member
Name |
Dollar
Range of
Shares
Owned in
Federated
Hermes
Institutional
Prime
Obligations
Fund |
Aggregate
Dollar
Range of
Shares
Owned in
Federated
Hermes Family of
Investment
Companies |
|
J.
Christopher Donahue |
None |
Over
$100,000 |
|
Thomas
R. Donahue |
None |
Over
$100,000 |
|
Independent
Board
Member
Name |
|
|
|
John
T. Collins |
None |
Over
$100,000 |
|
G.
Thomas Hough |
None |
Over
$100,000 |
|
Maureen
Lally-Green |
None |
Over
$100,000 |
|
Thomas
M. O’Neill |
None |
Over
$100,000 |
|
Madelyn
A. Reilly |
None |
Over
$100,000 |
|
P.
Jerome Richey |
None |
Over
$100,000 |
|
John
S. Walsh |
None |
Over
$100,000 |
Investment
Adviser
The
Adviser conducts investment research and makes investment decisions for the
Fund.
The
Adviser is a wholly owned subsidiary of Federated Hermes.
The
Adviser shall not be liable to the Trust or any Fund shareholder for any losses
that may be sustained in the purchase, holding or
sale of any security or for anything done or omitted by it, except acts or
omissions involving willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties imposed upon it by its contract with the
Trust.
In
December 2017, Federated Investors, Inc., now Federated Hermes, became a
signatory to the Principles for Responsible Investment
(PRI). The PRI is an investor initiative in partnership with the United Nations
Environment Programme Finance Initiative and the United Nations Global Compact.
Commitments made as a signatory to the PRI are not legally binding, but are
voluntary and aspirational. They include efforts, where consistent with our
fiduciary responsibilities, to incorporate environmental, social and corporate
governance (ESG) issues into investment analysis and investment decision making,
to be active owners and incorporate ESG issues into our ownership policies and
practices, to seek appropriate disclosure on ESG issues by the entities in which
we invest, to promote acceptance and implementation of the PRI within the
investment industry, to enhance our effectiveness in implementing the PRI, and
to report on our activities and progress towards implementing the PRI. Being a
signatory to the PRI does not obligate Federated Hermes to take, or not take,
any particular action as it relates to investment decisions or other
activities.
In
July 2018, Federated Investors, Inc., now Federated Hermes, acquired a majority
interest in Federated Hermes Limited (FHL)
(formerly, Hermes Fund Managers Limited), a pioneer of integrated ESG investing.
Federated Hermes now owns 100% of FHL. FHL’s experience with ESG issues
contributes to Federated Hermes’ understanding of material risks and
opportunities these issues may present.
EOS at
Federated Hermes, which was established as Hermes Equity Ownership Services
Limited (EOS) in 2004 as an affiliate of FHL and Hermes
Investment Management Limited, is a 50+ member engagement and stewardship team
that conducts long-term, objectives-driven dialogue with board and senior
executive level representatives of approximately
1,000 unique
issuers annually. It seeks to address the most material ESG risks and
opportunities through constructive and continuous discussions with the goal of
improving long-term results for investors. Engagers’ deep understanding across
sectors, themes and regional markets, along with language and cultural
expertise, allows EOS to provide insights to companies on the merits of
addressing ESG risks and the positive benefits of capturing opportunities.
Federated Hermes investment management teams have access to the insights gained
from understanding a company’s approach to these long-term strategic matters as
an additional input to improve portfolio risk/return
characteristics.
Services
Agreement
Federated
Advisory Services Company, an affiliate of the Adviser, provides certain support
services to the Adviser. The fee for these
services is paid by the Adviser and not by the Fund.
19
Other
Related Services
Affiliates
of the Adviser may, from time to time, provide certain electronic equipment and
software to institutional customers in order
to facilitate the purchase of Fund Shares offered by the
Distributor.
Code
Of Ethics Restrictions On Personal Trading
As
required by Rule 17j-1 of the Investment Company Act of 1940 and Rule 204A-1
under the Investment Advisers Act (as
applicable), the Fund, its Adviser and its Distributor have adopted codes of
ethics. These codes govern securities trading activities of investment
personnel, Fund Trustees and certain other employees. Although they do permit
these people to trade in securities, including those that the Fund could buy, as
well as Shares of the Fund, they also contain significant safeguards designed to
protect the Fund and its shareholders from abuses in this area, such as
requirements to obtain prior approval for, and to report, particular
transactions.
Voting
Proxies On Fund Portfolio Securities
The
Board has delegated to the Adviser authority to vote proxies on the securities
held in the Fund’s portfolio. The Board has also
approved the Adviser’s policies and procedures for voting the proxies, which are
described below.
Proxy
Voting Policies
As
an investment adviser with a fiduciary duty to the Fund and its shareholders,
the Adviser’s general policy is to cast proxy votes in
favor of management proposals and shareholder proposals that the Adviser
anticipates will enhance the long-term value of the securities being voted in a
manner that is consistent with the investment objectives of the Fund. Generally,
this will mean voting for proposals that the Adviser believes will improve the
management of a company, increase the rights or preferences of the voted
securities, or increase the chance that a premium offer would be made for the
company or for the voted securities. This approach to voting proxy proposals
will be referred to hereafter as the “General Policy.”
The
Adviser generally votes consistently on the same matter when securities of an
issuer are held by multiple client portfolios. However,
the Adviser may vote differently if a client’s investment objectives differ from
those of other clients or if a client explicitly instructs the Adviser to vote
differently.
The
following examples illustrate how the General Policy may apply to the most
common management proposals and shareholder
proposals. However, whether the Adviser supports or opposes a proposal will
always depend on a thorough understanding of the Fund’s investment objectives
and the specific circumstances described in the proxy statement and other
available information.
On
matters related to the board of directors, generally, the Adviser will vote to
elect nominees to the board in uncontested elections except in certain
circumstances, such as where the director: (1) had not attended at least 75% of
the board meetings during the previous year; (2) serves as the company’s chief
financial officer, unless the company is headquartered in the UK where this is
market practice; (3) has become overboarded (more than five boards for retired
executives and more than two boards for CEOs); (4) is the chair of the
nominating or governance committee when the roles of chairman of the board and
CEO are combined and there is no lead independent director; (5) served on the
compensation committee during a period in which compensation appears excessive
relative to performance and peers; or (6) served on a board that did not
implement a shareholder proposal that the Adviser supported and received more
than 50% shareholder support the previous year. In addition, the Adviser will
generally vote in favor of: (7) a full slate of directors, where the directors
are elected as a group and not individually, unless more than half of the
nominees are not independent; (8) shareholder proposals to declassify the board
of directors; (9) shareholder proposals to require a majority voting standard in
the election of directors; (10) shareholder proposals to separate the roles of
chairman of the board and CEO; (11) a proposal to require a company’s audit
committee to be comprised entirely of independent directors; and (12)
shareholder proposals to eliminate supermajority voting requirements in company
bylaws.
On
other matters of corporate governance, generally, the Adviser will vote:
(1) in favor of proposals to grant shareholders the right to call a special
meeting if owners of at least 10% of the outstanding stock agree; (2) against
proposals to allow shareholders to act by written consent; (3) on a case-by-case
basis for proposals to adopt or amend shareholder rights plans (also known as
“poison pills”); (4) in favor of shareholder proposals to eliminate
supermajority requirements in company bylaws; and (5) in favor of shareholder
proposals calling for “Proxy Access,” that is, a bylaw change allowing
shareholders owning at least 3% of the outstanding common stock for at least
three years to nominate candidates for election to the board of
directors.
Generally,
the Adviser will vote every shareholder proposal of an environmental or social
nature on a case-by-case basis. The quality of
these shareholder proposals varies widely across markets. Similarly, company
disclosures of their business practices related to environmental and social
risks are not always adequate for investors to make risk assessments. Thus, the
Adviser places great importance on company-specific analyses to determine how to
vote. Above all, the Adviser will vote in a manner that would enhance the
long-term value of the investment within the framework of the client’s
investment objectives.
20
The
Adviser’s general approach to analyzing these proposals calls for considering
the literal meaning of the written proposal, the financial
materiality of the proposal’s objective and the practices followed by industry
peers. This analysis utilizes research reports from the Adviser’s proxy
advisors, company filings, as well as reports published by the company and other
outside organizations.
On
matters of capital structure, generally, the Adviser will vote proxies for U.S.
issuers on a case-by-case basis for proposals to
authorize the issuance of new shares if not connected to an M&A transaction
and the potential dilution is more than 10%, against proposals to create
multiple-class voting structures where one class has superior voting rights to
the other classes, in favor of proposals to authorize reverse stock splits
unless the amount of authorized shares is not also reduced proportionately.
Generally, the Adviser will vote proxies for non-U.S. issuers in favor of
proposals to authorize issuance of shares with and without pre-emptive rights
unless the size of the authorities would threaten to unreasonably dilute
existing shareholders.
Votes
on executive compensation come in many forms, including advisory votes on U.S.
executive compensation plans (“Say On Pay”), advisory and
binding votes on the design or implementation of non-U.S. executive remuneration
plans and votes to approve new equity plans or amendments to existing plans.
Generally, the Adviser will support compensation arrangements that are aligned
with the client’s long-term investment objectives. With respect to Say On Pay
proposals, the Adviser will generally vote in favor unless the compensation plan
has failed to align executive compensation with corporate performance, or the
design of the plan is likely to lead to misalignment in the future. The Adviser
supports the principle of an annual shareholder vote on executive pay and will
generally vote accordingly on proposals which set the frequency of the Say On
Pay vote.
In
some markets, especially Europe, shareholders are provided a vote on the
remuneration policy, which sets out the structural elements
of a company’s executive remuneration plan on a forward-looking basis. The
Adviser will generally support these proposals unless the design of the
remuneration policy fails to appropriately link executive compensation with
corporate performance, total compensation appears excessive relative to the
company’s industry peer group, with local market dynamics also taken into
account; or there is insufficient disclosure to enable an informed judgment,
particularly as it relates to the disclosure of the maximum amounts of
compensation that may be awarded.
The
Adviser will generally vote in favor of equity plan proposals unless they result
in unreasonable dilution to existing shareholders,
permit replacement of “underwater” options with new options on more favorable
terms for the recipient, or omit the criteria for determining the granting or
vesting of awards.
On
matters relating to corporate transactions, the Adviser will generally vote in
favor of mergers, acquisitions and sales of assets if
the Adviser’s analysis of the proposed business strategy and the transaction
price would have a positive impact on the total return for
shareholders.
If
a shareholders meeting is contested, that is, shareholders are presented with a
set of director candidates nominated by company
management and a set of director candidates nominated by a dissident
shareholder, the Adviser will study the proposed business strategies of both
groups and vote in a way that maximizes expected total return for the
Fund.
In
addition, the Adviser will not vote any proxy if it determines that the
consequences or costs of voting outweigh the potential benefit of
voting. For example, if a foreign market requires shareholders voting proxies to
retain the voted shares until the meeting date (thereby rendering the shares
“illiquid” for some period of time), the Adviser will not vote proxies for such
shares. In addition, the Adviser is not obligated to incur any expense to send a
representative to a shareholder meeting or to translate proxy materials into
English.
To
the extent that the Adviser is permitted to loan securities, the Adviser does
not have the right to vote on securities while they are
on loan. However, the Adviser will take all reasonable steps to recall shares
prior to the record date when the meeting raises issues that the Adviser
believes materially affect shareholder value, provided that the Adviser
considers that the benefits of voting on the securities are greater than the
associated costs, including the opportunity cost of the lost revenue that would
otherwise be generated by the loan. However, there can be no assurance that the
Adviser will have sufficient notice of such matters to be able to terminate the
loan in time to vote thereon.
The
Adviser will take into account feedback from issuers on the voting
recommendations of the Adviser’s proxy advisory firm if the
feedback is provided at least five days before the voting cut-off date. In
certain circumstances, primarily those where the Adviser’s voting policy is
absolute and without exception, issuer feedback will not be part of the voting
decision. For example, it is the Adviser’s policy to always support a
shareholder proposal to separate the roles of chairman of the board and CEO.
Thus, any comments from the issuer opposing this proposal would not be
considered.
If
proxies are not delivered in a timely or otherwise appropriate basis, the
Adviser may not be able to vote a particular proxy.
21
For
an Adviser that employs a quantitative investment strategy for certain funds or
accounts that does not make use of qualitative
research (“Non-Qualitative Accounts”), the Adviser may not have the kind of
research to make decisions about how to vote proxies for them. Therefore, the
Adviser will vote the proxies of these Non-Qualitative Accounts as follows: (a)
in accordance with the Standard Voting Instructions (defined below); (b) if the
Adviser is casting votes for the same proxy on behalf of a regular qualitative
account and a Non-Qualitative Account, the Non-Qualitative Account would vote in
the same manner as the regular qualitative account; (c) if neither of the first
two conditions apply, as the proxy advisory firm is recommending; and (d) if
none of the previous conditions apply, as recommended by the Proxy Voting
Committee.
Proxy
Voting Procedures
The
Adviser has established a Proxy Voting Committee (“Proxy Committee”), to
exercise all voting discretion granted to the Adviser by the Board in
accordance with the proxy voting policies. To assist it in carrying out the
day-to-day operations related to proxy voting, the Proxy Committee has created
the Proxy Voting Management Group (PVMG). The day-to-day operations related to
proxy voting are carried out by the Proxy Voting Operations Team (PVOT) and
overseen by the PVMG. Besides voting the proxies, this work includes engaging
with investee companies on corporate governance matters, managing the proxy
advisory firm, soliciting voting recommendations from the Adviser’s investment
professionals, bringing voting recommendations to the Proxy Committee for
approval, filing with regulatory agencies any required proxy voting reports,
providing proxy voting reports to clients and investment companies as they are
requested from time to time and keeping the Proxy Committee informed of any
issues related to corporate governance and proxy voting.
The
Adviser has compiled a list of specific voting instructions based on the General
Policy (the “Standard Voting Instructions”).
The Standard Voting Instructions and any modifications to them are approved by
the Proxy Committee. The Standard Voting Instructions sometimes call for an
investment professional to review the ballot question and provide a voting
recommendation to the Proxy Committee (a “case-by-case vote”). The foregoing
notwithstanding, the Proxy Committee always has the authority to determine a
final voting decision.
The
Adviser has hired a proxy advisory firm to perform various proxy voting related
administrative services such as ballot reconciliation,
vote processing and recordkeeping functions. The Proxy Committee has supplied
the proxy advisory firm with the Standard Voting Instructions. The Proxy
Committee retains the right to modify the Standard Voting Instructions at any
time or to vote contrary to them at any time in order to cast proxy votes in a
manner that the Proxy Committee believes is in accordance with the General
Policy. The proxy advisory firm may vote any proxy as directed in the Standard
Voting Instructions without further direction from the Proxy Committee. However,
if the Standard Voting Instructions require case-by-case handling for a
proposal, the PVOT will work with the investment professionals and the proxy
advisory firm to develop a voting recommendation for the Proxy Committee and to
communicate the Proxy Committee’s final voting decision to the proxy advisory
firm. Further, if the Standard Voting Instructions require the PVOT to analyze a
ballot question and make the final voting decision, the PVOT will report such
votes to the Proxy Committee on a quarterly basis for review.
Conflicts
of Interest
The
Adviser has adopted procedures to address situations where a matter on which a
proxy is sought may present a potential conflict
between the interests of the Fund (and its shareholders) and those of the
Adviser or Distributor. This may occur where a significant business relationship
exists between the Adviser (or its affiliates) and a company involved with a
proxy vote.
A
company that is a proponent, opponent, or the subject of a proxy vote, and which
to the knowledge of the Proxy Committee has this
type of significant business relationship, is referred to below as an
“Interested Company.”
The
Adviser has implemented the following procedures in order to avoid concerns that
the conflicting interests of the Adviser or its
affiliates have influenced proxy votes. Any employee of the Adviser or its
affiliates who is contacted by an Interested Company regarding proxies to be
voted by the Adviser must refer the Interested Company to a member of the Proxy
Committee, and must inform the Interested Company that the Proxy Committee has
exclusive authority to determine how the proxy will be voted. Any Proxy
Committee member contacted by an Interested Company must report it to the full
Proxy Committee and provide a written summary of the communication. This
requirement includes engagement meetings with investee companies and does not
include communications with proxy solicitation firms. Under no circumstances
will the Proxy Committee or any member of the Proxy Committee make a commitment
to an Interested Company regarding the voting of proxies or disclose to an
Interested Company how the Proxy Committee has directed such proxies to be
voted. If the Standard Voting Instructions already provide specific direction on
the proposal in question, the Proxy Committee shall not alter or amend such
directions. If the Standard Voting Instructions require the Proxy Committee to
provide further direction, the Proxy Committee shall do so in accordance with
the proxy voting policies, without regard for the interests of the Adviser with
respect to the Interested Company. If the Proxy Committee provides any direction
as to the voting of proxies relating to a proposal affecting an Interested
Company, it must disclose annually to the Fund’s Board information regarding:
the significant business relationship; any material communication with the
Interested Company; the matter(s) voted on; and how, and why, the Adviser voted
as it did. In certain
22
circumstances
it may be appropriate for the Adviser to vote in the same proportion as all
other shareholders, so as to not affect the outcome beyond helping to establish
a quorum at the shareholders’ meeting. This is referred to as “proportional
voting.” If the Fund owns shares of another Federated Hermes mutual fund,
generally the Adviser will proportionally vote the client’s proxies for that
fund or seek direction from the Board or the client on how the proposal should
be voted. If the Fund owns shares of an unaffiliated mutual fund, the Adviser
may proportionally vote the Fund’s proxies for that fund depending on the size
of the position. If the Fund owns shares of an unaffiliated exchange-traded
fund, the Adviser will proportionally vote the Fund’s proxies for that
fund.
Downstream
Affiliates
If
the Proxy Committee gives further direction, or seeks to vote contrary to the
Standard Voting Instructions, for a proxy relating
to a portfolio company in which the Fund owns more than 10% of the portfolio
company’s outstanding voting securities at the time of the vote (“Downstream
Affiliate”), the Proxy Committee must first receive guidance from counsel to the
Proxy Committee as to whether any relationship between the Adviser and the
portfolio company, other than such ownership of the portfolio company’s
securities, gives rise to an actual conflict of interest. If counsel determines
that an actual conflict exists, the Proxy Committee must address any such
conflict with the executive committee of the board of directors or trustees of
any investment company client prior to taking any action on the proxy at
issue.
Proxy
Advisers’ Conflicts of Interest
Proxy
advisory firms may have significant business relationships with the subjects of
their research and voting recommendations.
For example, a proxy advisory firm board member also sits on the board of a
public company for which the proxy advisory firm will write a research report.
This and similar situations give rise to an actual or apparent conflict of
interest.
In
order to avoid concerns that the conflicting interests of the engaged proxy
advisory firm have influenced proxy voting recommendations,
the Adviser will take the following steps:
◾ A due
diligence team made up of employees of the Adviser and/or its affiliates will
meet with the proxy advisory firm on an annual basis and determine through a
review of their policies and procedures and through inquiry that the proxy
advisory firm has established a system of internal controls that provide
reasonable assurance that their voting recommendations are not influenced by the
business relationships they have with the subjects of their
research.
◾ Whenever
the standard voting guidelines call for voting a proposal in accordance with the
proxy advisory firm recommendation and the proxy advisory firm has disclosed
that they have a conflict of interest with respect to that issuer, the PVOT will
take the following steps: (a) the PVOT will obtain a copy of the research report
and recommendations published by another proxy advisory firm for that issuer;
(b) the Director of Proxy Voting, or his designee, will review both the engaged
proxy advisory firm research report and the research report of the other proxy
advisory firm and determine what vote will be cast. The PVOT will report all
proxies voted in this manner to the Proxy Committee on a quarterly basis.
Alternatively, the PVOT may seek direction from the Committee on how the
proposal shall be voted.
Proxy
Voting Report
A
report on “Form N-PX” of how the Fund voted any proxies during the most recent
12-month period ended June 30 is available via the Proxy
Voting Record (Form N-PX) link associated with the Fund and share class name at
FederatedHermes.com/us/FundInformation. Form N-PX filings are also available at
the SEC’s website at sec.gov.
Portfolio
Holdings Information
Information
concerning the Fund’s portfolio holdings is available in the “Products” section
of FederatedHermes.com/us.
Such information is posted on the website five business days after both
mid-month and month-end then remains posted on the website for six months
thereafter. Summary portfolio composition information as of the close of each
month is posted on the website 15 days (or the next business day) after
month-end and remains until replaced by the information for the succeeding
month. The summary portfolio composition information may include identification
of the Fund’s top 10 holdings, and percentage breakdowns of the portfolio by
credit quality tier, type of security and effective maturity range.
The
Fund’s WAM and WAL, Shadow NAV (market-based value of the Fund’s portfolio),
Daily and Weekly Liquid Assets, and Daily
Flows are posted every business day and remain posted on the website for six
months thereafter.
You may
also access portfolio information via the link to the Fund and share class name
at FederatedHermes.com/us.
The Fund’s Annual Shareholder Report and Semi-Annual Shareholder Report contain
complete listings of the Fund’s portfolio holdings as of the end of the Fund’s
second and fourth fiscal quarters. These reports are also available on the SEC’s
website at sec.gov.
23
The
Fund files with the SEC a complete schedule of its portfolio holdings as of the
close of each month on “Form N-MFP.” Form N-MFP is available on
the SEC’s website at sec.gov. You may access Form N-MFP via the link to the Fund
and share class name at FederatedHermes.com/us.
On
any business day, you may submit a request to receive an uncertified and
unaudited list of the Fund’s portfolio holdings as of the
prior business day by calling Federated Hermes at 1-800-245-4270. The Fund will
treat any such request as a standing request, and will transmit such list to you
on each business day, on an ongoing basis, until you call Federated Hermes at
1-800-245-4270 to terminate such request. Given the general availability of such
list, for purposes of its policies and procedures, the Fund considers the
information contained therein to be publicly available. The Adviser reserves the
right to refuse to fulfill any request for portfolio holdings information if it
believes that providing such information may adversely affect the Fund or its
shareholders. The identities of those persons or entities who have received such
list during a calendar quarter will be included in Appendix B to this SAI
following the close of every calendar quarter.
The
disclosure policy of the Fund and the Adviser prohibits the disclosure of
portfolio holdings information to any investor or intermediary
before the same information is made available to other investors. Employees of
the Adviser or its affiliates who have access to nonpublic information
concerning the Fund’s portfolio holdings are prohibited from trading securities
on the basis of this information. Such persons must report all personal
securities trades and obtain pre-clearance for all personal securities trades
other than mutual fund shares.
Firms
that provide administrative, custody, financial, accounting, legal or other
services to the Fund may receive nonpublic information
about Fund portfolio holdings for purposes relating to their services. The Fund
may also provide portfolio holdings information to publications that rate, rank
or otherwise categorize investment companies. Traders or portfolio managers may
provide “interest” lists to facilitate portfolio trading if the list reflects
only that subset of the portfolio for which the trader or portfolio manager is
seeking market interest. A list of service providers, publications and other
third parties who may receive nonpublic portfolio holdings information appears
in Appendix A to this SAI.
The
furnishing of nonpublic portfolio holdings information to any third party (other
than authorized governmental or regulatory
personnel) requires the prior approval of the President of the Adviser and of
the Chief Compliance Officer of the Fund. The President of the Adviser and the
Chief Compliance Officer will approve the furnishing of nonpublic portfolio
holdings information to a third party only if they consider the furnishing of
such information to be in the best interests of the Fund and its shareholders.
In that regard, and to address possible conflicts between the interests of Fund
shareholders and those of the Adviser and its affiliates, the following
procedures apply. No consideration may be received by the Fund, the Adviser, any
affiliate of the Adviser or any of their employees in connection with the
disclosure of portfolio holdings information. Before information is furnished,
the third party must sign a written agreement that it will safeguard the
confidentiality of the information, will use it only for the purposes for which
it is furnished and will not use it in connection with the trading of any
security. Persons approved to receive nonpublic portfolio holdings information
will receive it as often as necessary for the purpose for which it is provided.
Such information may be furnished as frequently as daily and often with no time
lag between the date of the information and the date it is furnished. The Board
receives and reviews annually a list of the persons who receive nonpublic
portfolio holdings information and the purposes for which it is
furnished.
Brokerage
Transactions And Investment Allocation
When
selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, the Adviser looks for prompt execution
of the order at a favorable price. Fixed-income securities are generally traded
in an over-the-counter market on a net basis (i.e., without commission) through
dealers acting as principal or in transactions directly with the issuer. Dealers
derive an undisclosed amount of compensation by offering securities at a higher
price than they bid for them. Some fixed-income securities may have only one
primary market maker. The Adviser seeks to use dealers it believes to be
actively and effectively trading the security being purchased or sold, but may
not always obtain the lowest purchase price or highest sale price with respect
to a security. The Adviser makes decisions on portfolio transactions and selects
brokers and dealers subject to review by the Fund’s Board.
Investment
decisions for the Fund are made independently from those of other accounts
managed by the Adviser and accounts managed by
affiliates of the Adviser. When the Fund and one or more of those accounts
invests in, or disposes of, the same security, available investments or
opportunities for sales will be allocated among the Fund and the account(s) in a
manner believed by the Adviser to be equitable. While the coordination and
ability to participate in volume transactions may benefit the Fund, it is
possible that this procedure could adversely impact the price paid or received
and/or the position obtained or disposed of by the Fund. Investment decisions,
and trading, for certain separately managed or wrap-fee accounts, and other
accounts, of the Adviser and/or certain investment adviser affiliates of the
Adviser are generally made, and conducted, independently from the Fund. It is
possible that such independent trading activity could adversely impact the
prices paid or received and/or positions obtained or disposed of by the
Fund.
24
On July
31, 2023, the
Fund owned securities of the following regular broker/dealers:
|
Broker
Dealer |
Amount
of
Securities
Owned |
|
Sumitomo
Mitsui Trust Bank Ltd.
BofA
Securities
Mitsubishi
UFG Securities Americas, Inc.
Societe
Generale
BNP
Paribas S.A.
Mizuho
Securities USA LLC
ING
Financial Markets LLC
Sumitomo
Mitsui Banking Corp. |
$827,026,067
$815,000,000
$534,701,000
$426,701,000
$409,701,000
$135,000,000
$120,701,000
$12,000,000 |
Administrator
Federated
Administrative Services (FAS), a subsidiary of Federated Hermes, provides
administrative personnel and services, including
certain legal, compliance and financial administrative services (“Administrative
Services”), necessary for the operation of the Fund. FAS provides Administrative
Services for a fee based upon the rates set forth below paid on the average
daily net assets of the Fund. For purposes of determining the appropriate rate
breakpoint, “Investment Complex” is defined as all of the Federated Hermes funds
subject to a fee under the Administrative Services Agreement with FAS. FAS is
also entitled to reimbursement for certain out-of-pocket expenses incurred in
providing Administrative Services to the Fund.
|
Administrative
Services
Fee
Rate |
Average
Daily Net Assets
of
the Investment Complex |
|
0.100% |
on
assets up to $50 billion |
|
0.075% |
on
assets over $50 billion |
Custodian
State
Street Bank and Trust Company, Boston, Massachusetts, is custodian for the
securities and cash of the Fund. Foreign instruments
purchased by the Fund are held by foreign banks participating in a network
coordinated by State Street Bank and Trust Company.
Transfer
Agent And Dividend Disbursing Agent
SS&C GIDS, Inc., the Fund’s
registered transfer agent, maintains all necessary shareholder
records.
Independent
Registered Public Accounting Firm
The
independent registered public accounting firm for the Fund, KPMG LLP, conducts
its audits in accordance with the standards
of the Public Company Accounting Oversight Board (United States), which require
it to plan and perform its audits to provide reasonable assurance about whether
the Fund’s financial statements and financial highlights are free of material
misstatement.
FEES
PAID BY THE FUND FOR SERVICES
|
For
the Year Ended July 31 |
2023 |
2022 |
2021 |
|
Advisory
Fee Earned |
$31,167,638 |
$26,847,301 |
$42,764,031 |
|
Advisory
Fee Waived |
$15,737,102 |
$16,595,747 |
$27,827,648 |
|
Net
Administrative Fee |
$12,178,462 |
$10,508,115 |
$16,694,080 |
|
Net
12b-1 Fee: |
|
|
|
|
Trust
Shares |
$— |
$— |
$— |
|
Net
Shareholder Services Fee: |
|
|
|
|
Service
Shares |
$27,682 |
$23,119 |
$40,641 |
|
Capital
Shares |
$— |
$42 |
$7,968 |
|
Trust
Shares |
$— |
$— |
$— |
Securities
Lending Activities
The
Fund does not participate in a securities lending program and did not engage in
any securities lending activities during the Fund’s
most recent fiscal year.
25
The
Financial Statements for the Fund for the fiscal year ended July 31,
2023, are
incorporated herein by reference to the Annual Report to Shareholders of
Federated Hermes Institutional Prime Obligations Fund dated July 31,
2023.
Investment
Ratings
Standard
& Poor’s (S&P) Short-Term Municipal Obligation RATINGS
An
S&P U.S. municipal note rating reflects the liquidity factors and market
access risks unique to the notes. Notes due in three years or
less will likely receive a note rating. Notes with an original maturity of more
than three years will most likely receive a long-term debt rating.
SP-1—Strong
capacity to pay principal and interest. An issue determined to possess a very
strong capacity to pay debt service is given a plus sign (+)
designation.
SP-2—Satisfactory
capacity to pay principal and interest, with some vulnerability to adverse
financial and economic changes over the term of the notes.
SP-3—Speculative
capacity to pay principal and interest.
S&P
Variable Rate Demand Notes (VRDNs) And Tender Option Bonds (TOBs)
Ratings
S&P
assigns “dual” ratings to all debt issues that have a put option or demand
feature as part of their structure. The first rating addresses
the likelihood of repayment of principal and interest as due, and the second
rating addresses only the demand feature. The long-term rating symbols are used
for bonds to denote the long-term maturity and the short-term rating symbols for
the put option (for example, ‘AAA/A-1+’). With U.S. municipal short-term demand
notes rating symbols are used with the short-term issue credit rating symbols
(for example, ‘SP-1+/A-1+’).
S&P
SHORT-TERM ISSUE RATINGS
Short-term
ratings are generally assigned to those obligations considered short-term in the
relevant market. In the United States,
for example, that means obligations with an original maturity of no more than
365 days—including commercial paper.
A-1—A
short-term obligation rated ‘A-1’ is rated in the highest category by S&P.
The obligor’s capacity to meet its financial commitment on the obligation is
strong. Within this category, certain obligations are designated with a plus
sign (+). This indicates that the obligor’s capacity to meet its financial
commitment on these obligations is extremely strong.
A-2—A
short-term obligation rated ‘A-2’ is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than obligations in
higher rating categories. However, the obligor’s capacity to meet its financial
commitment on the obligation is satisfactory.
A-3—A
short-term obligation rated ‘A-3’ exhibits adequate protection parameters.
However, adverse economic conditions or changing circumstances are more likely
to lead to a weakened capacity of the obligor to meet its financial commitment
on the obligation.
S&P
LONG-TERM ISSUE RATINGS
Issue
credit ratings are based, in varying degrees, on S&P’s analysis of the
following considerations: the likelihood of payment—capacity
and willingness of the obligor to meet its financial commitment on an obligation
in accordance with the terms of the obligation; the nature of and provisions of
the obligation; and the protection afforded by, and relative position of, the
obligation in the event of bankruptcy, reorganization, or other arrangement
under the laws of bankruptcy and other laws affecting creditors’
rights.
AAA—An
obligation rated ‘AAA’ has the highest rating assigned by S&P. The obligor’s
capacity to meet its financial commitment on the obligation is extremely
strong.
AA—An
obligation rated ‘AA’ differs from the highest rated obligations only to a small
degree. The obligor’s capacity to meet its financial commitment on the
obligation is very strong.
A—An
obligation rated ‘A’ is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligations in
higher-rated categories. However, the obligor’s capacity to meet its financial
commitment on the obligation is still strong.
BBB—An
obligation rated ‘BBB’ exhibits adequate protection parameters. However, adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity of the obligor to meet its financial commitment on the
obligation.
The
ratings ‘AA,’ ‘A’ and ‘BBB’ may be modified by the addition of a plus (+) or
minus (-) sign to show relative standing within the
major rating categories.
26
S&P
RATING OUTLOOK
An
S&P rating outlook assesses the potential direction of a long-term credit
rating over the intermediate term (typically six months to
two years). In determining a rating outlook, consideration is given to any
changes in the economic and/or fundamental business conditions.
Positive—Positive
means that a rating may be raised.
Negative—Negative
means that a rating may be lowered.
Stable—Stable
means that a rating is not likely to change.
Developing—Developing
means a rating may be raised or lowered.
N.M.—N.M.
means not meaningful.
MOODY’S
INVESTORS SERVICE, INC. (MOODY’S) SHORT-TERM MUNICIPAL OBLIGATION
RATINGS
Moody’s
Municipal Investment Grade (MIG) scale is used to rate U.S. municipal bond
anticipation notes of up to three years maturity.
Municipal notes rated on the MIG scale may be secured by either pledged revenues
or proceeds of a take-out financing received prior to note maturity. MIG ratings
expire at the maturity of the obligation, and the issuer’s long-term rating is
only one consideration in assigning the MIG rating.
MIG
1—This
designation denotes superior credit quality. Excellent protection is afforded by
established cash flows, highly reliable liquidity support, or demonstrated
broad-based access to the market for refinancing.
MIG
2—This
designation denotes strong credit quality. Margins of protection are ample,
although not as large as in the preceding group.
MIG
3—This
designation denotes acceptable credit quality. Liquidity and cash-flow
protection may be narrow, and market access for refinancing is likely to be less
well-established.
MOODY’S
VRDNs AND TOBs RATINGS
In
the case of issues with variable rate demand obligations, a two-component rating
is assigned: a long or short-term debt rating and
a demand obligation rating. The first element represents Moody’s evaluation of
risk associated with scheduled principal and interest payments. The second
element represents Moody’s evaluation of risk associated with the ability to
receive purchase price upon demand (“demand feature”). The second element uses a
rating from a variation of the MIG scale called the Variable Municipal
Investment Grade (VMIG) scale.
VMIG
1—This
designation denotes superior credit quality. Excellent protection is afforded by
the superior short-term credit strength of the liquidity provider and structural
and legal protections that ensure the timely payment of purchase price upon
demand.
VMIG
2—This
designation denotes strong credit quality. Good protection is afforded by the
strong short-term credit strength of the liquidity provider and structural and
legal protections that ensure the timely payment of purchase price upon
demand.
VMIG
3—This
designation denotes acceptable credit quality. Adequate protection is afforded
by the satisfactory short-term credit strength of the liquidity provider and
structural and legal protections that ensure the timely payment of purchase
price upon demand.
MOODY’S
SHORT-TERM RATINGS
Moody’s
short-term ratings are assigned to obligations with an original maturity of
thirteen months or less and reflect the likelihood
of a default on contractually promised payments.
P-1—Issuers
(or supporting institutions) rated Prime-1 have a superior ability to repay
short-term debt obligations.
P-2—Issuers
(or supporting institutions) rated Prime-2 have a strong ability to repay
short-term debt obligations.
P-3— Issuers
(or supporting institutions) rated Prime-3 have an acceptable ability to repay
short-term obligations.
MOODY’S
LONG-TERM RATINGS
Moody’s
long-term ratings are assigned to issuers or obligations with an original
maturity of one year or more and reflect both on the
likelihood of a default on contractually promised payments and the expected
financial loss suffered in the event of default.
Aaa—Obligations
rated Aaa are judged to be of the highest quality, subject to the lowest level
of credit risk.
Aa—Obligations
rated Aa are judged to be of high quality and are subject to very low credit
risk.
A—Obligations
rated A are judged to be upper-medium grade and are subject to low credit
risk.
Baa—Obligations
rated Baa are judged to be medium-grade and subject to moderate credit risk and
as such may possess certain speculative characteristics.
27
Moody’s
appends numerical modifiers 1, 2 and 3 to its generic rating classifications.
The modifier 1 indicates that the obligation
ranks in the higher end of its generic rating category; the modifier 2 indicates
a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of
that generic rating category.
FITCH,
INC. (FITCH) SHORT-TERM DEBT RATINGS
A
Fitch short-term issuer or obligation rating is based in all cases on the
short-term vulnerability to default of the rated entity or
security stream and relates to the capacity to meet financial obligations in
accordance with the documentation governing the relevant obligation. Short-Term
Ratings are assigned to obligations whose initial maturity is viewed as “short
term” based on market convention. Typically, this means up to 13 months for
corporate, sovereign, and structured obligations, and up to 36 months for
obligations in U.S. public finance markets.
F1:
Highest Short-Term Credit Quality—Indicates
the strongest intrinsic capacity for timely payment of financial commitments;
may have an added “+” to denote any exceptionally strong credit
feature.
F2:
Good Short-Term Credit Quality—Good
intrinsic capacity for timely payment of financial commitments.
F3:
Fair Short-Term Credit Quality—The
intrinsic capacity for timely payment of financial commitments is
adequate.
FITCH
LONG-TERM DEBT RATINGS
Fitch
long-term ratings report Fitch’s opinion on an entity’s relative vulnerability
to default on financial obligations. The “threshold”
default risk addressed by the rating is generally that of the financial
obligations whose non-payment would best reflect the uncured failure of that
entity. As such, Fitch long-term ratings also address relative vulnerability to
bankruptcy, administrative receivership or similar concepts, although the agency
recognizes that issuers may also make pre-emptive and therefore voluntary use of
such mechanisms.
AAA:
Highest Credit Quality—‘AAA’
ratings denote the lowest expectation of default risk. They are assigned only in
cases of exceptionally strong capacity for payment of financial commitments.
This capacity is highly unlikely to be adversely affected by foreseeable
events.
AA:
Very High Credit Quality—‘AA’
ratings denote expectations of very low default risk. They indicate very strong
capacity for payment of financial commitments. This capacity is not
significantly vulnerable to foreseeable events.
A:
High Credit Quality—‘A’
ratings denote expectations of low default risk. The capacity for payment of
financial commitments is considered strong. This capacity may, nevertheless, be
more vulnerable to adverse business or economic conditions than is the case for
higher ratings.
BBB:
Good Credit Quality—‘BBB’
ratings indicate that expectations of default risk are currently low. The
capacity for payment of financial commitments is considered adequate but adverse
business or economic conditions are more likely to impair this
capacity.
DBRS,
INC. (DBRS) COMMERCIAL PAPER AND SHORT-TERM DEBT RATINGS
The
DBRS short-term debt rating scale provides DBRS’s opinion on the risk that an
issuer will not meet its short-term financial
obligations in a timely manner. Ratings are based on quantitative and
qualitative considerations relevant to the issuer and the relative ranking of
claims.
R-1
(high)—Highest
credit quality. The capacity for the payment of short-term financial obligations
as they fall due is exceptionally high. Unlikely to be adversely affected by
future events.
R-1
(middle)—Superior
credit quality. The capacity for the payment of short-term financial obligations
as they fall due is very high. Differs from R-1 (high) by a relatively modest
degree. Unlikely to be significantly vulnerable to future events.
R-1
(low)—Good
credit quality. The capacity for the payment of short-term financial obligations
as they fall due is substantial. Overall strength is not as favorable as higher
rating categories. May be vulnerable to future events, but qualifying negative
factors are considered manageable.
R-2
(high)—Upper end
of adequate credit quality. The capacity for the payment of short-term financial
obligations as they fall due is acceptable. May be vulnerable to future
events.
R-2
(middle)—Adequate
credit quality. The capacity for the payment of short-term financial obligations
as they fall due is acceptable. May be vulnerable to future events or may be
exposed to other factors that could reduce credit quality.
R-2
(low)—Lower end
of adequate credit quality. The capacity for the payment of short-term financial
obligations as they fall due is acceptable. May be vulnerable to future events.
A number of challenges are present that could affect the issuer’s ability to
meet such obligations.
R-3—Lowest
end of adequate credit quality. There is a capacity for the payment of
short-term financial obligations as they fall due. May be vulnerable to future
events and the certainty of meeting such obligations could be impacted by a
variety of developments.
28
DBRS
LONG-TERM OBLIGATIONS RATINGS
The
DBRS long-term rating scale provides DBRS’s opinion on the risk of default. That
is, the risk that an issuer will fail to satisfy
its financial obligations in accordance with the terms under which an
obligations has been issued. Ratings are based on quantitative and qualitative
considerations relevant to the issuer, and the relative ranking of
claims.
AAA—Highest
credit quality. The capacity for the payment of financial obligations is
exceptionally high and unlikely to be adversely affected by future
events.
AA—Superior
credit quality. The capacity for the payment of financial obligations is
considered high. Credit quality differs from AAA only to a small degree.
Unlikely to be significantly vulnerable to future events.
A—Good
credit quality. The capacity for the payment of financial obligations is
substantial, but of lesser credit quality than AA. May be
vulnerable to future events, but qualifying negative factors are considered
manageable.
BBB—Adequate
credit quality. The capacity for the payment of financial obligations is
considered acceptable. May be vulnerable to future events.
“High”
or “low”—All
rating categories other than AAA also contain subcategories “(high)” and
“(low).” The absence of either a “(high)” or “(low)” designation indicates the
rating is in the middle of the category.
A.M.
BEST COMPANY, INC. (A.M. BEST) SHORT-TERM DEBT RATINGS
A
Best’s short-term debt rating is Best’s opinion of an issuer/entity’s ability to
meet its financial obligations having original maturities
of generally less than one year, such as commercial paper.
AMB-1+:
Strongest—Assigned
to issues where the issuer has the strongest ability to repay short-term debt
obligations.
AMB-1:
Outstanding—Assigned
to issues where the issuer has an outstanding ability to repay short-term debt
obligations.
AMB-2:
Satisfactory—Assigned
to issues where the issuer has a satisfactory ability to repay short-term debt
obligations.
A.M.
BEST LONG-TERM DEBT AND PREFERRED STOCK RATINGS
A
Best’s long-term debt rating is Best’s independent opinion of an issuer/entity’s
ability to meet its ongoing financial obligations
to security holders when due.
aaa:
Exceptional—Assigned
to issues where the issuer has an exceptional ability to meet the terms of the
obligation.
aa:
Very Strong—Assigned
to issues where the issuer has a very strong ability to meet the terms of the
obligation.
a:
Strong—Assigned
to issues where the issuer has a strong ability to meet the terms of the
obligation.
bbb:
Adequate—Assigned
to issues where the issuer has an adequate ability to meet the terms of the
obligation; however, the issue is more susceptible to changes in economic or
other conditions.
Ratings
may be enhanced with a “+” (plus) or “-” (minus) to indicate whether credit
quality is near the top or bottom of a
category.
A.M.
BEST RATING MODIFIERS
Both
long- and short-term credit ratings can be assigned a modifier.
u—Indicates
the rating may change in the near term, typically within six months. Generally
is event-driven, with positive, negative or developing implications.
pd—Indicates
ratings assigned to a company that chose not to participate in A.M. Best’s
interactive rating process. (Discontinued in 2010)
i—Indicates
rating assigned is indicative.
A.M.
BEST RATING OUTLOOK
A.M.
Best Credit Ratings are assigned a Rating Outlook that indicates the potential
direction of a credit rating over an intermediate
term, generally defined as the next 12 to 36 months.
Positive—Indicates
possible ratings upgrade due to favorable financial/market trends relative to
the current trading level.
Negative—Indicates
possible ratings downgrade due to unfavorable financial/market trends relative
to the current trading level.
Stable—Indicates
low likelihood of rating change due to stable financial/market
trends.
NOT
RATED
Certain
nationally recognized statistical rating organizations (NRSROs) may designate
certain issues as NR, meaning that the issue or
obligation is not rated.
29
Addresses
Federated
Hermes Institutional Prime Obligations Fund
INSTITUTIONAL
SHARES
Federated
Hermes Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
4000 Ericsson Drive
Warrendale, PA 15086-7561
Distributor
Federated
Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Investment
Adviser
Federated
Investment Management Company
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Custodian
State
Street Bank and Trust Company
1 Iron Street
Boston, MA 02110
1 Iron Street
Boston, MA 02110
Transfer
Agent and Dividend Disbursing Agent
SS&C GIDS,
Inc.
P.O. Box 219318
Kansas City, MO 64121-9318
P.O. Box 219318
Kansas City, MO 64121-9318
Independent
Registered Public Accounting Firm
KPMG
LLP
Two Financial Center
60 South Street
Boston, MA 02111
Two Financial Center
60 South Street
Boston, MA 02111
30
Appendix
A
The
following is a list of persons, other than the Adviser and its affiliates, that
have been approved to receive nonpublic portfolio holdings information
concerning the Federated Hermes Complex; however, certain persons below might
not receive such information concerning the Fund:
CUSTODIAN(S)
State
Street Bank and Trust Company
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
KPMG
LLP
LEGAL
COUNSEL
Goodwin
Procter LLP
K&L Gates LLP
K&L Gates LLP
Financial
Printer(S)
Donnelley
Financial Solutions
Proxy
Voting Administrator
Glass
Lewis & Co., LLC
SECURITY
PRICING SERVICES
Bloomberg
L.P.
IHS Markit (Markit North America)
ICE Data Pricing & Reference Data, LLC
JPMorgan PricingDirect
Refinitiv US Holdings Inc.
IHS Markit (Markit North America)
ICE Data Pricing & Reference Data, LLC
JPMorgan PricingDirect
Refinitiv US Holdings Inc.
RATINGS
AGENCIES
Fitch,
Inc.
Moody’s Investors Service, Inc.
Standard & Poor’s Financial Services LLC
Moody’s Investors Service, Inc.
Standard & Poor’s Financial Services LLC
Other
SERVICE PROVIDERS
Other
types of service providers that have been approved to receive nonpublic
portfolio holdings information include service providers offering, for example,
trade order management systems, portfolio analytics, or performance and
accounting systems, such as:
ACA Technology
Surveillance, Inc.
Bank of America Merrill Lynch
Bloomberg L.P.
Charles River Development
Citibank, N.A.
Eagle Investment Systems LLC
Electra Information Systems
FactSet Research Systems Inc.
FISGlobal
Institutional Shareholder Services
Investortools, Inc.
MSCI ESG Research LLC
PricewaterhouseCoopers
Sustainalytics U.S. Inc.
Wolters Kluwer N.V.
Bank of America Merrill Lynch
Bloomberg L.P.
Charles River Development
Citibank, N.A.
Eagle Investment Systems LLC
Electra Information Systems
FactSet Research Systems Inc.
FISGlobal
Institutional Shareholder Services
Investortools, Inc.
MSCI ESG Research LLC
PricewaterhouseCoopers
Sustainalytics U.S. Inc.
Wolters Kluwer N.V.
31