Mortgage Securities Trust Cmo Series 12, et al. – ‘485BPOS’ on 4/29/96

As of:  Monday, 4/29/96   ·   Effective:  4/30/96   ·   Accession #:  903112-96-259   ·   File #s:  33-52373, 33-52780, 33-57315

in

this entire Filing. an “Entity” Search.

Show

Documents searched

and

each “hit”. the 1st “hit”.

↓↑Hints

Post-Effective Amendment
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 485BPOS     Post-Effective Amendment                             105    415K 
 2: EX-27.CMOSER12  Article 6 FDS                                      2±    10K 
 3: EX-27.CMOSER15  Article 6 FDS                                      2±    10K 
 4: EX-27.CMOSER16  Article 6 FDS                                      2±    10K 
 5: EX-99.5.1   Consent                                                6     27K 

485BPOS   —   Post-Effective Amendment
Document Table of Contents

485BPOS
1st Page of 105
TOC
↑Top
Previous
Next
↓Bottom
Just 1st
 
As filed with the Securities and Exchange Commission on April 29, 1996  

                                                   Registration No. 33-52780

      SECURITIES AND EXCHANGE COMMISSION
      Washington, D.C. 20549

      POST-EFFECTIVE AMENDMENT
      To
      FORM S-6

       FOR REGISTRATION UNDER THE SECURITIES ACT
      OF 1933 OF SECURITIES OF UNIT INVESTMENT
      TRUSTS REGISTERED ON FORM N-8B-2

A.    Exact name of trust:    MORTGAGE SECURITIES TRUST,                        
        CMO SERIES 12, CMO SERIES 15
and CMO SERIES 16   

B.    Name of depositor:      REICH & TANG DISTRIBUTORS L.P.                    

C.    Complete address of depositor's principal executive offices:              

REICH & TANG DISTRIBUTORS L.P.                                      
600 Fifth Avenue                                                    
New York, NY 10020                                                  

D.    Name and complete address of agent for service:                           

PETER J. DeMARCO                    Copy of comments to:
    Executive Vice President            MICHAEL R. ROSELLA, ESQ.
Reich & Tang Distributors L.P.      Battle Fowler LLP   
600 Fifth Avenue                    75 East 55th Street 
New York, NY 10020                  New York, NY 10022  
                              (212) 856-6858

It is proposed that this filing become effective (check appropriate box)        

/ / immediately upon filing pursuant to paragraph (b) of Rule 485               
/x/ on April 30, 1996 pursuant to paragraph (b)                                 
/ / 60 days after filing pursuant to paragraph (a)                              
/ / on (       date       ) pursuant to paragraph (a) of Rule 485               

*    The Prospectus included in this Registration Statement constitutes a       
combined Prospectus as permitted by the provisions of Rule 429 of the 
General Rules and Regulations under the Securities Act of 1933 (the   
 "Act"). Said Prospectus covers units of undivided interest in Municipal
  Securities Trust, CMO Series 12, CMO Series 15 and CMO Series 16 covered
by prospectuses heretofore filed as part of separate registration     
statements on Form S-6 (Registration Nos. 33-52780, 33-52373 and      
33-57315, respectively) under the Act. This filing constitutes        
Post-Effective Amendment No. 3 for CMO Series 12, Post-Effective      
  Amendment No. 2 for CMO Series 15 and Post-Effective Amendment No. 1 for
CMO Series 16.                                                        

175587.1                                                                        

485BPOS
2nd Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 2nd
    CMO SERIES 12,
    CMO SERIES 15,
     CMO SERIES 16

     CROSS-REFERENCE SHEET

    Pursuant to Rule 404 of Regulation C
    under the Securities Act of 1933

     (Form N-8B-2 Items required by Instruction as
    to the Prospectus in Form S-6)

Form N-8B-2                                Form S-6   
   Item Number                         Heading in Prospectus

    I.  Organization and General Information

1.  (a) Name of trust...................Front Cover of Prospectus             
(b) Title of securities issued......     "                            
2.  Name and address of each depositor..The Sponsor                           
3.  Name and address of trustee.........The Trustee                           
4.  Name and address of principal                                             
underwriters......................The Sponsor                     
5.  State of organization of trust......Organization                          
6.  Execution and termination of                                              
trust agreement...................Trust Agreement, Amendment and  
                       Termination
7.  Changes of name.....................Not Applicable                        
8.  Fiscal year.........................     "                                
9.  Litigation..........................None                                  

       II.  General Description of the Trust and Securities of the Trust

10.  (a) Registered or bearer                                                   
securities......................Certificates                  
(b) Cumulative or distributive                                        
      securities......................Interest and Principal Distributions
(c) Redemption......................Trustee Redemption                
(d) Conversion, transfer, etc.......Certificates, Sponsor Repurchase, 
                                        Trustee Redemption, Exchange
                                          Privilege and Conversion Offer
(e) Periodic payment plan...........Not Applicable                    
(f) Voting rights...................Trust Agreement, Amendment and    
                       Termination
  (g) Notice to certificateholders....Records, Portfolio, Trust Agreement,
                                          Amendment and Termination, The
                                Sponsor, The Trustee
(h) Consents required...............Trust Agreement, Amendment and    
                       Termination
(i) Other provisions................Tax Status                        
11.  Type of securities                                                         
  comprising units..................Objectives, Portfolio, Description
                        of Portfolio
12.  Certain information regarding                                              
periodic payment certificates.....Not Applicable                  

 -i-
169252.1                                                                        

485BPOS
3rd Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 3rd
Form N-8B-2                                Form S-6   
   Item Number                         Heading in Prospectus

13.  (a) Load, fees, expenses, etc.......Summary of Essential Information,      
                                            Offering Price, Volume and Other
                                    Discounts, Sponsor's and
                                        Underwriters' Profits, Total
                                             Reinvestment Plan, Trust Expenses
                       and Charges
(b) Certain information regarding                                     
periodic payment certificates...Not Applicable                
(c) Certain percentages.............Summary of Essential Information, 
                                 Offering Price, Total
              Reinvestment
                Plan
(d) Price differences...............Volume and Other Discounts        
(e) Other loads, fees, expenses.....Certificates                      
(f) Certain profits receivable                                        
by depositors, principal                                      
underwriters, trustee or                                      
     affiliated persons..............Sponsor's and Underwriters' Profits
(g) Ratio of annual charges                                           
to income.......................Not Applicable                
14.  Issuance of trust's securities......Organization, Certificates             
15.  Receipt and handling of payments                                           
from purchasers...................Organization                    
16.  Acquisition and disposition of                                             
    underlying securities.............Organization, Objectives, Portfolio,
                                 Portfolio Supervision
17.  Withdrawal or redemption............Comparison of Public Offering Price,   
                                          Sponsor's Repurchase Price and
                                     Redemption Price, Sponsor
                                          Repurchase, Trustee Redemption
18.  (a) Receipt, custody and                                                   
      disposition of income...........Distribution Elections, Interest and
                                             Principal Distributions, Records,
                                   Total Reinvestment Plan
(b) Reinvestment of distributions...Total Reinvestment Plan           
  (c) Reserves or special funds.......Interest and Principal Distributions
(d) Schedule of distributions.......Not Applicable                    
19.  Records, accounts and reports.......Records, Total Reinvestment Plan       
20.  Certain miscellaneous provisions                                           
of trust agreement................Trust Agreement, Amendment and  
                       Termination
(a) Amendment.......................     "                            
(b) Termination.....................     "                            
(c) and (d) Trustee, removal and                                      
successor.......................The Trustee                   
(e) and (f) Depositor, removal                                        
and successor...................The Sponsor                   
21.  Loans to security holders...........Not Applicable                         
22.  Limitations on liability............The Sponsor, The Trustee,              
                         The Evaluator
23.  Bonding arrangements................Part II--Item A                        
24.  Other material provisions                                                  
of trust agreement................Not Applicable                  

       III.  Organization, Personnel and Affiliated Persons of Depositor

25.  Organization of depositor...........                                       
             The Sponsor
26.  Fees received by depositor..........Not Applicable                         

  -ii-
169252.1                                                                        

485BPOS
4th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 4th
Form N-8B-2                                Form S-6   
   Item Number                         Heading in Prospectus

27.  Business of depositor...............The Sponsor                            
28.  Certain information as to                                                  
officials and affiliated                                          
persons of depositor..............Part II--Item C                 
29.  Voting securities of depositor......Not Applicable                         
30.  Persons controlling depositor.......     "                                 
31.  Payments by depositor for certain                                          
services rendered to trust........     "                          
32.  Payment by depositor for certain                                           
other services rendered to trust..     "                          
33.  Remuneration of employees of                                               
depositor for certain services                                        
rendered to trust...................     "                            
34.  Remuneration of other persons for                                          
certain services rendered to trust..     "                            

      IV.  Distribution and Redemption of Securities

35.  Distribution of trust's                                                    
securities by states..............Distribution of Units           
36.  Suspension of sales of                                                     
trust's securities................Not Applicable                  
37.  Revocation of authority                                                    
to distribute.....................     "                          
38.  (a) Method of distribution..........Distribution of Units, Total           
                             Reinvestment Plan
(b) Underwriting agreements.........     "                            
(c) Selling agreements..............     "                            
39.  (a) Organization of principal                                              
underwriters....................The Sponsor                   
(b) N.A.S.D. membership of                                            
principal underwriters..........     "                        
40.  Certain fees received by                                                   
principal underwriters............Not Applicable                  
41.  (a) Business of principal                                                  
underwriters....................The Sponsor                   
(b) Branch offices of principal                                       
underwriters....................Not Applicable                
(c) Salesmen of principal                                             
underwriters....................     "                        
42.  Ownership of trust's                                                       
securities by certain persons.....     "                          
43.  Certain brokerage commissions                                              
received by principal                                             
underwriters......................     "                          
44.  (a) Method of valuation.............Summary of Essential Information,      
                                             Offering Price, Accrued Interest,
                                       Volume and Other Discounts,
                                    Total Reinvestment Plan,
                                 Distribution of Units
(b) Schedule as to offering price...Not Applicable                    
(c) Variation in offering price                                       
to certain persons..............Distribution of Units, Total  
                                         Reinvestment Plan, Volume and
                           Other Discounts
45.  Suspension of redemption rights.....Trustee Redemption                     

   -iii-
169252.1                                                                        

485BPOS
5th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 5th
Form N-8B-2                                Form S-6   
   Item Number                         Heading in Prospectus

46.  (a) Redemption valuation............Comparison of Public Offering Price,   
                                          Sponsor's Repurchase Price and
                                     Redemption Price, Trustee
            Redemption
(b) Schedule as to                                                    
redemption price................Not Applicable                
47.  Maintenance of position in                                                 
    underlying securities.............Comparison of Public Offering Price,
                                          Sponsor's Repurchase Price and
                                     Redemption Price, Sponsor
                                Repurchase, Trustee Redemption

       V.  Information Concerning the Trustee or Custodian

48.  Organization and regulation                                                
of trustee........................The Trustee                     
49.  Fees and expenses of trustee........Trust Expenses and Charges             
50.  Trustee's lien......................     "                                 

      VI.  Information Concerning Insurance of Holders of Securities

51.  Insurance of holders of                                                    
trust's securities................ Not Applicable                 

      VII.  Policy of Registrant

52.  (a) Provisions of trust agreement                                          
with respect to selection or                                  
elimination of underlying                                     
  securities......................Objectives, Portfolio, Portfolio
                       Supervision
(b) Transactions involving                                            
elimination of underlying                                     
securities......................Not Applicable                
(c) Policy regarding substitution                                     
or elimination of underlying                                  
  securities......................Objectives, Portfolio, Portfolio
                                        Supervision, Substitution of
                 Bonds
(d) Fundamental policy not                                            
otherwise covered...............Not Applicable                
53.  Tax status of trust.................Tax Status                             

      VIII.  Financial and Statistical Information

54.  Trust's securities during                                                  
last ten years....................Not Applicable                  
55.  Hypothetical account for issuers                                           
of periodic payment plans.........     "                          
56.  Certain information regarding                                              
periodic payment certificates.....     "                          
57.  Certain information regarding                                              
periodic payment plans............     "                          
58.  Certain other information                                                  
regarding periodic payment plans..     "                          

  -iv-
169252.1                                                                        

485BPOS
6th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 6th
Form N-8B-2                                Form S-6   
   Item Number                         Heading in Prospectus

59.  Financial Statements                                                       
(Instruction 1(c) to Form S-6)......Statement of Financial Condition  

 -v-
169252.1                                                                        

485BPOS
7th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 7th
Note:  Part A of This Prospectus May Not Be   
Distributed Unless Accompanied by Part B. 

MORTGAGE SECURITIES TRUST 

CMO SERIES 12 

         The Trust consists of 1 unit investment trust designated Mortgage
Series Trust, CMO Series 12 Intermediate Portfolio (the "Trust"). The Trust     
consists of an underlying portfolio of collateralized mortgage obligations      
("CMOs" or "Securities") and was formed to obtain safety of capital and provide 
a high level of current distributions of interest income. The Trust seeks to    
obtain a higher yield than fixed income investments with comparable AAA ratings.
An investment in the Trust entails differing degrees of risk. The Trust seeks to
achieve its objectives through investment in a fixed portfolio of CMOs which may
have been issued as debt obligations of a trust or corporation or which may     
represent certificated interests of beneficial ownership in pools of            
mortgage-backed securities. All of the CMOs in the portfolio are backed by      
underlying mortgage-backed securities which are pledged as collateral to secure 
payment of principal and interest on the CMOs. Each of these underlying         
mortgage-backed securities is guaranteed as to the payment of principal and     
interest by the Government National Mortgage Association ("GNMA"), the Federal  
National Mortgage Association ("FNMA") or the Federal Home Loan Mortgage        
Corporation ("FHLMC"). All of the CMOs in the Trust are issued by GNMA, FNMA or 
FHLMC or are otherwise rated AAA by Standard & Poor's and, therefore, the Units 
of the Trust are rated AAA by Standard & Poor's Corporation. The Units of the   
Trust are not, however, guaranteed by GNMA, FNMA, FHLMC, the United States or   
any of its agencies. The full faith and credit of the United States is pledged  
to the payment of all amounts guaranteed by GNMA. However, payments guaranteed  
by FNMA and FHLMC are not guaranteed by the United States and neither the CMOs  
in the Trust nor any underlying Fannie Maes or Freddie Macs constitute a debt   
obligation of the United States or any of its agencies. The Sponsor is Reich &  
Tang Distributors L.P. (successor Sponsor to Bear, Stearns & Co. Inc.). The     
value of the Units will fluctuate with the value of the CMOs in the portfolio.  
Both the Estimated Current Return and the Estimated Long Term Return are subject
to fluctuations with changes in portfolio composition, principal payments and   
prepayments, changes in the market value of the CMOs in the portfolios and      
changes in fees and expenses. Minimum purchase: 1,000 Units.                    

          This Prospectus consists of two parts. Part A contains the Summary
of Essential Information, including descriptive material relating to the Trust  
as of December 31, 1995 (the "Evaluation Date"), a summary of certain specific  
information regarding the Trusts and audited financial statements of the Trust, 
including the Portfolios as of the Evaluation Date. Part B of this Prospectus   
contains general information about the Trust. Part A may not be distributed     
unless accompanied by Part B of this Prospectus.                                

Investors Should Read and Retain Both Parts 
of This Prospectus for Future Reference.  

    THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
  AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
     COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.                                                   

Prospectus Part A Dated April 30, 1996  

181355.1                                                                        

485BPOS
8th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 8th
           THE TRUST. The Trust consists of a unit investment trust designated
Mortgage Securities Trust, CMO Series 12, Intermediate Portfolio (the "Trust"). 
The Trust was formed to obtain safety of capital and a high level of current    
distributions of interest income through investment in a fixed portfolio of     
CMOs. A CMO is a multiclass bond backed by a pool of mortgage pass-through      
securities or mortgage loans. CMOs are also known as "real estate mortgage      
investment conduits" (REMICs). As a result of the 1986 Tax Reform Act, most CMOs
are issued in REMIC form to create a certain tax advantage for the issuer. The  
terms CMO and REMIC are used interchangeably. The Trust seeks to obtain a higher
yield than fixed income investments with comparable AAA ratings. An investment  
in the Trust entails differing degrees of risk.                                 

         The Trust will invest primarily in planned amortization or target
amortization classes of CMOs. Such classes of CMOs receive payments of principal
according to a planned schedule to the extent that prepayments on the underlying
mortgage-backed securities occur within a broad time period. The principal is   
reduced only in specified amounts at specified times resulting in greater       
predictability of principal payments for the planned amortization bonds or      
targeted amortization bonds. For a discussion on planned amortization bonds or  
targeted amortization bonds see "The Trust--The Portfolio" and "The Trust--CMO  
Structure" in this Part A and "The Trust--The Securities--Planned Amortization  
or Targeted Amortization Bonds and Support Bonds" in Part B of this Prospectus. 
The Trust may also invest in other types of CMOs described above and in "The    
Trust--The Securities" in Part B of this Prospectus.                            

All of the CMOs in the Trust are backed by underlying   
mortgage-backed securities which are pledged as collateral to secure payment of 
principal and interest on the CMOs. Each of these mortgage-backed securities is 
guaranteed as to the payment of principal and interest by either the Government 
National Mortgage Association ("GNMA"), the Federal National Mortgage           
Association ("FNMA") or the Federal Home Loan Mortgage Corporation ("FHLMC").   
All of the CMOs in the Trust are issued by GNMA, FNMA or FHLMC or are otherwise 
rated AAA by Standard & Poor's Corporation ("Standard & Poor's") and therefore, 
the Units of the Trust are rated AAA by Standard & Poor's. There can be no      
assurance that the Trust's investment objectives can be achieved. Investments in
the Trust should be made with an understanding of the risks inherent in an      
investment in CMOs. (See "The Trust--Risk Considerations" in this Part A.) Each 
Unit of the Trust represents an undivided interest in the principal and net     
income of that Trust in the ratio of one thousand Units for the indicated       
principal amount of Securities in the Trust. (See "The Trust--Organization" in  
Part B of this Prospectus.) (For the specific number of Units in the Trust, see 
"Summary of Essential Information" in this Part A.)                             

       Generally, CMOs are designed to provide a substantial degree of
prepayment and reinvestment risk protection as compared to other mortgage       
related securities. The CMOs may have been issued as debt obligations of a trust
or corporation or as certificated interests representing beneficial ownership in
a pool of mortgage-backed securities (See "The Trust--The Securities" in Part B 
of this Prospectus for further description and examples) which trust,           
corporation or pool may have been established for the sole purpose of issuing   
CMOs by any of GNMA, FNMA or FHLMC or by a private business organization. Such  
private business organizations are typically single-purpose corporations        
established by mortgage-banking institutions for the sole purpose of issuing    
CMOs. Any CMOs in the Trust that have been issued by private business           
organizations have been rated AAA by Standard & Poor's. The sole assets of the  
issuers of the CMOs are the underlying mortgage-backed securities. If the       
collateral securing the Securities of these issuers is insufficient to make     
payments on those Securities, it is unlikely that any other assets of these     
issuers will be available for payment of the deficiency.                        

A-2     
181355.1                                                                        

485BPOS
9th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 9th
The underlying mortgage-backed securities which are pledged as collateral to    
secure the payment of principal and interest on the CMOs may be (i) "fully      
modified pass-through" mortgage-backed certificates, guaranteed by GNMA ("Ginnie
Maes"), (ii) mortgage pass-through certificates guaranteed by FNMA ("Fannie     
Maes") or (iii) mortgage participation certificates guaranteed by FHLMC         
("Freddie Macs"). The full faith and credit of the United States is pledged to  
the payment of all amounts guaranteed by GNMA. However, payments guaranteed by  
FNMA and FHLMC are not guaranteed by the United States and neither the CMOs in  
the Trust nor any underlying Fannie Maes or Freddie Macs constitute a debt or   
obligation of the United States or any of its agencies. The Units of the Trust, 
as such, are not guaranteed by any of GNMA, FNMA, FHLMC, the United States or   
any of its agencies. Additionally, CMOs that are issued by GNMA, FNMA or FHLMC  
or by any entity established by GNMA, FNMA or FHLMC are guaranteed as to payment
of principal and interest by GNMA, FNMA or FHLMC, respectively. The guaranty    
obligations of GNMA with respect to any Ginnie Maes or any CMOs are supported by
the full faith and credit of the United States. However, the guaranty of        
obligations of FNMA and FHLMC with respect to any Fannie Maes or Freddie Macs or
any CMOs are obligations of FNMA and FHLMC only (limited by their respective    
credit capabilities) and are not supported by the full faith and credit of the  
United States or any other governmental entity.                                 

         CMO Structure. CMOs are generally issued as a series of different
classes. An issue of CMOs generally is backed by a larger number of mortgages   
than a pool of Ginnie Maes, Fannie Maes or Freddie Macs, thus allowing greater  
statistical prediction of prepayment characteristics. Interest and principal    
payments on the mortgages underlying any series will first be applied to meet   
the interest payment requirements of each class in the series other than any    
class in respect of which interest accrues but is not paid or any "principal    
only" class. Principal payments on the underlying mortgages are thereafter      
generally applied to pay the principal amount of the class that has the earliest
maturity date. Once that class is retired, the principal payments on the        
underlying mortgages are applied to the class with the next earliest maturity   
date. This is repeated until all classes are paid. Therefore, while each class  
of CMOs remains subject to prepayment as the underlying mortgages prepay,       
structuring several classes of CMOs in the stream of principal payments allows a
more predictable estimate of the period of time when any one class is likely to 
be repaid. The estimate can be even closer with a class of planned amortization 
bonds or targeted amortization bonds. The amortization schedule for these CMOs  
is structured so that, at specified prepayment rates within a range, their      
principal will be repaid at specified times and in specified amounts. However,  
if any series of CMOs contains a class of planned amortization bonds or targeted
amortization bonds, then the other classes in that series may not be retired in 
an order of priority determined strictly with reference to their maturity dates.

      These other classes are often referred to as "support classes"
because their function is to support the amortization schedule of the planned   
amortization bonds or targeted amortization bonds. If the rate of prepayment on 
the underlying mortgages is faster than assumed, then classes with maturity     
dates later than the planned amortization bonds or targeted amortization bonds  
may be retired earlier than estimated to ensure that the planned amortization   
bonds or targeted amortization bonds receive the principal payments required by 
their amortization schedule. Similarly, if the rate of prepayments is slower    
than anticipated, then earlier support classes may be retired later than        
estimated. Hence, support classes of a series that contains planned amortization
bonds or targeted amortization bonds have less predictable prepayment           
characteristics than classes of a series that does not. This lack of            
predictability regarding prepayments also causes support class bonds to have    
greater market value fluctuation than other classes of a CMO and causes         
fluctuation, which may be substantial, both in the amount of income earned by   
the Trust and in the timing of the Trust's principal distributions. This        

A-3     
181355.1                                                                        

485BPOS
10th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 10th
fluctuation may adversely affect the repurchase and redemption prices of Units  
of the Trust. (See "Description of the Portfolio" in this Part A for the number 
of planned amortization bonds, targeted amortization bonds or support class     
bonds in the Trust portfolio.) The rate of prepayment on the underlying         
mortgages of a CMO will most likely decline as interest rates increase. If the  
rate of prepayment declines, the weighted average life of the support class     
bonds will most likely increase and, in some cases, the decline will impact the 
yield and market value of these Securities. This may cause an investor's        
principal in a support class bond to be outstanding for a longer period of time 
than initially anticipated. Conversely, if interest rates decline, prepayments  
on the underlying mortgages will most likely increase, and the weighted average 
life of the support class bonds may be shorter than anticipated. A holder of a  
support class bond in these situations may be unable to reinvest the proceeds of
these principal distributions at an effective interest rate equal to the        
specified coupon rate on the original support class bond. Therefore, an investor
expecting to earn a fixed return for a fixed number of years may find the life  
of a support class investment decreases as interest rates fall and increases as 
they rise. Investors should be aware that the Federal Financial Institutions    
Examination Council recently announced that certain high-risk CMO tranches are  
generally not suitable investments for depository institutions. Support class   
bonds such as those in the Trust would be characterized as high-risk CMO        
tranches and, therefore, not suitable for depository institutions. Investors    
should carefully consider all the risks inherent in an investment in support    
class bonds before investing in the Trust.                                      

         Some of the CMOs in the Trust may be either a class of Guaranteed
REMIC Certificates ("REMIC Certificate") issued by FNMA or a class of REMIC     
Certificates issued by FHLMC. A FNMA REMIC Certificate represents a beneficial  
ownership interest in a certain class of a FNMA REMIC Trust consisting of Fannie
Maes, each of which in turn represents a beneficial interest in a pool of first 
lien, single-family, fixed-rate residential mortgage loans. FNMA REMIC          
Certificates are issued pursuant to trust agreements executed by FNMA in both   
its corporate capacity and its capacity as trustee. A FNMA REMIC Certificate    
evidences a beneficial ownership interest in the distribution of principal and  
interest on the underlying Fannie Maes, subject to certain limits and in an     
order of distribution established for the particular FNMA REMIC Trust. Each FNMA
REMIC Certificate is backed by the guaranty obligation of FNMA to distribute on 
a timely basis required installments of principal and interest and to distribute
the principal balance of the FNMA REMIC Certificate in full no later than an    
established final distribution date, notwithstanding insufficiency of funds from
the underlying Fannie Maes. A FHLMC REMIC Certificate represents a beneficial   
ownership interest in a certain class of a pool of Freddie Macs, each of which  
in turn represents undivided interests in discrete pools of fixed-rate, first   
lien, residential mortgages or participations therein purchased by FHLMC. FHLMC 
REMIC Certificates are issued pursuant to multiclass mortgage participation     
certificate agreements executed by FHLMC. A FHLMC REMIC Certificate evidences a 
beneficial ownership interest in the distributions of principal and interest on 
the underlying Freddie Macs, subject to certain limits and in an order of       
distribution established for the particular FHLMC REMIC pool. Each FHLMC REMIC  
Certificate is backed by the guaranty obligation of FHLMC to distribute required
interest payments on a timely basis and to distribute required principal        
payments as principal payments on the underlying Freddie Macs are required to be
made. Except with respect to certain issues of "Gold" PCs, FHLMC generally does 
not guarantee timely payment of principal but does guarantee ultimate payment.  
Both FNMA REMIC Certificates and FHLMC REMIC Certificates pay interest monthly. 
(See "The Trust--The Securities" in Part B of this Prospectus for a description 
of FHLMC Gold PCs.)                                                             

If FNMA or FHLMC were unable to fulfill its guarantees, 
distributions to holders of REMIC Certificates such as the Trust would consist  

A-4     
181355.1                                                                        

485BPOS
11th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 11th
solely of payments and other recoveries upon the mortgages underlying the       
pledged Fannie Maes or Freddie Macs, respectively, and, accordingly,            
delinquencies and defaults would diminish distributions to the holders. (See    
"Description of the Portfolio" in this Part A for the number of FNMA REMIC      
Certificates and FHLMC REMIC Certificates in the Trust portfolio.)              

         Some of the CMOs in the Trust may be a class of compound interest
bonds or principal only bonds. Interest on compound interest bonds is accrued   
and is added to principal. Such interest is not paid until all classes of CMOs  
issued in the same series with earlier final distributions dates are paid in    
full. Principal only bonds entitle the holder to no payments of interest but the
holder will receive cash flow from the amortization of principal and            
prepayments. Both compound interest bonds and principal only bonds sell at a    
deep discount from par. The Sponsor believes that a portfolio with a limited    
amount of compound interest bonds and principal only bonds will assist the Trust
in achieving its objective of preserving capital. Since the principal only bond 
will accrue to par if held to maturity, the holder of such a bond would receive 
a full return of his or her initial investment upon maturity of the bond. In    
addition, compound interest bonds also assist in the preservation of capital as 
interest which accrues on these bonds is added to principal. (See "Description  
of the Portfolio" in this Part A for the amount of Securities in the Trust that 
is a class of compound interest bonds or principal only bonds.)                 

          Risk Considerations. An investment in Units of the Trust should be
made with an understanding of risks which an investment in fixed rate CMOs may  
entail, including the risk that the value of the portfolio and, hence, the value
of the Units will decline with increases in interest rates and that the life of 
the CMOs in the portfolio depends on the actual prepayments received on the     
underlying mortgage-backed securities, the timing of which cannot be determined 
but which may be sooner or later than anticipated, especially if interest rates 
decline. Mortgage prepayment rates are likely to fluctuate significantly from   
time to time as they have in recent years and at a rate faster or slower than   
that initially assumed. The rate of prepayments depends on a variety of         
geographic, social and other functions, including prevailing market interest    
rates and general economic factors. The potential for appreciation, which could 
otherwise be expected to result from a decline in interest rates, may be limited
by any increased prepayments by mortgagors. Investors should also note that     
prepayments of principal on CMOs purchased at a premium over par will result in 
some loss on investment while prepayments on CMOs purchased at a discount from  
par will result in some gain on investment. Also, if interest rates rise, the   
prepayment risk of higher yielding, premium CMOs and the prepayment benefit for 
lower yielding, discount CMOs will be reduced. (See "The Trust--Life of the     
Securities and of the Trust" in Part B of this Prospectus.) In addition, a      
number of factors, including the extent of prepayments of principal on the      
underlying mortgage-backed securities, affect the availability of funds for     
payment of principal of bonds on any payment date and, therefore, the timing of 
principal payments on each class of such bonds.                                 

          While all of the mortgage-backed securities underlying each of the
CMOs in the Trust are guaranteed as to the payment of principal and interest by 
GNMA, FNMA or FHLMC, the CMOs in the Trust represent obligations solely of the  
issuers of those CMOs and are not themselves insured or guaranteed by GNMA, FNMA
or FHLMC, or any other governmental agency. If a default were to occur with     
respect to any of the CMOs, there can be no assurance that the collateral       
securing such bonds would be sufficient to pay the principal and interest then  
due.                                                                            

          CMOs are generally not listed on a national securities exchange or
on the National Association of Securities Dealers Automated Quotation System,   
Inc. Whether or not CMOs are listed on a national securities exchange, the      

A-5     
181355.1                                                                        

485BPOS
12th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 12th
principal trading market for the CMOs will generally be in the over-the-counter 
market. As a result the existence of a liquid trading market for CMOs may depend
on whether dealers will make a market in CMOs. There can be no assurance that a 
market will be made for any of the CMOs in the Trust, that any market for the   
CMOs in the Trust's portfolio will be maintained or of the liquidity of the CMOs
in the Trust in any markets made. The price at which the CMOs in the Trust may  
be sold to meet redemptions and the value of the Trust will be adversely        
affected if trading markets for the CMOs in the Trusts are limited or absent.   
(See "The Trust--Liquidity" in Part B of this Prospectus.) In addition, the     
Trust may be restricted under the Investment Company Act of 1940 from selling   
securities to the Sponsor. However, taking into account the foregoing and other 
factors, the Sponsor believes that the nature of the GNMA, FNMA or FHLMC        
guarantees of any securities that have been issued by them, respectively, and   
the nature of the Ginnie Maes, Fannie Maes or Freddie Macs securities payments  
of principal and interest due on the Securities make the Securities adequately  
marketable for purposes of redemptions of Units by the Trustee (see "Redemption"
in Part B of this Prospectus).                                                  

         Investors should note that all of the CMOs in the Trust have been
issued by trusts, corporations or other entities that have elected to be treated
as Real Estate Mortgage Investment Conduits ("REMICs"). As such,                
Certificateholders will be required to include in income their respective pro   
rata share of interest on each Security (whether or not the Security has        
original issue discount) as interest accrues, whether or not the                
Certificateholder is an accrual method taxpayer. (See "Tax Status" in Part B of 
this Prospectus.)                                                               

          The principal amount of Securities actually deposited in the Trust
is affected by the prepayment estimate or factor for each CMO. If the prepayment
estimate or factor is adjusted because the level of actual prepayments increases
with respect to a particular CMO prior to the settlement date of the Securities,
the actual principal amount of Securities deposited in a Trust may be less than 
the amount noted above and the excess of any cash returned to that Trust as a   
result of these prepayments will be held in the Trust's principal account. Cash 
balances maintained in the principal account do not generate income for the     
Trusts.                                                                         

           Educational material regarding CMOs is available upon request, from
the Sponsor.                                                                    

         PUBLIC OFFERING PRICE. The secondary market Public Offering Price
per 1,000 Units of the Trust is equal to the aggregate bid side evaluation of   
the underlying Securities in a Trust divided by the number of Units outstanding 
times 1,000, plus a sales charge of 4.25% of the Public Offering Price per 1,000
Units or 4.439% of the net amount invested in Securities per 1,000 Units of the 
Trust. In addition, accrued interest to the expected date of settlement is added
to the Public Offering Price. If the Units of the Trust had been purchased on   
the Evaluation Date, the Public Offering Price per 1,000 Units would have been  
$837.98 plus accrued interest of $4.93, for a total of $842.91. The Public      
Offering Price per 1,000 Units may vary on a daily basis in accordance with the 
fluctuations in the aggregate bid price of the Bonds. (See "Public Offering" in 
Part B of this Prospectus.)                                                     

          The figures above assume a purchase of 1,000 Units. The price of a
single Unit, or any multiple thereof, is calculated by dividing the secondary   
market Public Offering Price per 1,000 Units by 1,000 and multiplying by the    
number of Units.                                                                

       DISTRIBUTIONS.  Distributions of principal and interest income,
less expenses, will be made by the Trust monthly on the 20th of each month.     
(See "Rights of Certificateholders--Interest and Principal Distributions" in    

A-6     
181355.1                                                                        

485BPOS
13th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 13th
Part B of this Prospectus. For the estimated amount of distributions see        
"Summary of Essential Information" for the Trust in this Part A.)               

          ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN. Estimated
Long Term Return for the Trust is calculated by: (1) computing the yield to     
maturity for each CMO in the Trust's portfolio in accordance with accepted CMO  
practices, which practices take into account not only the interest payable on   
the CMO but also the amortization of premiums or accretion of discounts, if any,
and estimates of projected prepayments; (2) calculating the average of the      
yields for the CMOs in the Trust's portfolio by weighing each CMO's yield by the
market value of the CMO and by the amount of time remaining to the date to which
the CMO is priced (thus creating an average yield for the portfolio of the      
Trust); and (3) reducing the average yield for the portfolio of the Trust in    
order to reflect estimated fees and expenses of the Trust and the maximum sales 
charge paid by Certificateholders. The resulting Estimated Long Term Return     
represents a measure of the return to Certificateholders earned over the        
estimated life of the Trust. (For the Estimated Long Term Return to             
Certificateholders, see "Summary of Essential Information" for the Trust. See   
"Estimated Long Term Return and Estimated Current Return" in Part B of this     
Prospectus.)                                                                    

          Estimated Current Return for the Trust is computed by dividing the
Estimated Net Annual Interest Income per 1,000 Units by the Public Offering     
Price per 1,000 Units. In contrast to the Estimated Long Term Return, the       
Estimated Current Return does not take into account estimates of prepayments or 
the amortization of premium or accretion of discount, if any, on the CMOs in the
portfolio of the Trust. For the Estimated Net Annual Interest Income to         
Certificateholders, see "Summary of Essential Information" in Part A.           

        If the CMOs in the Trust are priced at a discount, the Estimated
Current Return will generally be lower relative to the Estimated Long Term      
Return, whereas if the CMOs are priced at a premium, the Estimated Current      
Return will generally be higher relative to the Estimated Long Term Return. This
is because Estimated Current Return reflects primarily the interest rate on the 
CMOs, while Estimated Long Term Return reflects yield and timing of principal   
payments, and thus increases when the principal returned is greater than the    
price paid for the CMOs (discount) and decreases when the principal returned is 
lower than the price paid (premium). Estimated Long Term Return is calculated   
using an estimated average life for the CMOs in each Trust. Estimated average   
life is an essential factor in the calculation of Estimated Long Term Return.   
When a particular Trust has a shorter average life than is estimated, Estimated 
Long Term Return will be higher if the Trust contains CMOs priced at a discount 
and lower if the CMOs are priced at a premium. Conversely, when a particular    
Trust has a longer average life than is estimated, Estimated Long Term Return   
will be lower if the CMOs are priced at a discount and higher if the CMOs are   
priced at a premium. To calculate estimated average life several assumptions are
made to derive an estimated prepayment rate for the mortgages underlying the    
Ginnie Maes, Fannie Maes or Freddie Macs that may back the CMOs in the          
Portfolio; the calculation of estimated prepayment rates is based upon actual   
recent prepayments and analysis of several factors including, among other       
things, the spread between present market interest rates and the rate on the    
mortgages and the housing environment. The estimated prepayment rate that is    
derived is then applied to retire the principal amount of each CMO class of the 
same series as each CMO in the Trusts, including those CMOs in the Trusts,      
according to the specific principal reduction schedule of each series. For a    
more detailed explanation of the calculation of estimated average life, see     
"Estimated Long Term Return and Estimated Current Return" in Part B of this     
Prospectus. The estimated average life for the Trust is subject to change with  
alterations in the data used in any of the underlying assumptions. The actual   
average lives of the CMOs in the Trust's portfolio and the actual long term     
returns will be                                                                 

A-7     
181355.1                                                                        

485BPOS
14th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 14th
different from the estimated average lives and the estimated long term          
returns.                                                                        

       The Estimated Net Annual Interest Income per 1,000 Units of the
Trust will vary with changes in the fees and expenses of the Trustee and the    
Evaluator applicable to the Trusts and with the redemption, prepayment,         
maturity, sale or other disposition of the CMOs in the Trust. The Secondary     
Market Public Offering Price will vary with changes in the bid prices of the    
CMOs. Therefore, there is no assurance that the present Estimated Current Return
or Estimated Long Term Return will be realized in the future.                   

       Market for Units. The Sponsor, although not obligated to do so,
intends to maintain a secondary market for the Units at prices based on the     
aggregate bid side evaluation of the Securities in the Trust. The reoffer price 
will be based on the aggregate bid side evaluation of the Securities, divided by
the number of Units outstanding times 1,000, plus a sales charge of 4.25%       
(4.439% of the net amount invested), plus net accrued interest for the Trust. If
a market is not maintained a Certificateholder will be able to redeem his or her
Units with the Trustee at a price based on the aggregate bid side evaluation of 
the Securities. (See "Sponsor Repurchase" in Part B of this Prospectus.)        

         Total Reinvestment Plan. Distributions from the Trust are made to
Certificateholders monthly. The Certificateholder has the option, however, of   
either receiving his interest check, together with any principal payments, from 
the Trustee or participating in a reinvestment program offered by the Sponsor in
shares of The Treasurer's Fund, Inc., U.S. Treasury Money Market Portfolio (the 
"Fund"). Gabelli-O'Connor Fixed Income Mutual Funds Management Co. serves as the
investment advisor of the Fund and GOC Fund Distributors, Inc. serves as        
distributor for the Fund. Participation in the reinvestment option is           
conditioned on the Fund's lawful qualification for sale in the state in which   
the Certificateholder is a resident. The Plan is not designed to be a complete  
investment program. See "Total Reinvestment Plan" in Part B of this Prospectus. 
The shares of the Fund are not rated by Standard & Poor's.                      

A-8     
181355.1                                                                        

485BPOS
15th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 15th
MORTGAGE SECURITIES TRUST 
CMO SERIES 12, INTERMEDIATE PORTFOLIO 

SUMMARY OF ESSENTIAL INFORMATION AS OF DECEMBER 31, 1995  

Date of Deposit:*  February 10, 1993          Evaluation Time:  4.00 p.m.       
Principal Amount of                             New York Time.                  
Securities ................  $13,930,000    Minimum Principal Distribution: 
Principal Amount of Secu-                       $1 per 1,000 Units.             
rities per 1,000 Units.....  $804.45        Weighted Average Life to        
Number of Units .............  17,316,258       Maturity: 5.6 years             
Fractional Undivided Inter-                   Minimum Value of Trust:           
 est in Trust per Unit .....  1/17316258       Trust may be terminated if less
Secondary Market Public                         than $8,000,000 in principal    
Offering Price**+                            amount of Securities.        
Aggregate Bid Price                                                       
of Securities in Trust ...  $13,887,178    Mandatory Termination Date:    
Divided by 17,316,258 Units                   The earlier of December 31,   
  times $1,000 ............  $801.97          2042 or the disposition of the
Plus Sales Charge of 4.25%                    last Security in the Trust.   
of Public Offering Price   $36.01         Trustee:   The Chase Manhattan
Public Offering Price                         Bank, N.A.                    
 per 1,000 Units..........  $837.98        Trustee's Annual Fee:  $.84 per
Redemption and Sponsor's                        $1,000.                         
Repurchase Price                            Evaluator:  Kenny S&P           
per 1,000 Units+ ..........  $801.97+++#      Evaluation Services.          
Excess of Public Offering                     Evaluator's Fee for Each          
Price over Redemption and                     Evaluation:  $7 per           
Sponsor's Repurchase Price                    evaluation.                   
per 1,000 Units#...........  $36.01         Sponsor:  Reich & Tang          
Difference between Public                       Distributors L.P.               
Offering Price per 1,000                    Sponsor's Annual Fee:  Maximum  
Units and Principal                           of $.25 per $1,000 principal  
Amount per 1,000 Units                        amount of Securities (see     
Premium/(Discount) ........  $33.53           "Trust Expense and Charges"   
                                              in Part B of this Prospectus).

PER 1,000 UNIT INFORMATION  

Gross annual interest income (cash).............................       $55.92   
Less estimated annual fees and expenses.........................         1.36   
Estimated net annual interest income (cash).....................        54.56   
Estimated interest distribution.................................         4.55   
Estimated daily interest accrual................................          .15   
Estimated current return++(1)...................................        6.51%   
Estimated long term return++(1).................................        6.30%   
Record dates....................................................       1st of   
                                                                each month
Interest distribution dates.....................................      20th of   
                                                                each month

A-9     
181355.1                                                                        

485BPOS
16th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 16th
Footnotes to Summary of Essential Information 

*  The Date of Deposit is the date on which the Trust Agreement was signed
and the deposit of the Bonds with the Trustee made.                 

**  Per 1,000 Units.                                                        

+  Plus accrued interest.                                                 

 ++  The estimated current return and estimated long term return are increased
     for transactions entitled to a discount (see "Volume and Other Discounts"
in Part B of this Prospectus).                                      

+++  Based solely upon the bid side evaluation of the underlying Securities.  
  Upon tender for redemption, the price to be paid will be calculated as
described under "Trustee Redemption" in Part B of this Prospectus.  

 #  See "Comparison of Public Offering Price, Sponsor's Repurchase Price and
Redemption Price" in Part B of this Prospectus.                     

 (1)  Estimated current return represents annual interest income after estimated
   annual expenses divided by the Public Offering Price, including for the
     Intermediate Portfolio, a 4.25% maximum sales charge. Estimated long term
 return is the net annual percentage return based on the yield on each
 underlying Security in the Trust weighted to reflect market value and
      estimated average life. The estimated weighted average life to maturity of
  the Trust is an estimate based upon various assumptions discussed more
    fully under "Estimated Long Term Return and Estimated Current Return" in
 Part B of this Prospectus. Estimated long term return is adjusted for
estimated expenses and the maximum public offering price but not for
  delays in the Trust's distribution of income. Estimated current return
   shows current annual cash return to investors while estimated long term
return shows the return on Units held to estimated average life,    
      reflecting prepayments of principal, maturities, discounts and premiums on
underlying Securities. Actual returns will vary with purchase price,
payments and prepayments of principal on the underlying Ginnie Maes,
 Fannie Maes or Freddie Macs which back the Securities, and changes in
    Trust income after expenses. These returns do not include the effects of
 any delay in payments to Unitholders and a calculation which includes
those effects would be lower. See "Estimated Long Term Return and   
Estimated Current Return" in Part B of this Prospectus.             

A-10    
181355.1                                                                        

485BPOS
17th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 17th
INFORMATION REGARDING THE TRUST 
AS OF DECEMBER 31, 1995 

Description of the Portfolio*                                                   

   The Trust consists of 6 issues of CMOs. The Sponsor has not
participated as a sole underwriter or manager, co-manager or member of an       
underwriting syndicate from which any of the initial aggregate principal amount 
of the CMOs in the Portfolio were acquired. None of the CMOs have been issued by
entities created by GNMA, approximately 78.2% of the aggregate principal amount 
of the CMOs in the Portfolio have been issued by entities created by FNMA,      
approximately 21.8% of the aggregate principal amount of the CMOs in the        
Portfolio have been issued by entities created by FHLMC and none have been      
issued by private issuers. All of the CMOs in the Trust have been issued by     
trusts, corporations or other entities that have elected to be treated as Real  
Estate Mortgage Investment Conduits. The CMOs in the Trust have stated final    
distribution dates ranging from May 25, 2016 through February 25, 2022 and      
estimated average lives (based upon estimated prepayment rates) ranging from 2.6
to 14.2 years.                                                                  

       $11,600,000 of the principal amount of the Securities initially
deposited in the Trust were planned amortization bonds or targeted amortization 
bonds. None of the principal amount of the Securities are support class bonds   
that are part of a series that contains planned amortization bonds or targeted  
amortization bonds. $10,900,000 of the principal amount of the Securities in the
Trust are FNMA REMIC Certificates. $3,030,000 of the principal amount of the    
Securities in the Trust are FHLMC REMIC Certificates. None of the principal     
amount of the Securities initially deposited in the Trust are a class of        
compound interest bonds or principal only bonds.                                

           As of December 31, 1995, 39.7% of the aggregate principal amount of
the Securities in the Trust were acquired at a discount from par, 60.3% of the  
Securities in the Trust were acquired at a premium and none were acquired at    
par. A Certificateholder may receive more or less than his original purchase    
price upon disposition of his Units because the value of the Units fluctuates   
with the value of the underlying Securities.                                    

--------                                                                        
*     Changes in the Trust Portfolio:  From January 1, 1996 to March 22, 1996,  
   $190,000 principal amount of the securities in portfolio no. 3 was sold
 and is no longer contained in the Trust.  237,665 Units were redeemed
from the Trust.                                                     

A-11    
181355.1                                                                        

485BPOS
18th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 18th
 FINANCIAL AND STATISTICAL INFORMATION

Selected data for each Unit of each Trust outstanding for the periods listed    
below:                                                                          

                                                         Distribu-
                                                        tions of
                                                         Principal
                                    Distributions     During
                   Net Asset*    of Interest       the
                      Value         During the        Period
              Units Out-  Per 1,000     Period (per       (Per 1,000
Period Ended         standing     Units       1,000 Units)        Units)        

December 31, 1993   20,449,342    $980.55       $52.88              -0-         
December 31, 1994   19,909,109     720.00        51.61          $177.77         
December 31, 1995   17,316,258     810.52        54.81             1.69         

--------                                                                        
*  Net Asset Value per 1,000 Units is calculated by dividing net assets as      
   disclosed in the "Statement of Net Assets" by the number of Units outstanding
as of the date of the Statement of Net Assets. See Note 5 of Notes to     
Financial Statements for a description of the components of Net Assets.   

A-12    
181355.1                                                                        

485BPOS
19th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 19th
Independent Auditors' Report                              

The Sponsor, Trustee and Certificateholders                                     
Mortgage Securities Trust, CMO Series 12 Intermediate:                          

We have audited the accompanying statement of net assets, including the         
portfolio, of Mortgage Securities Trust, CMO Series 12 Intermediate as of       
December 31, 1995, and the related statements of operations, and changes in net 
assets for the years ended December 31, 1995 and 1994, and the period from      
February 10, 1993 to December 31, 1993. These financial statements are the      
responsibility of the Trustee (see note 2). Our responsibility is to express an 
opinion on these financial statements based on our audits.                      

We conducted our audits in accordance with generally accepted auditing          
standards. Those standards require that we plan and perform the audit to obtain 
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting 
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 1995, by correspondence with
the Trustee. An audit also includes assessing the accounting principles used and
significant estimates made by the Trustee, as well as evaluating the overall    
financial statement presentation. We believe that our audits provide a          
reasonable basis for our opinion.                                               

In our opinion, the financial statements referred to above present fairly, in   
all material respects, the financial position of Mortgage Securities Trust, CMO 
Series 12 Intermediate as of December 31, 1995, and the results of its          
operations and the changes in its net assets for the years ended December 31,   
1995 and 1994 and the period from February 10, 1993 to December 31, 1993 in     
conformity with generally accepted accounting principles.                       

                                                           KPMG Peat Marwick LLP

New York, New York                                                              
March 31, 1996                                                                  

485BPOS
20th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 20th
MORTGAGE SECURITIES TRUST, CMO SERIES 12 INTERMEDIATE                         

       Statement of Net Assets

Investments in marketable securities,                             
       at market value (cost $13,376,548)                    $  13,894,077

    Excess of other assets over total liabilities                  141,145
                                                                ------------

Net assets 17,316,258    units of fractional undivided            
       interest outstanding, $0.81 per unit)                 $  14,035,222
                                                                ============

See accompanying notes to financial statements.                   

485BPOS
21st Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 21st
                                                        [Enlarge/Download Table]
MORTGAGE SECURITIES TRUST, CMO SERIES 12 INTERMEDIATE                                     

                            Statements of Operations                                      

                                                                       For the period from
                                                                          February 10,    
                                                                          1993 (date of   
                                      For the years ended December 31,     deposit) to    
                                            1995             1994       December 31, 1993 
                                        ------------     ------------    ---------------  

                                                                                          
  Investment income - interest        $   1,049,206   $    1,146,619   $      1,270,388   

  Expenses:                                                                               
     Trustee's fees                          30,819           26,999             26,755   
     Evaluator's fees                         1,621           -                 -         
                                        ------------     ------------    ---------------  

         Total Expenses                      32,440           26,999             26,755   
                                        ------------     ------------    ---------------  

                Investment income, net    1,016,766        1,119,620          1,243,633   
                                        ------------     ------------    ---------------  

  Realized and unrealized gain (loss)                                                     
   on investments:                                                                        
       Realized loss on                                                                   
        securities sold                     (37,914)        (112,830)           -         
       Unrealized appreciation                                                            
        (depreciation) for the period     1,808,233       (1,558,615)           267,911   
                                        ------------     ------------    ---------------  

         Net gain (loss) on                                                               
           investments                    1,770,319       (1,671,445)           267,911   
                                        ------------     ------------    ---------------  

         Net increase (decrease)                                                          
          in net assets resulting                                                         
          from operations             $   2,787,085   $     (551,825)  $      1,511,544   
                                        ============     ============    ===============  

See accompanying notes to financial statements.                           

485BPOS
22nd Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 22nd
                                                        [Enlarge/Download Table]
 MORTGAGE SECURITIES TRUST, CMO SERIES 12 INTERMEDIATE                                 

                        Statements of Changes in Net Assets                            

                                                                    For the period from
                                                                       February 10,    
                                                                       1993 (date of   
                                   For the years ended December 31,     deposit) to    
                                          1995            1994       December 31, 1993 
                                      ------------    ------------    ---------------- 

                                                                                       
Operations:                                                                            
   Investment income, net           $   1,016,766  $    1,119,620  $        1,243,633  
  Net realized loss                                                                    
     on securities sold                   (37,914)       (112,830)           -         
   Unrealized appreciation                                                             
      (depreciation) for the period     1,808,233      (1,558,615)            267,911  
                                      ------------    ------------    ---------------- 

         Net increase (decrease)                                                       
           in net assets resulting                                                     
           from operations              2,787,085        (551,825)          1,511,544  
                                      ------------    ------------    ---------------- 

Distributions to Certificateholders:                                                   
  Investment income                     1,026,883       1,138,194           1,040,124  
  Principal                                30,048       3,625,968            -         
Redemptions:                                                                           
  Interest                                 21,337           5,437            -         
  Principal                             1,990,833         413,003            -         
                                      ------------    ------------    ---------------- 

             Total distributions and                                                   
               redemptions              3,069,101       5,182,602           1,040,124  
                                      ------------    ------------    ---------------- 

             Total (decrease) increase   (282,016)     (5,734,427)            471,420  

Net assets at beginning of period      14,317,238      20,051,665          19,580,245  
                                      ------------    ------------    ---------------- 

Net assets at end of period (including                                                 
   undistributed net investment                                                        
   income of $148,044, $179,498 and                                                    
   $203,509, respectively)          $  14,035,222  $   14,317,238  $       20,051,665  
                                      ============    ============    ================ 

See accompanying notes to financial statements.                                 

485BPOS
23rd Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 23rd
MORTGAGE SECURITIES TRUST, CMO SERIES 12 INTERMEDIATE                           
Notes to Financial Statements                             

December 31, 1995, 1994, and 1993                               

(1)      Organization and Financial and Statistical Information                 

Mortgage Securities Trust, CMO Series 12 Intermediate (Trust) was   
   organized on February 10, 1993 (date of deposit) by Bear, Stearns & Co.
 Inc. under the laws of the State of New York by a Trust Indenture and
  Agreement, and is registered under the Investment Company Act of 1940.
 Effective September 28, 1995, Reich & Tang Distributors L.P. (Reich &
   Tang) has become the successor sponsor (Sponsor) to certain of the unit
  investments trusts previously sponsored by Bear, Stearns & Co. Inc. As
  successor Sponsor, Reich & Tang has assumed all of the obligations and
rights of Bear Stearns & Co. Inc., the previous sponsor.            

(2)      Summary of Significant Accounting Policies                             

    Effective September 2, 1995, United States Trust Company of New York was
merged into Chase Manhattan Bank (National Association) (Chase).    
      Accordingly, Chase is the successor trustee of the unit investment trusts.
    The Trustee has custody of and responsibility for the accounting records
     and financial statements of the Trust and is responsible for establishing
and maintaining a system of internal control related thereto.       

      The Trustee is also responsible for all estimates of expenses and accruals
     reflected in the Trust's financial statements. The accompanying financial
statements have been adjusted to record the unrealized appreciation 
    (depreciation) of investments and to record interest income and expenses
on the accrual basis.                                               

    Investments are carried at market value which is determined by Kenny S&P
 Evaluation Services (Evaluator). The market value of the portfolio is
  based upon the bid prices for the bonds at the end of the year, except
   that the market value on the date of deposit represents the cost to the
Trust based on the offering prices for investments at that date. The
difference between cost and market value is reflected as unrealized 
   appreciation (depreciation) of investments. Securities transactions are
recorded on the trade date. Realized gains (losses) from securities 
      transactions are determined on the basis of average cost of the securities
sold or redeemed.                                                   

The preparation of financial statements in conformity with generally
     accepted accounting principles requires the Trustee to make estimates and
      assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the  
  financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those 
estimates.                                                          

         (Continued)

F-5                               
MORTGAGE SECURITIES TRUST, CMO SERIES 12 INTERMEDIATE                           

Notes to Financial Statements                               

(3)      Income Taxes                                                           

     The Trust is not subject to Federal income taxes as provided for by the
Internal Revenue Code.                                            

(4)      Trust Administration                                                   

       The fees and expenses of the Trust are incurred and paid on the basis set
    forth under "Trust Expenses and Charges" in Part B of this Prospectus.

      The Trust Indenture and Agreement provides for interest distributions on
a monthly basis.                                                  

      See "Financial and Statistical Information" in Part A of this Prospectus
       for the amounts of per unit distributions during the years ended December
     31, 1995 and 1994 and the period from February 10, 1993 to December 31,
1993.                                                             

The Trust Indenture and Agreement further requires that principal 
      received from the disposition of securities, other than those securities
sold in connection with the redemption of units, be distributed to
Certificateholders.                                               

       The Trust Indenture and Agreement also requires the Trust to redeem units
  tendered. 2,592,851 and 540,233 units were redeemed during the years
    ended December 31, 1995 and 1994, respectively. No units were redeemed
during the period ended December 31, 1993.                        

(5)      Net Assets                                                             

At December 31, 1995, the net assets of the Trust represented the 
interest of Certificateholders as follows:                        

  Original cost to Certificateholders            $20,449,342
   Less initial gross underwriting commission        (869,097)
                                                 -----------
                                                19,580,245

   Cost of securities sold or called               (6,203,697)
  Net unrealized appreciation                        517,529
  Undistributed net investment income                148,044
   Undistributed proceeds from bonds sold or called    (6,899)
                                                ------------

    Total                                      $14,035,222
                                                ============

The original cost to Certificateholders, less the initial gross     
underwriting commission, represents the aggregate initial public offering price 
net of the applicable sales charge on 20,449,342 units of fractional undivided  
interest of the Trust as of the date of deposit.                                

F-6                               

485BPOS
24th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 24th
                                                        [Enlarge/Download Table]

MORTGAGE SECURITIES TRUST, CMO SERIES 12  INTERMEDIATE                                                     

Portfolio                                                                                                  

December 31, 1995                                                                                          


                                                               Coupon/      Estimated First                
Port-                                                      Final Scheduled   Distribution                  
folio    Principal               Name of Issuer              Distribution      Date(s)            Market   
No.        Amount              and Title of Bonds                Date       (unaudited) (1)     Value (2)  
-----   ------------    ---------------------------------    ------------   ---------------    ------------

                                                                                                           
   1  $    2,530,000    Federal Home Loan Mortgage           4.500%             3/15/00     $     2,227,565
                        Corporation Multiclass Mortgage      9/15/2021                                     
                        Participation Certificates                                                         
                        (Guaranteed) Series 159-H                                                          

   2       2,500,000    Federal National Mortgage            6.500              6/25/98           2,486,553
                        Association Guaranteed REMIC         2/25/2021                                     
                        Pass-Through Certificates Fannie                                                   
                        Mae REMIC Trust 1991--Class 8-G                                                    

   3       2,500,000    Federal National Mortgage            8.000              1/25/99           2,540,236
                        Association Guaranteed REMIC         5/25/2016                                     
                        Pass-Through Certificates Fannie                                                   
                        Mae REMIC Trust 1991--Class 59-K                                                   

   4         500,000    Federal Home Loan Mortgage           7.000              2/15/00             509,428
                        Corporation Multiclass Mortgage      6/15/2021                                     
                        Participation Certificates                                                         
                        (Guaranteed) Series 1091-G                                                         

   5       2,900,000    Federal National Mortgage            8.000              6/25/03           3,012,362
                        Association Guaranteed REMIC         7/25/2020                                     
                        Pass-Through Certificates Fannie                                                   
                        Mae REMIC Trust 1992--Class 119-E                                                  

   6       3,000,000    Federal National Mortgage            7.500             12/25/04           3,117,933
                        Association Guaranteed REMIC         2/25/2022                                     
                        Pass-Through Certificates Fannie                                                   
                        Mae REMIC Trust 1993--Class 2-PK                                                   

        ------------                                                                           ------------
      $   13,930,000                                                                        $    13,894,077
        ============                                                                           ============

See accompanying footnotes to portfolio and notes to financial statements.

                                       F-7

485BPOS
25th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 25th
MORTGAGE SECURITIES TRUST, CMO SERIES 12 INTERMEDIATE                           

Footnotes to Portfolio                              

December 31, 1995                               

(1)   See "The Trust - Portfolio" in Part B of this Prospectus for an           
  explanation of redemption features. See "Tax Status" in Part B of this
Prospectus for a statement of the Federal tax consequences to a     
  Certificateholder upon the sale, redemption or maturity of a security.

(2)   At December 31, 1995, the net unrealized appreciation of all the          
securities was comprised of the following:                          

  Gross unrealized appreciation                    $ 566,675
   Gross unrealized depreciation                     ( 49,146)
                                                     -------
  Net unrealized appreciation                     $  517,529
                                                     =======

(3)   The annual interest income, based upon securities held at December 31,    
1995, to the Trust is $968,368.                                     

(4)   All of the CMOs in the portfolio are backed by underlying mortgage-backed 
     securities which are pledged as collateral to secure payment of principal
     and interest on the CMOs. The CMOs in the Trust are issues by the Federal
     National Mortgage Association ("FNMA") and the Federal Home Loan Mortgage
      Corporation ("FHLMC"). The Units of the Trust are not, however, guaranteed
      by FNMA, FHLMC, the United States or any of its agencies. Payments are not
     guaranteed by the United States and neither the CMOs in the Trust nor any
   underlying FNMA's or FHLMC's constitute a debt obligation of the United
States or any of its agencies.                                      

F-8                                     

485BPOS
26th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 26th
Note:  Part A of This Prospectus May Not Be   
Distributed Unless Accompanied by Part B. 

MORTGAGE SECURITIES TRUST 

CMO SERIES 15 

         The Trust consists of 1 unit investment trust designated Mortgage
Series Trust, CMO Series 15 Intermediate Portfolio (the "Trust"). The Trust     
consists of an underlying portfolio of collateralized mortgage obligations      
("CMOs" or "Securities") and was formed to obtain safety of capital and provide 
a high level of current distributions of interest income. The Trust seeks to    
obtain a higher yield than fixed income investments with comparable AAA ratings.
An investment in the Trust entails differing degrees of risk. The Trust seeks to
achieve its objectives through investment in a fixed portfolio of CMOs which may
have been issued as debt obligations of a trust or corporation or which may     
represent certificated interests of beneficial ownership in pools of            
mortgage-backed securities. All of the CMOs in the portfolio are backed by      
underlying mortgage-backed securities which are pledged as collateral to secure 
payment of principal and interest on the CMOs. Each of these underlying         
mortgage-backed securities is guaranteed as to the payment of principal and     
interest by the Government National Mortgage Association ("GNMA"), the Federal  
National Mortgage Association ("FNMA") or the Federal Home Loan Mortgage        
Corporation ("FHLMC"). All of the CMOs in the Trust are issued by GNMA, FNMA or 
FHLMC or are otherwise rated AAA by Standard & Poor's and, therefore, the Units 
of the Trust are rated AAA by Standard & Poor's Corporation. The Units of the   
Trust are not, however, guaranteed by GNMA, FNMA, FHLMC, the United States or   
any of its agencies. The full faith and credit of the United States is pledged  
to the payment of all amounts guaranteed by GNMA. However, payments guaranteed  
by FNMA and FHLMC are not guaranteed by the United States and neither the CMOs  
in the Trust nor any underlying Fannie Maes or Freddie Macs constitute a debt   
obligation of the United States or any of its agencies. The Sponsor is Reich &  
Tang Distributors L.P. (successor Sponsor to Bear, Stearns & Co. Inc.). The     
value of the Units will fluctuate with the value of the CMOs in the portfolio.  
Both the Estimated Current Return and the Estimated Long Term Return are subject
to fluctuations with changes in portfolio composition, principal payments and   
prepayments, changes in the market value of the CMOs in the portfolios and      
changes in fees and expenses. Minimum purchase: 1,000 Units.                    

          This Prospectus consists of two parts. Part A contains the Summary
of Essential Information, including descriptive material relating to the Trust  
as of December 31, 1995 (the "Evaluation Date"), a summary of certain specific  
information regarding the Trust and audited financial statements of the Trust,  
including the Portfolio as of the Evaluation Date. Part B of this Prospectus    
contains general information about the Trust. Part A may not be distributed     
unless accompanied by Part B of this Prospectus.                                

Investors Should Read and Retain Both Parts 
of This Prospectus for Future Reference.  

    THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
  AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
     COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.                                                   

Prospectus Part A Dated April 30, 1996  

267690.1                                                                        

485BPOS
27th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 27th
           THE TRUST. The Trust consists of a unit investment trust designated
Mortgage Securities Trust, CMO Series 15, Intermediate Portfolio (the "Trust"). 
The Trust was formed to obtain safety of capital and a high level of current    
distributions of interest income through investment in a fixed portfolio of     
CMOs. A CMO is a multiclass bond backed by a pool of mortgage pass-through      
securities or mortgage loans. CMOs are also known as "real estate mortgage      
investment conduits" (REMICs). As a result of the 1986 Tax Reform Act, most CMOs
are issued in REMIC form to create a certain tax advantage for the issuer. The  
terms CMO and REMIC are used interchangeably. The Trust seeks to obtain a higher
yield than fixed income investments with comparable AAA ratings. An investment  
in the Trust entails differing degrees of risk.                                 

         The Trust will invest primarily in planned amortization or target
amortization classes of CMOs. Such classes of CMOs receive payments of principal
according to a planned schedule to the extent that prepayments on the underlying
mortgage-backed securities occur within a broad time period. The principal is   
reduced only in specified amounts at specified times resulting in greater       
predictability of principal payments for the planned amortization bonds or      
targeted amortization bonds. For a discussion on planned amortization bonds or  
targeted amortization bonds see "The Trust--Description of the Portfolio" and   
"The Trust--CMO Structure" in this Part A and "The Trust--The                   
Securities--Planned Amortization or Targeted Amortization Bonds and Support     
Bonds" in Part B of this Prospectus. The Intermediate Portfolio may also invest 
in other types of CMOs described above and in "The Trust--The Securities" in    
Part B of this Prospectus.                                                      

All of the CMOs in the Trust are backed by underlying   
mortgage-backed securities which are pledged as collateral to secure payment of 
principal and interest on the CMOs. Each of these mortgage-backed securities is 
guaranteed as to the payment of principal and interest by either the Government 
National Mortgage Association ("GNMA"), the Federal National Mortgage           
Association ("FNMA") or the Federal Home Loan Mortgage Corporation ("FHLMC").   
All of the CMOs in the Trust are issued by GNMA, FNMA or FHLMC or are otherwise 
rated AAA by Standard & Poor's Corporation ("Standard & Poor's") and therefore, 
the Units of the Trust are rated AAA by Standard & Poor's. There can be no      
assurance that the Trust's investment objectives can be achieved. Investments in
the Trust should be made with an understanding of the risks inherent in an      
investment in CMOs. (See "The Trust--Risk Considerations" in this Part A.) Each 
Unit of the Trust represents an undivided interest in the principal and net     
income of that Trust in the ratio of one thousand Units for the indicated       
principal amount of Securities in that Trust. (See "The Trust--Organization" in 
Part B of this Prospectus.) (For the specific number of Units in the Trust, see 
"Summary of Essential Information" in this Part A.)                             

       Generally, CMOs are designed to provide a substantial degree of
prepayment and reinvestment risk protection as compared to other mortgage       
related securities. The CMOs may have been issued as debt obligations of a trust
or corporation or as certificated interests representing beneficial ownership in
a pool of mortgage-backed securities (See "The Trust--The Securities" in Part B 
of this Prospectus for further description and examples) which trust,           
corporation or pool may have been established for the sole purpose of issuing   
CMOs by any of GNMA, FNMA or FHLMC or by a private business organization. Such  
private business organizations are typically single-purpose corporations        
established by mortgage-banking institutions for the sole purpose of issuing    
CMOs. Any CMOs in the Trust that have been issued by private business           
organizations have been rated AAA by Standard & Poor's. The sole assets of the  
issuers of the CMOs are the underlying mortgage-backed securities. If the       
collateral securing the Securities of these issuers is insufficient to make     
payments on those Securities, it is unlikely that any other assets of these     
issuers will be available for payment of the deficiency.                        

A-2     
267690.1                                                                        

485BPOS
28th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 28th
The underlying mortgage-backed securities which are pledged as collateral to    
secure the payment of principal and interest on the CMOs may be (i) "fully      
modified pass-through" mortgage-backed certificates, guaranteed by GNMA ("Ginnie
Maes"), (ii) mortgage pass-through certificates guaranteed by FNMA ("Fannie     
Maes") or (iii) mortgage participation certificates guaranteed by FHLMC         
("Freddie Macs"). The full faith and credit of the United States is pledged to  
the payment of all amounts guaranteed by GNMA. However, payments guaranteed by  
FNMA and FHLMC are not guaranteed by the United States and neither the CMOs in  
the Trust nor any underlying Fannie Maes or Freddie Macs constitute a debt or   
obligation of the United States or any of its agencies. The Units of the Trust, 
as such, are not guaranteed by any of GNMA, FNMA, FHLMC, the United States or   
any of its agencies. Additionally, CMOs that are issued by GNMA, FNMA or FHLMC  
or by any entity established by GNMA, FNMA or FHLMC are guaranteed as to payment
of principal and interest by GNMA, FNMA or FHLMC, respectively. The guaranty    
obligations of GNMA with respect to any Ginnie Maes or any CMOs are supported by
the full faith and credit of the United States. However, the guaranty of        
obligations of FNMA and FHLMC with respect to any Fannie Maes or Freddie Macs or
any CMOs are obligations of FNMA and FHLMC only (limited by their respective    
credit capabilities) and are not supported by the full faith and credit of the  
United States or any other governmental entity.                                 

         CMO Structure. CMOs are generally issued as a series of different
classes. An issue of CMOs generally is backed by a larger number of mortgages   
than a pool of Ginnie Maes, Fannie Maes or Freddie Macs, thus allowing greater  
statistical prediction of prepayment characteristics. Interest and principal    
payments on the mortgages underlying any series will first be applied to meet   
the interest payment requirements of each class in the series other than any    
class in respect of which interest accrues but is not paid or any "principal    
only" class. Principal payments on the underlying mortgages are thereafter      
generally applied to pay the principal amount of the class that has the earliest
maturity date. Once that class is retired, the principal payments on the        
underlying mortgages are applied to the class with the next earliest maturity   
date. This is repeated until all classes are paid. Therefore, while each class  
of CMOs remains subject to prepayment as the underlying mortgages prepay,       
structuring several classes of CMOs in the stream of principal payments allows a
more predictable estimate of the period of time when any one class is likely to 
be repaid. The estimate can be even closer with a class of planned amortization 
bonds or targeted amortization bonds. The amortization schedule for these CMOs  
is structured so that, at specified prepayment rates within a range, their      
principal will be repaid at specified times and in specified amounts. However,  
if any series of CMOs contains a class of planned amortization bonds or targeted
amortization bonds, then the other classes in that series may not be retired in 
an order of priority determined strictly with reference to their maturity dates.

      These other classes are often referred to as "support classes"
because their function is to support the amortization schedule of the planned   
amortization bonds or targeted amortization bonds. If the rate of prepayment on 
the underlying mortgages is faster than assumed, then classes with maturity     
dates later than the planned amortization bonds or targeted amortization bonds  
may be retired earlier than estimated to ensure that the planned amortization   
bonds or targeted amortization bonds receive the principal payments required by 
their amortization schedule. Similarly, if the rate of prepayments is slower    
than anticipated, then earlier support classes may be retired later than        
estimated. Hence, support classes of a series that contains planned amortization
bonds or targeted amortization bonds have less predictable prepayment           
characteristics than classes of a series that does not. This lack of            
predictability regarding prepayments also causes support class bonds to have    
greater market value fluctuation than other classes of a CMO and causes         
fluctuation, which may be substantial, both in the amount of income earned by   
the Trust and in the timing of the Trust's principal distributions. This        

A-3     
267690.1                                                                        

485BPOS
29th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 29th
fluctuation may adversely affect the repurchase and redemption prices of Units  
of the Trust. (See "Description of the Portfolio" in this Part A for the number 
of planned amortization bonds, targeted amortization bonds or support class     
bonds in the Trust portfolios.) The rate of prepayment on the underlying        
mortgages of a CMO will most likely decline as interest rates increase. If the  
rate of prepayment declines, the weighted average life of the support class     
bonds will most likely increase and, in some cases, the decline will impact the 
yield and market value of these Securities. This may cause an investor's        
principal in a support class bond to be outstanding for a longer period of time 
than initially anticipated. Conversely, if interest rates decline, prepayments  
on the underlying mortgages will most likely increase, and the weighted average 
life of the support class bonds may be shorter than anticipated. A holder of a  
support class bond in these situations may be unable to reinvest the proceeds of
these principal distributions at an effective interest rate equal to the        
specified coupon rate on the original support class bond. Therefore, an investor
expecting to earn a fixed return for a fixed number of years may find the life  
of a support class investment decreases as interest rates fall and increases as 
they rise. Investors should be aware that the Federal Financial Institutions    
Examination Council recently announced that certain high-risk CMO tranches are  
generally not suitable investments for depository institutions. Support class   
bonds such as those in the Trust would be characterized as high-risk CMO        
tranches and, therefore, not suitable for depository institutions. Investors    
should carefully consider all the risks inherent in an investment in support    
class bonds before investing in the Trust.                                      

         Some of the CMOs in the Trust may be either a class of Guaranteed
REMIC Certificates ("REMIC Certificate") issued by FNMA or a class of REMIC     
Certificates issued by FHLMC. A FNMA REMIC Certificate represents a beneficial  
ownership interest in a certain class of a FNMA REMIC Trust consisting of Fannie
Maes, each of which in turn represents a beneficial interest in a pool of first 
lien, single-family, fixed-rate residential mortgage loans. FNMA REMIC          
Certificates are issued pursuant to trust agreements executed by FNMA in both   
its corporate capacity and its capacity as trustee. A FNMA REMIC Certificate    
evidences a beneficial ownership interest in the distribution of principal and  
interest on the underlying Fannie Maes, subject to certain limits and in an     
order of distribution established for the particular FNMA REMIC Trust. Each FNMA
REMIC Certificate is backed by the guaranty obligation of FNMA to distribute on 
a timely basis required installments of principal and interest and to distribute
the principal balance of the FNMA REMIC Certificate in full no later than an    
established final distribution date, notwithstanding insufficiency of funds from
the underlying Fannie Maes. A FHLMC REMIC Certificate represents a beneficial   
ownership interest in a certain class of a pool of Freddie Macs, each of which  
in turn represents undivided interests in discrete pools of fixed-rate, first   
lien, residential mortgages or participations therein purchased by FHLMC. FHLMC 
REMIC Certificates are issued pursuant to multiclass mortgage participation     
certificate agreements executed by FHLMC. A FHLMC REMIC Certificate evidences a 
beneficial ownership interest in the distributions of principal and interest on 
the underlying Freddie Macs, subject to certain limits and in an order of       
distribution established for the particular FHLMC REMIC pool. Each FHLMC REMIC  
Certificate is backed by the guaranty obligation of FHLMC to distribute required
interest payments on a timely basis and to distribute required principal        
payments as principal payments on the underlying Freddie Macs are required to be
made. Except with respect to certain issues of "Gold" PCs, FHLMC generally does 
not guarantee timely payment of principal but does guarantee ultimate payment.  
Both FNMA REMIC Certificates and FHLMC REMIC Certificates pay interest monthly. 
(See "The Trust--The Securities" in Part B of this Prospectus for a description 
of FHLMC Gold PCs.)                                                             

If FNMA or FHLMC were unable to fulfill its guarantees, 
distributions to holders of REMIC Certificates such as the Trusts would         

A-4     
267690.1                                                                        

485BPOS
30th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 30th
consist solely of payments and other recoveries upon the mortgages underlying   
the pledged Fannie Maes or Freddie Macs, respectively, and, accordingly,        
delinquencies and defaults would diminish distributions to the holders. (See    
"Description of the Portfolio" in this Part A for the number of FNMA REMIC      
Certificates and FHLMC REMIC Certificates in the Trust's portfolio.)            

         Some of the CMOs in the Trust may be a class of compound interest
bonds or principal only bonds. Interest on compound interest bonds is accrued   
and is added to principal. Such interest is not paid until all classes of CMOs  
issued in the same series with earlier final distributions dates are paid in    
full. Principal only bonds entitle the holder to no payments of interest but the
holder will receive cash flow from the amortization of principal and            
prepayments. Both compound interest bonds and principal only bonds sell at a    
deep discount from par. The Sponsor believes that a portfolio with a limited    
amount of compound interest bonds and principal only bonds will assist the Trust
in achieving its objective of preserving capital. Since the principal only bond 
will accrue to par if held to maturity, the holder of such a bond would receive 
a full return of his or her initial investment upon maturity of the bond. In    
addition, compound interest bonds also assist in the preservation of capital as 
interest which accrues on these bonds is added to principal. (See "Description  
of the Portfolio" in this Part A for the amount of Securities in the Trust that 
is a class of compound interest bonds or principal only bonds.)                 

          Risk Considerations. An investment in Units of the Trust should be
made with an understanding of risks which an investment in fixed rate CMOs may  
entail, including the risk that the value of the portfolio and, hence, the value
of the Units will decline with increases in interest rates and that the life of 
the CMOs in the portfolio depends on the actual prepayments received on the     
underlying mortgage-backed securities, the timing of which cannot be determined 
but which may be sooner or later than anticipated, especially if interest rates 
decline. Mortgage prepayment rates are likely to fluctuate significantly from   
time to time as they have in recent years and at a rate faster or slower than   
that initially assumed. The rate of prepayments depends on a variety of         
geographic, social and other functions, including prevailing market interest    
rates and general economic factors. The potential for appreciation, which could 
otherwise be expected to result from a decline in interest rates, may be limited
by any increased prepayments by mortgagors. Investors should also note that     
prepayments of principal on CMOs purchased at a premium over par will result in 
some loss on investment while prepayments on CMOs purchased at a discount from  
par will result in some gain on investment. Also, if interest rates rise, the   
prepayment risk of higher yielding, premium CMOs and the prepayment benefit for 
lower yielding, discount CMOs will be reduced. (See "The Trust--Life of the     
Securities and of the Trust" in Part B of this Prospectus.) In addition, a      
number of factors, including the extent of prepayments of principal on the      
underlying mortgage-backed securities, affect the availability of funds for     
payment of principal of bonds on any payment date and, therefore, the timing of 
principal payments on each class of such bonds.                                 

          While all of the mortgage-backed securities underlying each of the
CMOs in the Trust are guaranteed as to the payment of principal and interest by 
GNMA, FNMA or FHLMC, the CMOs in the Trust represent obligations solely of the  
issuers of those CMOs and are not themselves insured or guaranteed by GNMA, FNMA
or FHLMC, or any other governmental agency. If a default were to occur with     
respect to any of the CMOs, there can be no assurance that the collateral       
securing such bonds would be sufficient to pay the principal and interest then  
due.                                                                            

          CMOs are generally not listed on a national securities exchange or
on the National Association of Securities Dealers Automated Quotation System,   
Inc. Whether or not CMOs are listed on a national securities exchange, the      

A-5     
267690.1                                                                        

485BPOS
31st Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 31st
principal trading market for the CMOs will generally be in the over-the-counter 
market. As a result the existence of a liquid trading market for CMOs may depend
on whether dealers will make a market in CMOs. There can be no assurance that a 
market will be made for any of the CMOs in the Trust, that any market for the   
CMOs in the Trust's portfolios will be maintained or of the liquidity of the    
CMOs in the Trust in any markets made. The price at which the CMOs in the Trust 
may be sold to meet redemptions and the value of the Trust will be adversely    
affected if trading markets for the CMOs in the Trust are limited or absent.    
(See "The Trust--Liquidity" in Part B of this Prospectus.) In addition, the     
Trust may be restricted under the Investment Company Act of 1940 from selling   
securities to the Sponsor. However, taking into account the foregoing and other 
factors, the Sponsor believes that the nature of the GNMA, FNMA or FHLMC        
guarantees of any securities that have been issued by them, respectively, and   
the nature of the Ginnie Maes, Fannie Maes or Freddie Macs securities payments  
of principal and interest due on the Securities make the Securities adequately  
marketable for purposes of redemptions of Units by the Trustee (see "Redemption"
in Part B of this Prospectus).                                                  

         Investors should note that all of the CMOs in the Trust have been
issued by trusts, corporations or other entities that have elected to be treated
as Real Estate Mortgage Investment Conduits ("REMICs"). As such,                
Certificateholders will be required to include in income their respective pro   
rata share of interest on each Security (whether or not the Security has        
original issue discount) as interest accrues, whether or not the                
Certificateholder is an accrual method taxpayer. (See "Tax Status" in Part B of 
this Prospectus.)                                                               

          The principal amount of Securities actually deposited in the Trust
is affected by the prepayment estimate or factor for each CMO. If the prepayment
estimate or factor is adjusted because the level of actual prepayments increases
with respect to a particular CMO prior to the settlement date of the Securities,
the actual principal amount of Securities deposited in a Trust may be less than 
the amount noted above and the excess of any cash returned to that Trust as a   
result of these prepayments will be held in the Trust's principal account. Cash 
balances maintained in the principal account do not generate income for the     
Trusts.                                                                         

           Educational material regarding CMOs is available upon request, from
the Sponsor.                                                                    

         PUBLIC OFFERING PRICE. The secondary market Public Offering Price
per 1,000 Units of the Trust is equal to the aggregate bid side evaluation of   
the underlying Securities in the Trust divided by the number of Units           
outstanding times 1,000, plus a sales charge of 3.5% of the Public Offering     
Price per 1,000 Units or 3.627% of the net amount invested in Securities per    
1,000 Units of the Trust. In addition, accrued interest to the expected date of 
settlement is added to the Public Offering Price. If the Units of the           
Intermediate Portfolio had been purchased on the Evaluation Date, the Public    
Offering Price per 1,000 Units would have been $1,041.11 plus accrued interest  
of $5.24, for a total of $1,046.35. The Public Offering Price per 1,000 Units   
may vary on a daily basis in accordance with the fluctuations in the aggregate  
bid price of the Bonds. (See "Public Offering" in Part B of this Prospectus.)   

          The figures above assume a purchase of 1,000 Units. The price of a
single Unit, or any multiple thereof, is calculated by dividing the secondary   
market Public Offering Price per 1,000 Units by 1,000 and multiplying by the    
number of Units.                                                                

       DISTRIBUTIONS.  Distributions of principal and interest income,
less expenses, will be made by the Trust monthly on the 20th of each month.     
(See "Rights of Certificateholders--Interest and Principal Distributions" in    

A-6     
267690.1                                                                        

485BPOS
32nd Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 32nd
Part B of this Prospectus. For the estimated amount of distributions see        
"Summary of Essential Information" for the Trust in this Part A.)               

          ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN. Estimated
Long Term Return for the Trust is calculated by: (1) computing the yield to     
maturity for each CMO in the Trust's portfolio in accordance with accepted CMO  
practices, which practices take into account not only the interest payable on   
the CMO but also the amortization of premiums or accretion of discounts, if any,
and estimates of projected prepayments; (2) calculating the average of the      
yields for the CMOs in the Trust's portfolio by weighing each CMO's yield by the
market value of the CMO and by the amount of time remaining to the date to which
the CMO is priced (thus creating an average yield for the portfolio of the      
Trust); and (3) reducing the average yield for the portfolio of the Trust in    
order to reflect estimated fees and expenses of the Trust and the maximum sales 
charge paid by Certificateholders. The resulting Estimated Long Term Return     
represents a measure of the return to Certificateholders earned over the        
estimated life of the Trust. (For the Estimated Long Term Return to             
Certificateholders, see "Summary of Essential Information" for the Trust. See   
"Estimated Long Term Return and Estimated Current Return" in Part B of this     
Prospectus.)                                                                    

          Estimated Current Return for the Trust is computed by dividing the
Estimated Net Annual Interest Income per 1,000 Units by the Public Offering     
Price per 1,000 Units. In contrast to the Estimated Long Term Return, the       
Estimated Current Return does not take into account estimates of prepayments or 
the amortization of premium or accretion of discount, if any, on the CMOs in the
portfolio of the Trust. For the Estimated Net Annual Interest Income to         
Certificateholders, see "Summary of Essential Information" in Part A.           

        If the CMOs in the Trust are priced at a discount, the Estimated
Current Return will generally be lower relative to the Estimated Long Term      
Return, whereas if the CMOs are priced at a premium, the Estimated Current      
Return will generally be higher relative to the Estimated Long Term Return. This
is because Estimated Current Return reflects primarily the interest rate on the 
CMOs, while Estimated Long Term Return reflects yield and timing of principal   
payments, and thus increases when the principal returned is greater than the    
price paid for the CMOs (discount) and decreases when the principal returned is 
lower than the price paid (premium). Estimated Long Term Return is calculated   
using an estimated average life for the CMOs in the Trust. Estimated average    
life is an essential factor in the calculation of Estimated Long Term Return.   
When a particular Trust has a shorter average life than is estimated, Estimated 
Long Term Return will be higher if the Trust contains CMOs priced at a discount 
and lower if the CMOs are priced at a premium. Conversely, when a particular    
Trust has a longer average life than is estimated, Estimated Long Term Return   
will be lower if the CMOs are priced at a discount and higher if the CMOs are   
priced at a premium. To calculate estimated average life several assumptions are
made to derive an estimated prepayment rate for the mortgages underlying the    
Ginnie Maes, Fannie Maes or Freddie Macs that may back the CMOs in the          
Portfolio; the calculation of estimated prepayment rates is based upon actual   
recent prepayments and analysis of several factors including, among other       
things, the spread between present market interest rates and the rate on the    
mortgages and the housing environment. The estimated prepayment rate that is    
derived is then applied to retire the principal amount of each CMO class of the 
same series as each CMO in the Trust, including those CMOs in the Trust,        
according to the specific principal reduction schedule of each series. For a    
more detailed explanation of the calculation of estimated average life, see     
"Estimated Long Term Return and Estimated Current Return" in Part B of this     
Prospectus. The estimated average life for the Trust is subject to change with  
alterations in the data used in any of the underlying assumptions. The actual   
average lives of the CMOs in the Trust portfolio and the actual long term       
returns will be different from the estimated average lives and the estimated    
long term returns.                                                              

A-7     
267690.1                                                                        

485BPOS
33rd Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 33rd
       The Estimated Net Annual Interest Income per 1,000 Units of the
Trust will vary with changes in the fees and expenses of the Trustee and the    
Evaluator applicable to the Trust and with the redemption, prepayment, maturity,
sale or other disposition of the CMOs in the Trust. The Secondary Market Public 
Offering Price will vary with changes in the bid prices of the CMOs. Therefore, 
there is no assurance that the present Estimated Current Return or Estimated    
Long Term Return will be realized in the future.                                

       Market for Units. The Sponsor, although not obligated to do so,
intends to maintain a secondary market for the Units at prices based on the     
aggregate bid side evaluation of the Securities in the Trust. The reoffer price 
will be based on the aggregate bid side evaluation of the Securities, divided by
the number of Units outstanding times 1,000, plus a sales charge of 3.5% (3.627%
of the net amount invested), plus net accrued interest for the Intermediate     
Portfolio. If a market is not maintained a Certificateholder will be able to    
redeem his or her Units with the Trustee at a price based on the aggregate bid  
side evaluation of the Securities. (See "Sponsor Repurchase" in Part B of this  
Prospectus.)                                                                    

         Total Reinvestment Plan. Distributions from the Trust are made to
Certificateholders monthly. The Certificateholder has the option, however, of   
either receiving his interest check, together with any principal payments, from 
the Trustee or participating in a reinvestment program offered by the Sponsor in
shares of The Treasurer's Fund, Inc., U.S. Treasury Money Market Portfolio (the 
"Fund"). Gabelli-O'Connor Fixed Income Mutual Funds Management Co. serves as the
investment advisor of the Fund and GOC Fund Distributors, Inc. serves as        
distributor for the Fund. Participation in the reinvestment option is           
conditioned on the Fund's lawful qualification for sale in the state in which   
the Certificateholder is a resident. The Plan is not designed to be a complete  
investment program. See "Total Reinvestment Plan" in Part B of this Prospectus. 
The shares of the Fund are not rated by Standard & Poor's.                      

A-8     
267690.1                                                                        

485BPOS
34th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 34th
MORTGAGE SECURITIES TRUST 
CMO SERIES 15, INTERMEDIATE PORTFOLIO 

SUMMARY OF ESSENTIAL INFORMATION AS OF DECEMBER 31, 1995  

Date of Deposit:*  March 30, 1994             Evaluation Time:  4.00 p.m.       
Principal Amount of                             New York Time.                  
Securities ................  $9,690,000     Minimum Principal Distribution: 
Principal Amount of Secu-                       $1 per 1,000 Units.             
rities per 1,000 Units.....  $1,000.24      Weighted Average Life to        
Number of Units .............  9,687,683        Maturity: 6.6 years             
Fractional Undivided Inter-                   Minimum Value of Trust:           
est in Trust per Unit .....  1/9687683        Trust may be terminated if    
Secondary Market Public                         less than $4,000,000 in         
Offering Price**+                             principal amount              
Aggregate Bid Price of                        of Securities.                
Securities in Trust .....  $9,722,044     Mandatory Termination Date:   
Divided by 9,690,000 Units                    The earlier of December 31,   
  times $1,000 ............  $1,003.55        2044 or the disposition of the
Plus Sales Charge of 3.5%                     last Security in the Trust.   
of Public Offering Price   $37.56         Trustee:  The Chase Manhattan 
Public Offering Price                         Bank, N.A.                    
 per 1,000 Units..........  $1,041.11      Trustee's Annual Fee:  $.84 per
Redemption and Sponsor's                        $1,000.                         
Repurchase Price                            Evaluator:  Kenny S&P           
per 1,000 Units+ ..........  $1,003.55+++#    Evaluation Services.          
Excess of Public Offering                     Evaluator's Fee for Each          
Price over Redemption and                     Evaluation:  $7 per           
Sponsor's Repurchase Price                    evaluation.                   
per 1,000 Units#...........  $37.56         Sponsor:  Reich & Tang          
Difference between Public                       Distributors L.P.               
Offering Price per 1,000                    Sponsor's Annual Fee:  Maximum  
Units and Principal                           of $.25 per $1,000 principal  
Amount per 1,000 Units                        amount of Securities (see     
Premium/(Discount) ........  $40.87           "Trust Expense and Charges"   
                                              in Part B of this Prospectus).

PER 1,000 UNIT INFORMATION  

Gross annual interest income (cash).............................       $67.12   
Less estimated annual fees and expenses.........................         1.62   
Estimated net annual interest income (cash).....................        65.50   
Estimated interest distribution.................................         5.46   
Estimated daily interest accrual................................          .18   
Estimated current return++(1)...................................        6.29%   
Estimated long term return++(1).................................        6.26%   
Record dates....................................................       1st of   
                                                                each month
Interest distribution dates.....................................      20th of   
                                                                each month

A-9     
267690.1                                                                        

485BPOS
35th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 35th
Footnotes to Summary of Essential Information 

*  The Date of Deposit is the date on which the Trust Agreement was signed
and the deposit of the Bonds with the Trustee made.                 

**  Per 1,000 Units.                                                        

+  Plus accrued interest.                                                 

 ++  The estimated current return and estimated long term return are increased
     for transactions entitled to a discount (see "Volume and Other Discounts"
in Part B of this Prospectus).                                      

+++  Based solely upon the bid side evaluation of the underlying Securities.  
  Upon tender for redemption, the price to be paid will be calculated as
described under "Trustee Redemption" in Part B of this Prospectus.  

 #  See "Comparison of Public Offering Price, Sponsor's Repurchase Price and
Redemption Price" in Part B of this Prospectus.                     

 (1)  Estimated current return represents annual interest income after estimated
  annual expenses divided by the Public Offering Price, including a 3.5%
maximum sales charge. Estimated long term return is the net annual  
   percentage return based on the yield on each underlying Security in the
  Trust weighted to reflect market value and estimated average life. The
   estimated weighted average life to maturity of the Trust is an estimate
     based upon various assumptions discussed more fully under "Estimated Long
   Term Return and Estimated Current Return" in Part B of this Prospectus.
 Estimated long term return is adjusted for estimated expenses and the
maximum public offering price but not for delays in the Trust's     
      distribution of income. Estimated current return shows current annual cash
    return to investors while estimated long term return shows the return on
      Units held to estimated average life, reflecting prepayments of principal,
maturities, discounts and premiums on underlying Securities. Actual 
returns will vary with purchase price, payments and prepayments of  
      principal on the underlying Ginnie Maes, Fannie Maes or Freddie Macs which
  back the Securities, and changes in Trust income after expenses. These
      returns do not include the effects of any delay in payments to Unitholders
and a calculation which includes those effects would be lower. See  
  "Estimated Long Term Return and Estimated Current Return" in Part B of
this Prospectus.                                                    

A-10    
267690.1                                                                        

485BPOS
36th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 36th
INFORMATION REGARDING THE TRUSTS  
AS OF DECEMBER 31, 1995 

Description of the Portfolio*                                                   

   The Trust consists of 4 issues of CMOs. The Sponsor has not
participated as a sole underwriter or manager, co-manager or member of an       
underwriting syndicate from which any of the initial aggregate principal amount 
of the CMOs in the Portfolio were acquired. None of the CMOs have been issued by
entities created by GNMA, approximately 79.4% of the aggregate principal amount 
of the CMOs in the Portfolio have been issued by entities created by FNMA,      
approximately 20.6% of the aggregate principal amount of the CMOs in the        
Portfolio have been issued by entities created by FHLMC and none have been      
issued by private issuers. All of the CMOs in the Trust have been issued by     
trusts, corporations or other entities that have elected to be treated as Real  
Estate Mortgage Investment Conduits. The CMOs in the Trust have stated final    
distribution dates ranging from October 15, 2013 through April 25, 2022 and     
estimated average lives (based upon estimated prepayment rates) ranging from 8.0
to 11.0 years.                                                                  

         The CMOs in Portfolio Nos. 1, 3 and 4 (representing $6,000,000 of
the principal amount of the Securities initially deposited in the Trust) are    
planned amortization bonds or targeted amortization bonds. None of the principal
amount of the Securities are support class bonds that are part of a series that 
contains planned amortization bonds or targeted amortization bonds. $7,690,000  
of the principal amount of the Securities initially deposited in the Trust are  
FNMA REMIC Certificates. $2,000,000 of the principal amount of the securities   
initially deposited in the Trust are FHLMC REMIC Certificates. None of the      
principal amount of the Securities initially deposited in the Trust are a class 
of compound interest bonds or principal only bonds.                             

           As of December 31, 1995, 79.4% of the aggregate principal amount of
the Securities in the Trust were acquired at a discount from par, 20.6% of the  
Securities in the Trust were acquired at a premium and none were acquired at    
par. A Certificateholder may receive more or less than his original purchase    
price upon disposition of his Units because the value of the Units fluctuates   
with the value of the underlying Securities.                                    

            Educational material regarding CMOs is available, upon request, from
the Sponsor.                                                                    

--------                                                                        
*     Changes in the Trust Portfolio:  From January 1, 1996 to March 22, 1996,  
 $485,000 of the principal amount of the securities in portfolio no. 3
 was sold and is no longer contained in the Trust.  958,100 Units were
redeemed from the Trust.                                            

A-11    
267690.1                                                                        

485BPOS
37th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 37th
 FINANCIAL AND STATISTICAL INFORMATION

Selected data for each Unit of the Trust outstanding for the periods listed     
below:                                                                          

                                                         Distribu-
                                                        tions of
                                                         Principal
                                    Distributions     During
                   Net Asset*    of Interest       the
                        Value       During the        Period
              Units Out-  Per 1,000     Period (per       (Per 1,000
Period Ended         standing     Units       1,000 Units)        Units)        

December 31, 1994   10,000,000  $  880.00       $39.04              -0-         
December 31, 1995    9,687,683   1,019.28        65.40              -0-         

--------                                                                        
*  Net Asset Value per 1,000 Units is calculated by dividing net assets as      
   disclosed in the "Statement of Net Assets" by the number of Units outstanding
as of the date of the Statement of Net Assets. See Note 5 of Notes to     
Financial Statements for a description of the components of Net Assets.   

A-12    
267690.1                                                                        

485BPOS
38th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 38th
Independent Auditors' Report                              

The Sponsor, Trustee and Certificateholders                                     
Mortgage Securities Trust, CMO Series 15 Intermediate:                          

We have audited the accompanying statement of net assets, including the         
portfolio, of Mortgage Securities Trust, CMO Series 15 Intermediate as of       
December 31, 1995, and the related statements of operations, and changes in net 
assets for the year ending December 31, 1995 and for the period from March 30,  
1994 (date of initial deposit) to December 31, 1994. These financial statements 
are the responsibility of the Trustee (see note 2). Our responsibility is to    
express an opinion on these financial statements based on our audits.           

We conducted our audits in accordance with generally accepted auditing          
standards. Those standards require that we plan and perform the audit to obtain 
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting 
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 1995, by correspondence with
the Trustee. An audit also includes assessing the accounting principles used and
significant estimates made by the Trustee, as well as evaluating the overall    
financial statement presentation. We believe that our audits provide a          
reasonable basis for our opinion.                                               

In our opinion, the financial statements referred to above present fairly, in   
all material respects, the financial position of Mortgage Securities Trust, CMO 
Series 15 Intermediate as of December 31, 1995, and the results of its          
operations and the changes in its net assets for the year ending December 31,   
1995 and for the period from March 30, 1994 (date of initial deposit) to        
December 31, 1994 in conformity with generally accepted accounting principles.  

KPMG Peat Marwick LLP                                                           

New York, New York                                                              
March 31, 1996                                                                  

485BPOS
39th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 39th
MORTGAGE SECURITIES TRUST, CMO SERIES 15 INTERMEDIATE         
Statement of Net Assets           

December 31, 1995           

Investments in marketable securities,                                           
at market value (cost $9,261,509)                               $ 9,732,945 

Excess of other assets over total liabilities                         141,541   
                                                                  ----------

Net assets 9,687,683    units of fractional undivided                           
   undivided interest outstanding$1.02  per  unit)             $ 9,874,486
                                                                  ==========

See accompanying notes to financial statements.                                 

485BPOS
40th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 40th
                                                                [Download Table]
                MORTGAGE SECURITIES TRUST, CMO SERIES 15 INTERMEDIATE              
                          Statements of Operations                                 


                                                               For the period from 
                                               For the            March 30, 1994   
                                              Year Ended        (date of deposit)  
                                           December 31, 1995   to December 31, 1994
                                           -----------------   --------------------

                                                                                   
Investment income - interest               $     668,226       $     510,228       

Expenses:                                                                          
   Trustee's fees                                 21,375             10,800        
   Evaluator's fees                                1,622                -          
                                             ------------        ----------------  

              Total Expenses                      22,997             10,800        
                                             ------------        ----------------  

              Investment income, net             645,229             499,428       
                                             ------------        ----------------  

Realized and unrealized gain on investments:                                       
    Realized gain on securities sold               6,037                -          
    Unrealized appreciation (depreciation)                                         
       for the period                          1,397,167            (925,731)      
                                             ------------        ----------------  

       Net gain (loss) on investments          1,403,204            (925,731)      
                                             ------------        ----------------  

       Net increase (decrease) in                                                  
         net assets resulting                                                      
         from operations            $          2,048,433       $    (426,303)      
                                             ============        ================  


See accompanying notes to financial statements.                             

485BPOS
41st Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 41st
                                                                [Download Table]
              MORTGAGE SECURITIES TRUST, CMO SERIES 15 INTERMEDIATE                
                      Statements of Changes in Net Assets                          


                                                               For the Period from 
                                               For the             March 30, 1994  
                                             Year Ending         (date of deposit) 
                                           December 31, 1995   to December 31, 1994
                                           -----------------   --------------------

                                                                                   
Operations:                                                                        
   Investment income, net                  $     645,229      $          499,428   
   Realized gain on securities                                                     
     sold                                          6,037                 -         
   Unrealized appreciation (depreciation)                                          
     for the period                            1,397,167                (925,731)  
                                             ------------         ---------------  

              Net increase (decrease) in                                           
                 net assets resulting                                              
                 from operations               2,048,433                (426,303)  
                                             ------------         ---------------  

Distributions to Certificateholders:                                               
     Investment income                           654,000                 390,400   
     Principal                                    -                      -         
     To Sponsor of accrued interest to                                             
        date of settlement                        -                      (54,053)  

Redemptions:                                                                       
     Interest                                      1,871                 -         
     Principal                                   312,173                 -         
                                             ------------         ---------------  

   Total distributions and redemptions           968,044                 336,347   
                                             ------------         ---------------  

            Total increase (decrease)          1,080,389                (762,650)  

Net assets, at beginning of period             8,794,097               9,556,747   
                                             ------------         ---------------  

Net assets, at end of period (including                                            
          undistributed net investment                                             
       income of $98,386                                                           
          and $109,028, repectively.)      $   9,874,486      $        8,794,097   
                                             ============         ===============  


See accompanying notes to financial statements.                                 

485BPOS
42nd Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 42nd
 MORTGAGE SECURITIES TRUST, CMO SERIES 15 INTERMEDIATE
Notes to Financial Statements   

December 31, 1995 and 1994                              

(1)      Organization and Financial and Statistical Information                 

Mortgage Securities Trust, CMO Series 15 Intermediate (Trust) was   
     organized on March 30, 1994 (date of deposit) by Bear, Stearns & Co. Inc.
under the laws of the State of New York by a Trust Indenture and    
  Agreement, and is registered under the Investment Company Act of 1940.
 Effective September 28, 1995, Reich & Tang Distributors L.P. (Reich &
   Tang) has become the successor sponsor (Sponsor) to certain of the unit
  investments trusts previously sponsored by Bear, Stearns & Co. Inc. As
  successor Sponsor, Reich & Tang has assumed all of the obligations and
rights of Bear Stearns & Co. Inc., the previous sponsor.            

(2)      Summary of Significant Accounting Policies                             

    Effective September 2, 1995, United States Trust Company of New York was
merged into Chase Manhattan Bank (National Association) (Chase).    
      Accordingly, Chase is the successor trustee of the unit investment trusts.
    The Trustee has custody of and responsibility for the accounting records
     and financial statements of the Trust and is responsible for establishing
and maintaining a system of internal control related thereto.       

      The Trustee is also responsible for all estimates of expenses and accruals
     reflected in the Trust's financial statements. The accompanying financial
statements have been adjusted to record the unrealized appreciation 
    (depreciation) of investments and to record interest income and expenses
on the accrual basis.                                               

    Investments are carried at market value which is determined by Kenny S&P
 Evaluation Services (Evaluator). The market value of the portfolio is
  based upon the bid prices for the bonds at the end of the year, except
   that the market value on the date of deposit represents the cost to the
Trust based on the offering prices for investments at that date. The
difference between cost and market value is reflected as unrealized 
   appreciation (depreciation) of investments. Securities transactions are
recorded on the trade date. Realized gains (losses) from securities 
      transactions are determined on the basis of average cost of the securities
sold or redeemed.                                                   

The preparation of financial statements in conformity with generally
     accepted accounting principles requires the Trustee to make estimates and
      assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the  
  financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those 
estimates.                                                          

         (Continued)

F-5                               

485BPOS
43rd Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 43rd
 MORTGAGE SECURITIES TRUST, CMO SERIES 15 INTERMEDIATE

Notes to Financial Statements       

(3)       Income Taxes                                                          

     The Trust is not subject to Federal income taxes as provided for by the
Internal Revenue Code.                                            

(4)      Trust Administration                                                   

       The fees and expenses of the Trust are incurred and paid on the basis set
    forth under "Trust Expenses and Charges" in Part B of this Prospectus.

      The Trust Indenture and Agreement provides for interest distributions on
a monthly basis.                                                  

      See "Financial and Statistical Information" in Part A of this Prospectus
       for the amounts of per unit distributions during the years ended December
       31, 1995 and the period from March 30, 1994 (date of deposit) to December
31, 1994.                                                         

The Trust Indenture and Agreement further requires that principal 
      received from the disposition of bonds, other than those securities sold
in connection with the redemption of units, be distributed to     
Certificateholders.                                               

       The Trust Indenture and Agreement also requires the Trust to redeem units
      tendered. 312,317 units were redeemed during the year ended December 31,
      1995. No units were redeemed during the period from March 30, 1994 (date
of deposit) to December 31, 1994.                                 

(5)      Net Assets                                                             

At December 31, 1995, the net assets of the Trust represented the 
interest of Certificateholders as follows:                        

  Original cost to Certificateholders            $ 9,903,365
   Less initial gross underwriting commission        (346,618)
                                                 -----------
                                                   9,556,747

   Cost of securities sold or called                 (295,238)
  Net unrealized appreciation                        471,436
  Undistributed net investment income                 98,386
  Undistributed proceeds from bonds sold or called    43,155
                                                  ------------
     Total                                       $ 9,874,486
                                                 ===========

The original cost to Certificateholders, less the initial gross     
underwriting commission, represents the aggregate initial public offering price 
net of the applicable sales charge on 10,000,000 units of fractional undivided  
interest of the Trust as of the date of deposit.                                

 F-6

485BPOS
44th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 44th
                                                        [Enlarge/Download Table]
MORTGAGE SECURITIES TRUST, CMO SERIES 15 INTERMEDIATE                                                      

Portfolio                                                                                                  

December 31, 1995 .                                                                                        


                                                               Coupon/      Estimated First                
Port-                                                      Final Scheduled   Distribution                  
folio     Principal              Name of Issuer              Distribution       Date(s)           Market   
No.         Amount            and Title of Bonds(3)              Date       (unaudited) (1)     Value (2)  
-----    ------------   ---------------------------------    ------------   ---------------    ------------

                                                                                                           
   1  $     2,000,000   Federal National  Mortgage           7.500%             1/25/99     $     2,069,291
                        Association Guaranteed REMIC         5/25/2020                                     
                        Pass-Through  Certificates Fannie                                                  
                        Mae REMIC Trust 1992-Class 146-PJ                                                  

   2        3,800,000   Federal National  Mortgage           6.500              1/25/99           3,796,212
                        Association Guaranteed REMIC         4/25/2020                                     
                        Pass-Through  Certificates Fannie                                                  
                        Mae REMIC Trust 1993-Class 74-B                                                    

   3        2,000,000   Federal Home Loan Mortgage           6.000              7/15/99           1,928,571
                        Corporation Multiclass Mortgage      10/15/2013                                    
                        Participation Certificates                                                         
                        (Guaranteed) Series 1595-B                                                         

   4        1,890,000   Federal National  Mortgage           7.050             12/25/00           1,938,871
                        Association Guaranteed REMIC         4/25/2022                                     
                        Pass-Through  Certificates Fannie                                                  
                        Mae REMIC Trust 1993-Class 23-PM                                                   

         ------------                                                                          ------------
      $     9,690,000                                                                       $     9,732,945
         ============                                                                          ============

      See accompanying footnotes to portfolio and notes to financial statements.

485BPOS
45th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 45th
MORTGAGE SECURITIES TRUST, CMO SERIES 15 INTERMEDIATE                           

Footnotes to Portfolio                              

December 31, 1995                               

(1)   See "The Trust - Portfolio" in Part B of this Prospectus for an           
  explanation of redemption features. See "Tax Status" in Part B of this
Prospectus for a statement of the Federal tax consequences to a     
Certificateholder upon the sale, redemption or maturity of a bond.  

(2)   At December 31, 1995, the net unrealized appreciation of all the          
  securities was comprised of gross unrealized appreciation of $471,436.

(3)   The annual interest income, based upon securities held at December 31,    
1995, to the Trust is 650,245.                                      

(4)   All of the CMOs in the portfolio are backed by underlying mortgage-backed 
     securities which are pledged as collateral to secure payment of principal
     and interest on the CMOs. The CMOs in the Trust are issued by the Federal
     National Mortgage Association ("FNMA") and the Federal Home Loan Mortgage
      Corporation ("FHLMC"). The Units of the Trust are not, however, guaranteed
      by FNMA, FHLMC, the United States or any of its agencies. Payments are not
     guaranteed by the United States and neither the CMOs in the Trust nor any
   underlying FNMA's or FHLMC's constitute a debt obligation of the United
States or any of its agencies.                                      

F-8                               

485BPOS
46th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 46th
Note:  Part A of This Prospectus May Not Be   
Distributed Unless Accompanied by Part B. 

MORTGAGE SECURITIES TRUST 

CMO SERIES 16 

         The Trust consists of 1 unit investment trust designated Mortgage
Series Trust, CMO Series 16, Intermediate Portfolio (the "Trust"). The Trust    
consists of an underlying portfolio of collateralized mortgage obligations      
("CMOs" or "Securities") and was formed to obtain safety of capital and provide 
a high level of current distributions of interest income. The Trust seeks to    
obtain a higher yield than fixed income investments with comparable AAA ratings.
An investment in the Trust entails differing degrees of risk. The Trust seeks to
achieve its objectives through investment in a fixed portfolio of CMOs which may
have been issued as debt obligations of a trust or corporation or which may     
represent certificated interests of beneficial ownership in pools of            
mortgage-backed securities. All of the CMOs in the portfolio are backed by      
underlying mortgage-backed securities which are pledged as collateral to secure 
payment of principal and interest on the CMOs. Each of these underlying         
mortgage-backed securities is guaranteed as to the payment of principal and     
interest by the Government National Mortgage Association ("GNMA"), the Federal  
National Mortgage Association ("FNMA") or the Federal Home Loan Mortgage        
Corporation ("FHLMC"). All of the CMOs in the Trust are issued by GNMA, FNMA or 
FHLMC or are otherwise rated AAA by Standard & Poor's and, therefore, the Units 
of the Trust are rated AAA by Standard & Poor's Corporation. The Units of the   
Trust are not, however, guaranteed by GNMA, FNMA, FHLMC, the United States or   
any of its agencies. The full faith and credit of the United States is pledged  
to the payment of all amounts guaranteed by GNMA. However, payments guaranteed  
by FNMA and FHLMC are not guaranteed by the United States and neither the CMOs  
in the Trust nor any underlying Fannie Maes or Freddie Macs constitute a debt   
obligation of the United States or any of its agencies. The Sponsor is Reich &  
Tang Distributors L.P. (successor Sponsor to Bear, Stearns & Co. Inc.). The     
value of the Units will fluctuate with the value of the CMOs in the portfolio.  
Both the Estimated Current Return and the Estimated Long Term Return are subject
to fluctuations with changes in portfolio composition, principal payments and   
prepayments, changes in the market value of the CMOs in the portfolios and      
changes in fees and expenses. Minimum purchase: 1,000 Units.                    

          This Prospectus consists of two parts. Part A contains the Summary
Fof Essential Information, including descriptive material relating to the Trust 
as of December 31, 1995 (the "Evaluation Date"), a summary of certain specific  
information regarding the Trust and audited financial statements of the Trust,  
including the Portfolio as of the Evaluation Date. Part B of this Prospectus    
contains general information about the Trust. Part A may not be distributed     
unless accompanied by Part B of this Prospectus.                                

Investors Should Read and Retain Both Parts 
of This Prospectus for Future Reference.  

    THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
  AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
     COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.                                                   

Prospectus Part A Dated April 30, 1996  

C/M:  11939.0001 352475.1                                                       

485BPOS
47th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 47th
           THE TRUST. The Trust consists of a unit investment trust designated
Mortgage Securities Trust, CMO Series 16, Intermediate Portfolio. The Trust was 
formed to obtain safety of capital and a high level of current distributions of 
interest income through investment in a fixed portfolio of CMOs. A CMO is a     
multiclass bond backed by a pool of mortgage pass-through securities or mortgage
loans. CMOs are also known as "real estate mortgage investment conduits"        
(REMICs). As a result of the 1986 Tax Reform Act, most CMOs are issued in REMIC 
form to create a certain tax advantage for the issuer. The terms CMO and REMIC  
are used interchangeably. The Trust seeks to obtain a higher yield than fixed   
income investments with comparable AAA ratings. An investment in the Trust      
entails differing degrees of risk.                                              

         The Trust, as an Intermediate Portfolio, will invest primarily in
planned amortization or target amortization classes of CMOs. Such classes of    
CMOs receive payments of principal according to a planned schedule to the extent
that prepayments on the underlying mortgage-backed securities occur within a    
broad time period. The principal is reduced only in specified amounts at        
specified times resulting in greater predictability of principal payments for   
the planned amortization bonds or targeted amortization bonds. For a discussion 
on planned amortization bonds or targeted amortization bonds see "The           
Trust--Description of the Portfolio" and "The Trust--CMO Structure" in this Part
A and "The Trust--The Securities--Planned Amortization Bonds or Targeted        
Amortization Bonds and Support Bonds" in Part B of this Prospectus. The Trust   
may also invest in other types of CMOs described above and in "The Trust--The   
Securities" in Part B of this Prospectus.                                       

All of the CMOs in the Trust are backed by underlying   
mortgage-backed securities which are pledged as collateral to secure payment of 
principal and interest on the CMOs. Each of these mortgage-backed securities is 
guaranteed as to the payment of principal and interest by either the Government 
National Mortgage Association ("GNMA"), the Federal National Mortgage           
Association ("FNMA") or the Federal Home Loan Mortgage Corporation ("FHLMC").   
All of the CMOs in the Trust are issued by GNMA, FNMA or FHLMC or are otherwise 
rated AAA by Standard & Poor's Corporation ("Standard & Poor's") and therefore, 
the Units of the Trust are rated AAA by Standard & Poor's. There can be no      
assurance that the Trust's investment objectives can be achieved. Investments in
the Trust should be made with an understanding of the risks inherent in an      
investment in CMOs. (See "The Trust--Risk Considerations" in this Part A.) Each 
Unit of the Trust represents an undivided interest in the principal and net     
income of the Trust in the ratio of one thousand Units for the indicated        
principal amount of Securities in the Trust. (See "The Trust--Organization" in  
Part B of this Prospectus.) (For the specific number of Units in the Trust, see 
"Summary of Essential Information" in this Part A.)                             

       Generally, CMOs are designed to provide a substantial degree of
prepayment and reinvestment risk protection as compared to other mortgage       
related securities. The CMOs may have been issued as debt obligations of a trust
or corporation or as certificated interests representing beneficial ownership in
a pool of mortgage-backed securities (See "The Trust--The Securities" in Part B 
of this Prospectus for further description and examples) which trust,           
corporation or pool may have been established for the sole purpose of issuing   
CMOs by any of GNMA, FNMA or FHLMC or by a private business organization. Such  
private business organizations are typically single-purpose corporations        
established by mortgage-banking institutions for the sole purpose of issuing    
CMOs. Any CMOs in the Trust that have been issued by private business           
organizations have been rated AAA by Standard & Poor's. The sole assets of the  
issuers of the CMOs are the underlying mortgage-backed securities. If the       
collateral securing the Securities of these issuers is insufficient to make     
payments on those Securities, it is unlikely that any other assets of these     
issuers will be available for payment of the deficiency.                        

A-2     
C/M:  11939.0001 352475.1                                                       

485BPOS
48th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 48th
The underlying mortgage-backed securities which are pledged as collateral to    
secure the payment of principal and interest on the CMOs may be (i) "fully      
modified pass-through" mortgage-backed certificates, guaranteed by GNMA ("Ginnie
Maes"), (ii) mortgage pass-through certificates guaranteed by FNMA ("Fannie     
Maes") or (iii) mortgage participation certificates guaranteed by FHLMC         
("Freddie Macs"). The full faith and credit of the United States is pledged to  
the payment of all amounts guaranteed by GNMA. However, payments guaranteed by  
FNMA and FHLMC are not guaranteed by the United States and neither the CMOs in  
the Trust nor any underlying Fannie Maes or Freddie Macs constitute a debt or   
obligation of the United States or any of its agencies. The Units of the Trust, 
as such, are not guaranteed by any of GNMA, FNMA, FHLMC, the United States or   
any of its agencies. Additionally, CMOs that are issued by GNMA, FNMA or FHLMC  
or by any entity established by GNMA, FNMA or FHLMC are guaranteed as to payment
of principal and interest by GNMA, FNMA or FHLMC, respectively. The guaranty    
obligations of GNMA with respect to any Ginnie Maes or any CMOs are supported by
the full faith and credit of the United States. However, the guaranty of        
obligations of FNMA and FHLMC with respect to any Fannie Maes or Freddie Macs or
any CMOs are obligations of FNMA and FHLMC only (limited by their respective    
credit capabilities) and are not supported by the full faith and credit of the  
United States or any other governmental entity.                                 

         CMO Structure. CMOs are generally issued as a series of different
classes. An issue of CMOs generally is backed by a larger number of mortgages   
than a pool of Ginnie Maes, Fannie Maes or Freddie Macs, thus allowing greater  
statistical prediction of prepayment characteristics. Interest and principal    
payments on the mortgages underlying any series will first be applied to meet   
the interest payment requirements of each class in the series other than any    
class in respect of which interest accrues but is not paid or any "principal    
only" class. Principal payments on the underlying mortgages are thereafter      
generally applied to pay the principal amount of the class that has the earliest
maturity date. Once that class is retired, the principal payments on the        
underlying mortgages are applied to the class with the next earliest maturity   
date. This is repeated until all classes are paid. Therefore, while each class  
of CMOs remains subject to prepayment as the underlying mortgages prepay,       
structuring several classes of CMOs in the stream of principal payments allows a
more predictable estimate of the period of time when any one class is likely to 
be repaid. The estimate can be even closer with a class of planned amortization 
bonds or targeted amortization bonds. The amortization schedule for these CMOs  
is structured so that, at specified prepayment rates within a range, their      
principal will be repaid at specified times and in specified amounts. However,  
if any series of CMOs contains a class of planned amortization bonds or targeted
amortization bonds, then the other classes in that series may not be retired in 
an order of priority determined strictly with reference to their maturity dates.

      These other classes are often referred to as "support classes"
because their function is to support the amortization schedule of the planned   
amortization bonds or targeted amortization bonds. If the rate of prepayment on 
the underlying mortgages is faster than assumed, then classes with maturity     
dates later than the planned amortization bonds or targeted amortization bonds  
may be retired earlier than estimated to ensure that the planned amortization   
bonds or targeted amortization bonds receive the principal payments required by 
their amortization schedule. Similarly, if the rate of prepayments is slower    
than anticipated, then earlier support classes may be retired later than        
estimated. Hence, support classes of a series that contains planned amortization
bonds or targeted amortization bonds have less predictable prepayment           
characteristics than classes of a series that does not. This lack of            
predictability regarding prepayments also causes support class bonds to have    
greater market value fluctuation than other classes of a CMO and causes         
fluctuation, which may be substantial, both in the amount of income earned by   

A-3     
C/M:  11939.0001 352475.1                                                       

485BPOS
49th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 49th
the Trust and in the timing of the Trust's principal distributions. This        
fluctuation may adversely affect the repurchase and redemption prices of Units  
of the Trust. (See "Description of the Portfolio" in this Part A for the number 
of planned amortization bonds, targeted amortization bonds or support class     
bonds in the Trust portfolio.) The rate of prepayment on the underlying         
mortgages of a CMO will most likely decline as interest rates increase. If the  
rate of prepayment declines, the weighted average life of the support class     
bonds will most likely increase and, in some cases, the decline will impact the 
yield and market value of these Securities. This may cause an investor's        
principal in a support class bond to be outstanding for a longer period of time 
than initially anticipated. Conversely, if interest rates decline, prepayments  
on the underlying mortgages will most likely increase, and the weighted average 
life of the support class bonds may be shorter than anticipated. A holder of a  
support class bond in these situations may be unable to reinvest the proceeds of
these principal distributions at an effective interest rate equal to the        
specified coupon rate on the original support class bond. Therefore, an investor
expecting to earn a fixed return for a fixed number of years may find the life  
of a support class investment decreases as interest rates fall and increases as 
they rise. Investors should be aware that the Federal Financial Institutions    
Examination Council recently announced that certain high-risk CMO tranches are  
generally not suitable investments for depository institutions. Support class   
bonds such as those in the Long-Intermediate Portfolio would be characterized as
high-risk CMO tranches and, therefore, not suitable for depository institutions.
Investors should carefully consider all the risks inherent in an investment in  
support class bonds before investing in the Trust.                              

         Some of the CMOs in the Trust may be either a class of Guaranteed
REMIC Certificates ("REMIC Certificate") issued by FNMA or a class of REMIC     
Certificates issued by FHLMC. A FNMA REMIC Certificate represents a beneficial  
ownership interest in a certain class of a FNMA REMIC Trust consisting of Fannie
Maes, each of which in turn represents a beneficial interest in a pool of first 
lien, single-family, fixed-rate residential mortgage loans. FNMA REMIC          
Certificates are issued pursuant to trust agreements executed by FNMA in both   
its corporate capacity and its capacity as trustee. A FNMA REMIC Certificate    
evidences a beneficial ownership interest in the distribution of principal and  
interest on the underlying Fannie Maes, subject to certain limits and in an     
order of distribution established for the particular FNMA REMIC Trust. Each FNMA
REMIC Certificate is backed by the guaranty obligation of FNMA to distribute on 
a timely basis required installments of principal and interest and to distribute
the principal balance of the FNMA REMIC Certificate in full no later than an    
established final distribution date, notwithstanding insufficiency of funds from
the underlying Fannie Maes. A FHLMC REMIC Certificate represents a beneficial   
ownership interest in a certain class of a pool of Freddie Macs, each of which  
in turn represents undivided interests in discrete pools of fixed-rate, first   
lien, residential mortgages or participations therein purchased by FHLMC. FHLMC 
REMIC Certificates are issued pursuant to multiclass mortgage participation     
certificate agreements executed by FHLMC. A FHLMC REMIC Certificate evidences a 
beneficial ownership interest in the distributions of principal and interest on 
the underlying Freddie Macs, subject to certain limits and in an order of       
distribution established for the particular FHLMC REMIC pool. Each FHLMC REMIC  
Certificate is backed by the guaranty obligation of FHLMC to distribute required
interest payments on a timely basis and to distribute required principal        
payments as principal payments on the underlying Freddie Macs are required to be
made. Except with respect to certain issues of "Gold" PCs, FHLMC generally does 
not guarantee timely payment of principal but does guarantee ultimate payment.  
Both FNMA REMIC Certificates and FHLMC REMIC Certificates pay interest monthly. 
(See "The Trust--The Securities" in Part B of this Prospectus for a description 
of FHLMC Gold PCs.)                                                             

A-4     
C/M:  11939.0001 352475.1                                                       

485BPOS
50th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 50th
If FNMA or FHLMC were unable to fulfill its guarantees, 
distributions to holders of REMIC Certificates such as the Trust would consist  
solely of payments and other recoveries upon the mortgages underlying the       
pledged Fannie Maes or Freddie Macs, respectively, and, accordingly,            
delinquencies and defaults would diminish distributions to the holders. (See    
"Description of Portfolio" in this Part A for the number of FNMA REMIC          
Certificates and FHLMC REMIC Certificates in the Trust portfolio.)              

         Some of the CMOs in the Trust may be a class of compound interest
bonds or principal only bonds. Interest on compound interest bonds is accrued   
and is added to principal. Such interest is not paid until all classes of CMOs  
issued in the same series with earlier final distributions dates are paid in    
full. Principal only bonds entitle the holder to no payments of interest but the
holder will receive cash flow from the amortization of principal and            
prepayments. Both compound interest bonds and principal only bonds sell at a    
deep discount from par. The Sponsor believes that a portfolio with a limited    
amount of compound interest bonds and principal only bonds will assist the Trust
in achieving its objective of preserving capital. Since the principal only bond 
will accrue to par if held to maturity, the holder of such a bond would receive 
a full return of his or her initial investment upon maturity of the bond. In    
addition, compound interest bonds also assist in the preservation of capital as 
interest which accrues on these bonds is added to principal. (See "Description  
of Portfolio" in this Part A for the amount of Securities in the Trust that is a
class of compound interest bonds or principal only bonds.)                      

          Risk Considerations. An investment in Units of the Trust should be
made with an understanding of risks which an investment in fixed rate CMOs may  
entail, including the risk that the value of the portfolio and, hence, the value
of the Units will decline with increases in interest rates and that the life of 
the CMOs in the portfolio depends on the actual prepayments received on the     
underlying mortgage-backed securities, the timing of which cannot be determined 
but which may be sooner or later than anticipated, especially if interest rates 
decline. Mortgage prepayment rates are likely to fluctuate significantly from   
time to time as they have in recent years and at a rate faster or slower than   
that initially assumed. The rate of prepayments depends on a variety of         
geographic, social and other functions, including prevailing market interest    
rates and general economic factors. The potential for appreciation, which could 
otherwise be expected to result from a decline in interest rates, may be limited
by any increased prepayments by mortgagors. Investors should also note that     
prepayments of principal on CMOs purchased at a premium over par will result in 
some loss on investment while prepayments on CMOs purchased at a discount from  
par will result in some gain on investment. Also, if interest rates rise, the   
prepayment risk of higher yielding, premium CMOs and the prepayment benefit for 
lower yielding, discount CMOs will be reduced. (See "The Trust--Life of the     
Securities and of the Trust" in Part B of this Prospectus.) In addition, a      
number of factors, including the extent of prepayments of principal on the      
underlying mortgage-backed securities, affect the availability of funds for     
payment of principal of bonds on any payment date and, therefore, the timing of 
principal payments on each class of such bonds.                                 

          While all of the mortgage-backed securities underlying each of the
CMOs in the Trust are guaranteed as to the payment of principal and interest by 
GNMA, FNMA or FHLMC, the CMOs in the Trust represent obligations solely of the  
issuers of those CMOs and are not themselves insured or guaranteed by GNMA, FNMA
or FHLMC, or any other governmental agency. If a default were to occur with     
respect to any of the CMOs, there can be no assurance that the collateral       
securing such bonds would be sufficient to pay the principal and interest then  
due.                                                                            

A-5     
C/M:  11939.0001 352475.1                                                       

485BPOS
51st Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 51st
          CMOs are generally not listed on a national securities exchange or
on the National Association of Securities Dealers Automated Quotation System,   
Inc. Whether or not CMOs are listed on a national securities exchange, the      
principal trading market for the CMOs will generally be in the over-the-counter 
market. As a result the existence of a liquid trading market for CMOs may depend
on whether dealers will make a market in CMOs. There can be no assurance that a 
market will be made for any of the CMOs in the Trust, that any market for the   
CMOs in the Trust's portfolios will be maintained or of the liquidity of the    
CMOs in the Trust in any markets made. The price at which the CMOs in the Trust 
may be sold to meet redemptions and the value of the Trust will be adversely    
affected if trading markets for the CMOs in the Trust are limited or absent.    
(See "The Trust--Liquidity" in Part B of this Prospectus.) In addition, the     
Trust may be restricted under the Investment Company Act of 1940 from selling   
securities to the Sponsor. However, taking into account the foregoing and other 
factors, the Sponsor believes that the nature of the GNMA, FNMA or FHLMC        
guarantees of any securities that have been issued by them, respectively, and   
the nature of the Ginnie Maes, Fannie Maes or Freddie Macs securities payments  
of principal and interest due on the Securities make the Securities adequately  
marketable for purposes of redemptions of Units by the Trustee (see "Redemption"
in Part B of this Prospectus).                                                  

         Investors should note that all of the CMOs in the Trust have been
issued by trusts, corporations or other entities that have elected to be treated
as Real Estate Mortgage Investment Conduits ("REMICs"). As such,                
Certificateholders will be required to include in income their respective pro   
rata share of interest on each Security (whether or not the Security has        
original issue discount) as interest accrues, whether or not the                
Certificateholder is an accrual method taxpayer. (See "Tax Status" in Part B of 
this Prospectus.)                                                               

          The principal amount of Securities actually deposited in the Trust
is affected by the prepayment estimate or factor for each CMO. If the prepayment
estimate or factor is adjusted because the level of actual prepayments increases
with respect to a particular CMO prior to the settlement date of the Securities,
the actual principal amount of Securities deposited in the Trust may be less    
than the amount noted above and the excess of any cash returned to the Trust as 
a result of these prepayments will be held in the Trust's principal account.    
Cash balances maintained in the principal account do not generate income for the
Trust.                                                                          

           Educational material regarding CMOs is available upon request, from
the Sponsor.                                                                    

         PUBLIC OFFERING PRICE. The secondary market Public Offering Price
per 1,000 Units of the Trust is equal to the aggregate bid side evaluation of   
the underlying Securities in the Trust divided by the number of Units           
outstanding times 1,000, plus a sales charge of 3.5% of the Public Offering     
Price per 1,000 Units or 3.626% of the net amount invested in Securities per    
1,000 Units of the Trust. In addition, accrued interest to the expected date of 
settlement is added to the Public Offering Price. If the Units of the           
Intermediate Portfolio had been purchased on the Evaluation Date, the Public    
Offering Price per 1,000 Units would have been $1,064.74, plus accrued interest 
of $3.83, for a total of $1,068.57. The Public Offering Price per 1,000 Units   
may vary on a daily basis in accordance with the fluctuations in the aggregate  
bid price of the Bonds. (See "Public Offering" in Part B of this Prospectus.)   

         The figures above assume a purchase of 1,000 Units.  The price of
a single Unit, or any multiple thereof, is calculated by dividing the           

A-6     
C/M:  11939.0001 352475.1                                                       

485BPOS
52nd Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 52nd
secondary market Public Offering Price per 1,000 Units by 1,000 and multiplying 
by the number of Units.                                                         

           DISTRIBUTIONS. Distributions of principal and interest income, less
expenses, will be made by the Trust monthly on the 20th of each month. (See     
"Rights of Certificateholders--Interest and Principal Distributions" in Part B  
of this Prospectus. For the estimated amount of distributions see "Summary of   
Essential Information" for the Trust in this Part A.)                           

          ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN. Estimated
Long Term Return for the Trust is calculated by: (1) computing the yield to     
maturity for each CMO in the Trust's portfolio in accordance with accepted CMO  
practices, which practices take into account not only the interest payable on   
the CMO but also the amortization of premiums or accretion of discounts, if any,
and estimates of projected prepayments; (2) calculating the average of the      
yields for the CMOs in the Trust's portfolio by weighing each CMO's yield by the
market value of the CMO and by the amount of time remaining to the date to which
the CMO is priced (thus creating an average yield for the portfolio of the      
Trust); and (3) reducing the average yield for the portfolio of the Trust in    
order to reflect estimated fees and expenses of the Trust and the maximum sales 
charge paid by Certificateholders. The resulting Estimated Long Term Return     
represents a measure of the return to Certificateholders earned over the        
estimated life of the Trust. (For the Estimated Long Term Return to             
Certificateholders, see "Summary of Essential Information" for the Trust. See   
"Estimated Long Term Return and Estimated Current Return" in Part B of this     
Prospectus.)                                                                    

          Estimated Current Return for the Trust is computed by dividing the
Estimated Net Annual Interest Income per 1,000 Units by the Public Offering     
Price per 1,000 Units. In contrast to the Estimated Long Term Return, the       
Estimated Current Return does not take into account estimates of prepayments or 
the amortization of premium or accretion of discount, if any, on the CMOs in the
portfolio of the Trust. For the Estimated Net Annual Interest Income to         
Certificateholders, see "Summary of Essential Information" in Part A.           

        If the CMOs in the Trust are priced at a discount, the Estimated
Current Return will generally be lower relative to the Estimated Long Term      
Return, whereas if the CMOs are priced at a premium, the Estimated Current      
Return will generally be higher relative to the Estimated Long Term Return. This
is because Estimated Current Return reflects primarily the interest rate on the 
CMOs, while Estimated Long Term Return reflects yield and timing of principal   
payments, and thus increases when the principal returned is greater than the    
price paid for the CMOs (discount) and decreases when the principal returned is 
lower than the price paid (premium). Estimated Long Term Return is calculated   
using an estimated average life for the CMOs in the Trust. Estimated average    
life is an essential factor in the calculation of Estimated Long Term Return.   
When a particular Trust has a shorter average life than is estimated, Estimated 
Long Term Return will be higher if the Trust contains CMOs priced at a discount 
and lower if the CMOs are priced at a premium. Conversely, if the Trust has a   
longer average life than is estimated, Estimated Long Term Return will be lower 
if the CMOs are priced at a discount and higher if the CMOs are priced at a     
premium. To calculate estimated average life several assumptions are made to    
derive an estimated prepayment rate for the mortgages underlying the Ginnie     
Maes, Fannie Maes or Freddie Macs that may back the CMOs in the Portfolio; the  
calculation of estimated prepayment rates is based upon actual recent           
prepayments and analysis of several factors including, among other things, the  
spread between present market interest rates and the rate on the mortgages and  
the housing environment. The estimated prepayment rate that is derived is then  
applied to retire the principal amount of each CMO class of the same series as  
each CMO in the Trust, including those CMOs in the Trust, according to the      
specific                                                                        

A-7     
C/M:  11939.0001 352475.1                                                       

485BPOS
53rd Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 53rd
principal reduction schedule of each series. For a more detailed explanation of 
the calculation of estimated average life, see "Estimated Long Term Return and  
Estimated Current Return" in Part B of this Prospectus. The estimated average   
life for the Trust is subject to change with alterations in the data used in any
of the underlying assumptions. The actual average lives of the CMOs in the      
Trust's portfolio and the actual long term returns will be different from the   
estimated average lives and the estimated long term returns.                    

       The Estimated Net Annual Interest Income per 1,000 Units of the
Trust will vary with changes in the fees and expenses of the Trustee and the    
Evaluator applicable to the Trust and with the redemption, prepayment, maturity,
sale or other disposition of the CMOs in the Trust. The Secondary Market Public 
Offering Price will vary with changes in the bid prices of the CMOs. Therefore, 
there is no assurance that the present Estimated Current Return or Estimated    
Long Term Return will be realized in the future.                                

       Market for Units. The Sponsor, although not obligated to do so,
intends to maintain a secondary market for the Units at prices based on the     
aggregate bid side evaluation of the Securities in the Trust. The reoffer price 
will be based on the aggregate bid side evaluation of the Securities, divided by
the number of Units outstanding times 1,000, plus a sales charge of 3.5% (3.626%
of the net amount invested), plus net accrued interest. If a market is not      
maintained a Certificateholder will be able to redeem his or her Units with the 
Trustee at a price based on the aggregate bid side evaluation of the Securities.
(See "Sponsor Repurchase" in Part B of this Prospectus.)                        

         Total Reinvestment Plan. Distributions from the Trust are made to
Certificateholders monthly. The Certificateholder has the option, however, of   
either receiving his interest check, together with any principal payments, from 
the Trustee or participating in a reinvestment program offered by the Sponsor in
shares of The Treasurer's Fund, Inc., U.S. Treasury Money Market Portfolio (the 
"Fund"). Gabelli-O'Connor Fixed Income Mutual Funds Management Co. serves as the
investment advisor of the Fund and GOC Fund Distributors, Inc. serves as        
distributor for the Fund. Participation in the reinvestment option is           
conditioned on the Fund's lawful qualification for sale in the state in which   
the Certificateholder is a resident. The Plan is not designed to be a complete  
investment program. See "Total Reinvestment Plan" in Part B of this Prospectus. 
The shares of the Fund are not rated by Standard & Poor's.                      

A-8     
C/M:  11939.0001 352475.1                                                       

485BPOS
54th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 54th
MORTGAGE SECURITIES TRUST 
CMO SERIES 16, INTERMEDIATE PORTFOLIO 

                                                        [Enlarge/Download Table]

           SUMMARY OF ESSENTIAL INFORMATION AS OF DECEMBER 31, 1995                     

                                                                                        
Date of Deposit:*  February 9, 1995           Evaluation Time:  4.00 p.m.               
Principal Amount of                             New York Time.                          
  Securities ................  $8,000,000     Minimum Principal Distribution:           
Principal Amount of Secu-                       $1 per 1,000 Units.                     
  rities per 1,000 Units.....  $1,000.00      Weighted Average Life to                  
Number of Units .............  8,000,000        Maturity: 3.9 years                     
Fractional Undivided Inter-                   Minimum Value of Trust:                   
  est in Trust per Unit .....  1/8000000        Trust may be terminated if less than    
Secondary Market Public                         $3,200,000 in principal amount of       
  Offering Price**+                             Securities.                             
  Aggregate Bid Price of                      Mandatory Termination Date:               
    Securities in Trust .....  $8,219,792       The earlier of December 31, 2044 or the 
  Divided by 8,000,000 Units                    disposition of the last Security in the 
    times $1,000 ............  $1,027.47        Trust.                                  
  Plus Sales Charge of 3.50%                  Trustee:  The Chase Manhattan Bank, N.A.  
    of Public Offering Price   $37.27         Trustee's Annual Fee:  $.84 per $1,000.   
  Public Offering Price                       Evaluator:  Kenny S&P Evaluation Services.
    per 1,000 Units..........  $1,064.74      Evaluator's Fee for Each                  
Redemption and Sponsors'                        Evaluation:  $10 per evaluation.        
  Repurchase Price                            Sponsor:  Reich & Tang Distributors L.P.  
  per 1,000 Units+ ..........  $1,027.47+++#  Sponsor's Annual Fee:  Maximum of         
Excess of Public Offering                       $.25 per $1,000 principal amount        
  Price over Redemption and                     of Securities (see "Trust               
  Sponsors' Repurchase Price                    Expense and Charges" in Part B          
  per 1,000 Units#...........  $37.27           of this Prospectus).                    
Difference between Public                                                               
  Offering Price per 1,000                                                              
  Units and Principal                                                                   
  Amount per 1,000 Units                                                                
  Premium/(Discount) ........  $64.74                                                   

PER 1,000 UNIT INFORMATION  

Gross annual interest income (cash).............................       $77.06   
Less estimated annual fees and expenses.........................         1.82   
Estimated net annual interest income (cash).....................        75.24   
Estimated interest distribution.................................         6.27   
Estimated daily interest accrual................................          .21   
Estimated current return++(1)...................................        7.07%   
Estimated long term return++(1).................................        6.25%   
Record dates....................................................       1st of   
                                                                each month
Interest distribution dates.....................................      20th of   
                                                                each month

A-9     
C/M:  11939.0001 352475.1                                                       

485BPOS
55th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 55th
Footnotes to Summary of Essential Information 

*  The Date of Deposit is the date on which the Trust Agreement was signed
and the deposit of the Bonds with the Trustee made.                 

**  Per 1,000 Units.                                                        

+  Plus accrued interest.                                                 

 ++  The estimated current return and estimated long term return are increased
     for transactions entitled to a discount (see "Volume and Other Discounts"
in Part B of this Prospectus).                                      

+++  Based solely upon the bid side evaluation of the underlying Securities.  
  Upon tender for redemption, the price to be paid will be calculated as
described under "Trustee Redemption" in Part B of this Prospectus.  

 #  See "Comparison of Public Offering Price, Sponsors' Repurchase Price and
Redemption Price" in Part B of this Prospectus.                     

 (1)  Estimated current return represents annual interest income after estimated
  annual expenses divided by the Public Offering Price, including a 3.5%
maximum sales charge. Estimated long term return is the net annual  
   percentage return based on the yield on each underlying Security in the
  Trust weighted to reflect market value and estimated average life. The
   estimated weighted average life to maturity of the Trust is an estimate
     based upon various assumptions discussed more fully under "Estimated Long
   Term Return and Estimated Current Return" in Part B of this Prospectus.
 Estimated long term return is adjusted for estimated expenses and the
maximum public offering price but not for delays in the Trust's     
      distribution of income. Estimated current return shows current annual cash
    return to investors while estimated long term return shows the return on
      Units held to estimated average life, reflecting prepayments of principal,
maturities, discounts and premiums on underlying Securities. Actual 
returns will vary with purchase price, payments and prepayments of  
      principal on the underlying Ginnie Maes, Fannie Maes or Freddie Macs which
  back the Securities, and changes in Trust income after expenses. These
      returns do not include the effects of any delay in payments to Unitholders
and a calculation which includes those effects would be lower. See  
  "Estimated Long Term Return and Estimated Current Return" in Part B of
this Prospectus.                                                    

A-10    
C/M:  11939.0001 352475.1                                                       

485BPOS
56th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 56th
INFORMATION REGARDING THE TRUST 
AS OF DECEMBER 31, 1995 

Description of the Portfolio*                                                   

   The Trust consists of 5 issues of CMOs. The Sponsor has not
participated as a sole underwriter or manager, co-manager or member of an       
underwriting syndicate from which any of the CMOs in the Portfolio were         
acquired. None of the CMOs have been issued by entities created by GNMA, 3 have 
been issued by entities created by FNMA, 2 have been issued by entities created 
by FHLMC and none have been issued by private issuers. All of the CMOs in the   
Trust have been issued by trusts, corporations or other entities that have      
elected to be treated as Real Estate Mortgage Investment Conduits. The CMOs in  
the Trust have stated final distribution dates ranging from March 25, 2020      
through June 25, 2023.                                                          

          All of the CMOs in the Portfolio are planned amortization bonds or
targeted amortization bonds. None of the principal amount of the Securities are 
support class bonds that are part of a series that contains planned amortization
bonds or targeted amortization bonds. $4,000,000 of the principal amount of the 
Securities in the Trust are FNMA REMIC Certificates. $4,000,000 of the principal
amount of the securities initially deposited in the Trust are FHLMC REMIC       
Certificates. None of the principal amount of the Securities initially deposited
in the Trust are a class of compound interest bonds or principal only bonds.    

         As of December 31, 1995, 75% of the aggregate principal amount of
the Securities in the Trust were acquired at a discount from par, 25% of the    
Securities in the Trust were acquired at a premium and none were acquired at    
par. A Certificateholder may receive more or less than his original purchase    
price upon disposition of his Units because the value of the Units fluctuates   
with the value of the underlying Securities.                                    

--------                                                                        
*     Changes in the Trust Portfolio:  From January 1, 1996 to March 22, 1996,  
 $655,000 of the principal amount of the securities in portfolio no. 4
 was sold and is no longer contained in the Trust.  646,130 Units were
redeemed from the Trust.                                            

A-11    
C/M:  11939.0001 352475.1                                                       

485BPOS
57th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 57th
FINANCIAL AND STATISTICAL INFORMATION 

Selected data for each unit of the Trust outstanding for the periods listed     
below:                                                                          

                                                   Distribu-
                                                  tions of
                                                   Principal
                              Distributions     During
             Net Asset*    of Interest       the
                  Value       During the        Period
         Units Out-  Per 1,000     Period (per      (Per 1,000
Period Ended      standing     Units       1,000 Units)        Units)           

December 31, 1995 8,000,000  $1,037.41          $59.57          -0-             

--------                                                                        
*     Net Asset Value per 1,000 Units is calculated by dividing net assets as   
disclosed in the "Statement of Net Assets" by the number of Units   
    outstanding as of the date of the Statement of Net Assets. See Note 5 of
    Notes to Financial Statements for a description of the components of Net
Assets.                                                             

A-12    
C/M:  11939.0001 352475.1                                                       

485BPOS
58th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 58th
Independent Auditors' Report                              

The Sponsor, Trustee and Certificateholders                                     
Mortgage Securities Trust, CMO Series 16 Intermediate:                          

We have audited the accompanying statement of net assets, including the         
portfolio, of Mortgage Securities Trust, CMO Series 16 Intermediate as of       
December 31, 1995, and the related statements of operations and changes in net  
assets for the period from February 9, 1995 (date of initial deposit) to        
December 31, 1995. These financial statements are the responsibility of the     
Trustee (see note 2). Our responsibility is to express an opinion on these      
financial statements based on our audit.                                        

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable 
assurance about whether the financial statements are free of material           
misstatement. An audit includes examining, on a test basis, evidence supporting 
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 1995, by correspondence with
the Trustee. An audit also includes assessing the accounting principles used and
significant estimates made by the Trustee, as well as evaluating the overall    
financial statement presentation. We believe that our audit provides a          
reasonable basis for our opinion.                                               

In our opinion, the financial statements referred to above present fairly, in   
all material respects, the financial position of Mortgage Securities Trust, CMO 
Series 16 Intermediate as of December 31, 1995, and the results of its          
operations and the changes in its net assets for the period from February 9,    
1995 (date of initial deposit) to December 31, 1995 in conformity with generally
accepted accounting principles.                                                 

                                                           KPMG Peat Marwick LLP

New York, New York                                                              
March 31, 1996                                                                  

485BPOS
59th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 59th
MORTGAGE SECURITIES TRUST, CMO SERIES 16 INTERMEDIATE                         

   Statement of Net Assets

   December 31, 1995

Investments in marketable securities, at market                   
   value (cost $7,644,050)                               $   8,219,792

  Excess of other assets over total liabilities                 79,504
                                                            ------------

Net assets (8,000,000 units per unit of fractional                
undivided interest outstanding, $1.04 per unit)                 
                                                         $   8,299,296
                                                            ============

See accompanying notes to financial statements.                   

485BPOS
60th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 60th
MORTGAGE SECURITIES TRUST, CMO SERIES 16 INTERMEDIATE                         

Statement of Operations 

                                 For the period from
                                February 9, 1995
                               (date of initial deposit)
                                to December 31, 1995
                                --- ------------ ---

Investment income - interest                  $   551,663                   

Expenses:                                                                   
Trustee's fees                                  8,378                 
Evaluator's fees                                 920                  
                                ------------

Total expenses                              9,298             
                                ------------

Investment income, net              542,365     

Unrealized appreciation                                           
for the period                            575,742           
                                ------------

Net increase in net                                           
assets resulting                                          
from operations                      $  1,118,107         
                                ============

See accompanying notes to financial statements.                             

485BPOS
61st Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 61st
MORTGAGE SECURITIES TRUST, CMO SERIES 16 INTERMEDIATE                         

            Statement of Changes in Net Assets

                                             For the Period from
                                            February 9, 1995
                                           (date of initial deposit)
                                          to December 31, 1995
                                               -- ---------  -----

Operations:                                                                 
Investment income, net                            $  542,365          
Unrealized appreciation                                               
for the period                                     575,742        
                                           ---------

Net increase in net                               
assets resulting                              
   from operations                         1,118,107

Distributions:                                                              
To Certificateholders of investment income         462,861        
                                           ---------

Total increase                               655,246  

Net assets, at beginning of period                     7,644,050            
                                           ---------

Net assets, at end of period (including                                     
undistributed net investment                                          
income of $79,504)                                $ 8,299,296         
                                           =========

See accompanying notes to financial statements.                             

485BPOS
62nd Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 62nd
MORTGAGE SECURITIES TRUST, CMO SERIES 16 INTERMEDIATE                           
Notes to Financial Statements                               

December 31, 1995                               

(1)      Organization and Financial and Statistical Information                 

Mortgage Securities Trust, CMO Series 15 Intermediate (Trust) was   
  organized on February 9, 1995 (date of deposit) by Bear, Stearns & Co.
 Inc. under the laws of the State of New York by a Trust Indenture and
  Agreement, and is registered under the Investment Company Act of 1940.
 Effective September 28, 1995, Reich & Tang Distributors L.P. (Reich &
     Tang) has become the successor sponsor to certain of the unit investments
trusts previously sponsored by Bear, Stearns & Co. Inc. As successor
  Sponsor, Reich & Tang has assumed all of the obligations and rights of
Bear Stearns & Co. Inc., the previous sponsor.                      

(2)      Summary of Significant Accounting Policies                             

    Effective September 2, 1995, United States Trust Company of New York was
merged into Chase Manhattan Bank (National Association) (Chase).    
      Accordingly, Chase is the successor trustee of the unit investment trusts.
    The Trustee has custody of and responsibility for the accounting records
     and financial statements of the Trust and is responsible for establishing
and maintaining a system of internal control related thereto.       

      The Trustee is also responsible for all estimates of expenses and accruals
     reflected in the Trust's financial statements. The accompanying financial
statements have been adjusted to record the unrealized appreciation 
    (depreciation) of investments and to record interest income and expenses
on the accrual basis.                                               

    Investments are carried at market value which is determined by Kenny S&P
 Evaluation Services (Evaluator). The market value of the portfolio is
  based upon the bid prices for the bonds at the end of the year, except
   that the market value on the date of deposit represents the cost to the
Trust based on the offering prices for investments at that date. The
difference between cost and market value is reflected as unrealized 
   appreciation (depreciation) of investments. Securities transactions are
recorded on the trade date. Realized gains (losses) from securities 
      transactions are determined on the basis of average cost of the securities
sold or redeemed.                                                   

The preparation of financial statements in conformity with generally
     accepted accounting principles requires the Trustee to make estimates and
      assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the  
  financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those 
estimates.                                                          

(3)      Income Taxes                                                           

   The Trust is not subject to Federal income taxes as provided for by the
Internal Revenue Code.                                              

         (Continued)
     F-5

485BPOS
63rd Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 63rd
MORTGAGE SECURITIES TRUST, CMO SERIES 16 INTERMEDIATE                           

Notes to Financial Statements                               

(4)      Trust Administration                                                   

       The fees and expenses of the Trust are incurred and paid on the basis set
    forth under "Trust Expenses and Charges" in Part B of this Prospectus.

      The Trust Indenture and Agreement provides for interest distributions on
a monthly basis.                                                  

      See "Financial and Statistical Information" in Part A of this Prospectus
       for the amounts of per unit distributions during the years ended December
31, 1995.                                                         

The Trust Indenture and Agreement further requires that principal 
    received from the disposition of bonds, other than those bonds sold in
connection with the redemption of units, be distributed to        
    Certificateholders. No units have been redeemed since the inception of
the Trust.                                                        

(5)      Net Assets                                                             

At December 31, 1995, the net assets of the Trust represented the 
interest of Certificateholders as follows:                        

 Original cost to Certificateholders           $ 7,921,295
  Less initial gross underwriting commission       (277,245)
                                               -----------
                                                 7,644,050

 Net unrealized appreciation                       575,742
 Undistributed net investment income                79,504
                                                    ------

   Total                                     $ 8,299,296
                                               =========

The original cost to Certificateholders, less the initial gross     
underwriting commission, represents the aggregate initial public offering price 
net of the applicable sales charge on 8,000,000 units of fractional undivided   
interest of the Trust as of the date of deposit.                                

F-6                               

485BPOS
64th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 64th
                                                        [Enlarge/Download Table]
MORTGAGE SECURITIES TRUST, CMO SERIES 16 INTERMEDIATE                                                     

Portfolio                                                                                                 

December 31, 1995                                                                                         

                                                              Coupon/      Estimated First                

Port-                                                     Final Scheduled   Distribution                  
folio     Principal              Name of Issuer            Distribution        Date(s)           Market   
No.         Amount           and Title of Bonds(3)             Date        (unaudited) (1)     Value (2)  
-----    ------------   --------------------------------  ---------------  ---------------    ------------

                                                                                                          
   1  $     1,000,000   Federal National  Mortgage        9.00%                3/25/97     $     1,058,551
                        Association Guaranteed REMIC      3/25/2020                                       
                        Pass-Through  Certificates                                                        
                        Fannie Mae REMIC Trust 1990-24 E                                                  

   2        1,000,000   Federal National Mortgage         8.750               11/25/96           1,041,005
                        Association Guaranteed REMIC      8/25/2020                                       
                        Pass-Through  Certificates                                                        
                        Fannie Mae REMIC Trust G21 G                                                      

   3        2,000,000   Federal Home Loan Mortgage        7.950                2/15/01           2,074,923
                        Corporation Multiclass Mortgage   9/15/2020                                       
                        Participation Certificates,                                                       
                        Series 1155 J                                                                     

   4        2,000,000   Federal Home Loan Mortgage        7.50%                1/15/99           2,063,144
                        Corporation Multiclass Mortgage   7/15/2021                                       
                        Participation Certificates,                                                       
                        Series 1255 G                                                                     

   5        2,000,000   Federal National  Mortgage        6.50%                5/25/98           1,982,169
                        Association Guaranteed REMIC      6/25/2023                                       
                        Pass-Through  Certificates                                                        
                        Fannie Mae REMIC Trust 1994-10 M                                                  

         ------------                                                                         ------------
      $     8,000,000                                                                      $     8,219,792
         ============                                                                         ============

See accompanying footnotes to portfolio and notes to financial statements.

                                       F-7

485BPOS
65th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 65th
MORTGAGE SECURITIES TRUST, CMO SERIES 16 INTERMEDIATE                           

Footnotes to Portfolio                              

December 31, 1995                               

(1)   See "The Trust - Portfolio" in Part B of this Prospectus for an           
  explanation of redemption features. See "Tax Status" in Part B of this
Prospectus for a statement of the Federal tax consequences to a     
Certificateholder upon the sale, redemption or maturity of a bond.  

(2)   At December 31, 1995, the net unrealized appreciation of all the securites
was comprised of gross unrealized appreciation of $575,742.         

(3)   The annual interest income, based upon securities held at December 31,    
1995, to the Trust is 616,500.                                      

(4)   All of the CMOs in the portfolio are backed by underlying mortgage-backed 
     securities which are pledged as collateral to secure payment of principal
     and interest on the CMOs. The CMOs in the Trust are issued by the Federal
     National Mortgage Association ("FNMA") and the Federal Home Loan Mortgage
      Corporation ("FHLMC"). The Units of the Trust are not, however, guaranteed
      by FNMA, FHLMC, the United States or any of its agencies. Payments are not
     guaranteed by the United States and neither the CMOs in the Trust nor any
   underlying FNMA's or FHLMC's constitute a debt obligation of the United
States or any of its agencies.                                      

F-8                               

485BPOS
66th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 66th
Note: Part B of This Prospectus   
May Not Be Distributed unless 
Accompanied by Part A 

Please Read and Retain Both Parts of This   
Prospectus for Future Reference.  

MORTGAGE SECURITIES TRUST   
CMO SERIES  

Prospectus Part B   

Dated: April 30, 1996   

THE TRUST   

Organization                                                                    

        "Mortgage Securities Trust CMO Series" (the "Trust") consists of
the "unit investment trusts" designated as set forth in Part A.*  The Trust     
was created under the laws of the State of New York pursuant to the Trust       
Indenture and Agreements** (the "Trust Agreement"), dated the Date of           
Deposit, among Reich & Tang Distributors L.P., as successor Sponsor to Bear,    
Stearns & Co. Inc., or depending on the particular Trust, among Reich & Tang    
Distributors L.P. and Gruntal & Co., Incorporated as Co-Sponsors (the Sponsor   
or Co-Sponsors, if applicable, are referred to herein as the "Sponsor"), The    
Chase Manhattan Bank, N.A., as Trustee, and Kenny S&P Evaluation Services, a    
division of J.J. Kenny Co., Inc., as Evaluator.  The name of the Sponsor for a  
particular Trust is contained in the "Summary of Additional Information" in     
Part A.                                                                         

      The Trust contains different issues of collateralized mortgage
obligations ("CMOs" or "Securities").  On the Date of Deposit the Sponsor       
deposited with the Trustee the underlying Securities as set forth in Part A,    
including delivery statements relating to contracts for the purchase of such    
Securities, and cash or an irrevocable letter of credit issued by a major       
commercial bank in the amount required for such purchases.  Thereafter, the     
Trustee delivered to the Sponsor units of interest ("Units") representing the   
entire ownership of the Trust.  Each "Unit" of a Trust outstanding on the       
Evaluation Date represents an undivided interest or pro rata share in the       
principal and interest of the Trust in the ratio of one Unit for the indicated  
principal amount of Securities in that Trust on such date as specified in       
Part A of this Prospectus.  Certificateholders will have the right to have      
their Units redeemed (see "Redemption") at a price based on the aggregate bid   
side evaluation of the Securities.  To the extent that any Units are redeemed   
by the Trustee, the fractional undivided interest or pro rata share in the      
Trust represented by each unredeemed Unit will increase, although the actual    
interest in the Trust represented by such fraction will remain unchanged.       
Units will remain outstanding until redeemed upon tender to the Trustee by      
Certificateholders, which may include the Sponsor or the underwriters (the      
"Underwriters"), or until the termination of the Trust Agreement.               
--------                                                                        
*     This Part B relates to the outstanding series of Short-Intermediate       
Portfolio, Intermediate Portfolio or Long-Intermediate Portfolio as 
reflected in Part A attached hereto.                                
**    References in this Prospectus to the Trust Agreement are qualified in     
their entirety by the Trust Indenture and Agreement which is        
incorporated herein.                                                

1427.3                                                                          

485BPOS
67th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 67th
Objectives                                                                      

      The Trust offers investors the opportunity to participate in a
portfolio of collateralized mortgage obligations with a greater degree of       
safety and diversification than they might be able to acquire themselves.  The  
objectives of the Trust are to obtain safety of capital and a high level of     
current distribution of interest income through investment in a fixed           
portfolio of CMOs.  The Trust seeks to obtain a higher yield than fixed income  
investments with comparable AAA ratings.  These CMOs may have been issued as    
debt obligations of a trust or corporation or as certificated interests         
representing beneficial ownership in pools of mortgage-backed securities.  All  
of the CMOs in the Trust are backed by underlying mortgage-backed securities    
which are pledged as collateral to secure payment of principal and interest on  
the CMOs.  Each of these mortgage-backed securities is guaranteed by either     
the Government National Mortgage Association ("GNMA"), the Federal National     
Mortgage Association ("FNMA"), or the Federal Home Loan Mortgage Corporation    
("FHLMC").  All of the CMOs in the Trust are issued by GNMA, FNMA or FHLMC or   
are otherwise rated AAA by Standard & Poor's and, therefore, the Units of the   
Trust are rated AAA by Standard & Poor's Corporation.  However, neither GNMA,   
FNMA, FHLMC, the United States or any of its agencies guarantees payment on     
Units of the Trust.  The full faith and credit of the United States is pledged  
to the payment of all amounts guaranteed by GNMA.  However, payments            
guaranteed by FNMA and FHLMC are not guaranteed by the United States and        
neither the CMOs in the Trust nor any underlying Fannie Maes or Freddie Macs    
constitute a debt obligation of the United States or any of its agencies.       

     Investors should be aware that there is no assurance that the
Trust's objectives will be achieved.  An investment in Units of the Trust       
should be made with an understanding of the risks which an investment in a      
fixed portfolio of fixed rate CMOs may entail, including the risk that the      
value of a Trust portfolio and hence of the Units will decline with increases   
in interest rates.  It should also be noted that the potential for              
appreciation on the Securities which would otherwise be expected to result      
from a decline in interest rates, may tend to be limited by any increased       
prepayments including selling the property, refinancing the mortgage or         
otherwise paying off the loan in whole or in part by mortgagors as interest     
rates decline.  In addition, prepayments of principal on Securities purchased   
at a premium over par will result in some loss on investment, while             
prepayments on Securities purchased at a discount from par will result in some  
gain on investment.  The Sponsor cannot predict future economic policies or     
their consequences or, therefore, the course or extent of any similar           
fluctuations in the future.  Educational materials regarding CMOs, including a  
discussion of risk factors, investment features of CMOs and questions an        
investor should ask before investing are available, upon request, from the      
Sponsor.                                                                        

          Since disposition of Units prior to final liquidation of the Trust
may result in an investor receiving less than the amount paid for such Units    
(see "Comparison of Public Offering Price, Sponsor's Repurchase Price and       
Redemption Price"), the purchase of a Unit should be looked upon as a long-     
term investment.  Neither the Trust nor the Total Reinvestment Plan are         
designed to be complete investment programs.                                    

Portfolios                                                                      

          The portfolios of the Trust consist of the Securities described in
"Description of Portfolio" in Part A.                                           

     In selecting Securities for deposit in the Trust, the Sponsor
considered the following factors, among others:  (i) the types of CMOs          
available, (ii) the yield and price of the Securities relative to other         
comparable mortgage-backed securities, (iii) the estimated average lives and    

-2-     
1427.3                                                                          

485BPOS
68th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 68th
prepayment schedules of the Securities, (iv) the payment provisions applicable  
to the Securities, and (v) whether the Securities were issued after July 18,    
1984 if interest thereon is United States source income.                        

        The Trust consists of the Securities listed under "Portfolio" in
Part A as long as they may continue to be held from time to time in the Trust   
together with accrued and undistributed interest thereon and undistributed and  
uninvested cash realized from the disposition or redemption of Securities (see  
"Trust Administration--Portfolio Supervision").                                 

     A CMO is a multiclass bond backed by a pool of mortgage pass-
through securities or mortgage loans. CMOs are also known as "real estate       
mortgage investment conduits" (REMICs). As a result of the 1986 Tax Reform      
Act, most CMOs are issued in REMIC form to create a certain tax advantage for   
the issuer.  The terms CMO and REMIC are used interchangeably.  CMOs generally  
are bond-like tranches of the cash flow from a mortgage pool.  An issue of      
CMOs generally is backed by a larger number of mortgages than a pool of Ginnie  
Maes, Fannie Maes or Freddie Macs, thus allowing greater statistical            
prediction of prepayment characteristics.  CMOs also differ from regular        
mortgage-backed securities in that the cash flow on the mortgage pool are       
applied to the various classes of any series of CMOs in the order specified by  
that series, rather than to each CMO in the series pro rata.                    

The Securities                                                                  

          The Securities in the Long-Intermediate Trust portfolio consist of
support class bonds, described below.  The Securities in the Intermediate       
Trust Portfolio may consist primarily of planned amortization or targeted       
amortization bonds.  The Securities in the Short-Intermediate Portfolio may     
consist of one or more of several classes of CMOs, including:                   

  Standard (Plain Vanilla) Bonds:  This class of CMO accrues
interest at a fixed rate on its outstanding principal amount.  The interest is  
payable monthly, quarterly or semi-annually as specified.  Holders of Standard  
Bonds receive only interest until all CMOs issued in the same series with       
earlier final distribution dates have been paid in full.  In addition, some     
Standard Bonds may be issued as a support class to Planned Amortization Bonds   
or Targeted Amortization Bonds (see below).                                     

         Compound Interest Bonds:  Interest accrues upon this class of CMO
but is not payable until all classes of CMOs issued in the same series with     
earlier final distribution dates have been paid in full.  Interest that         
accrues but is not paid is added to the principal amount of the Compound        
Interest Bond.                                                                  

       Adjustable Rate Bonds:  Interest rates on this class of CMO may
increase or decrease at one or more specified dates according to the            
documentation governing their issuance.                                         

          Floating Rate Bonds:  Interest rates on these classes of CMOs vary
directly or inversely (although not necessarily proportionately) in relation    
to generally accepted market interest rate indices.  The interest rate is       
usually capped to limit the extent of over-collateralization with mortgage-     
backed securities required in order to ensure that there is sufficient cash     
flow to service all the classes of CMOs in that series.                         

     Planned Amortization Bonds or Targeted Amortization Bonds and
Support Bonds:  Planned Amortization or Target Amortization classes of CMOs     
receive payments of principal according to a planned schedule to the extent     
that prepayments on the underlying mortgage-backed securities occur within a    
broad time period (the "Protection Period").  The principal is reduced only in  
specified amounts at specified times resulting in greater predictability of     

-3-     
1427.3                                                                          

485BPOS
69th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 69th
principal payments for the Planned Amortization Bonds or Targeted Amortization  
Bonds.  The greater predictability of cash flows for Planned Amortization and   
Target Amortization Bonds is achieved by creating other classes of bonds        
commonly called "support classes."  Support classes generally receive           
principal payments on any payment date only if scheduled payments have been     
made on specified Planned Amortization and/or Target Amortization classes.      
Support classes absorb the variability of principal cash flows from the         
underlying mortgage-backed securities.  For instance, if prepayments on the     
underlying mortgage-backed securities occur at a rate greater or less than      
that provided for by the Protection Period, then the excess or deficiency of    
cash flows generated is absorbed by the support classes of CMOs in the          
particular series until the principal amount of each of the other classes has   
been paid in full, resulting in less predictability of cash flows for the       
support classes.  Accordingly, the support classes are subject to a higher      
level of risk than the Planned Amortization or Target Amortization Bonds        
because the support classes have a higher degree of average life variability.   
Because the support classes have a higher degree of average life variability,   
they generally pay a higher yield.                                              

        Principal Only Bonds:  This class of stripped CMOs has the right
to all principal payments from the underlying mortgage-backed securities.       
Principal Only Bonds sell at a deep discount.  The return on a Principal Only   
Bond increases the faster prepayments are received at par.  The return on a     
Principal Only Bond decreases if the rate of prepayment is slow.  Slow          
prepayment can also cause great delays in recognizing gains.                    

   Pledged as collateral to secure the payment of interest and
principal on each type of CMO in the Portfolio will be Ginnie Maes, Fannie      
Maes or Freddie Macs, guaranteed by GNMA, FNMA and FHLMC, respectively.  The    
Units of the Trust, however, will not be guaranteed by GNMA, FNMA, FHLMC, the   
United States or any of its agencies.  The Trust may contain CMOs, the          
collateral pledged to secure which, are mortgages referred to as "Relocation    
Mortgages."  Relocation Mortgages are issued expressly to finance home          
purchases by transferred employees.  Since such mortgages are related to the    
relocation of the individual rather than housing activity and mortgages rates   
generally, the anticipated prepayment rate for them is different than other     
individual mortgage-backed securities.  Historically, prepayment speeds with    
respect to Relocation Mortgages are faster and less interest rate sensitive     
than traditional single family mortgages.  Therefore, with respect to any CMOs  
in the Trust supported by such Relocation Mortgages, the Trust would expect to  
receive prepayment of principal on such instruments at a faster rate than that  
with respect to other CMOs in the Trust.                                        

        GNMA.  The Government National Mortgage Association is a wholly-
owned corporate instrumentality of the United States within the Department of   
Housing and Urban Development.  The National Housing Act of 1943, as amended,   
authorizes GNMA to guarantee the timely payment of the principal of, and        
interest on, certificates which are based on and backed by a pool of mortgage   
loans insured by the Federal Housing Administration ("FHA"), or partially       
guaranteed by the Veteran's Administration ("VA").  In order to meet its        
obligations under such guaranty, GNMA may issue its general obligations to the  
United States Treasury in an amount which is at any time sufficient to enable   
GNMA, with no limitations as to amount, to perform its obligations under its    
guaranty.  In the event it is called upon at any time to make good its          
guaranty, GNMA has the full power and authority to borrow from the Treasury of  
the United States, if necessary, amounts sufficient to make payments of         
principal and interest on the Ginnie Maes.                                      

       Ginnie Maes.  Ginnie Maes are mortgage-backed securities of the
"fully modified pass-through" type, the terms of which provide for timely       
monthly payments by the issuers to the registered holders of their pro rata     
shares of the scheduled principal payments, whether or not collected by the     

-4-     
1427.3                                                                          

485BPOS
70th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 70th
issuers, on account of the mortgages backing such Ginnie Maes, plus any         
prepayment of principal of such mortgages received, and interest (net of        
servicing and guarantee charges) on the aggregate unpaid principal balance of   
such Ginnie Maes, whether or not interest on account of such mortgages has      
been collected by the issuers.  Ginnie Maes will be guaranteed as to timely     
payment of principal and interest by GNMA.  The full faith and credit of the    
United States is pledged to the payment of all amounts which may be required    
to be paid under the guaranty.                                                  

       FNMA.  The Federal National Mortgage Association is a Federally
chartered, privately-owned corporation organized and existing under the         
Federal National Mortgage Association Charter Act.  FNMA was originally         
established in 1938 as a United States government agency to provide             
supplemental liquidity to the mortgage market but was transformed into a        
stockholder owned and privately managed corporation by legislation enacted in   
1968.  The Secretary of Housing and Urban Development exercises general         
regulatory power over FNMA.  FNMA nevertheless maintains certain relationships  
with the U.S. Government.  Although thirteen members of its board of directors  
are authorized to be elected by the shareholders, five are appointed by the     
President of the United States.  The President can also remove board members,   
including those elected by the shareholders.  Although the Secretary of the     
Treasury has discretionary authority to lend FNMA up to $2.25 billion           
outstanding at any time, neither the United States nor any agency thereof is    
obligated to finance FNMA's obligations or to assist FNMA in any other matter,  
and obligations issued by FNMA are not guaranteed by and do not constitute a    
debt or obligation of the United States or of any agency or instrumentality     
thereof other than FNMA.  FNMA provides funds to the mortgage market primarily  
by purchasing home mortgage loans from lenders, thereby replenishing funds for  
additional lending.  FNMA acquires funds to purchase home mortgage loans from   
many capital market investors which may not ordinarily invest in mortgages      
thereby expanding the total amount of funds available for housing.              

         Fannie Maes.  Fannie Maes are certificates of beneficial interest
evidencing pro rata undivided ownership interests in pools of residential       
mortgages either previously owned by FNMA or purchased by it in connection      
with the formation of a pool.  FNMA guarantees the full and timely payment of   
principal and interest (adjusted to the pass-through rate) on the mortgage      
loans in the pool, whether or not received by FNMA or recovered by it in        
foreclosure.  If FNMA were unable to fulfill its guaranty, distributions to     
holders of Fannie Maes would consist solely of payments and other recoveries    
upon the underlying mortgages, and, accordingly, delinquencies and default      
would diminish distributions to the holders.  The obligations of FNMA under     
its guaranty are solely those of FNMA and are not backed by the full faith and  
credit of the United States.  Moreover, neither the United States nor any of    
its agencies is obligated to finance the operations of FNMA or to assist it.    

         FHLMC.  The Federal Home Loan Mortgage Corporation is a corporate
instrumentality of the United States created pursuant to the Emergency Home     
Finance Act of 1970 (the "FHLMC Act").  FHLMC's common stock is owned by the    
Federal Home Loan Banks.  FHLMC was established primarily for the purpose of    
increasing the availability of mortgage credit for the financing of urgently    
needed housing.  It seeks to provide an enhanced degree of liquidity for        
residential mortgage investments primarily by assisting in the development of   
secondary markets for conventional mortgages.  The principal activity of FHLMC  
currently consists of the purchase of first lien, conventional residential      
mortgage loans or participation interests in such mortgage loans and the        
resale of the mortgage loans so purchased in the form of mortgage securities,   
primarily Freddie Macs.  All mortgage loans purchased by FHLMC must meet        
certain standards set forth in the FHLMC Act.  Mortgages retained by FHLMC are  
financed with debt and equity capital.                                          

-5-     
1427.3                                                                          

485BPOS
71st Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 71st
        Freddie Macs.  Freddie Macs represent an undivided interest in a
pool of first lien, residential mortgages and mortgage participations           
("Mortgages" or "PCs") purchased by FHLMC.  PCs include "Gold PCs," "Original   
PCs," "ARM PCs," "Gold Giant PCs," "Original Giant PCs," and "ARM Giant PCs."   
PCs may include whole loans, participation interests in whole loans and         
undivided interest in whole loans or participations comprising other PCs.  For  
example, Gold PCs, Original PCs and ARM PCs represent undivided interests in    
discrete pools consisting of Mortgages.  Gold Giant PCs, Original Giant PCs     
and ARM Giant PCs represent beneficial ownership interests in discrete pools    
consisting of PCs.  In the case of Original PCs FHLMC guarantees the timely     
payment of interest at the rate provided for by Freddie Macs on the unpaid      
principal balance outstanding on the underlying mortgage loans in the PCs       
represented by the Freddie Macs, whether or not received, and also guarantees   
collection of all principal on the underlying mortgage loans, without any       
offset or deduction, but does not guarantee the timely payment of scheduled     
principal.  Unlike Original PCs, Gold PCs guarantee the timely payment of both  
interest and scheduled principal, thus producing a more predictable payment     
stream.  Gold PCs also offer a shorter payment delay than that of conventional  
mortgage pass-through securities (FHLMC advances payment to Gold PC holders 14  
days after the borrower's scheduled principal and interest payments are due),   
and a shorter period (approximately 45 days) between the first day of the       
month in which the Gold PCs are issued and the initial payment date.  Freddie   
Macs are not guaranteed by the United States or by any Federal Home Loan Bank   
and do not constitute debts or obligations of the United States or any Federal  
Home Loan Bank.  The obligations of FHLMC under its guarantee are obligations   
solely of FHLMC and are not backed by, nor entitled to, the full faith and      
credit of the United States.  If FHLMC were unable to fulfill its guaranty,     
distributions to holders of Freddie Macs would consist solely of payments and   
other recoveries upon the underlying mortgages, and, accordingly,               
delinquencies and defaults would diminish distributions to the holders.         

Special Features of Market Discount Securities                                  

        Certain of the Securities in the Trust may have been valued at a
market discount.  Securities trade at less than par value because the interest  
rates on the Securities are lower than interest on comparable obligations       
being issued at currently prevailing interest rates.  The current returns of    
Securities trading at a market discount are lower than the current returns of   
comparably rated obligations of a similar type issued at currently prevailing   
interest rates because discount securities tend to increase in market value as  
they approach maturity and the full principal amount becomes payable.  If       
currently prevailing interest rates for newly issued and otherwise comparable   
securities increase, the market discount of previously issued securities will   
become deeper, and if currently prevailing interest rates for newly issued      
comparable securities decline, the market discount of previously issued         
securities will be reduced, other things, including, without limitation,        
credit quality and rate of prepayment, being equal.  Investors should also      
note that the value of the Securities valued at a market discount will          
increase faster than the Securities valued at a market premium if interest      
rates decrease.  Conversely, if interest rates increase, the value of the       
Securities valued at a market discount will decrease faster than the            
Securities valued at a premium.  In addition, if interest rates rise, the       
prepayment risk of higher yielding premium Securities, and the prepayment       
benefit for lower yielding, discount Securities will be reduced.  Market        
discount attributable to interest rate changes does not indicate a lack of      
market confidence in the issue.                                                 

Special Features of Market Premium Securities                                   

        Certain of the Securities in the Trust may have been valued at a
market premium.  Securities trade at a premium because the interest rates on    
the Securities are higher than interest on comparable obligations being issued  

-6-     
1427.3                                                                          

485BPOS
72nd Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 72nd
at currently prevailing interest rates.  The current returns of Securities      
trading at a market premium are higher than the current returns of comparably   
rated obligations of a similar type issued at currently prevailing interest     
rates because premium securities tend to decrease in market value as they       
approach maturity when the principal amount becomes payable.  Because part of   
the purchase price is returned not at maturity but through current income       
payments, an early redemption of a premium security at par will result in a     
reduction in yield.  If currently prevailing interest rates for newly issued    
and otherwise comparable securities increase, the market premium of previously  
issued securities will decline and if currently prevailing interest rates for   
newly issued comparable securities decline the market premium of previously     
issued securities will increase, other things, including, without limitation,   
credit quality and rate of prepayment, being equal.  Market premium             
attributable to interest rate changes does not indicate market confidence in    
the issue.                                                                      

          Neither the Sponsor nor the Trustee shall be liable in any way for
any default, failure or defect in any of the Securities.  Because certain of    
the Securities from time to time may be redeemed or will mature in accordance   
with their terms or may be sold under certain circumstances, no assurance can   
be given that the Trust will retain its present size and composition for any    
length of time.  The proceeds from the sale of a Security or the exercise of    
any redemption or call provision will be distributed to Certificateholders      
except to the extent such proceeds are applied to meet redemptions of Units     
(see "Trustee Redemption").                                                     

Liquidity                                                                       

       The Securities in the Trust have been registered, or are exempt
from registration, under the Securities Act of 1933 and, therefore, may be      
sold by a Trust at any time to provide funds for purposes of redemption of      
Units. However, the Securities are generally not listed on a national           
securities exchange or on the National Association of Securities Dealers        
Automated Quotation System, Inc.  Whether or not the Securities are listed,     
the principal trading market for the Securities will generally be in the over-  
the-counter market.  As a result, the existence of a liquid trading market for  
the Securities may depend on whether dealers will make a market in the          
Securities.  There can be no assurance that a market will be made for any of    
the Securities, that any market for the Securities will be maintained or of     
the liquidity of the Securities in any markets made.  In addition, the Trust    
may be restricted under the Investment Company Act of 1940 from selling         
Securities to the Sponsor.  The price at which the Securities may be sold to    
meet redemptions and the value of the Trust will be adversely affected if       
trading markets for the Securities are limited or absent.  However, taking      
into account the foregoing and other factors, the Sponsor believes that the     
nature of the GNMA, FNMA or FHLMC guarantees of any Securities that have been   
issued by them, respectively, and the nature of the Ginnie Maes, Fannie Maes    
or Freddie Macs security payments of principal and interest due on the          
Securities make the Securities adequately marketable for purposes of            
redemption of Units by the Trustee (see "Redemption").                          

Limited Assets and Limited Liability                                            

          Except as indicated under "Description of Portfolio" in Part A and
except for any Securities that were issued by GNMA, FNMA or FHLMC, the issuers  
of the Securities are limited purpose corporations, trusts or other entities    
("Limited Purpose Issuers"), organized solely for the purpose of issuing        
Ginnie Mae, Fannie Mae or Freddie Mac-collateralized CMOs.  None of the         
securities issued by the Limited Purpose Issuers (including the Securities      
deposited in the Trust) are guaranteed by the parent company or any other       
affiliate of any Limited Purpose Issuer.  Consequently, holders of these        
securities (including the Trust) must rely upon payments on the Ginnie Maes,    

-7-     
1427.3                                                                          

485BPOS
73rd Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 73rd
Fannie Maes or Freddie Macs and upon any other collateral securing the          
securities (including the Securities deposited in the Trust) for the payment    
of principal and interest due on the Securities.  If the collateral securing    
the securities of each Limited Purpose Issuer is insufficient to make payments  
on those securities, it is unlikely that any other asset of the Limited         
Purpose Issuer will be available for payment of the deficiency.  The            
collateral securing the CMOs of each Issuer (including the Securities           
deposited in the Trust) will be held by the CMO Trustee as security for the     
CMOs of that Issuer.  Although payment of principal of and interest on Ginnie   
Maes, Fannie Maes and Freddie Macs securing the Securities is guaranteed by     
GNMA, FNMA and FHLMC, respectively, the CMOs (including the Securities          
deposited in the Trust except for any Securities which have been issued         
directly or indirectly by GNMA, FNMA or FHLMC) represent obligations solely of  
the Issuers and are not insured or guaranteed by GNMA, FNMA or FHLMC or any     
other governmental agency.  A default with respect to the securities of a       
particular Issuer (including the Securities of the Issuer deposited in the      
Trust) may not necessarily result from a corresponding default with respect to  
the underlying Ginnie Maes, Fannie Maes or Freddie Macs.                        

      For any Securities that have been issued by issuers other than
GNMA, FNMA or FHLMC, the Sponsor has obtained representations from the issuer   
that it has received an opinion of counsel to the effect that it is not an      
investment company or that it has been exempted from the definition of an       
investment company by order of the Securities and Exchange Commission.  With    
respect to any Securities of issuers that have been exempted from the           
definition of an investment company by order of the Securities and Exchange     
Commission, the value of the Securities will not exceed more than 5%            
individually, or 10% in the aggregate, of the total value of the Securities in  
the Trust.                                                                      

Life of the Securities and of the Trust                                         

       CMOs are generally issued as a series of different classes.  An
issue of CMOs tends to be backed by a larger number of mortgages than a pool    
of Ginnie Maes, Fannie Maes or Freddie Macs, thus allowing greater statistical  
prediction of prepayment characteristics.  However, mortgage prepayment rates   
are likely to fluctuate significantly from time to time and investors should    
consider the associated risks.  (See "Risk Considerations" in Part A.)          
Interest and principal payments on the mortgages underlying any series will     
first be applied to meet the interest payment requirements of each class in     
the series other than any class in respect of which interest accrues but is     
not paid or any principal only class.  Then, principal payments on the          
underlying mortgages are generally applied to pay the principal amount of the   
class that has the earliest maturity date.  Once that class is retired, the     
principal payments on the underlying mortgages are applied to the class with    
the next earliest maturity date.  This is repeated until all classes are paid.  
Therefore, while each class of CMOs, remains subject to prepayment as the       
underlying mortgages prepay, structuring several classes of CMOs in the stream  
of principal payments allows a more predictable estimate of the period of time  
when any one class is likely to be repaid.  The estimate can be even closer     
with a class of planned amortization bonds or targeted amortization bonds.      
The amortization schedule for these CMOs is structured so that, at specified    
prepayment rates within a relatively wide range, their principal will be        
repaid at specified times and in specified amounts.  However, if any series of  
CMOs contains a class of planned amortization bonds or targeted amortization    
bonds, then the other classes in that series may not be retired in an order of  
priority determined strictly with reference to their maturity dates.            

      These other classes are often referred to as "support classes"
because their function is to support the amortization schedule of the planned   
amortization bonds or targeted amortization bonds.  If the rate of prepayments  
on the underlying mortgages is faster than assumed, then classes with maturity  

-8-     
1427.3                                                                          

485BPOS
74th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 74th
dates later than the planned amortization bonds or targeted amortization bonds  
may be retired earlier than estimated to ensure that the planned amortization   
bonds or targeted amortization bonds receive the principal payments required    
by their amortization schedule.  Similarly, if the rate of prepayments is       
slower than anticipated, earlier support classes may be retired later than      
estimated.  Hence, support classes of a series that contains planned            
amortization bonds or targeted amortization bonds have less predictable         
prepayment characteristics than classes of a series that does not.  This lack   
of predictability regarding prepayments also causes support class bonds to      
have greater market value fluctuation than other classes of a CMO (see          
"Description of Portfolios" in each Part A for the number of planned            
amortization bonds, target amortization bonds and support bonds contained in    
the Trust portfolios).  With respect to the Long-Intermediate Portfolio, this   
fluctuation may be substantial, both in the amount of income earned and in the  
timing of principal distributions.  This fluctuation may adversely affect the   
repurchase and redemption prices of Units of the Long-Intermediate Portfolio.   
The rate of prepayment on the underlying mortgages of a CMO will most likely    
decline as interest rates increase.  If the rate of prepayment declines, the    
weighted average life of the support class bonds will most likely increase      
and, in some cases, the decline will impact the yield and market value of       
these Securities.  This may cause an investor's principal in a support class    
bond to be outstanding for a longer period of time than initially anticipated.  
Conversely, if interest rates decline, prepayments on the underlying mortgages  
will most likely increase, and the weighted average life of the support class   
bonds may be shorter than anticipated.  A holder of a support class bond in     
these situations may be unable to reinvest the proceeds of these principal      
distributions at an effective interest rate equal to the specified coupon rate  
on the original support class bond.  Therefore, an investor expecting to earn   
a fixed return for a fixed number of years may find the life of a support       
class investment decreases as interest rates fall and increases as they rise.   

         In contrast, Ginnie Maes, Fannie Maes or Freddie Macs, estimation
of repayment is more difficult as the cash flow on the underlying mortgages is  
simply passed through on a pro rata basis to the holders.  However, any         
estimate of the prepayment period for any class of CMO is based upon certain    
assumptions as to the prepayment speed of the underlying mortgages, which       
assumptions may prove to be inaccurate over time.  See "Estimated Long Term     
Return and Estimated Current Return."                                           

      All of the mortgages in the pools relating to the Ginnie Maes,
Fannie Maes or Freddie Macs backing the Securities in the Trust are subject to  
prepayment without any significant premium or penalty at the option of the      
mortgagors (i.e., the homeowners).  Because certain of the Securities from      
time to time may be redeemed or prepaid or will mature in accordance with       
their terms or may be sold under certain circumstances described herein, no     
assurance can be given that the Trust will retain for any length of time its    
present size and composition (see "Redemption").                                

     While the mortgages on the 1 to 4 family dwellings underlying
Ginnie Maes, Fannie Maes or Freddie Macs which may back the Securities are      
amortized over a period of up to 30 years, it has been the experience of the    
mortgage industry that the average life of comparable mortgages, owing to       
prepayments, is considerably less.  Prepayments on mortgages are commonly       
measured relative to a prepayment standard or model.  The prepayment model of   
the Public Securities Association (the "Prepayment Model") represents an        
assumed rate of prepayment each month relative to the then outstanding          
principal balance of a pool of new mortgage loans.  100% of the Prepayment      
Model assumes prepayment rates of 0.2% per annum of the then outstanding        
principal balance of such mortgage loans in the first month of the life of the  
mortgage loans and an additional 0.2% per annum in each month thereafter until  
the 30th month.  Beginning in the 30th month and in each month thereafter       
during the life of the mortgage loans, 100% of the Prepayment Model assumes a   

-9-     
1427.3                                                                          

485BPOS
75th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 75th
constant prepayment rate of 6% per annum.  The principal repayment behavior of  
any individual mortgage will likely vary from these assumptions.  The extent    
of this variation will depend on a variety of factors, including the            
relationship between the coupon rate on a mortgage and prevailing mortgage      
origination rates.  As prevailing mortgage origination rates increase in        
relationship to a mortgage coupon rate, the likelihood of prepayment of that    
mortgage decreases.  Conversely, during periods in which prevailing mortgage    
origination rates are significantly less than a mortgage coupon rate,           
prepayment of that mortgage becomes increasingly likely.  Research analysts     
use complex formulae to scrutinize the prepayments of mortgage pools in an      
attempt to predict more accurately the average life of any particular class of  
mortgage-backed bonds.  The basis for the calculation of estimated average      
life and the relationship of this calculation for Estimated Long Term Return    
is more fully described under "Estimated Long Term Return and Estimated         
Current Return."                                                                

          Generally speaking, a number of factors, including mortgage market
interest rates and homeowners' mobility, will affect the average life of the    
Ginnie Maes, Fannie Maes or Freddie Macs which back the Securities in the       
Trust and, accordingly, there can be no assurance that the prepayment levels    
which will be actually realized will conform to the estimated levels.  Changes  
in prepayment patterns, as reported by each of GNMA, FNMA and FHLMC on a        
periodic basis, if generally applicable to the mortgage pools related to        
specific CMOs could influence yield assumptions used in pricing the             
securities.  Shifts in prepayment patterns are influenced by changes in         
housing cycles and mortgage refinancing and are also subject to certain         
limitations on the gathering of the data; it is impossible to predict how new   
statistics will affect the yield assumptions that determine mortgage industry   
rooms and pricing of CMOs.  Moreover, there is no assurance that the pools of   
mortgage loans relating to the Securities in the Trust will conform to          
prepayment experience as reported by GNMA, FNMA or FHLMC on a periodic basis    
or the prepayment experience of other mortgage lenders.                         

   While the value of CMOs generally fluctuates inversely with
changes in interest rates, it should also be noted that the potential for       
appreciation on CMOs, which could otherwise be expected to result from a        
decline in interest rates, may tend to be limited by any increased prepayments  
by mortgagors as interest rates decline (except for Principal Only Bonds whose  
yield increases with the speed at which payments of principal are received at   
par).  Accordingly, the termination of the Trust might be accelerated as a      
result of prepayments made as described above.  In addition, it is possible     
that, in the absence of a secondary market for the Units or otherwise,          
redemption of Units may occur in sufficient numbers to reduce a Portfolio to a  
size resulting in the termination of the Trust (termination for this reason     
would be delayed if additional Units are issued).  Early termination of a       
Trust may have important consequences to Certificateholders, e.g., the extent   
that Units were purchased with a view to an investment of longer duration, the  
overall investment program of the investor may require readjustment, or the     
overall return on investment may be less or greater than anticipated,           
depending in part on whether the purchase price paid for Units represented the  
payment of an overall premium or a discount, respectively, above or below the   
stated principal amounts of the underlying mortgages.                           

PUBLIC OFFERING 

Offering Price                                                                  

         The secondary market Public Offering Price per 1,000 Units of the
Trust is computed by adding to the aggregate bid price of the Securities in     
the Trust divided by the number of Units outstanding times 1,000, an amount     
equal to (a) for the Short-Intermediate Portfolio, 3.627% of the aggregate bid  

-10-    
1427.3                                                                          

485BPOS
76th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 76th
price of the Securities per 1,000 Units which is equal to 3.5% of the Public    
Offering Price per 1,000 Units, (b) for the Intermediate Portfolio, 3.896% of   
the aggregate bid price of the Securities per 1,000 Units which is 3.75% of     
the Public Offering Price per 1,000 Units and (c) for the Long-Intermediate     
Portfolio, 4.167% of the aggregate offering price of the Securities per 1,000   
Units which is equal to 4% of the Public Offering Price per 1,000 Units.  A     
proportionate share of accrued interest on the Securities is added to the       
Public Offering Price.  Accrued interest is the accumulated and unpaid          
interest on Securities from the last day on which interest was paid and is      
accounted for daily by the Trust at the initial daily rate set forth under      
"Summary of Essential Information" in Part A.  The Public Offering Price can    
vary on a daily basis from the amount stated in this Prospectus in accordance   
with fluctuations in the prices of the Securities and the price to be paid by   
each investor will be computed as of the date the Units are purchased.  The     
aggregate bid price evaluation of the Bonds is determined in the manner set     
forth under "Trustee Redemption."                                               

       The Evaluator may obtain current bid or offering prices for the
Securities from investment dealers or brokers (including the Sponsor) that      
customarily deal in CMOs or from any other report service or source of          
information which the Evaluator deems appropriate.                              

Accrued Interest                                                                

    Accrued interest is the accumulation of unpaid interest on a
Security from the last day on which interest thereon was paid.  Interest on     
Securities in the Trust is actually paid monthly to the Trust.  However,        
interest on Securities in the Trust is accounted for daily on an accrual        
basis.  Because of this, a Trust always has an amount of interest earned but    
not yet collected by the Trustee because of non-collected coupons.  For this    
reason, the Public Offering Price of Units will have added to it the            
proportionate share of accrued and undistributed interest to Date of            
Settlement.                                                                     

       A Certificateholder will not recover his proportionate share of
accrued interest until the Units are sold or redeemed, or the Trust is          
terminated.  At that time, the Certificateholder will receive his               
proportionate share of the accrued interest computed to the Settlement Date in  
the case of sale or termination and to the date of tender in the case of        
redemption.                                                                     

Employee Discounts                                                              

Employees (and their immediate families) of Reich & Tang
Distributors L.P. and its affiliates, Gruntal & Co., Incorporated and of any    
underwriter of a Trust, pursuant to employee benefit arrangements, may          
purchase Units of a Trust at a price equal to the bid side evaluation of the    
underlying securities in the Trust divided by the number of Units outstanding   
plus a reduced sales charge of $10.00 per Unit.  Such arrangements result in    
less selling effort and selling expenses than sales to employee groups of       
other companies.  Resales or transfers of Units purchased under the employee    
benefit arrangements may only be made through the Sponsor's secondary market,   
so long as it is being maintained.                                              

Distribution of Units                                                           

        Certain banks and thrifts will make Units of the Trust available
to their customers on an agency basis.  A portion of the sales charge paid by   
their customers is retained by or remitted to the banks.  Under the Glass-      
Steagall Act, banks are prohibited from underwriting Units; however, the        
Glass-Steagall Act does permit certain agency transactions and the banking      
regulators have indicated that these particular agency transactions are         

-11-    
1427.3                                                                          

485BPOS
77th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 77th
permitted under such Act.  In addition, state securities laws on this issue     
may differ from the interpretations of federal law expressed herein and banks   
and financial institutions may be required to register as dealers pursuant to   
state law.                                                                      

          The Sponsor intends to qualify the Units for sale in substantially
all States through the Underwriters and through dealers who are members of the  
National Association of Securities Dealers, Inc.  Units may be sold to dealers  
at prices which represent a concession of up to $25 per 1,000 Units, subject    
to the Sponsor's right to change the dealers' concession from time to time.     
In addition, for transactions of 1,000,000 Units or more, the Sponsor intends   
to negotiate the applicable sales charge and such charge will be disclosed to   
any such purchaser.  Such Units may then be distributed to the public by the    
dealers at the Public Offering Price then in effect.  The Sponsor reserves the  
right to reject, in whole or in part, any order for the purchase of Units.      
The Sponsor reserves the right to change the discounts from time to time.       

Sponsor's and Underwriters' Profits                                             

        The Sponsor will receive a gross commission equal to (a) for the
Short-Intermediate Portfolio, 3.5% of the Public Offering Price per 1,000       
Units (equivalent to 3.627% of the net amount invested in the Securities),      
(b) for the Intermediate Portfolio, 3.75% of the Public Offering Price per      
1,000 Units (equivalent to 3.896% of the net amount invested in the             
Securities) and (c) for the Long-Intermediate Portfolio, 4% of the Public       
Offering Price per 1,000 Units (equivalent to 4.167% of the net amount          
invested in the Securities).  In addition, in maintaining a market for the      
Units (see "Sponsor's Repurchase") the Sponsor will realize profits or sustain  
losses in the amount of any difference between the price at which they buy      
Units and the price at which they resell such Units.                            

          Participants in the Total Reinvestment Plan can designate a broker
as the recipient of a dealer concession (see "Total Reinvestment Plan").        

Comparison of Public Offering Price, Sponsor's                                  
Repurchase Price and Redemption Price                                           

       The secondary market Public Offering Price of the Units will be
determined on the basis of the current bid prices of the Securities in the      
Trust, plus the applicable sale charges.  The value at which Units may be       
resold in the secondary market will be determined on the basis of the           
aggregate bid side evaluation of the Securities.  On the Evaluation Date, the   
Public Offering Price per 1,000 Units and the Sponsor's Repurchase Price per    
1,000 Units (each based on the bid side evaluation of the Securities) each      
exceeded the Redemption Price per 1,000 Units and the Sponsor's secondary       
market Repurchase Price per 1,000 Units (based on the current bid side          
evaluation of the Securities) by the amounts shown under "Summary of Essential  
Information" in Part A.                                                         

ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN 

    The rate of return on an investment in Units of the Trust is
measured in terms of "Estimated Current Return" and "Estimated Long Term        
Return" as described below.                                                     

        The Estimated Net Annual Interest Income per 1,000 Units for the
Trust, set forth under "Summary of Essential Information", shows the return     
based on $1.00 principal amount per Unit after deducting estimated annual fees  
and expenses.  This figure will change as Securities mature, are prepaid,       
exchanged, redeemed, pair or sold, as replacements or Additional Securities     

-12-    
1427.3                                                                          

485BPOS
78th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 78th
are purchased and deposited in the Trust or as the expenses of the Trust        
change.                                                                         

          In actual operation, payments received in respect of the mortgages
underlying the Ginnie Maes, Fannie Maes or Freddie Macs which in turn back the  
Securities will consist of a portion representing interest and a portion        
representing principal.  Although the aggregate monthly payment made by the     
obligor on each mortgage remains constant (aside from optional prepayments of   
principal), in the early years the larger proportion of each payment will       
represent interest, while in later years, the proportion representing interest  
will decline and the proportion representing principal will increase, although  
the interest rate remains constant.  Moreover, by reason of optional            
prepayments, payments in the earlier years on mortgages may be substantially    
in excess of those required by the amortization schedules of these mortgages;   
conversely, payments in later years may be substantially less since the         
aggregate unpaid principal balances of the underlying mortgages and, hence,     
the related Ginnie Maes, Fannie Maes or Freddie Macs may have been greatly      
reduced--ultimately even sufficiently reduced to accelerate termination of the  
Trust.  To the extent that those Securities bearing the higher interest rate    
represented in the Portfolio are prepaid faster than other Securities, the net  
annual interest per 1,000 Units and the return on the Units can be expected to  
decline.  Monthly payments to the Certificateholders will reflect all of the    
foregoing factors.                                                              

       Interest on the Securities in the Trust, less estimated fees of
the Trustee and Sponsor and certain other expenses, is expected to accrue per   
1,000 Units at the daily rate (based on a 360-day year) shown under "Summary    
of Essential Information".  The actual daily rate will vary as Securities are   
prepaid, exchanged, redeemed, paid or sold or as the expenses of the Trust      
change.                                                                         

       The Estimated Current Return and the Estimated Long Term Return
for each Trust on the Evaluation Date are set forth under "Summary of           
Essential Information" in Part A.  Estimated Long Term Return is calculated     
by:  (1) computing the yield to maturity for each CMO in the Trust's portfolio  
in accordance with accepted CMO practices, which practices take into account    
not only the interest payable on the CMO but also the amortization of premiums  
or accretion of discounts, if any, and estimated appropriate prepayments;       
(2) calculating the average of yields for the CMOs in the Trust's portfolio by  
weighing each CMOs' yield by the market value of the CMO and by the amount of   
time remaining to the date to which the CMO is priced (thus creating an         
average yield for the portfolio of the Trust); and (3) reducing the average     
yield for the portfolio of the Trust in order to reflect estimated fees and     
expenses of the Trust and the maximum sales charge paid by Certificateholders.  
The resulting Estimated Long Term Return represents a measure of the return to  
Certificateholders earned over the estimated life of the Trust.                 

  Estimated Current Return for each Portfolio is computed by
dividing the Estimated Net Annual Interest Income per 1,000 Units by the        
Public Offering Price per 1,000 Units.  In contrast to the Estimated Long Term  
Return, the Estimated Current Return does not take into account the             
amortization of premium or accretion of discount, if any, on the CMOs in the    
portfolio of the Trust.                                                         

        The calculation of an estimated average life for any Security in
the Trust is a two stage process.  First, several assumptions are made to       
derive an estimated prepayment rate for the mortgages underlying the Ginnie     
Maes, Fannie Maes or Freddie Macs which back the Securities.  Based upon        
historical prepayment data provided by GNMA, FNMA or FHLMC an assumption is     
made as to how the prepayment behavior of the mortgages will be affected as     
they amortize.  However, because historical prepayment data afford only a       
limited basis upon which to analyze prepayment behavior, the Sponsor has        

-13-    
1427.3                                                                          

485BPOS
79th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 79th
developed an econometric model that allows an analysis of several other         
important variables.  The principal variables are the spread between present    
market interest rates and the interest rate on the mortgages and the turnover   
rate in the housing market.  Finally, the Sponsor uses this model's prepayment  
predictions to derive an estimated prepayment rate for the mortgage pool,       
expressed in terms of the PSA Prepayment Model, from which an estimated         
average life an estimated prepayment schedule can be projected for the Ginnie   
Maes, Fannie Maes or Freddie Macs themselves.  While the various estimates      
made in this first stage are subjected to rigorous analysis, investors should   
be aware that they are based upon reported statistical relations that may not   
remain constant and assumptions about the future of an uncertain economic       
environment.                                                                    

         The second stage in determining the estimated average life of any
Security in the Trust involves the use of a formula to apply the estimated      
rate of principal payments on the mortgage pool to amortize the Ginnie Maes,    
Fannie Maes or Freddie Macs which back the Securities and to retire the         
principal amount of each CMO class of the same series, including the Security   
itself, according to the specific principal reduction schedule of that series.  
This results in an estimate of the point at which the principal of any          
Security will begin to be paid and how long it will take for the principal to   
be fully paid.  If any Security was issued in a series that contains planned    
amortization bonds or targeted amortization bonds, then the estimated rate of   
principal payments on the underlying mortgages will be applied to the other     
classes in that series in a manner that takes account of the amortization       
schedule of the planned amortization bonds or targeted amortization bonds.      
This results in less predictable prepayment characteristics for those other     
classes.  The estimated average life for the Trust provided under the "Summary  
of Essential Information" is subject to change with alterations in the data     
used in any of the underlying assumptions.  The actual average lives of the     
Securities and the actual long term returns will be different from the          
estimated average lives and the Estimated Long Term Returns.                    

        Both Estimated Current Return and Estimated Long Term Return are
subject to fluctuation with changes in Portfolio composition, principal         
payments and prepayments and changes in market value of the underlying          
Securities and changes in fees and expenses, including sales charges, and       
therefore can be materially different than the figures set forth under the      
Summary of Essential Information.  The size of any difference between           
Estimated Current Return and Estimated Long Term Return can also be expected    
to fluctuate at least as frequently.  In addition, both return figures may not  
be directly comparable to yield figures used to measure other investments, and  
since the return figures are based on certain assumptions and variables the     
actual returns received by a Certificateholder may be higher or lower.  The     
Estimated Long Term Return and Estimated Current Return calculations do not     
take into account certain delays in distributions of income and the timing of   
other receipts and distributions on Units and may, depending on maturities,     
over or understate the impact of sales charges.  Both of these factors may      
result in lower figures.                                                        

     In addition to the Public Offering Price, the price of a Unit
includes accrued interest on the Securities.  Securities deposited in the       
Trust include an item of accrued but unpaid interest up to the date of          
delivery of the Securities.  Certificateholders pay for this additional         
accrued interest when they purchase Units.  In addition, interest accruing      
after the date of delivery of the Securities is added to the Public Offering    
Price.  Accrued interest earns no return.                                       

          The payment dates of the Securities may vary and therefore accrued
interest at any time may be greater than the amount of interest actually        
received by the Trust and distributed to Certificateholders.  Therefore,        
accrued interest (if any) is always added to the value of the Units.  If a      

-14-    
1427.3                                                                          

485BPOS
80th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 80th
Certificateholder sells all or a portion of his Units, he will receive his      
proportionate share of the accrued interest from the purchaser of his Units.    
Similarly, if a Certificateholder redeems all or a portion of his Units, the    
Redemption Price per Unit will include accrued interest on the Securities.      

RIGHTS OF CERTIFICATEHOLDERS  

Certificates                                                                    

  Ownership of Units of the Trust is evidenced by registered
Certificates executed by the Trustee and the Sponsor.  Certificates may be      
issued in denominations of one thousand or more Units.  Certificates are        
transferable by presentation and surrender to the Trustee properly endorsed     
and/or accompanied by a written instrument or instruments of transfer.          
Although no such charge is presently made or contemplated, the Trustee may      
require a Certificateholder to pay $2.00 for each Certificate reissued or       
transferred and any governmental charge that may be imposed in connection with  
each such transfer or interchange.  Mutilated, destroyed, stolen or lost        
Certificates will be replaced upon delivery of satisfactory indemnity and       
payment of expenses incurred.                                                   

Interest and Principal Distributions                                            

        Interest received by each Trust is credited by the Trustee to an
Interest Account for the Trust.  Proceeds representing principal received from  
the maturity, redemption, sale or other disposition of the Securities are       
credited to the Principal Account of the Trust.                                 

         Distributions to each Certificateholder from the Interest Account
are computed as of the close of business on each Record Date for the following  
Payment Date and consist of an amount substantially equal to such Certificate-  
holder's pro rata share of the amount of interest received on the Securities    
during such month in the Interest Account less amounts deducted or estimated    
to be deducted as discussed below.  Distributions from the Principal Account    
of each Trust (other than amount representing failed contracts, as previously   
discussed) will be computed as of each monthly Record Date, and will be made    
to the Certificateholders of that Trust on the next monthly Payment Date.       
Proceeds representing principal received from the disposition of any of the     
Securities between a Record Date and a Payment Date which are not used for      
redemptions of Units will be held in the Principal Account and not distributed  
until the second succeeding monthly Payment Date.  No distributions will be     
made to Certificateholders electing to participate in the Total Reinvestment    
Plan.  Persons who purchase Units between a Record Date and a Payment Date      
will receive their first distribution on the second Payment Date after such     
purchase.  All funds in respect of the Securities received and held by the      
Trustee prior to distribution to Certificateholders may be of benefit to the    
Trustee and do not bear interest to Certificateholders.                         

       As of the first day of each month, the Trustee will deduct from
the Interest Account of each Trust, and, to the extent funds are not            
sufficient therein, from the Principal Account of the Trust, amounts necessary  
to pay the expenses of the Trust (as determined on the basis set forth under    
"Trust Expenses and Charges").  The Trustee also may withdraw from said         
accounts such amounts, if any, as it deems necessary to establish a reserve     
for any applicable taxes or other governmental charges that may be payable out  
of the Trust.  Amounts so withdrawn shall not be considered a part of the       
Trust's assets until such time as the Trustee shall return all or any part of   
such amounts to the appropriate accounts.  In addition, the Trustee may         
withdraw from the Interest and Principal Accounts such amounts as may be        
necessary to cover purchases of Replacement Securities and redemptions of       
Units by the Trustee.                                                           

-15-    
1427.3                                                                          

485BPOS
81st Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 81st
         The estimated monthly distribution per 1,000 Units will be in the
approximate amount shown under "Summary of Essential Information" in Part A     
and will change and may be reduced as Securities are prepaid or are redeemed,   
exchanged or sold, or as expenses of the Trust fluctuate.  No distribution      
need be made from the Principal Account until the balance therein is an amount  
sufficient to distribute $1 per 1,000 Units.                                    

Records                                                                         

       The Trustee shall furnish Certificateholders in connection with
each distribution a statement of the amount of interest, if any, and the        
amount of the receipts, if any, which are being distributed, expressed in each  
case as a dollar amount per 1,000 Units.  Within a reasonable time after the    
end of each calendar year the Trustee will furnish to each person who at any    
time during the calendar year was a Certificateholder of record, a statement    
showing (a) as to the Interest Account:  interest received, amounts paid for    
purchases of Replacement Securities and redemptions of Units, if any,           
deductions for applicable taxes and fees and expenses of the Trust, and the     
balance remaining after such distributions and deductions, expressed both as a  
total dollar amount and as a dollar amount representing the pro rata share of   
each 1,000 Units outstanding on the last business day of such calendar year;    
(b) as to the Principal Amount:  the dates of disposition of any Securities     
and the net proceeds received therefrom, deductions for payments of applicable  
taxes and fees and expenses of the Trust, amounts paid for purchases of         
Replacement Securities and redemptions of Units, if any, and the balance        
remaining after such distributions and deductions, expressed both as a total    
dollar amount and as a dollar amount representing the pro rata share of each    
1,000 Units outstanding on the last business day of such calendar year; (c) a   
list of the Securities held and the number of Units outstanding on the last     
business day of such calendar year; (d) the Redemption Price per 1,000 Units    
based upon the last computation thereof made during such calendar year; and     
(e) amounts actually distributed to Certificateholders during such calendar     
year from the Interest and Principal Accounts, separately stated, of the        
Trust, expressed both as total dollar amounts and as dollar amounts             
representing the pro rata share of each 1,000 Units outstanding on the last     
business day of such calendar year.                                             

The Trustee shall keep available for inspection by      
Certificateholders at all reasonable times during usual business hours, books   
or record and account of its transactions as Trustee, including records of the  
names and address of Certificateholders, Certificates issued or held, a         
current list of Securities in the Portfolio and a copy of the Trust Agreement.  

TAX STATUS  

         The Sponsor believes that (i) each Security the interest on which
is United States source income (which is the case for most Securities issued    
by United States issuers) was or will have been issued after July 18, 1984,     
(ii) each Security is a regular interest in a REMIC, as defined in Sections     
860A-G of the Code, and (iii) interest on any Security issued by a non-United   
States issuer is not subject to any foreign withholding taxes under current     
law.  There can be no assurance, however, that foreign withholding taxes will   
not be imposed on interest on Securities issued by non-United States issuers    
in the future.                                                                  

         Neither the Sponsor nor Battle Fowler LLP has made or will make a
review of the facts and circumstances relating to the issuance of any           
Security.                                                                       

-16-    
1427.3                                                                          

485BPOS
82nd Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 82nd
    Based on the foregoing, in the opinion of Battle Fowler LLP,
special counsel for the Sponsor, under existing law:                            

    The Trust is not an association taxable as a corporation for
 Federal income tax purposes, and income received by the Trust will be
  treated as the income of the Certificateholder in the manner set forth
below.                                                              

         Each Certificateholder will be considered the owner of a pro rata
  portion of each Security in the Trust under the grantor trust rules of
  Sections 671-679 of the Internal Revenue Code of 1986, as amended (the
"Code").  In order to determine the face amount of the Certificate- 
holder's pro rata portion of each Security on the initial Date of   
Deposit, see Principal Amount of Securities under "Portfolio."  The 
    total cost to a Certificateholder of his Units, including sales charges,
is allocated among his or her pro rata portion of each Security (in 
proportion to the fair market values thereof on the date the        
Certificateholder purchases his Units) in order to determine his tax
cost for his pro rata portion of each Security.  In order for a     
    Certificateholder who purchases his Units on the initial Date of Deposit
to determine the fair market value of his pro rata portion of each  
Security on such date, see Cost of Securities to Trust under        
"Portfolio."                                                        

        A Certificateholder will be required to include in income his or
  her respective pro rata share of interest on each Security (whether or
not the Security has original issue discount, as discussed below) as
interest accrues, whether or not the Certificateholder is an accrual
method taxpayer.  An individual Certificateholder who itemizes      
deductions may deduct his pro rata share of fees and expenses of the
Trust only to the extent that such amount together with the         
Certificateholder's other miscellaneous deductions exceeds 2% of his
 adjusted gross income and subject to overall restrictions on itemized
deductions set forth in Section 68 of the Code.                     

          The Trust may contain Securities which were originally issued at a
discount ("original issue discount").  In general, original issue   
discount is defined as the difference between the price at which a  
security was issued and its stated redemption price at maturity.    
  Original issue discount on a Security will accrue as interest over the
life of the Security under a formula based on the compounding of    
interest.  Such formula requires the adoption by the issuer of the  
  Securities of certain prepayment assumptions, discussed in more detail
in "Estimated Long Term Return and Estimated Current Return."       
   Certificateholders are urged to consult their own tax advisers.  In the
case of a Certificateholder who purchases Units in a trust holding a
Security that was originally issued at a discount, the amount of    
original issue discount that will accrue will be reduced if the     
  Certificateholder purchases the Units at a price that reflects a lower
yield for the Security than the yield thereon at the time of the    
original issuance of such Security.  Each Certificateholder will be 
   required to include in income in each year the amount of original issue
 discount which accrues during the year on his pro rata portion of any
   Security originally issued at a discount.  The amount of original issue
  discount so included in income in respect of a Certificateholder's pro
   rata portion of a Security is added to the Certificateholder's tax cost
therefor.                                                           

       If a Certificateholder's tax cost for his pro rata portion of a
Security exceeds the redemption price at maturity thereof, the      
Certificateholder will be considered to have purchased his pro rata 
  portion of the Security at a "premium."  The Certificateholder (except

-17-    
1427.3                                                                          

485BPOS
83rd Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 83rd
   in the case of a dealer in securities or one who holds debt obligations
  primarily for sale to customers in the ordinary course of his trade or
    business) may elect to amortize the premium prior to the maturity of the
   Security.  The amount amortized in any year should be applied to offset
   the Certificateholder's interest from the Security and should result in
    an adjustment to basis (i.e., a reduction of the Certificateholder's tax
cost) for his pro rata portion of the Security.                     

        A Certificateholder will recognize taxable gain or loss when all
or part of his pro rata portion of a Security is disposed of for an 
amount greater or less than his original tax cost therefor plus any 
accrued original issue discount or minus any amortized premium.  Any
 such taxable gain or loss will be capital gain or loss, except in the
case of a dealer, and except as provided for in the next paragraph. 

       Any gain from the disposition of a Certificateholder's pro rata
portion of a Security issued after July 18, 1984 and acquired by the
    Certificateholder at "market discount" (i.e., if the Certificateholder's
original cost for his pro rata portion of the Security (plus any    
original issue discount which has accrued thereon) is less than its 
   stated redemption price at maturity) will be treated as ordinary income
    to the extent the gain does not exceed the accrued market discount.  The
  deduction of capital losses is subject to limitations.  A Certificate-
holder will be considered to have disposed of all or part of his pro
 rata portion of each Security when he sells or redeems all or some of
    his Units.  A Certificateholder will also be considered to have disposed
    of all or part of his pro rata portion of a Security when all or part of
 the Security is sold by the Trust or is redeemed or paid at maturity.

          Units that are owned by Certificateholders, other than a dealer in
securities or one who holds debt obligations primarily for sale to  
  customers in the ordinary course of his trade or business, are capital
    assets and generally produce capital gains and losses upon their sale or
   disposition.  Gain realized upon the sale or disposition of an interest
   in a REMIC, however, will be ordinary income to the extent of unaccrued
original issue discount as determined by a prescribed formula.      

        Under the income tax laws of the State and City of New York, the
    Trust is not an association taxable as a corporation and income received
   by the Trust will be treated as the income of the Certificateholders in
the same manner as for Federal income tax purposes.                 

       Notwithstanding the foregoing, a Certificateholder who is not a
citizen or resident of the United States or a United States domestic
corporation (a "Foreign Certificateholder") will generally not be   
subject to United States Federal income taxes, including withholding
  taxes, or information reporting, on the interest income (including any
original issue discount) on, or any gain from the sale or other     
disposition of, his pro rata portion of any Security provided that  
 (i) the interest income or gain is not effectively connected with the
  conduct by the Foreign Certificateholder of a trade or business within
  the United States, (ii) if the interest is United States source income
   (which is the case on most Securities issued by United States issuers),
   the Security is issued after July 18, 1984 and the Foreign Certificate-
holder does not own, actually or constructively, 10% or more of the 
    total combined voting power of all classes of voting stock of the issuer
of the Security and is not a controlled foreign corporation related 
  (within the meaning of Section 864(d)(4) of the Code) to the issuer of
the Security, (iii) with respect to any gain, the Foreign           
    Certificateholder (if an individual) is not present in the United States
 for 183 days or more during the taxable year and does not have a "tax
home" (as defined in Section 911(d)(3) of the Code) in the United   

-18-    
1427.3                                                                          

485BPOS
84th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 84th
   States, and the gain is not attributable to an office or fixed place of
business maintained by such individual in the United States, and    
  (iv) the Foreign Certificateholder provides the required certification
of his status and of the matters contained in clauses (i), (ii) and 
 (iii) above.  Foreign Certificateholders should consult their own tax
  advisers with respect to United States Federal income tax consequences
of ownership of Units.                                              

        After the end of each calendar year, the Trustee will furnish to
each Certificateholder an annual statement containing information relating to   
the interest received by the Trust on the Securities, the gross proceeds        
received by the Trust from the disposition of any Security (resulting from      
redemption or payment at maturity of any Security or the sale by the Trust of   
any Security), and the fees and expenses paid by the Trust.  The Trustee will   
also furnish annual information returns to each Certificateholder and to the    
Internal Revenue Service.                                                       

      The foregoing discussion relates only to United States Federal
and, to a limited extent, New York State and City income taxes.                 
Certificateholders may be subject to taxation in New York or in other           
jurisdictions (including a Foreign Certificateholder's country of residence)    
and should consult their own tax advisers in this regard.                       

Tax-Exempt Investors                                                            

     Entities that generally qualify for an exemption from federal
income tax, such as many pension trusts, are nevertheless taxed under Section   
511 of the Code on "unrelated business taxable income."  Unrelated business     
taxable income is income from a trade or business regularly carried on by the   
tax-exempt entity that is unrelated to the entity's exempt purpose.  Unrelated  
business taxable income generally does not include interest income or gain      
from the sale of investment property, unless such income is derived from        
property that is debt-financed or such gain is derived from property that is    
dealer property.  A tax-exempt entity's interest income from the Trust and      
gain from the sale of Units in the Trust or the Trust's sale of Securities is   
not expected to constitute unrelated business income to such tax-exempt entity  
unless the acquisition of the Unit itself is debt-financed or constitutes       
dealer property in the hands of the tax-exempt entity.                          

        Before investing in the Trust, the trustee or investment manager
of an employee benefit plan (e.g., a pension or profit sharing retirement       
plan) should consider among other things (i) whether the investment is prudent  
under ERISA, taking into account the needs of the plan and all of the facts     
and circumstances of the investment in the Trust; (ii) whether the investment   
satisfies the diversification requirement of Section 404(a)(1)(C) of ERISA;     
and (iii) whether the assets of the Trust are deemed "plans assets" under       
ERISA and the Department of Labor regulations regarding the definition of       
"plan assets."                                                                  

       Prospective tax-exempt investors are urged to consult their own
advisors prior to investing in the Trust.                                       

LIQUIDITY 

Sponsor Repurchase                                                              

         The Sponsor, although not obligated to do so, intends to maintain
a secondary market for the Units and continuously to offer to repurchase the    
Units.  The Sponsor's secondary market repurchase price after the initial       
public offering is completed will be based on the aggregate bid price of the    
Securities in the Trust and will be the same as the redemption price.  The      

-19-    
1427.3                                                                          

485BPOS
85th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 85th
aggregate bid price will be determined by the Evaluator on a daily basis after  
the initial public offering is completed and computed on the basis set forth    
under "Trustee Redemption".  Certificateholders who wish to dispose of their    
Units should inquire of the Sponsor as to current market prices prior to        
making a tender for redemption.  The Sponsor may discontinue repurchase of      
Units if the supply of Units exceeds demand, or for other business reasons.     
The date of repurchase is deemed to be the date on which Certificates           
representing Units are physically received in proper form by Reich & Tang       
Distributors L.P., 600 Fifth Avenue, New York, New York 10020, on behalf of     
the Sponsor.  Units received after 4 P.M., New York Time, will be deemed to     
have been repurchased on the next business day.  In the event a market is not   
maintained for the Units, a Certificateholder may be able to dispose of Units   
only by tendering them to the Trustee for redemption.                           

     Units purchased by the Sponsor in the secondary market may be
reoffered for sale by the Sponsor at a price based on the aggregate bid price   
of the Securities in the Trust plus (a) for the Short-Intermediate Portfolio,   
a 3.5% sales charge (3.627% of the net amount invested) plus net accrued        
interest, (b) for the Intermediate Portfolio, a 3.75% sales charge (3.896% of   
the net amount invested) plus net accrued interest and (c) for the Long-        
Intermediate Portfolio, a 4% Sales Charge (4.167% of the net amount invested)   
plus net accrued interest.  Any Units that are purchased by the Sponsor in the  
secondary market also may be redeemed by the Sponsor if it determines such      
redemption to be in its best interest.                                          

     The Sponsor may, under certain circumstances, as a service to
Certificateholders, elect to purchase any Units tendered to the Trustee for     
redemption (see "Trust Redemption").  Factors which the Sponsor will consider   
in making a determination will include the number of Units of the Trust which   
it has in inventory, its estimate of the salability and the time required to    
sell such Units and general market conditions.  For example, if in order to     
meet redemption of Units the Trustee must dispose of Securities, and if such    
disposition cannot be made by the redemption date (seven calendar days after    
render), the Sponsor may elect to purchase such Units.  Such purchase shall be  
made by payment to the Certificateholder not later than the close of business   
on the redemption date of an amount equal to the Redemption Price on the date   
of tender.                                                                      

Trustee Redemption                                                              

       Units may also be tendered to the Trustee for redemption at its
corporate trust office at 770 Broadway, New York, New York 10003, upon proper   
delivery of Certificates representing such Units and payment of any relevant    
tax.  At the present time there are no specific taxes related to the            
redemption of Units.  No redemption fee will be charged by the Sponsor or the   
Trustee.  Units redeemed by the Trustee will be canceled.                       

          Certificate representing Units to be redeemed must be delivered to
the Trustee and must be properly endorsed or accompanied by proper instruments  
of transfer with signature guaranteed (or by providing satisfactory indemnity,  
as in the case of lost, stolen or mutilated Certificates).  Thus, redemptions   
of Units cannot be effected until Certificates representing such Units have     
been delivered by the person seeking redemption.  (See "Certificates".)         
Certificateholders must sign exactly as their names appear on the faces of      
their Certificates.  In certain instances the Trustee may require additional    
documents such as, but not limited to, trust instruments, certificates of       
death, appointments as executor or administrator or certificates of corporate   
authority.                                                                      

         Within seven calendar days following a tender for redemption, or,
if such seventh day is not a business day, on the first business day prior      
thereto, the Certificateholder will be entitled to receive in cash an amount    

-20-    
1427.3                                                                          

485BPOS
86th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 86th
for each Unit tendered equal to the Replacement Price per Unit computed as of   
the Evaluation Time set forth under "Summary of Essential Information" in       
Part A on the date of tender.  The "date of tender" is deemed to be the date    
on which Units are received by the Trustee, except that with respect to Units   
received after the close of trading on the New York Stock Exchange, the date    
of tender is  the next day on which such Exchange is open for trading, and      
such Units will be deemed to have been tendered to the Trustee on such day for  
redemption at the Redemption Price computed on that day.                        

       Accrued interest paid on redemption shall be withdrawn from the
Interest Account, or, if the balance therein is insufficient, from the          
Principal Account.  All other amounts paid on redemption shall be withdrawn     
from the Principal Account.  The Trustee is empowered to sell Securities in     
order to make funds available for redemptions.  Such sales, if required, could  
result in a sale of Securities by the Trustee at a loss.  To the extent         
Securities are sold, the size and diversity of the Trust will be reduced.       

        The Redemption Price per Unit is the pro rata share of each Unit
in a Trust determined by the Trustee on the basis of (i) the cash on hand in    
the Trust or moneys in the process of being collected, (ii) the value of the    
Securities in the Trust based on the bid prices of such Securities and          
(iii) interest accrued thereon, less (a) amounts representing taxes or other    
governmental charges payable out of the Trust, (b) the accrued expenses of the  
Trust and (c) cash allocated for the distribution to Certificateholders of      
record as of the business day prior to the evaluation being made.  The          
Evaluator may determine the value of the Securities in the Trust (i) if the     
Securities are listed on a national securities exchange (CMOs are usually not   
so listed), based on the closing sale prices on that exchange (unless the       
Evaluator deems these prices inappropriate as a basis for valuation), (ii) if   
the Securities are not so listed or, if so listed and the principal market      
therefor is other than on the exchange or there are no closing sale prices on   
the exchange, based on the closing sale prices on the over-the-counter market   
(unless the Evaluator deems these prices inappropriate as a basis for           
evaluation), (iii) if closing sale prices are unavailable, (a) on the basis of  
current bid or offering prices for the Securities, (b) if bid or offering       
prices are not available for any Securities, on the basis of current bid or     
offering prices for comparable securities, (c) by appraising the value of the   
Securities on the bid or offering side of the market or (d) by any combination  
of the above.  The Evaluator may obtain current price information as to the     
Securities from investment dealers or brokers (including the Sponsor) which     
customarily deal in this type of security.                                      

          While the Sponsor believes that Securities of the type included in
the Trust involve minimal risk of loss of principal, due to variations in       
interest rates the market value of these Securities, and Redemption Price per   
Unit (particularly of the Long-Intermediate Portfolio), can be expected to      
fluctuate during the period of an investment in the Trust.                      

       The Trustee is irrevocably authorized in its discretion, if the
Sponsor does not elect to purchase a Unit tendered for redemption or if the     
Sponsor tenders a Unit for redemption, in lieu of redeeming such Unit, to sell  
such Unit in the over-the-counter market for the account of the tendering       
Certificateholder at prices which will return to the Certificateholder an       
amount in cash, net after deducting brokerage commissions, transfer taxes and   
other charges, equal to or in excess of the Redemption Price for such Unit.     
The Trustee will pay the net proceeds of any such sale to the Certificate-      
holder on the day he would otherwise be entitled to receive payment of the      
Redemption Price.                                                               

         The Trustee reserves the right to suspend the right of redemption
and to postpone the date of payment of the Redemption Price per Unit for any    
period during which the New York Stock Exchange is closed, other than           

-21-    
1427.3                                                                          

485BPOS
87th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 87th
customary weekend and holiday closings, or trading on that Exchange is          
restricted or during which (as determined by the Securities and Exchange        
Commission) an emergency exists as a result of which disposal or evaluation of  
the Bonds is not reasonably practicable, or for such other periods as the       
Securities and Exchange Commission may by order permit.  The Trustee and the    
Sponsor is not liable to any person or in any way for any loss or damage which  
may result from any such suspension or postponement.                            

     A Certificateholder who wishes to dispose of his Units should
inquire of his bank or broker in order to determine if there is a current       
secondary market price in excess of the Redemption Price.                       

TOTAL REINVESTMENT PLAN 

       Distributions of interest and principal, if any, from the Trust
are made to Certificateholders monthly.  The Certificateholder has the option,  
however, of either receiving his interest check, together with any principal    
payments, from the Trustee or participating in a reinvestment program offered   
by the Sponsor in shares of The Treasurer's Fund, Inc., U.S. Treasury Money     
Market Portfolio (the "Fund").  Participation in the reinvestment option is     
conditioned on the Fund's lawful qualification for sale in the state in which   
the Certificateholder is a resident.                                            

    Upon enrollment in the reinvestment option, the Trustee will
direct interest and/or principal distributions, if any, to the Fund.  The Fund  
seeks to maximize current income and to maintain liquidity and a stable net     
asset value by investing in short term U.S. Treasury Obligations which have     
effective maturities of one year or less.  For more complete information        
concerning the Fund, including charges and expenses, the Certificateholder      
should fill out and mail the card attached to the inside back cover of this     
Prospectus.  The prospectus for the Fund will be sent to Certificateholders.    
The Certificateholder should read the prospectus for the Fund carefully before  
deciding to participate.  The shares of the Fund are not rated by Standard &    
Poor's.                                                                         

TRUST ADMINISTRATION  

Portfolio Supervision                                                           

   The Trust is a unit investment trust and is not an actively
managed fund.  Traditional methods of investment management for a managed fund  
typically involve frequent changes in a portfolio of securities on the basis    
of economic, financial and market analyses.  The portfolios of the Trust,       
however, will not be actively managed and therefore the adverse financial       
condition of an issuer will not require the sale of its Securities from the     
Portfolios.   However, the Sponsor may direct the disposition of Securities     
upon default in payment of amounts due on any of the Securities, institution    
of certain legal proceedings, default in payment of amounts due on other        
securities of the same issuer or guarantor, or decline in price or the          
occurrence of other market or credit factors that in the opinion of the         
Sponsor would make the retention of these Securities detrimental to the         
interest of the Certificateholders.  If a default in the payment of amounts     
due on any Security occurs and if the Sponsor fails to give instructions to     
sell or hold that Security, the Indenture provides that the Trustee, within 30  
days of that failure by the Sponsor, shall sell the Security.                   

     The Sponsor is required to instruct the Trustee to reject any
offer made by an issuer of any of the Securities to issue new Securities in     
exchange or substitution for any Securities pursuant to a refunding or          

-22-    
1427.3                                                                          

485BPOS
88th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 88th
refinancing plan, except that the Sponsor may instruct the Trustee to accept    
or reject any offer or to take any other action with respect thereto as the     
Sponsor may deem proper if (a) the issuer is in default with respect to these   
Securities or (b) in the written opinion of the Sponsor the issuer will         
probably default with respect to these Securities in the reasonably             
foreseeable future.  Any Securities so received in exchange or substitution     
will be held by the Trustee subject to the terms and conditions of the          
Indenture to the same extent as Securities originally deposited thereunder.     
Within five days after the deposit of Securities in exchange or substitution    
for underlying Securities, the Trustee is required to give notice thereof to    
each Certificateholder, identifying the Securities eliminated and the           
Securities substituted therefor.  Except as stated herein, the acquisition by   
the Trust of any securities other than the Securities initially deposited is    
prohibited.                                                                     

Trust Agreement, Amendment and Termination                                      

          The Trust Agreement may be amended by the Trustee, the Sponsor and
the Evaluator without the consent of any of the Certificateholders; (1) to      
cure any ambiguity or to correct or supplement any provision which may be       
defective or inconsistent; (2) to change any provision thereof as may be        
required by the Securities and Exchange Commission or any successor             
governmental agency; or (3) to make such other provisions in regard to matters  
arising thereunder as shall not adversely affect the interests of the           
Certificateholders.                                                             

  The Trust Agreement may also be amended in any respect, or
performance of any of the provisions thereof may be waived, with the consent    
of the holders of Certificates evidencing 66-2/3% of the Units then             
outstanding for the purpose of modifying the rights of Certificateholders;      
provided that no such amendment or waiver shall reduce any Certificateholder's  
interest in a Trust without his consent or reduce the percentage of Units       
required to consent to any such amendment or waiver without the consent of the  
holders of all Certificates.  The Trust Agreement may not be amended, without   
the consent of the holders of all Certificates in a Trust then outstanding, to  
increase the number of Units issuable or to permit the acquisition of any       
bonds in addition to or in substitution for those initially deposited in such   
Trust, except in accordance with the provisions of the Trust Agreement.  The    
Trustee shall promptly notify Certificateholders, in writing, of the substance  
of any such amendment.                                                          

        The Trust Agreement provides that the Trust shall terminate upon
the maturity, redemption or other disposition, as the case may be, of the last  
of the Securities held in the Trust but in no event is it to continue beyond    
the end of the calendar year preceding the fiftieth anniversary of the          
execution of the Trust Agreement.  If the value of the Trust shall be less      
than the minimum amount set forth under "Summary of Essential Information" in   
Part A, the Trustee may, in its discretion, and shall when so directed by the   
Sponsor, terminate such Trust.  Each Trust may also be terminated at any time   
with the consent of the holders of Certificates representing 100% of the Units  
then outstanding.  In the event of termination, written notice thereof will be  
sent by the Trustee to all Certificateholders.  Within a reasonable period      
after termination, the Trustee must sell any Securities remaining in the        
terminated Trust, and, after paying all expenses and charges incurred by the    
Trust, distribute to each Certificateholder, upon surrender for calculation of  
his Certificate for Units, his pro rata share of the Interest and Principal     
Accounts.                                                                       

The Sponsor                                                                     

          The Sponsor, Reich & Tang Distributors L.P. (successor to the Unit
Investment Trust Division of Bear, Stearns & Co. Inc.), a Delaware limited      

-23-    
1427.3                                                                          

485BPOS
89th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 89th
partnership, is engaged in the brokerage business and is a member of the        
National Association of Securities Dealers, Inc.  Reich & Tang is also a        
registered investment adviser.  Reich & Tang maintains its principal business   
offices at 600 Fifth Avenue, New York, New York 10020.  Reich & Tang Asset      
Management L.P. ("RTAM LP"), a registered investment adviser, having its        
principal place of business at 399 Boylston Street, Boston, MA 02116, is the    
99% limited partner of the Sponsor.  RTAM LP is 99.5% owned by New England      
Investment Companies, LP ("NEIC LP") and Reich & Tang Asset Management, Inc.,   
a wholly owned subsidiary of NEIC LP, owns the remaining .5% interest of RTAM   
LP and is its general partner.  NEIC LP's general partner is New England        
Investment Companies, Inc. ("NEIC"), a holding company offering a broad array   
of investment styles across a wide range of asset categories through ten        
investment advisory/management affiliates and two distribution affiliates.      
These affiliates in the aggregate are investment advisers or managers to over   
57 registered investment companies.  Reich & Tang is the successor sponsor for  
numerous series of unit investment trusts, including, New York Municipal        
Trust, Series 1 (and Subsequent Series), Municipal Securities Trust, Series 1   
(and Subsequent Series), 1st Discount Series (and Subsequent Series), Multi-    
State Series 1 (and Subsequent Series), Insured Municipal Securities Trust,     
Series 1 (and Subsequent Series), 5th Discount Series (and Subsequent Series),  
and Equity Securities Trust, Series 1, Signature Series, Gabelli                
Communications Income Trust (and Subsequent Series).                            

          For certain other Trusts as set forth in the "Summary of Essential
Information" in Part A, the Co-Sponsors are Reich & Tang and Gruntal & Co.,     
Incorporated, both of whom have entered into an Agreement Among Co-Sponsors     
pursuant to which both parties have agreed to act as Co-Sponsors for the        
Trust.  Reich & Tang has been appointed by Gruntal & Co., Incorporated as       
agent for purposes of taking any action required or permitted to be taken by    
the Sponsors under the Trust Agreement.  If the Sponsors are unable to agree    
with respect to action to be taken jointly by them under the Trust Agreement    
and they cannot agree as to which Sponsor shall act as sole Sponsor, then       
Reich & Tang shall act as sole Sponsor.  If one of the Sponsors fails to        
perform its duties under the Trust Agreement or becomes incapable of acting or  
becomes bankrupt or its affairs are taken over by public authorities, that      
Sponsor may be discharged under the Trust Agreement and a new Sponsor may be    
appointed or the remaining Sponsor may continue to act as Sponsor.              

       Gruntal & Co., Incorporated, a Delaware corporation, operates a
securities broker/dealer from its main office in New York City and branch       
offices in ten states and the District of Columbia.  The firm is active in the  
marketing of investment companies and has signed dealer agreements with many    
major mutual fund groups.  Further, through its Syndicate Department, Gruntal   
& Co., Incorporated has underwritten a large number of Closed-End Funds and     
has been Co-Manager on the following offerings:  Cigna High Income Shares;      
Dreyfus New York Municipal Income, Inc.; Franklin Principal Maturity Trust;     
and Van Kampen Meritt Limited Term High Income Trust.                           

  The information included herein is only for the purpose of
informing investors as to the financial responsibility of the Sponsor and       
their ability to carry out their contractual obligations.                       

      The Sponsor is liable for the performance of their obligations
arising from their responsibilities under the Trust Agreement, but will be      
under no liability to Certificateholders for taking any action, or refraining   
from taking any action, in good faith pursuant to the Trust Agreement, or for   
errors in judgment except in cases of their own willful misfeasance, bad        
faith, gross negligence or reckless disregard of its obligations and duties.    

          The Sponsor may resign at any time by delivering to the Trustee an
instrument of resignation executed by the Sponsor.                              

-24-    
1427.3                                                                          

485BPOS
90th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 90th
    If at any time either of the Sponsor shall resign or fail to
perform any of its duties under the Trust Agreement or becomes incapable of     
acting or becomes bankrupt or its affairs are taken over by public              
authorities, then the Trustee may either (a) appoint a successor Sponsor;       
(b) terminate the Trust Agreement and liquidate the Trust; or (c) continue to   
act as Trustee without terminating the Trust Agreement.  Any successor Sponsor  
appointed by the Trust shall be satisfactory to the Trustee and, at the time    
of appointment, shall have a net worth of at least $1,000,000.                  

The Trustee                                                                     

         The Trustee is The Chase Manhattan Bank (National Association), a
national banking association with its principal executive office located at     
1 Chase Manhattan Plaza, New York, New York 10081 and its unit investment       
trust office at 770 Broadway, New York, New York 10003 (800) 882-9898.  The     
Trustee is subject to the supervision by the Comptroller of the Currency, the   
Federal Deposit Insurance Corporation and the Board of Governors of the         
Federal Reserve System.                                                         

     The Trustee shall not be liable or responsible in any way for
taking any action, or for refraining from taking any action, in good faith      
pursuant to the Trust Agreement, or for errors in judgment; or for any          
disposition of any moneys, Securities or Certificates in accordance with the    
Trust Agreement, except in cases of its own willful misfeasance, bad faith,     
gross negligence or reckless disregard of its obligations and duties;           
provided, however, that the Trustee shall not in any event be liable or         
responsible for any evaluation made by the Evaluator.  In addition, the         
Trustee shall not be liable for any taxes or other governmental charges         
imposed upon or in respect of the Securities or the Trust which it may be       
required to pay under current or future law of the United States or any other   
taxing authority having jurisdiction.  The Trustee shall not be liable for      
depreciation or loss incurred by reason of the sale by the Trustee of any of    
the Securities pursuant to the Trust Agreement.                                 

       For further information relating to the responsibilities of the
Trustee under the Trust Agreement, reference is made to the material set forth  
under "Rights of Certificateholders.                                            

        The Trustee may resign by executing an instrument in writing and
filing the same with the Sponsor, and mailing a copy of a notice of             
resignation to all Certificateholders.  In such an event, the Sponsor is        
obligated to appoint a successor Trustee as soon as possible.  In addition, if  
the Trustee becomes incapable of acting or becomes bankrupt or its affairs are  
taken over by public authorities, the Sponsor may remove the Trustee and        
appoint a successor as provided in the Trust Agreement.  Notice of such         
removal and appointment shall be mailed to each Certificateholder by the        
Sponsor.  If upon resignation of the Trustee no successor has been appointed    
and has accepted the appointment within thirty days after notification, the     
retiring Trustee may apply to a court of competent jurisdiction for the         
appointment of a successor.  The resignation or removal of the Trustee becomes  
effective only when the successor Trustee accepts its appointment as such or    
when a court of competent jurisdiction appoints a successor Trustee.  Upon      
execution of a written acceptance of such appointment by such successor         
Trustee, all the rights, powers, duties and obligations of the original         
Trustee shall vest in the successor.                                            

          Any corporation into which the Trustee may be merged or with which
it may be consolidated, or any corporation resulting from any merger or         
consolidation to which the Trustee shall be a party, shall be the successor     
Trustee.  The Trustee must always be a banking corporation organized under the  
laws of the United States or any state and have at all times an aggregate       
capital, surplus and undivided profits of not less than $2,500,000.             

-25-    
1427.3                                                                          

485BPOS
91st Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 91st
The Evaluator                                                                   

          The Evaluator is Kenny S&P Evaluation Services, a division of J.J.
Kenny Co., Inc. with main offices located at 65 Broadway, New York, New York    
10006.  The Evaluator is a wholly-owned subsidiary of McGraw-Hill, Inc.  The    
Evaluator is a registered investment advisor and also provides financial        
information services.                                                           

       The Trustee, the Sponsor and the Certificateholders may rely on
any evaluation furnished by the Evaluator and shall have no responsibility for  
the accuracy thereof.  Determinations by the Evaluator under the Trust          
Agreement shall be made in good faith upon the basis of the best information    
available to it, provided, however, that the Evaluator shall be under no        
liability to the Trustee, the Sponsor or Certificateholders for errors in       
judgment, except in cases of its own willful misfeasance, bad faith, gross      
negligence or reckless disregard of its obligations and duties.                 

     The Evaluator may resign or may be removed by the Sponsor and
Trustee, and the Sponsor and the Trustee are to use their best efforts to       
appoint a satisfactory successor.  Such resignation or removal shall become     
effective upon the acceptance of appointment by the successor Evaluator.  If    
upon resignation of the Evaluator no successor has accepted appointment within  
thirty days after notice of resignation, the Evaluator may apply to a court of  
competent jurisdiction for the appointment of a successor.                      

TRUST EXPENSES AND CHARGES  

      At no cost to the Trust, the Sponsor has borne the expenses of
creating and establishing the Trust, including the cost of initial preparation  
and execution of the Trust Agreement, registration of the Trust and the Units   
under the Investment Company Act of 1940 and the Securities Act of 1933, the    
initial preparation and printing of the Certificates, legal expenses,           
advertising and selling expenses, expenses of the Trustee including, but not    
limited to, an amount equal to interest accrued on certain "when issued"        
securities since the date of settlement for the Units, initial fees and other   
out-of-pocket expenses.  The fees of the Evaluator, however, incurred during    
the Initial Public Offering are paid directly by the Trust.                     

       The Sponsor will not charge the Trust a fee for its services as
such.  (See "Sponsor's and Underwriters' Profits.")                             

          The Sponsor will receive for portfolio supervisory services to the
Trust an Annual Fee in the amount set forth under "Summary of Essential         
Information" in Part A.  The Sponsor's fee may exceed the actual cost of        
providing portfolio supervisory services for the Trust, but at no time will     
the total amount received for portfolio supervisory services rendered to all    
series of the Mortgage Securities Trust in any calendar year exceed the         
aggregate cost to the Sponsor of supplying such services in such year.  (See    
"Portfolio Supervision.")  Pursuant to the Agreement Among Co-Sponsors, Reich   
& Tang Distributors L.P. shall receive the entire Sponsor's fee set forth in    
the "Summary of Essential Information" in Part A.                               

       The Trustee will receive for its ordinary recurring services to
the Trust an annual fee in the amount set forth under "Summary of Essential     
Information" in Part A.  For a discussion of the services performed by the      
Trustee pursuant to its obligations under the Trust Agreement, see "Trust       
Administration" and "Rights of Certificateholders."                             

-26-    
1427.3                                                                          

485BPOS
92nd Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 92nd
    The Evaluator will receive, for each daily evaluation of the
Securities in the Trust after the initial public offering is completed, a fee   
in the amount set forth under "Summary of Essential Information" in Part A.     

      The Trustee's and Evaluator's fees applicable to the Trust are
payable monthly as of the Record Date from the Interest Account of such Trust   
to the extent funds are available and then from the Principal Account.  Both    
fees may be increased without approval of the Certificateholders by amounts     
not exceeding proportionate increases in consumer prices for services as        
measured by the United States Department of Labor's Consumer Price Index        
entitled "All Services Less Rent."                                              

      The following additional charges are or may be incurred by the
Trust:  all expenses (including counsel fees) of the Trustee incurred and       
advances made in connection with its activities under the Trust Agreement,      
including the expenses and costs of any action undertaken by the Trustee to     
protect the Trust and the rights and interests of the Certificateholders; fees  
of the Trustee for any extraordinary services performed under the Trust         
Agreement; indemnification of the Trustee for any loss or liability accruing    
to it without gross negligence, bad faith or willful misconduct on its part,    
arising out of or in connection with its acceptance or administration of the    
Trust; indemnification of the Sponsor for any losses, liabilities and expenses  
incurred in acting as sponsors of the Trust without gross negligence, bad       
faith or willful misconduct on its part; and all taxes and other governmental   
charges imposed upon the Securities or any part of the Trust (no such taxes or  
charges are being levied, made or, to the knowledge of the Sponsor,             
contemplated).  The above expenses, including the Trustee's fees, when paid by  
or owing to the Trustee are secured by a first lien on the Trust to which such  
expenses are charged.  In addition, the Trustee is empowered to sell            
Securities in order to make funds available to pay all expenses.                

         The accounts of the Trust shall be audited not less than annually
by independent public accountants selected by the Sponsor.  The expenses of     
the audit shall be an expense of the Trust.  So long as the Sponsor maintains   
a secondary market, the Sponsor will bear any audit expense which exceeds $.50  
per 1,000 Units.  Certificateholders covered by the audit during the year may   
receive a copy of the audited financials upon request.                          

EXCHANGE PRIVILEGE AND CONVERSION OFFER 

Exchange Privilege                                                              

          Certificateholders may elect to exchange any or all of their Units
of these Trusts for Units of one or more of any available series of Insured     
Municipal Securities Trust, Municipal Securities Trust, New York Municipal      
Trust, Mortgage Securities Trust or Equity Securities Trust (the "Exchange      
Trusts") at a reduced sales charge as set forth below.  Under the Exchange      
Privilege, the Sponsor's repurchase price during the initial offering period    
of the Units being surrendered will be based on the market value of the         
Securities in the Trust portfolio or on the aggregate offer price of the Bonds  
in the other Trust Portfolios; and, after the initial offering period has been  
completed, will be based on the aggregate bid price of the Bonds in the         
particular Trust portfolio.  Units in an Exchange Trust then will be sold to    
the Certificateholder at a price based on the aggregate offer price of the      
Bonds in the Exchange Trust portfolio (or for units of Equity Securities        
Trust, based on the market value of the underlying Securities in the Equity     
Trust portfolio) during the initial public offering period of the Exchange      
Trust; and after the initial public offering period has been completed,         
based on the aggregate bid price of the Bonds in the Exchange Trust portfolio   
if its initial offering has been completed, plus accrued interest (or for       
units of Equity Securities Trust, based on the market value of the underlying   

-27-    
1427.3                                                                          

485BPOS
93rd Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 93rd
securities in the Equity Trust portfolio) and a reduced sales charge as set     
forth below.                                                                    

       Except for certificateholders who wish to exercise the Exchange
Privilege within the first five months of their purchase of Units of a Trust,   
the sales charge applicable to the purchase of units of an Exchange Trust       
shall be approximately 1.5% of the price of each Exchange Trust unit (or 1,000  
Units for the Mortgage Securities Trust or 100 Units for the Equity Securities  
Trust).  For certificateholders who wish to exercise the Exchange Privilege     
within the first five months of their purchase of Units of a Trust, the sales   
charge applicable to the purchase of units of an Exchange Trust shall be the    
greater of (i) 1.5% of the price of each Exchange Trust unit (or 1,000 Units    
for the Mortgage Securities Trust or 100 Units for the Equity Securities        
Trust), or (ii) an amount which when coupled with the sales charge paid by the  
certificateholder upon his original purchase of Units of the Trust at least     
equals the sales charge applicable in the direct purchase of units of an        
Exchange Trust.  The Exchange Privilege is subject to the following             
conditions:                                                                     

          1.  The Sponsor must be maintaining a secondary market in both the
 Units of the Trust held by the Certificateholder and the Units of the
    available Exchange Trust.  While the Sponsor has indicated its intention
to maintain a market in the Units of the Trust sponsored by it, the 
Sponsor is under no obligation to continue to maintain a secondary  
  market and therefore there is no assurance that the Exchange Privilege
will be available to a Certificateholder at any specific time in the
   future.  At the time of the Certificateholder's election to participate
in the Exchange Privilege, there also must be Units of the Exchange 
   Trust available for sale, either under the initial primary distribution
or in the Sponsor's secondary market.                               

       2.  Exchanges will be effected in whole units only.  Any excess
 proceeds from the Units surrendered for exchange will be remitted and
  the selling Certificateholder will not be permitted to advance any new
funds in order to complete an exchange.  Units of the Mortgage      
  Securities Trust may only be acquired in blocks of 1,000 Units.  Units
of the Equity Securities Trust may only be acquired in blocks of 100
Units.                                                              

          3.  The Sponsor reserves the right to suspend, modify or terminate
   the Exchange Privilege.  The Sponsor will provide Certificateholders of
the Trust with 60 days prior written notice of any termination or   
  material amendment to the Exchange Privilege, provided that, no notice
need be given if (i) the only material effect of an amendment is to 
reduce or eliminate the sales charge payable at the time of the     
exchange, to add one or more series of the Trust eligible for the   
   Exchange Privilege or to delete a series which has been terminated from
 eligibility for the Exchange Privilege, (ii) there is a suspension of
   the redemption of units of an Exchange Trust under Section 22(e) of the
  Investment Company Act of 1940, or (iii) an Exchange Trust temporarily
 delays or ceases the sale of its units because it is unable to invest
amounts effectively in accordance with its investment objectives,   
    policies and restrictions.  During the 60 day notice period prior to the
 termination or material amendment of the Exchange Privilege described
  above, the Sponsor will continue to maintain a secondary market in the
units of all Exchange Trusts that could be acquired by the affected 
   certificateholders.  Certificateholders may, during this 60 day period,
exercise the Exchange Privilege in accordance with its terms then in
effect.  In the event the Exchange Privilege is not available to a  
    Certificateholder at the time he wishes to exercise it, the Certificate-
holder will immediately be notified and no action will be taken with

-28-    
1427.3                                                                          

485BPOS
94th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 94th
   respect to his Units without further instructions from the Certificate-
holder.                                                             

      To exercise the Exchange Privilege, a Certificateholder should
notify the Sponsor of his desire to exercise his Exchange Privilege.  If Units  
of a designated, outstanding series of an Exchange Trust are at the time        
available for sale and such Units may lawfully be sold in the state in which    
the Certificateholder is a resident, the Certificateholder will be provided     
with a current prospectus or prospectuses relating to each Exchange Trust in    
which he indicates an interest.  He may then select the Trust or Trusts into    
which he desires to invest the proceeds from his sale of Units.  The exchange   
transaction will operate in a manner essentially identical to a secondary       
market transaction except that units may be purchased at a reduced sales        
charge.                                                                         

Example:  Assume that after the initial public offering has been completed, a   
Certificateholder has five units of a Trust with a current value of $700 per    
unit which he has held for more than five months and the Certificateholder      
wishes to exchange the proceeds for units of a secondary market Exchange Trust  
with a current price of $725 per unit.  The proceeds from the Certificate-      
holder's original units will aggregate $3,500.  Since only whole units of an    
Exchange Trust may be purchased under the Exchange Privilege, the Certificate-  
holder would be able to acquire four units (or 4,000 Units of the Mortgage      
Securities Trust or 400 Units of the Equity Securities Trust) for a total cost  
of $2,943.50 ($2,900 for units and $43.50 for the sales charge).  The           
remaining $556.50 would be remitted to the Certificateholder in cash.  If the   
Certificateholder acquired the same number of units at the same time in a       
regular secondary market transaction, the price would have been $3,059.50       
($2,900 for units and $159.50 for the sales charge, assuming a 5 1/2% sales     
charge times the public offering price).                                        

The Conversion Offer                                                            

     Unit owners of any registered unit investment trust for which
there is no active secondary market in the units of such trust (a "Redemption   
Trust") may elect to redeem such units and apply the proceeds of the            
redemption to the purchase of available Units of one or more series of          
Municipal Securities Trust, Insured Municipal Securities Trust, Mortgage        
Securities Trust, New York Municipal Trust or Equity Securities Trust (the      
"Conversion Trusts") at the Public Offering Price for units of the Conversion   
Trust based on a reduced sales charge as set forth below.  Under the            
Conversion Offer, units of the Redemption Trust must be tendered to the         
trustee of such trust for redemption at the redemption price, which is based    
upon the market value of the underlying securities in the Trust portfolio or    
the aggregate bid side evaluation of the underlying bonds in such trust and is  
generally about 1 1/2% to 2% lower than the offering price for such bonds.      
The purchase price of the units will be based on the aggregate offer price of   
the underlying bonds in the Conversion Trust portfolio during its initial       
public offering period, or at a price based on the aggregate bid price of the   
underlying bonds if the initial public offering of the Conversion Trust has     
been completed, plus accrued interest and a sales charge as set forth below.    
If the participant elects to purchase units of the Equity Securities Trust      
under the Conversion Offer, the purchase price of the units will be based, at   
all times, on the market value of the underlying securities in the Trust        
portfolio plus a sales charge.                                                  

         Except for Certificateholders who wish to exercise the Conversion
Offer within the first five months of their purchase of units of a Redemption   
Trust, the sales charge applicable to the purchase of Units of the Conversion   
Trust shall be 1.5% per Unit (or per 1,000 Units for the Mortgage Securities    
Trust or per 100 Units for the Equity Securities Trust).  For certificate-      
holders who wish to exercise the Conversion Offer within the first five months  

-29-    
1427.3                                                                          

485BPOS
95th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 95th
of their purchase of units of a Redemption Trust, the sales charge applicable   
to the purchase of Units of a Conversion Trust shall be the greater of          
(i) 1.5% per Unit (or per 1,000 Units for the Mortgage Securities Trust or per  
100 Units for the Equity Securities Trust) or (ii) an amount which when         
coupled with the sales charge paid by the certificateholder upon his original   
purchase of units of the Redemption Trust at least equals the sales charge      
applicable in the direct purchase of Units of a Conversion Trust.  The          
Conversion Offer is subject to the following limitations:                       

      1.  The Conversion Offer is limited only to unit owners of any
   Redemption Trust, defined as a unit investment trust for which there is
  no active secondary market at the time the Certificateholder elects to
 participate in the Conversion Offer.  At the time of the unit owner's
election to participate in the Conversion Offer, there also must be 
available units of a Conversion Trust, either under a primary       
distribution or in the Sponsor's secondary market.                  

          2.  Exchanges under the Conversion Offer will be effected in whole
   units only.  Unit owners will not be permitted to advance any new funds
    in order to complete an exchange under the Conversion Offer.  Any excess
  proceeds from units being redeemed will be returned to the unit owner.
    Units of the Mortgage Securities Trust may only be acquired in blocks of
   1,000 units.  Units of the Equity Securities Trust may only be acquired
in blocks of 100 Units.                                             

 3.   The Sponsor reserves the right to modify, suspend or
    terminate the Conversion Offer at any time without notice to unit owners
of Redemption Trusts.  In the event the Conversion Offer is not     
    available to a unit owner at the time he wishes to exercise it, the unit
owner will be notified immediately and no action will be taken with 
 respect to his units without further instruction from the unit owner.
  The Sponsor also reserves the right to raise the sales charge based on
   actual increases in the Sponsor's costs and expenses in connection with
   administering the program, up to a maximum sales charge of $20 per unit
  (or per 1,000 units for the Mortgage Securities Trust or per 100 Units
for the Equity Securities Trust).                                   

      To exercise the Conversion Offer, a unit owner of a Redemption
Trust should notify his retail broker of his desire to redeem his Redemption    
Trust Units and use the proceeds from the redemption to purchase Units of one   
or more of the Conversion Trusts.  If Units of a designated, outstanding        
series of a Conversion Trust are at that time available for sale and if such    
Units may lawfully be sold in the state in which the unit owner is a resident,  
the unit owner will be provided with a current prospectus or prospectuses       
relating to each Conversion Trust in which he indicates an interest.  He then   
may select the Trust or Trusts into which he decides to invest the proceeds     
from the sale of his Units.  The transaction will be handled entirely through   
the unit owner's retail broker.  The retail broker must tender the units to     
the trustee of the Redemption Trust for redemption and then apply the proceeds  
of the redemption toward the purchase of units of a Conversion Trust at a       
price based on the aggregate offer or bid side evaluation per Unit of the       
Conversion Trust, depending on which price is applicable, plus accrued          
interest and the applicable sales charge.  The certificates must be             
surrendered to the broker at the time the redemption order is placed and the    
broker must specify to the Sponsor that the purchase of Conversion Trust Units  
is being made pursuant to the Conversion Offer.  The unit owner's broker will   
be entitled to retain $5 of the applicable sales charge.                        

Example:  Assume that a unit owner has five units of a Redemption Trust which   
he has held for more than five months with a current redemption price of $675   
per unit based on the aggregate bid price of the underlying bonds and the unit  
owner wishes to participate in the Conversion Offer and exchange the proceeds   

-30-    
1427.3                                                                          

485BPOS
96th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 96th
for units of a secondary market Conversion Trust with a current price of $750   
per Unit.  The proceeds for the unit owner's redemption of units will           
aggregate $3,375.  Since only whole units of a Redemption Trust may be          
purchased under the Conversion Offer, the unit owner will be able to acquire    
four units of the Conversion Trust (or 4,000 units of the Mortgage Securities   
Trust or 400 Units of the Equity Securities Trust) for a total cost of $3,045   
($3,000 for units and $45 for the sales charge).  The remaining $330 would be   
remitted to the unit owner in cash.  If the unit owner acquired the same        
number of Conversion Trust units at the same time in a regular secondary        
market transaction, the price would have been $3,165 ($3,000 for units and      
$165 for the sales charge, assuming a 5 1/2% sales charge times the public      
offering price).                                                                

Description Of The Exchange Trusts And The Conversion Trusts                    

      Municipal Securities Trust and New York Municipal Trust may be
appropriate investment vehicles for an investor who is more interested in tax-  
exempt income.  The interest income from New York Municipal Trust is, in        
general, also exempt from New York State and local New York income taxes,       
while the interest income from Municipal Securities Trust is subject to         
applicable New York State and local New York taxes, except for that portion of  
the income which is attributable to New York obligations in the Trust           
portfolio, if any.  The interest income from each State Trust of the Municipal  
Securities Trust, Multi-State Series is, in general, exempt from state and      
local taxes when held by residents of the state where the issuers of bonds in   
such State Trusts are located.  The Insured Municipal Securities Trust          
combines the advantages of providing interest income free from regular federal  
income tax under existing law with the added safety of irrevocable insurance.   
Insured Navigator Series further combines the advantages of providing interest  
income free from regular federal income tax and state and local taxes when      
held by residents of the state where issuers of bonds in such state trusts are  
located with the added safety of irrevocable insurance.  Mortgage Securities    
Trust offers an investment vehicle for investors who are interested in          
obtaining safety of capital and a high level of current distribution of         
interest income through investment in a fixed portfolio of collateralized       
mortgage obligations.  Equity Securities Trust offers investors an opportunity  
to achieve capital appreciation together with a high level of current income.   

Tax Consequences of the Exchange Privilege                                      
and the Conversion Offer                                                        

      A surrender of units pursuant to the Exchange Privilege or the
Conversion Offer will constitute a "taxable event" to the Certificateholder     
under the Internal Revenue Code.  The Certificateholder will realize a tax      
gain or loss that will be of a long- or short-term capital or ordinary income   
nature depending on the length of time the units have been held and other       
factors.  (See "Tax Status".)  A Certificateholder's tax basis in the Units     
acquired pursuant to the Exchange Privilege or Conversion Offer will be equal   
to the purchase price of such Units.  Investors should consult their own tax    
advisors as to the tax consequences to them of exchanging or redeeming units    
and participating in the Exchange Privilege or Conversion Offer.                

Rating of Units                                                                 

        Standard & Poor's has rated the Units of the Trust AAA.  This is
the highest rating assigned by Standard & Poor's (see Description of Standard   
& Poor's Ratings).  Standard & Poor's has been compensated by the Sponsor for   
its service in rating the Units.                                                

-31-    
1427.3                                                                          

485BPOS
97th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 97th
OTHER MATTERS 

Legal Opinions                                                                  

    The legality of the Units offered hereby and certain matters
relating to federal tax law have been passed upon by Battle Fowler LLP,         
75 East 55th Street, New York, New York 10022 as counsel for the Sponsor.       
Carter, Ledyard & Milburn, Two Wall Street, New York, New York 10005 have       
acted as counsel for the Trustee.                                               

Independent Auditors                                                            

          The financial statements of the Trust or Trusts included in Part A
of this Prospectus as of the dates set forth in Part A, have been examined by   
KPMG Peat Marwick LLP, independent certified public accountants, for the        
periods indicated in its reports appearing herein.  The financial statements    
examined by KPMG Peat Marwick have been so included in reliance on its report   
given upon the authority of said firm as experts in accounting and auditing.    

DESCRIPTION OF RATINGS* 

Standard & Poor's Corporation                                                   

      A Standard & Poor's rating on the units of an investment trust
(hereinafter referred to collectively as "units" and "trust") is a current      
assessment of creditworthiness with respect to the investments held by such     
trust.  This assessment takes into consideration the financial capacity of the  
issuers and of any guarantors, issuers, lessees, or mortgagors with respect to  
such investments.  The assessment, however, does not take into account the      
extent to which trust expenses or portfolio asset sales for less than the       
Trust's purchase price will reduce payment to the unit holder of the interest   
and principal required to be paid on the portfolio assets.  In addition, the    
rating is not a recommendation to purchase, sell or hold units, inasmuch as     
the rating does not comment as to market price of the units or suitability for  
a particular investor.                                                          

          Trusts rated AAA are composed exclusively of assets that, together
with their credit support are rated AAA by Standard & Poor's.  Standard &       
Poor's defines its AAA rating for such assets as the highest rating assigned    
by Standard & Poor's to a debt obligation.  Capacity to pay interest and repay  
principal is extremely strong.                                                  

--------                                                                        
*     As described by the rating companies themselves.                          

-32-    
1427.3                                                                          

485BPOS
98th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 98th
==============================================================================  
I am the owner of __________ units of Mortgage Securities Trust, CMO Series     
_______ Short-Intermediate/Intermediate/Long-Intermediate Portfolio.            

I would like to learn more about The Treasurer's Fund, Inc., U.S. Treasury      
Money Market Portfolio including charges and expenses. I understand that my     
request for more information about this fund in no way obligates me to          
participate in the reinvestment option, and that this request form is not an    
offer to sell. Please send me more information, including a copy of the         
current prospectus of The Treasurer's Fund, Inc.                                

                                            Date ______________________ 19__

Registered Holder (Print)                     Registered Holder (Print)         

Registered Holder Signature                   Registered Holder Signature       
                                             (The signatures if joint tenancy)

My Brokerage Firm's Name                                                        

Street Address                                                                  

City, State & Zip Code                                                          

Broker's Name                                                    Broker's No.   

=============================================================================== 

MAIL TO:  

THE TREASURER'S FUND, INC.  
19 OLD KINGS HIGHWAY SOUTH  
DARIEN, CONNECTICUT 06820 

1427.1                                                                          

485BPOS
99th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 99th
INDEX                                       

Title                                Page         MORTGAGE SECURITIES TRUST     
     Part A                                   CMO SERIES

Risk Considerations...................A-6          (Unit Investment Trust)      
Summary of Essential                                                            
Information........................A-10                                     
Information Regarding the Trust......A-11                                       
Financial and Statistical                                 Prospectus            
Information........................A-12                                     
Audit and Financial Information                                                 
Report of Independent Auditors......F-1                                     
Statement of Net Assets.............F-2           Dated: April 30, 1996     
Statement of Operations.............F-3                                     
Statement of Changes in Net                                                 
Assets............................F-4                  Sponsor:         
Notes to Financial Statements.......F-5       Reich & Tang Distributors L.P.
Portfolio...........................F-6              600 Fifth Avenue       
                                              New York, New York 10020
      Part B                                  212-830-5200

The Trust...........................    1                                       
Public Offering....................    10         (and for certain Trusts:)     
Estimated Long Term Return and                                                  
Estimated Current Return..........   13        Gruntal & Co., Incorporated  
Rights of Certificateholders........   15               14 Wall Street          
Tax Status..........................   16          New York, New York 10005     
Liquidity .........................    19                212-267-8800           
Total Reinvestment Plan.............   22                                       
Trust Administration................   22                                       
Trust Expenses and Charges..........   26                                       
Exchange Privilege and                                                          
Conversion Offer..................   27                  Trustee:           
Other Matters.......................   32       The Chase Manhattan Bank, N.A.  
Description of Ratings..............   32                770 Broadway           
                                              New York, New York 10003
                                              800-882-9898
Parts A and B of this Prospectus                                    
do not contain all of the information                                           
set forth in the registration                                                   
statement and exhibits relating                           Evaluator:            
thereto, filed with the Securities and          Kenny S&P Evaluation Services,  
Exchange Commission, Washington, D.C.         a division of J.J. Kenny Co., Inc.
under the Securities Act of 1933, and                    65 Broadway            
the Investment Company Act of 1940,                New York, New York 10006     
and to which reference is made.                                                 

       *          *          *

  This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, securities in any state to any person to whom  
it is not lawful to make such offer in such state.                              

      No person is authorized to give any information or to make any
representations not contained in Parts A and B in this Prospectus; and any      
information or representation not contained herein must not be relied upon as   
having been authorized by the Trust, the Trustee, the Evaluator, or the         
Sponsor.  The Trust is registered as a unit investment trust under the          
Investment Company Act of 1940.  Such registration does not imply that the      
Trust or any of its Units have been guaranteed, sponsored, recommended or       
approved by the United States or any state or any agency or officer thereof.    

1427.3                                                                          

485BPOS
100th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 100th
PART II 

ADDITIONAL INFORMATION NOT REQUIRED 
IN PROSPECTUS 

CONTENTS OF REGISTRATION STATEMENT  

This Post-Effective Amendment to the Registration Statements on Form S-6        
comprises the following papers and documents:                                   

The facing sheet on Form S-6.                                                   
The Cross-Reference Sheet.                                                      
The Prospectus consisting of     pages.                                         
Signatures.                                                                     
Consent of Independent Auditors.                                                
Consent of Counsel (included in Exhibits 99.3.1 and 99.3.1.1).                  
Consent of the Evaluator and Confirmation of Ratings of Standard & Poor's       
Corporation (included in Exhibit 99.5.1).                                   

The following exhibits:                                                         

99.1.1    --   Form of Reference Trust Agreement, as amended (filed as          
       Exhibit 1.1.1 to Amendment No. 1 to Form S-6 Registration
         Statements Nos. 33-52780, 33-52373 and 33-57315 of Mortgage
    Securities Trust, CMO Series 12, CMO Series 15 and CMO
            Series 16 on February 10, 1993, March 30, 1994 and February 9,
        1995, respectively, and incorporated herein by reference).

99.1.1.1  --   Trust Indenture and Agreement for Mortgage Securities Trust, CMO 
               Series 1 (and Subsequent Series) (filed as Exhibit 1.1.1. to Post
              Effective Amendment No. 4 to Form S-6 Registration Statement No.
               33-48009 of Mortgage Securities Trust, CMO Series 10 on April 29,
1996 and incorporated herein by reference).       

99.1.3.4  --   Certificate of Formation and Agreement among Limited Partners,   
             as amended, of Reich & Tang Distributors L.P. (filed as Exhibit
     99.1.3.4 to Post-Effective Amendment No. 10 to Form S-6
          Registration Statements Nos. 2-98914, 33-00376, 33-00856 and
     33-01869 of Municipal Securities Trust, Series 28, 39th
             Discount Series, Series 29 & 40th Discount Series and Series 30
           & 41st Discount Series, respectively, on October 31, 1995 and
incorporated herein by reference).                

99.1.4    --   Form of Agreement Among Underwriters (filed as Exhibit 1.4 to    
             Amendment No. 1 to Form S-6 Registration Statement No. 33-28384
             of Insured Municipal Securities Trust, 47th Discount Series and
   Series 20 on June 16, 1989 and incorporated herein by
reference).                                       

99.2.1    --   Form of Certificate (filed as Exhibit 2.1 to Amendment No. 2 to  
      Form S-6 Registration Statement No. 33-36316 of Mortgage
    Securities Trust, CMO Series 1 on November 1, 1990 and
incorporated herein by reference).                

II-1    
175587.1                                                                        

485BPOS
101st Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 101st
99.3.1    --   Opinion of Battle Fowler LLP as to the legality of the           
         securities being registered, including their consent to the
     delivery thereof and to the use of their name under the
           headings "Tax Status" and "Legal Opinions" in the Prospectus,
         and to the filing of their opinion regarding the tax status
  (filed as Exhibit 3.1 to Amendment No. 1 to Form S-6
             Registration Statements Nos. 33-52780, 33-52373 and 33-57315 of
             Mortgage Securities Trust, CMO Series 12, CMO Series 15 and CMO
            Series 16 on February 10, 1993, March 30, 1994 and February 9,
        1995, respectively, and incorporated herein by reference).

*99.5.1   --   Consent of the Evaluator and Confirmation of Ratings of          
Standard & Poor's Corporation.                    

99.6.0    --   Power of Attorney of Reich & Tang Distributors L.P., the         
        Depositor, by its officers and a majority of its Directors
     (filed as Exhibit 99.6.0 to Amendment No. 1 to Form S-6
             Registration Statement No. 33-62627 of Equity Securities Trust,
         Series 6, Signature Series, Gabelli Entertainment and Media
   Trust on November 16, 1995 and incorporated herein by
reference).                                       

*27       --   Financial Data Schedule(s) (for EDGAR filing only).              

--------                                                                        
*     Being filed by this Amendment.                                            

II-2    
175587.1                                                                        

485BPOS
102nd Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 102nd
SIGNATURES  

       Pursuant to the requirements of the Securities Act of 1933, the
registrants, Mortgage Securities Trust, CMO Series 12, CMO Series 15 and CMO    
Series 16 certify that they have met all of the requirements for effectiveness  
of this Post-Effective Amendment to the Registration Statements pursuant to     
Rule 485(b) under the Securities Act of 1933.  The registrants have duly        
caused this Post-Effective Amendment to the Registration Statements to be       
signed on their behalf by the undersigned, thereunto duly authorized, in the    
City of New York and State of New York on the 17th day of April, 1996.          

MORTGAGE SECURITIES TRUST, CMO SERIES 12,               
CMO SERIES 15 and CMO SERIES 16                         
(Registrants)                               

REICH & TANG DISTRIBUTORS L.P.                          
(Depositor)                                 

By:   Reich & Tang Asset Management, Inc.,              
as general partner                          

By:   PETER J. DeMARCO                                  
(Authorized Signatory)                      

        Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement has been signed below    
by the following persons who constitute the principal officers and a majority   
of the directors of Reich & Tang Asset Management, Inc., the general partner    
of Reich & Tang Distributors L.P., the Depositor, in the capacities and on the  
dates indicated.                                                                

Name                  Title                               Date                  

PETER S. VOSS         President, Chief Executive Officer  )                     
 and Director                        )
G. NEAL RYLAND        Executive Vice President, Treasurer )  April 17, 1996     
 and Chief Financial Officer         )
EDWARD N. WADSWORTH   Clerk                               )                     
RICHARD E. SMITH III  Director                            )By: PETER J. DeMARCO 
STEVEN W. DUFF        Director                            )    Attorney-in-Fact*
BERNADETTE N. FINN    Vice President                      )                     
LORRAINE C. HYSLER    Secretary                           )                     
RICHARD DE SANCTIS    Vice President and Treasurer        )                     

---------------                                                                 

*     Executed copies of Powers of Attorney were filed as Exhibit 6.0 to        
  Amendment No. 1 to Registration Statement No. 33-62627 on November 16,
1995.                                                               

II-3    
175587.1                                                                        

485BPOS
103rd Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 103rd
CONSENT OF INDEPENDENT AUDITORS         

We consent to the use in these Post-Effective Amendments to the Registration    
Statements of our reports on the financial statements of Mortgage Securities    
Trust, Collateralized Mortgage Obligation Series 12 Intermediate; Mortgage      
Securities Trust, Collateralized Mortgage Obligation Series 15 Intermediate and 
Mortgage Securities Trust, Collateralized Mortgage Obligation Series 16         
Intermediate included herein and to the reference to our firm under the heading 
"Independent Auditors" in the Prospectus which is part of this Registration     
Statement.                                                                      

               KPMG PEAT MARWICK LLP

New York, New York                                                              
April 17, 1996                                                                  

II-4    

485BPOS
104th Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 104th
EXHIBIT INDEX 

Exhibit           Description                                         Page No.  

99.1.1            Form of Reference Trust Agreement, as                         
amended (filed as Exhibit 1.1.1 to          
Amendment No. 1 to Form S-6 Registration    
Statements Nos. 33-52780, 33-52373 and      
33-57315 of Mortgage Securities Trust, CMO  
Series 12, CMO Series 15 and CMO Series 16  
on February 10, 1993, March 30, 1994 and    
February 9, 1995, respectively, and         
incorporated herein by reference).          

99.1.1.1          Trust Indenture and Agreement for Mortgage                    
Securities Trust, CMO Series 1 (and         
Subsequent Series) (filed as Exhibit 1.1.1. 
to Post Effective Amendment No. 4 to Form   
S-6 Registration Statement No. 33-48009 of  
Mortgage Securities Trust, CMO Series 10 on 
April 29, 1996 and incorporated herein by   
reference).                                 

99.1.3.4          Certificate of Formation and Agreement                        
among Limited Partners, as amended, of      
Reich & Tang Distributors L.P. (filed as    
Exhibit 99.1.3.4 to Post-Effective          
Amendment No. 10 to Form S-6 Registration   
Statements Nos. 2-98914, 33-00376,          
33-00856 and 33-01869 of Municipal          
Securities Trust, Series 28, 39th Discount  
Series, Series 29 & 40th Discount Series    
and Series 30 & 41st Discount Series,       
respectively, on October 31, 1995 and       
incorporated herein by reference).          

99.1.4            Form of Agreement Among Underwriters                          
(filed as Exhibit 1.4 to Amendment No. 1    
to Form S-6 Registration Statement          
No. 33-28384 of Insured Municipal           
Securities Trust, 47th Discount Series and  
Series 20 on June 16, 1989 and              
incorporated herein by reference).          

99.2.1            Form of Certificate (filed as Exhibit 2.1                     
to Amendment No. 2 to Form S-6              
Registration Statement No. 33-36316 of      
Mortgage Securities Trust, CMO Series 1 on  
November 1, 1990 and incorporated herein    
by reference).                              

-1-     
175587.1                                                                        

485BPOS
Last Page of 105
TOC
1st
Previous
Next
↓Bottom
Just 105th
Exhibit           Description                                         Page No.  

99.3.1            Opinion of Battle Fowler LLP as to the                        
legality of the securities being            
registered, including their consent to the  
delivery thereof and to the use of their    
name under the headings "Tax Status" and    
"Legal Opinions" in the Prospectus, and to  
the filing of their opinion regarding the   
tax status (filed as Exhibit 3.1 to         
Amendment No. 1 to Form S-6 Registration    
Statements Nos. 33-52780, 33-52373 and      
33-57315 of Mortgage Securities Trust, CMO  
Series 12, CMO Series 15 and CMO Series 16  
on February 10, 1993, March 30, 1994 and    
February 9, 1995, respectively, and         
incorporated herein by reference).          

99.5.1            Consent of the Evaluator and Confirmation                     
of Ratings of Standard & Poor's             
Corporation.                                

99.6.0            Power of Attorney of Reich & Tang                             
Distributors L.P., the Depositor, by its    
officers and a majority of its Directors    
(filed as Exhibit 99.6.0 to Amendment No.   
1 to Form S-6 Registration Statement No.    
33-62627 of Equity Securities Trust,        
Series 6, Signature Series, Gabelli         
Entertainment and Media Trust on November   
16, 1995 and incorporated herein by         
reference).                                 

27                Financial Data Schedule(s) (for EDGAR                         
filing only).                               

-2-     
175587.1                                                                        

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘485BPOS’ Filing		Date		First		Last			Other Filings
		6/25/23		56
		4/25/22		36
		2/25/22		17
		3/25/20		56
		5/25/16		17
		10/15/13		36
Effective on:		4/30/96		1		99
Filed on:		4/29/96		1		104
		4/17/96		102		103
		3/31/96		19		58
		3/22/96		17		56
		1/1/96		17		56
		12/31/95		7		65			24F-2NT
		11/16/95		101		105
		10/31/95		100		104
		9/28/95		23		62
		9/2/95		23		62
		2/9/95		54		105			487
		12/31/94		19		43			24F-2NT
		3/30/94		34		105			487
		12/31/93		19		23			24F-2NT
		2/10/93		15		105
									List all Filings