0000889512 2011-12-29 2012-12-28 0000889512 lmpit33:S000008908Member lmpit33:InvestorSharesMember 2011-12-29 2012-12-28 0000889512 lmpit33:S000016859Member lmpit33:InstitutionalSharesMember 2011-12-29 2012-12-28 0000889512 lmpit33:S000008908Member lmpit33:InstitutionalSharesMember 2011-12-29 2012-12-28 0000889512 lmpit33:S000008908Member lmpit33:InstitutionalSharesMember lmpit33:C000024235Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000008909Member lmpit33:InstitutionalSharesMember 2011-12-29 2012-12-28 0000889512 lmpit33:S000008909Member lmpit33:InstitutionalSharesMember lmpit33:C000024238Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000016859Member lmpit33:InstitutionalSharesMember lmpit33:C000046977Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000008906Member lmpit33:InstitutionalSharesMember 2011-12-29 2012-12-28 0000889512 lmpit33:S000008910Member lmpit33:InstitutionalSharesMember lmpit33:C000024239Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000008906Member lmpit33:InvestorSharesMember 2011-12-29 2012-12-28 0000889512 lmpit33:S000008910Member lmpit33:InstitutionalSharesMember 2011-12-29 2012-12-28 0000889512 lmpit33:S000008906Member lmpit33:InvestorSharesMember lmpit33:C000089730Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000008908Member lmpit33:InvestorSharesMember lmpit33:C000089731Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000008906Member lmpit33:InstitutionalSharesMember lmpit33:C000024230Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000016858Member lmpit33:InstitutionalSharesMember 2011-12-29 2012-12-28 0000889512 lmpit33:S000016858Member lmpit33:InstitutionalSharesMember lmpit33:C000046975Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000008906Member lmpit33:InvestorSharesMember lmpit33:C000024230Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000008908Member lmpit33:InvestorSharesMember lmpit33:C000024235Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000016858Member lmpit33:InvestorSharesMember 2011-12-29 2012-12-28 0000889512 lmpit33:S000008909Member lmpit33:InvestorSharesMember 2011-12-29 2012-12-28 0000889512 lmpit33:S000008909Member lmpit33:InvestorSharesMember lmpit33:C000024238Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000016858Member lmpit33:InvestorSharesMember lmpit33:C000046975Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000008909Member lmpit33:InvestorSharesMember lmpit33:C000089732Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000008910Member lmpit33:InvestorSharesMember 2011-12-29 2012-12-28 0000889512 lmpit33:S000008910Member lmpit33:InvestorSharesMember lmpit33:C000089733Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000008910Member lmpit33:InvestorSharesMember lmpit33:C000024239Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000016858Member lmpit33:InvestorSharesMember lmpit33:C000089734Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000008908Member lmpit33:AdministrativeSharesMember lmpit33:C000091743Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000008906Member lmpit33:AdministrativeSharesMember 2011-12-29 2012-12-28 0000889512 lmpit33:S000008906Member lmpit33:AdministrativeSharesMember lmpit33:C000091742Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000008908Member lmpit33:AdministrativeSharesMember 2011-12-29 2012-12-28 0000889512 lmpit33:S000008908Member lmpit33:AdministrativeSharesMember lmpit33:C000024235Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000008910Member lmpit33:AdministrativeSharesMember 2011-12-29 2012-12-28 0000889512 lmpit33:S000016859Member lmpit33:InvestorSharesMember 2011-12-29 2012-12-28 0000889512 lmpit33:S000008910Member lmpit33:AdministrativeSharesMember lmpit33:C000091745Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000016859Member lmpit33:InvestorSharesMember lmpit33:C000046977Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000008906Member lmpit33:AdministrativeSharesMember lmpit33:C000024230Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000016859Member lmpit33:InvestorSharesMember lmpit33:C000089735Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000008910Member lmpit33:AdministrativeSharesMember lmpit33:C000024239Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000016858Member lmpit33:AdministrativeSharesMember 2011-12-29 2012-12-28 0000889512 lmpit33:S000016858Member lmpit33:AdministrativeSharesMember lmpit33:C000091746Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000008909Member lmpit33:AdministrativeSharesMember lmpit33:C000091744Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000008909Member lmpit33:AdministrativeSharesMember 2011-12-29 2012-12-28 0000889512 lmpit33:S000016859Member lmpit33:AdministrativeSharesMember lmpit33:C000091747Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000016859Member lmpit33:AdministrativeSharesMember lmpit33:C000046977Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000016859Member lmpit33:AdministrativeSharesMember 2011-12-29 2012-12-28 0000889512 lmpit33:S000016858Member lmpit33:AdministrativeSharesMember lmpit33:C000046975Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000008909Member lmpit33:AdministrativeSharesMember lmpit33:C000024238Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000008906Member lmpit33:SSharesMember 2011-12-29 2012-12-28 0000889512 lmpit33:S000008906Member lmpit33:SSharesMember lmpit33:C000024231Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000016858Member lmpit33:PremiumMember 2011-12-29 2012-12-28 0000889512 lmpit33:S000008906Member lmpit33:PremiumMember 2011-12-29 2012-12-28 0000889512 lmpit33:S000016858Member lmpit33:PremiumMember lmpit33:C000024235Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000016858Member lmpit33:PremiumMember lmpit33:C000046976Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000008906Member lmpit33:PremiumMember lmpit33:C000024229Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000008906Member lmpit33:PremiumMember lmpit33:C000024228Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000016859Member lmpit33:PremiumMember 2011-12-29 2012-12-28 0000889512 lmpit33:S000008906Member lmpit33:HorizonSharesMember 2011-12-29 2012-12-28 0000889512 lmpit33:S000008906Member lmpit33:HorizonSharesMember lmpit33:C000024232Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000016859Member lmpit33:PremiumMember lmpit33:C000024235Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000008906Member lmpit33:LShareMember 2011-12-29 2012-12-28 0000889512 lmpit33:S000016859Member lmpit33:PremiumMember lmpit33:C000046978Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000008908Member lmpit33:LiquidReservesSharesMember 2011-12-29 2012-12-28 0000889512 lmpit33:S000008906Member lmpit33:LShareMember lmpit33:C000024229Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000008908Member lmpit33:LiquidReservesSharesMember lmpit33:C000024236Member 2011-12-29 2012-12-28 0000889512 lmpit33:S000008908Member lmpit33:InstitutionalLiquidReservesSharesMember 2011-12-29 2012-12-28 0000889512 lmpit33:S000008908Member lmpit33:InstitutionalLiquidReservesSharesMember lmpit33:C000024237Member 2011-12-29 2012-12-28 pure iso4217:USD 2012-12-28 LEGG MASON PARTNERS INSTITUTIONAL TRUST 0000889512 2012-12-13 2012-12-28 2012-08-31 false Western Asset Institutional Liquid Reserves Investment objective The fund’s investment objective is to provide shareholders with liquidity and as high a level of current income as is consistent with preservation of capital. Western Asset Institutional AMT Free Municipal Money Market Fund Western Asset Institutional Liquid Reserves Investment objective The fund’s investment objective is to provide shareholders with liquidity and as high a level of current income as is consistent with preservation of capital. Investment objective The fund seeks current income that is exempt from federal income tax to the extent consistent with preservation of capital and the maintenance of liquidity. Fees and expenses of the fund The accompanying table describes the fees and expenses that you may pay if you buy and hold Institutional Shares of the fund. Shareholder fees (fees paid directly from your investment) (%) Fees and expenses of the fund The accompanying table describes the fees and expenses that you may pay if you buy and hold Institutional Shares of the fund. 0 0 Shareholder fees (fees paid directly from your investment) (%) Investment objective The fund’s investment objectives are to provide shareholders with high levels of current income exempt from federal income taxes, preservation of capital and liquidity. Fees and expenses of the fund The accompanying table describes the fees and expenses that you may pay if you buy and hold Institutional Shares of the fund. Annual fund operating expenses (expenses that you pay each year as a percentage of the value of your investment) (%) Shareholder fees (fees paid directly from your investment) (%) 0 0.0021 0 0 0 0.0002 0.0023 0 Western Asset Institutional Cash Reserves Annual fund operating expenses (expenses that you pay each year as a percentage of the value of your investment) (%) Investment objective The fund’s investment objective is to provide shareholders with liquidity and as high a level of current income as is consistent with preservation of capital. Fees and expenses of the fund Annual fund operating expenses (expenses that you pay each year as a percentage of the value of your investment) (%) The accompanying table describes the fees and expenses that you may pay if you buy and hold Institutional Shares of the fund. Shareholder fees (fees paid directly from your investment) (%) Annual fund operating expenses (expenses that you pay each year as a percentage of the value of your investment) (%) Example 0 -0.0003 0.002 Number of years you own your shares ($) 0 This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes:<ul type="square"><li style="margin-left:-20px">You invest $10,000 in the fund for the time periods indicated</li><li style="margin-left:-20px">Your investment has a 5% return each year and the fund’s operating expenses remain the same</li><li style="margin-left:-20px">You reinvest all distributions and dividends without a sales charge</li></ul>Although your actual costs may be higher or lower, based on these assumptions your costs would be: Principal investment strategies The fund is a money market fund which invests in high quality, U.S. dollar-denominated short-term debt securities that, at the time of purchase, are rated by one or more rating agencies in the highest short-term rating category or, if not rated, are determined by the subadviser to be of equivalent quality. The fund may invest in all types of money market instruments, including bank obligations, commercial paper and asset-backed securities, structured investments, repurchase agreements and other short-term debt securities. These instruments may be issued or guaranteed by all types of issuers, including U.S. and foreign banks and other private issuers, the U.S. government or any of its agencies or instrumentalities, U.S. states and municipalities, or foreign governments. These securities may pay interest at fixed, floating or adjustable rates, or may be issued at a discount. The fund may invest without limit in bank obligations, such as certificates of deposit, fixed time deposits and bankers’ acceptances. The fund generally limits its investments in foreign securities to U.S. dollar denominated obligations of issuers, including banks and foreign governments, located in the major industrialized countries, although with respect to bank obligations, the branches of the banks issuing the obligations may be located in The Bahamas or the Cayman Islands. As a money market fund, the fund tries to maintain a share price of $1.00, and must follow strict rules as to the credit quality, liquidity, diversification and maturity of its investments. Where required by these rules, the fund’s subadviser or Board of Trustees (the “Board”) will decide whether a security should be held or sold in the event of credit downgrades or certain other events occurring after purchase. Certain risks An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. There is no assurance that the fund will meet its investment objective. The fund could underperform other short-term debt instruments or money market funds, or you could lose money, as a result of risks such as: Market and interest rate risk. There may be changes in interest rates, lack of liquidity or other disruptions in the bond markets or other adverse market events and conditions. The financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities of issuers worldwide. In response to the crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. The withdrawal of this support, failure of efforts in response to the crisis, or investor perception that these efforts are not succeeding could negatively affect financial markets generally as well as the value and liquidity of certain securities. In addition, policy and legislative changes in the United States and in other countries are changing many aspects of financial regulation. The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time. Credit risk. An issuer or obligor of a security held by the fund or a counterparty to a financial contract with the fund may default or its credit may be downgraded, or the value of assets underlying a security may decline. Yield risk. The amount of income received by the fund will go up or down depending on day-to-day variations in short-term interest rates, and when interest rates are very low the fund’s expenses could absorb all or a significant portion of the fund’s income. If interest rates increase, the fund’s yield may not increase proportionately. For example, the fund’s manager may discontinue any temporary voluntary fee limitation or recoup amounts previously waived and/or reimbursed. In addition, the recent adoption of more stringent regulations governing the management of money market funds could have a negative effect on the fund’s yield. Risk of increase in expenses. Your actual costs of investing in the fund may be higher than the expenses shown in “Annual fund operating expenses” for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets decrease, or if a fee limitation is changed or terminated. Structured securities risk. The payment and credit qualities of structured securities derive from their underlying assets, and they may behave in ways not anticipated by the fund, or they may not receive tax, accounting or regulatory treatment anticipated by the fund. Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in obligations that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. Foreign investments risk. The fund’s investments in securities of foreign issuers or issuers with significant exposure to foreign markets involve additional risk. Foreign countries in which the fund may invest may have markets that are less liquid, less regulated and more volatile than U.S. markets. The value of the fund’s investments may decline because of factors affecting the particular issuer as well as foreign markets and issuers generally, such as unfavorable government actions, and political or financial instability. Lack of information may also affect the value of these securities. Prepayment or call risk. Many issuers have a right to prepay their securities. If interest rates fall, an issuer may exercise this right. If this happens, the fund will be forced to reinvest prepayment proceeds at a time when yields on securities available in the market are lower than the yield on the prepaid security. Extension risk. If interest rates rise, repayments of fixed income securities may occur more slowly than anticipated by the market. This may drive the prices of these securities down because their interest rates are lower than the current interest rate and they remain outstanding longer. Portfolio selection risk. The value of your investment may decrease if the subadviser’s judgment about the quality, relative yield or value of, or market trends affecting, a particular security or sector, or about interest rates generally, is incorrect. Redemption risk. The fund may experience heavy redemptions, particularly during periods of declining or illiquid markets, that could cause the fund to liquidate its assets at inopportune times or at a loss or depressed value and that could affect the fund’s ability to maintain a $1.00 share price. In addition, the fund may suspend redemptions when permitted by applicable regulations. These risks are discussed in more detail later in this Prospectus or in the statement of additional information ("SAI"). Performance The accompanying bar chart and table provide some indication of the risks of investing in the fund. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class O shares). The table shows the average annual total returns of each class of the fund’s shares offered through this Prospectus that has been in operation for at least one full calendar year. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. The fund makes updated performance information available at the fund’s website, http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class), or by calling the fund at 1-877-721-1926 or 1-203-703-6002. The fund’s past performance is not necessarily an indication of how the fund will perform in the future. 0.0024 0 Total returns (%) 0.0025 Average annual total returns (for periods ended December 31, 2011) (%) 0.0005 0 0.0029 0.0006 0.0018 -0.0009 0.0031 0.002 0 -0.0008 0.0002 0.0023 0.002 20 63 112 Western Asset Institutional Cash Reserves 254 Investment objective The fund’s investment objective is to provide shareholders with liquidity and as high a level of current income as is consistent with preservation of capital. Fees and expenses of the fund The accompanying table describes the fees and expenses that you may pay if you buy and hold Investor Shares of the fund. The fund invests in securities through an underlying fund: Prime Cash Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Prime Cash Reserves Portfolio. 0.0002 0.0122 0.0168 Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Annual fund operating expenses (expenses that you pay each year as a percentage of the value of your investment) (%) Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in obligations that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. December 31, 2014 0.0152 Example 0.0083 1-877-721-1926 or 1-203-703-6002 This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes:<ul type="square"><li style="margin-left:-20px">You invest $10,000 in the fund for the time periods indicated</li><li style="margin-left:-20px">Your investment has a 5% return each year and the fund’s operating expenses remain the same</li><li style="margin-left:-20px">You reinvest all distributions and dividends without a sales charge</li></ul>Although your actual costs may be higher or lower, based on these assumptions your costs would be: 0.0102 http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class) 0.0279 The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class O shares). 0.0459 0.0442 The fund’s past performance is not necessarily an indication of how the fund will perform in the future. Shareholder fees (fees paid directly from your investment) (%) 0.0158 0.0013 0.0002 0.0002 Number of years you own your shares ($) 20 74 144 349 Western Asset Institutional U.S. Treasury Reserves The fund’s investment objective is to provide shareholders with liquidity and as high a level of current income from U.S. government obligations as is consistent with preservation of capital. 0 Fees and expenses of the fund The accompanying table describes the fees and expenses that you may pay if you buy and hold Institutional Shares of the fund. Shareholder fees (fees paid directly from your investment) (%) Annual fund operating expenses (expenses that you pay each year as a percentage of the value of your investment) (%) Example This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes:<ul type="square"><li style="margin-left:-20px">You invest $10,000 in the fund for the time periods indicated</li><li style="margin-left:-20px">Your investment has a 5% return each year and the fund’s operating expenses remain the same</li><li style="margin-left:-20px">You reinvest all distributions and dividends without a sales charge</li></ul>Although your actual costs may be higher or lower, based on these assumptions your costs would be: Number of years you own your shares ($) 0 The fund invests in securities through an underlying fund: Tax Free Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Tax Free Reserves Portfolio. The fund invests in securities through an underlying fund: U.S. Treasury Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of U.S. Treasury Reserves Portfolio. Principal investment strategies The fund is a money market fund which invests all of its assets in direct obligations of the U.S. Treasury, including U.S. Treasury bills, notes and bonds. The fund will not enter into repurchase agreements, but may enter into reverse repurchase agreements to satisfy redemption requests or for other temporary or emergency purposes. Although the fund invests in U.S. government obligations, an investment in the fund is neither insured nor guaranteed by the U.S. government. As a money market fund, the fund tries to maintain a share price of $1.00, and must follow strict rules as to the credit quality, liquidity, diversification and maturity of its investments. Where required by these rules, the fund’s subadviser or Board of Trustees (the “Board”) will decide whether a security should be held or sold in the event of credit downgrades or certain other events occurring after purchase. Certain risks An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. There is no assurance that the fund will meet its investment objective. The fund could underperform other short-term debt instruments or money market funds, or you could lose money, as a result of risks such as: Market and interest rate risk. There may be changes in interest rates, lack of liquidity or other disruptions in the bond markets or other adverse market events and conditions. The financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities of issuers worldwide. In response to the crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. The withdrawal of this support, failure of efforts in response to the crisis, or investor perception that these efforts are not succeeding could negatively affect financial markets generally as well as the value and liquidity of certain securities. In addition, policy and legislative changes in the United States and in other countries are changing many aspects of financial regulation. The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time. Credit risk. An issuer or obligor of a security held by the fund or a counterparty to a financial contract with the fund may default or its credit may be downgraded, or the value of assets underlying a security may decline. Yield risk. The amount of income received by the fund will go up or down depending on day-to-day variations in short-term interest rates, and when interest rates are very low the fund’s expenses could absorb all or a significant portion of the fund’s income. If interest rates increase, the fund’s yield may not increase proportionately. For example, the fund’s manager may discontinue any temporary voluntary fee limitation or recoup amounts previously waived and/or reimbursed. In addition, the recent adoption of more stringent regulations governing the management of money market funds could have a negative effect on the fund’s yield. Risk of increase in expenses. Your actual costs of investing in the fund may be higher than the expenses shown in “Annual fund operating expenses” for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets decrease, or if a fee limitation is changed or terminated. Portfolio selection risk. The value of your investment may decrease if the subadviser’s judgment about the quality, relative yield or value of, or market trends affecting, a particular security or sector, or about interest rates generally, is incorrect. Redemption risk. The fund may experience heavy redemptions, particularly during periods of declining or illiquid markets, that could cause the fund to liquidate its assets at inopportune times or at a loss or depressed value and that could affect the fund’s ability to maintain a $1.00 share price. In addition, the fund may suspend redemptions when permitted by applicable regulations. These risks are discussed in more detail later in this Prospectus or in the statement of additional information ("SAI"). Performance The accompanying bar chart and table provide some indication of the risks of investing in the fund. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares. The table shows the average annual total returns of each class of the fund’s shares offered through this Prospectus that has been in operation for at least one full calendar year. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. The fund makes updated performance information available at the fund’s website, http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class), or by calling the fund at 1-877-721-1926 or 1-203-703-6002. The fund’s past performance is not necessarily an indication of how the fund will perform in the future. Total returns (%) Calendar Years ended December 31 Best quarter (12/31/2006): 1.22 Worst quarter (03/31/2010): 0.00 The year-to-date return as of the most recent calendar quarter, which ended 09/30/2012, was 0.01 Fees and expenses of the fund Average annual total returns (for periods ended December 31, 2011) (%) The accompanying table describes the fees and expenses that you may pay if you buy and hold Investor Shares of the fund. Calendar Years ended December 31 Best quarter (12/31/2006): 1.32 Worst quarter (09/30/2011): 0.03 The year-to-date return as of the most recent calendar quarter, which ended 09/30/2012, was 0.15 0.002 Shareholder fees (fees paid directly from your investment) (%) 0.001 0.0003 Investment objective 0.0033 0 0 Example This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes:<ul type="square"><li style="margin-left:-20px">You invest $10,000 in the fund for the time periods indicated</li><li style="margin-left:-20px">Your investment has a 5% return each year and the fund’s operating expenses remain the same</li><li style="margin-left:-20px">You reinvest all distributions and dividends without a sales charge</li></ul>Although your actual costs may be higher or lower, based on these assumptions your costs would be: Example Annual fund operating expenses (expenses that you pay each year as a percentage of the value of your investment) (%) 0.0021 0.001 0.0002 0.0033 December 31, 2014 Example 20 67 The year-to-date return as of the most recent calendar quarter 122 2012-09-30 0.0015 286 Best quarter 2006-12-31 Example 0.0132 Worst quarter 2011-09-30 0.0003 This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes:<ul type="square"><li style="margin-left:-20px">You invest $10,000 in the fund for the time periods indicated</li><li style="margin-left:-20px">Your investment has a 5% return each year and the fund’s operating expenses remain the same</li><li style="margin-left:-20px">You reinvest all distributions and dividends without a sales charge</li></ul>Although your actual costs may be higher or lower, based on these assumptions your costs would be: This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes:<ul type="square"><li style="margin-left:-20px">You invest $10,000 in the fund for the time periods indicated</li><li style="margin-left:-20px">Your investment has a 5% return each year and the fund’s operating expenses remain the same</li><li style="margin-left:-20px">You reinvest all distributions and dividends without a sales charge</li></ul>Although your actual costs may be higher or lower, based on these assumptions your costs would be: This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes:<ul type="square"><li style="margin-left:-20px">You invest $10,000 in the fund for the time periods indicated</li><li style="margin-left:-20px">Your investment has a 5% return each year and the fund's operating expenses remain the same</li><li style="margin-left:-20px">You reinvest all distributions and dividends without a sales charge</li></ul>Although your actual costs may be higher or lower, based on these assumptions your costs would be: The fund invests in securities through an underlying fund: Liquid Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Liquid Reserves Portfolio. 34 106 186 0.0108 Number of years you own your shares ($) 0.013 0.0319 0.0502 0.0527 0.0298 418 0.0062 24 0.0021 84 Western Asset Institutional Government Reserves 158 378 Investment objective The fund seeks maximum current income to the extent consistent with preservation of capital and the maintenance of liquidity. Principal investment strategies The fund is a money market fund which, under normal market conditions, invests at least 80% of its assets in short-term high quality municipal obligations and interests in municipal obligations that pay interest that is exempt from federal income tax, including the federal alternative minimum tax. Municipal securities include debt obligations issued by any of the 50 states and their political subdivisions, agencies and public authorities, certain other governmental issuers (such as Puerto Rico, the U.S. Virgin Islands and Guam) and other qualifying issuers. These securities include participation or other interests in municipal securities and other structured securities such as variable rate demand obligations, tender option bonds, partnership interests and swap-based securities, many of which may be issued or backed by U.S. or non-U.S. banks. Some municipal securities, such as general obligation issues, are backed by the issuer’s taxing authority, while other municipal securities, such as revenue issues, are backed only by revenues from certain facilities or other sources and not by the issuer itself. The fund invests in securities that, at the time of purchase, are rated by one or more rating agencies in the highest short-term rating category (or, with respect to not more than 3% of its total assets, in the second highest category) or, if not rated, are determined by the subadviser to be of equivalent quality. Under normal circumstances, the fund may invest up to 20% of its assets in investments that pay interest that may be subject to regular federal income tax and/or the federal alternative minimum tax, although for temporary or defensive purposes, the fund may invest an unlimited amount in such securities. As a money market fund, the fund tries to maintain a share price of $1.00, and must follow strict rules as to the credit quality, liquidity, diversification and maturity of its investments. Where required by these rules, the fund’s subadviser or Board of Trustees (the “Board”) will decide whether a security should be held or sold in the event of credit downgrades or certain other events occurring after purchase. Certain risks An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. There is no assurance that the fund will meet its investment objective. The fund could underperform other short-term municipal debt instruments or money market funds, or you could lose money, as a result of risks such as: Market and interest rate risk. There may be changes in interest rates, lack of liquidity or other disruptions in the bond markets or other adverse market events and conditions. The financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities of issuers worldwide. In response to the crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. The withdrawal of this support, failure of efforts in response to the crisis, or investor perception that these efforts are not succeeding could negatively affect financial markets generally as well as the value and liquidity of certain securities. In addition, policy and legislative changes in the United States and in other countries are changing many aspects of financial regulation. The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time. Credit risk. An issuer or obligor of a security held by the fund or a counterparty to a financial contract with the fund may default or its credit may be downgraded, or the value of assets underlying a security may decline. Yield risk. The amount of income received by the fund will go up or down depending on day-to-day variations in short-term interest rates, and when interest rates are very low the fund’s expenses could absorb all or a significant portion of the fund’s income. If interest rates increase, the fund’s yield may not increase proportionately. For example, the fund’s manager may discontinue any temporary voluntary fee limitation or recoup amounts previously waived and/or reimbursed. In addition, the recent adoption of more stringent regulations governing the management of money market funds could have a negative effect on the fund’s yield. Risk of increase in expenses. Your actual costs of investing in the fund may be higher than the expenses shown in “Annual fund operating expenses” for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets decrease, or if a fee limitation is changed or terminated. Tax risk. The income on the fund’s municipal securities could become subject to federal income tax due to noncompliant conduct by issuers, unfavorable legislation or litigation or adverse interpretations by regulatory authorities. Structured securities risk. The payment and credit qualities of structured securities derive from their underlying assets, and they may behave in ways not anticipated by the fund, or they may not receive tax, accounting or regulatory treatment anticipated by the fund. Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in municipal securities and interests in municipal securities that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. Risks relating to investments in municipal securities. Municipal issuers may be adversely affected by rising health care costs, increasing unfunded pension liabilities, and by the phasing out of federal programs providing financial support. Unfavorable conditions and developments relating to projects financed with municipal securities can result in lower revenues to issuers of municipal securities. Issuers often depend on revenues from these projects to make principal and interest payments. The value of municipal securities can also be adversely affected by changes in the financial condition of one or more individual municipal issuers or insurers of municipal issuers, regulatory and political developments, tax law changes or other legislative actions, and by uncertainties and public perceptions concerning these and other factors. Prepayment or call risk. Many issuers have a right to prepay their securities. If interest rates fall, an issuer may exercise this right. If this happens, the fund will be forced to reinvest prepayment proceeds at a time when yields on securities available in the market are lower than the yield on the prepaid security. Extension risk. If interest rates rise, repayments of fixed income securities may occur more slowly than anticipated by the market. This may drive the prices of these securities down because their interest rates are lower than the current interest rate and they remain outstanding longer. Portfolio selection risk. The value of your investment may decrease if the subadviser’s judgment about the quality, relative yield or value of, or market trends affecting, a particular security or sector, or about interest rates generally, is incorrect. Redemption risk. The fund may experience heavy redemptions, particularly during periods of declining or illiquid markets, that could cause the fund to liquidate its assets at inopportune times or at a loss or depressed value and that could affect the fund’s ability to maintain a $1.00 share price. In addition, the fund may suspend redemptions when permitted by applicable regulations. These risks are discussed in more detail later in this Prospectus or in the statement of additional information (“SAI”). The fund is classified as “non-diversified,” which means it may invest a larger percentage of its assets in a smaller number of issuers than a diversified fund. However, the fund intends to comply with the diversification requirements applicable to money market funds which limit the fund’s ability to invest in the obligations of a single issuer. Fees and expenses of the fund The accompanying table describes the fees and expenses that you may pay if you buy and hold Institutional Shares of the fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. Shareholder fees (fees paid directly from your investment) (%) 0 Number of years you own your shares ($) 0 Number of years you own your shares ($) 0 Principal investment strategies 0 Number of years you own your shares ($) The fund is classified as “non-diversified,” which means it may invest a larger percentage of its assets in a smaller number of issuers than a diversified fund. However, the fund intends to comply with the diversification requirements applicable to money market funds which limit the fund’s ability to invest in the obligations of a single issuer. 0.002 0 34 0.0002 106 186 418 Annual fund operating expenses (expenses that you pay each year as a percentage of the value of your investment) (%) 0.0022 The fund is a money market fund which invests in high quality, U.S. dollar-denominated short-term debt securities that, at the time of purchase, are rated by one or more rating agencies in the highest short-term rating category or, if not rated, are determined by the subadviser to be of equivalent quality. The fund may invest in all types of money market instruments, including bank obligations, commercial paper and asset-backed securities, structured investments, repurchase agreements and other short-term debt securities. These instruments may be issued or guaranteed by all types of issuers, including U.S. and foreign banks and other private issuers, the U.S. government or any of its agencies or instrumentalities, U.S. states and municipalities, or foreign governments. These securities may pay interest at fixed, floating or adjustable rates, or may be issued at a discount. The fund may invest without limit in bank obligations, such as certificates of deposit, fixed time deposits and bankers’ acceptances. The fund generally limits its investments in foreign securities to U.S. dollar denominated obligations of issuers, including banks and foreign governments, located in the major industrialized countries, although with respect to bank obligations, the branches of the banks issuing the obligations may be located in The Bahamas or the Cayman Islands. As a money market fund, the fund tries to maintain a share price of $1.00, and must follow strict rules as to the credit quality, liquidity, diversification and maturity of its investments. Where required by these rules, the fund’s subadviser or Board of Trustees (the “Board”) will decide whether a security should be held or sold in the event of credit downgrades or certain other events occurring after purchase. 0.002 The fund invests in securities through an underlying fund: Liquid Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Liquid Reserves Portfolio. 0 <a name="tx445870_5"></a>Certain risks Performance 0.0002 The accompanying bar chart and table provide some indication of the risks of investing in the fund. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares. The table shows the average annual total returns of each class of the fund’s shares offered through this Prospectus that has been in operation for at least one full calendar year. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. The fund makes updated performance information available at the fund’s website, http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class), or by calling the fund at 1-877-721-1926 or 1-203-703-6002. The fund’s past performance is not necessarily an indication of how the fund will perform in the future. 0.0022 Example The fund invests in securities through an underlying fund: Prime Cash Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Prime Cash Reserves Portfolio. Principal investment strategies 23 72 125 281 The fund is a money market fund which invests in high quality, U.S. dollar-denominated short-term debt securities that, at the time of purchase, are rated by one or more rating agencies in the highest short-term rating category or, if not rated, are determined by the subadviser to be of equivalent quality. The fund may invest in all types of money market instruments, including bank obligations, commercial paper and asset-backed securities, structured investments, repurchase agreements and other short-term debt securities. These instruments may be issued or guaranteed by all types of issuers, including U.S. and foreign banks and other private issuers, the U.S. government or any of its agencies or instrumentalities, U.S. states and municipalities, or foreign governments. These securities may pay interest at fixed, floating or adjustable rates, or may be issued at a discount. The fund may invest without limit in bank obligations, such as certificates of deposit, fixed time deposits and bankers’ acceptances. The fund generally limits its investments in foreign securities to U.S. dollar denominated obligations of issuers, including banks and foreign governments, located in the major industrialized countries, although with respect to bank obligations, the branches of the banks issuing the obligations may be located in The Bahamas or the Cayman Islands. As a money market fund, the fund tries to maintain a share price of $1.00, and must follow strict rules as to the credit quality, liquidity, diversification and maturity of its investments. Where required by these rules, the fund’s subadviser or Board of Trustees (the “Board”) will decide whether a security should be held or sold in the event of credit downgrades or certain other events occurring after purchase. This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes: <ul type="square"><li style="margin-left:-20px">You invest $10,000 in the fund for the time periods indicated</li><li style="margin-left:-20px">Your investment has a 5% return each year and the fund’s operating expenses remain the same</li><li style="margin-left:-20px">You reinvest all distributions and dividends without a sales charge</li></ul>Although your actual costs may be higher or lower, based on these assumptions your costs would be: The fund is a money market fund which, under normal circumstances, will invest substantially all of its assets in short-term high quality municipal securities whose interest is exempt from federal income tax, including the federal alternative minimum tax. Municipal securities include debt obligations issued by any of the 50 states and their political subdivisions, agencies and public authorities, certain other governmental issuers (such as Puerto Rico, the U.S. Virgin Islands and Guam) and other qualifying issuers. These securities include participation or other interests in municipal securities and other structured securities such as variable rate demand obligations, tender option bonds, partnership interests and swap-based securities, many of which may be issued or backed by U.S. or non-U.S. banks. Some municipal securities, such as general obligation issues, are backed by the issuer’s taxing authority, while other municipal securities, such as revenue issues, are backed only by revenues from certain facilities or other sources and not by the issuer itself. The fund invests in securities that, at the time of purchase, are rated by one or more rating agencies in the highest short-term rating category (or, with respect to not more than 3% of its total assets, in the second highest category) or, if not rated, are determined by the subadviser to be of equivalent quality. The interest paid on municipal securities purchased by the fund is excluded from gross income for regular federal income tax purposes, and, as noted above, will not typically be subject to the federal alternative minimum tax. As a result, the rate of interest paid on these securities normally is lower than the rate of interest paid on fully taxable securities. Under normal circumstances, the fund must invest at least 80% of its net assets in short-term high quality municipal obligations and interests in municipal obligations that pay interest that is exempt from federal income tax, including the federal alternative minimum tax. Although the fund will ordinarily not invest in securities the interest on which is subject to regular federal income tax or the federal alternative minimum tax, when the subadviser believes that suitable AMT-free municipal securities are not available, the fund may temporarily invest up to 20% of its assets in investments that pay interest that may be subject to federal income tax or the federal alternative minimum tax. In addition, the fund may depart from its principal investment strategies in response to unusually adverse market, economic or political conditions, as described under “More on the funds’ investment strategies, investments and risks—Defensive investing.” As a money market fund, the fund tries to maintain a share price of $1.00, and must follow strict rules as to the credit quality, liquidity, diversification and maturity of its investments. Where required by these rules, the fund’s subadviser or Board of Trustees (the “Board”) will decide whether a security should be held or sold in the event of credit downgrades or certain other events occurring after purchase. 0.0017 Western Asset Institutional Tax Free Reserves 0.0183 Certain risks Number of years you own your shares ($) 0.0217 2002-10-02 23 72 125 281 The fund is a money market fund which invests in high quality, U.S. dollar-denominated short-term debt securities that, at the time of purchase, are rated by one or more rating agencies in the highest short-term rating category or, if not rated, are determined by the subadviser to be of equivalent quality. The fund may invest in all types of money market instruments, including bank obligations, commercial paper and asset-backed securities, structured investments, repurchase agreements and other short-term debt securities. These instruments may be issued or guaranteed by all types of issuers, including U.S. and foreign banks and other private issuers, the U.S. government or any of its agencies or instrumentalities, U.S. states and municipalities, or foreign governments. These securities may pay interest at fixed, floating or adjustable rates, or may be issued at a discount. The fund may invest without limit in bank obligations, such as certificates of deposit, fixed time deposits and bankers’ acceptances. The fund generally limits its investments in foreign securities to U.S. dollar denominated obligations of issuers, including banks and foreign governments, located in the major industrialized countries, although with respect to bank obligations, the branches of the banks issuing the obligations may be located in The Bahamas or the Cayman Islands. As a money market fund, the fund tries to maintain a share price of $1.00, and must follow strict rules as to the credit quality, liquidity, diversification and maturity of its investments. Where required by these rules, the fund’s subadviser or Board of Trustees (the “Board”) will decide whether a security should be held or sold in the event of credit downgrades or certain other events occurring after purchase. Principal investment strategies Certain risks The bar chart shows changes in the fund’s performance from year to year for Institutional Shares. 1-877-721-1926 or 1-203-703-6002 Best quarter http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class) 2006-12-31 0.0122 Worst quarter 2010-03-31 0 The year-to-date return as of the most recent calendar quarter 2012-09-30 0.0001 The fund invests in securities through an underlying fund: U.S. Treasury Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of U.S. Treasury Reserves Portfolio. The fund invests in securities through an underlying fund: Government Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Government Portfolio. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares. 1-877-721-1926 or 1-203-703-6002 http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class) The fund’s past performance is not necessarily an indication of how the fund will perform in the future. Principal investment strategies The fund is a money market fund which invests exclusively in short-term U.S. government obligations, including U.S. Treasuries and securities issued or guaranteed by the U.S. government or its agencies, authorities, instrumentalities or sponsored entities and in repurchase agreements. These securities may pay interest at fixed, floating or adjustable rates or may be issued at a discount. U.S. government obligations are not necessarily backed by the full faith and credit of the United States. Although the fund invests in U.S. government obligations, an investment in the fund is neither insured nor guaranteed by the U.S. government. The fund invests in securities that, at the time of purchase, are rated by one or more rating agencies in the highest short term rating category or, if not rated, are determined by the subadviser to be of equivalent quality. As a money market fund, the fund tries to maintain a share price of $1.00, and must follow strict rules as to the credit quality, liquidity, diversification and maturity of its investments. Where required by these rules, the fund’s subadviser or Board of Trustees (the “Board”) will decide whether a security should be held or sold in the event of credit downgrades or certain other events occurring after purchase. Certain risks An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. There is no assurance that the fund will meet its investment objective. The fund could underperform other short-term debt instruments or money market funds, or you could lose money, as a result of risks such as: Market and interest rate risk. There may be changes in interest rates, lack of liquidity or other disruptions in the bond markets or other adverse market events and conditions. The financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities of issuers worldwide. In response to the crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. The withdrawal of this support, failure of efforts in response to the crisis, or investor perception that these efforts are not succeeding could negatively affect financial markets generally as well as the value and liquidity of certain securities. In addition, policy and legislative changes in the United States and in other countries are changing many aspects of financial regulation. The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time. Credit risk. An issuer or obligor of a security held by the fund or a counterparty to a financial contract with the fund may default or its credit may be downgraded, or the value of assets underlying a security may decline. Yield risk. The amount of income received by the fund will go up or down depending on day-to-day variations in short-term interest rates, and when interest rates are very low the fund’s expenses could absorb all or a significant portion of the fund’s income. If interest rates increase, the fund’s yield may not increase proportionately. For example, the fund’s manager may discontinue any temporary voluntary fee limitation or recoup amounts previously waived and/or reimbursed. In addition, the recent adoption of more stringent regulations governing the management of money market funds could have a negative effect on the fund’s yield. Risk of increase in expenses. Your actual costs of investing in the fund may be higher than the expenses shown in “Annual fund operating expenses” for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets decrease, or if a fee limitation is changed or terminated. Structured securities risk. The payment and credit qualities of structured securities derive from their underlying assets, and they may behave in ways not anticipated by the fund, or they may not receive tax, accounting or regulatory treatment anticipated by the fund. Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in obligations that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. Foreign investments risk. The fund’s investments in securities of foreign issuers or issuers with significant exposure to foreign markets involve additional risk. Foreign countries in which the fund may invest may have markets that are less liquid, less regulated and more volatile than U.S. markets. The value of the fund’s investments may decline because of factors affecting the particular issuer as well as foreign markets and issuers generally, such as unfavorable government actions, and political or financial instability. Lack of information may also affect the value of these securities. Prepayment or call risk. Many issuers have a right to prepay their securities. If interest rates fall, an issuer may exercise this right. If this happens, the fund will be forced to reinvest prepayment proceeds at a time when yields on securities available in the market are lower than the yield on the prepaid security. Extension risk. If interest rates rise, repayments of fixed income securities may occur more slowly than anticipated by the market. This may drive the prices of these securities down because their interest rates are lower than the current interest rate and they remain outstanding longer. Portfolio selection risk. The value of your investment may decrease if the subadviser’s judgment about the quality, relative yield or value of, or market trends affecting, a particular security or sector, or about interest rates generally, is incorrect. Redemption risk. The fund may experience heavy redemptions, particularly during periods of declining or illiquid markets, that could cause the fund to liquidate its assets at inopportune times or at a loss or depressed value and that could affect the fund’s ability to maintain a $1.00 share price. In addition, the fund may suspend redemptions when permitted by applicable regulations. These risks are discussed in more detail later in this Prospectus or in the statement of additional information ("SAI"). An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. There is no assurance that the fund will meet its investment objective. The fund could underperform other short-term debt instruments or money market funds, or you could lose money, as a result of risks such as: Market and interest rate risk. There may be changes in interest rates, lack of liquidity or other disruptions in the bond markets or other adverse market events and conditions. The financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities of issuers worldwide. In response to the crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. The withdrawal of this support, failure of efforts in response to the crisis, or investor perception that these efforts are not succeeding could negatively affect financial markets generally as well as the value and liquidity of certain securities. In addition, policy and legislative changes in the United States and in other countries are changing many aspects of financial regulation. The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time. Credit risk. An issuer or obligor of a security held by the fund or a counterparty to a financial contract with the fund may default or its credit may be downgraded, or the value of assets underlying a security may decline. Yield risk. The amount of income received by the fund will go up or down depending on day-to-day variations in short-term interest rates, and when interest rates are very low the fund’s expenses could absorb all or a significant portion of the fund’s income. If interest rates increase, the fund’s yield may not increase proportionately. For example, the fund’s manager may discontinue any temporary voluntary fee limitation or recoup amounts previously waived and/or reimbursed. In addition, the recent adoption of more stringent regulations governing the management of money market funds could have a negative effect on the fund’s yield. Risk of increase in expenses. Your actual costs of investing in the fund may be higher than the expenses shown in “Annual fund operating expenses” for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets are lower than estimated, or if a fee limitation is changed or terminated. Structured securities risk. The payment and credit qualities of structured securities derive from their underlying assets, and they may behave in ways not anticipated by the fund, or they may not receive tax, accounting or regulatory treatment anticipated by the fund. Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in obligations that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. Foreign investments risk. The fund’s investments in securities of foreign issuers or issuers with significant exposure to foreign markets involve additional risk. Foreign countries in which the fund may invest may have markets that are less liquid, less regulated and more volatile than U.S. markets. The value of the fund’s investments may decline because of factors affecting the particular issuer as well as foreign markets and issuers generally, such as unfavorable government actions, and political or financial instability. Lack of information may also affect the value of these securities. Prepayment or call risk. Many issuers have a right to prepay their securities. If interest rates fall, an issuer may exercise this right. If this happens, the fund will be forced to reinvest prepayment proceeds at a time when yields on securities available in the market are lower than the yield on the prepaid security. Extension risk. If interest rates rise, repayments of fixed income securities may occur more slowly than anticipated by the market. This may drive the prices of these securities down because their interest rates are lower than the current interest rate and they remain outstanding longer. Portfolio selection risk. The value of your investment may decrease if the subadviser’s judgment about the quality, relative yield or value of, or market trends affecting, a particular security or sector, or about interest rates generally, is incorrect. Redemption risk. The fund may experience heavy redemptions, particularly during periods of declining or illiquid markets, that could cause the fund to liquidate its assets at inopportune times or at a loss or depressed value and that could affect the fund’s ability to maintain a $1.00 share price. In addition, the fund may suspend redemptions when permitted by applicable regulations. These risks are discussed in more detail later in this Prospectus or in the statement of additional information (“SA”). An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. There is no assurance that the fund will meet its investment objective. The fund could underperform other short-term municipal debt instruments or money market funds, or you could lose money, as a result of risks such as: Market and interest rate risk. There may be changes in interest rates, lack of liquidity or other disruptions in the bond markets or other adverse market events and conditions. The financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities of issuers worldwide. In response to the crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. The withdrawal of this support, failure of efforts in response to the crisis, or investor perception that these efforts are not succeeding could negatively affect financial markets generally as well as the value and liquidity of certain securities. In addition, policy and legislative changes in the United States and in other countries are changing many aspects of financial regulation. The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time. Credit risk. An issuer or obligor of a security held by the fund or a counterparty to a financial contract with the fund may default or its credit may be downgraded, or the value of assets underlying a security may decline. Yield risk. The amount of income received by the fund will go up or down depending on day-to-day variations in short-term interest rates, and when interest rates are very low the fund’s expenses could absorb all or a significant portion of the fund’s income. If interest rates increase, the fund’s yield may not increase proportionately. For example, the fund’s manager may discontinue any temporary voluntary fee limitation or recoup amounts previously waived and/or reimbursed. In addition, the recent adoption of more stringent regulations governing the management of money market funds could have a negative effect on the fund’s yield. Risk of increase in expenses. Your actual costs of investing in the fund may be higher than the expenses shown in “Annual fund operating expenses” for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets decrease, or if a fee limitation is changed or terminated. Tax risk. The income on the fund’s municipal securities could become subject to federal income tax due to noncompliant conduct by issuers, unfavorable legislation or litigation or adverse interpretations by regulatory authorities. Structured securities risk. The payment and credit qualities of structured securities derive from their underlying assets, and they may behave in ways not anticipated by the fund, or they may not receive tax, accounting or regulatory treatment anticipated by the fund. Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in municipal securities and interests in municipal securities that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. Risks relating to investments in municipal securities. Municipal issuers may be adversely affected by rising health care costs, increasing unfunded pension liabilities, and by the phasing out of federal programs providing financial support. Unfavorable conditions and developments relating to projects financed with municipal securities can result in lower revenues to issuers of municipal securities. Issuers often depend on revenues from these projects to make principal and interest payments. The value of municipal securities can also be adversely affected by changes in the financial condition of one or more individual municipal issuers or insurers of municipal issuers, regulatory and political developments, tax law changes or other legislative actions, and by uncertainties and public perceptions concerning these and other factors. Prepayment or call risk. Many issuers have a right to prepay their securities. If interest rates fall, an issuer may exercise this right. If this happens, the fund will be forced to reinvest prepayment proceeds at a time when yields on securities available in the market are lower than the yield on the prepaid security. Extension risk. If interest rates rise, repayments of fixed income securities may occur more slowly than anticipated by the market. This may drive the prices of these securities down because their interest rates are lower than the current interest rate and they remain outstanding longer. Portfolio selection risk. The value of your investment may decrease if the subadviser’s judgment about the quality, relative yield or value of, or market trends affecting, a particular security or sector, or about interest rates generally, is incorrect. Redemption risk. The fund may experience heavy redemptions, particularly during periods of declining or illiquid markets, that could cause the fund to liquidate its assets at inopportune times or at a loss or depressed value and that could affect the fund’s ability to maintain a $1.00 share price. In addition, the fund may suspend redemptions when permitted by applicable regulations. These risks are discussed in more detail later in this Prospectus or in the statement of additional information (“SAI”). Certain risks Performance Performance Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. The accompanying bar chart and table provide some indication of the risks of investing in the fund. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class A shares). The table shows the average annual total returns of each class of the fund’s shares offered through this Prospectus that has been in operation for at least one full calendar year. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. The fund makes updated performance information available at the fund’s website, http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class), or by calling the fund at 1-877-721-1926 or 1-203-703-6002. The fund’s past performance is not necessarily an indication of how the fund will perform in the future. <div style="display:none">~ http://www.leggmason.com/role/ScheduleShareholderFeesWesternAssetInstitutionalCashReserves column period compact * ~</div> The accompanying bar chart and table provide some indication of the risks of investing in the fund. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class O shares), a class of the fund that is invested in the same portfolio of securities as Investor Shares. The table shows the average annual total returns of Institutional Shares. No performance information is presented for Investor Shares because there were no Investor Shares outstanding during the calendar years shown. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. The fund makes updated performance information available at the fund’s website, http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class), or by calling the fund at 1-877-721-1926 or 1-203-703-6002. The fund’s past performance is not necessarily an indication of how the fund will perform in the future. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. There is no assurance that the fund will meet its investment objective. The fund could underperform other short-term debt instruments or money market funds, or you could lose money, as a result of risks such as: Market and interest rate risk. There may be changes in interest rates, lack of liquidity or other disruptions in the bond markets or other adverse market events and conditions. The financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities of issuers worldwide. In response to the crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. The withdrawal of this support, failure of efforts in response to the crisis, or investor perception that these efforts are not succeeding could negatively affect financial markets generally as well as the value and liquidity of certain securities. In addition, policy and legislative changes in the United States and in other countries are changing many aspects of financial regulation. The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time. Credit risk. An issuer or obligor of a security held by the fund or a counterparty to a financial contract with the fund may default or its credit may be downgraded, or the value of assets underlying a security may decline. Yield risk. The amount of income received by the fund will go up or down depending on day-to-day variations in short-term interest rates, and when interest rates are very low the fund’s expenses could absorb all or a significant portion of the fund’s income. If interest rates increase, the fund’s yield may not increase proportionately. For example, the fund’s manager may discontinue any temporary voluntary fee limitation or recoup amounts previously waived and/or reimbursed. In addition, the recent adoption of more stringent regulations governing the management of money market funds could have a negative effect on the fund’s yield. Risk of increase in expenses. Your actual costs of investing in the fund may be higher than the expenses shown in “Annual fund operating expenses” for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets decrease, or if a fee limitation is changed or terminated. Portfolio selection risk. The value of your investment may decrease if the subadviser’s judgment about the quality, relative yield or value of, or market trends affecting, a particular security or sector, or about interest rates generally, is incorrect. Redemption risk. The fund may experience heavy redemptions, particularly during periods of declining or illiquid markets, that could cause the fund to liquidate its assets at inopportune times or at a loss or depressed value and that could affect the fund’s ability to maintain a $1.00 share price. In addition, the fund may suspend redemptions when permitted by applicable regulations. These risks are discussed in more detail later in this Prospectus or in the statement of additional information (“SAI”). An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. There is no assurance that the fund will meet its investment objective. The fund could underperform other short-term debt instruments or money market funds, or you could lose money, as a result of risks such as: Market and interest rate risk. There may be changes in interest rates, lack of liquidity or other disruptions in the bond markets or other adverse market events and conditions. The financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities of issuers worldwide. In response to the crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. The withdrawal of this support, failure of efforts in response to the crisis, or investor perception that these efforts are not succeeding could negatively affect financial markets generally as well as the value and liquidity of certain securities. In addition, policy and legislative changes in the United States and in other countries are changing many aspects of financial regulation. The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time. Credit risk. An issuer or obligor of a security held by the fund or a counterparty to a financial contract with the fund may default or its credit may be downgraded, or the value of assets underlying a security may decline. Yield risk. The amount of income received by the fund will go up or down depending on day-to-day variations in short-term interest rates, and when interest rates are very low the fund’s expenses could absorb all or a significant portion of the fund’s income. If interest rates increase, the fund’s yield may not increase proportionately. For example, the fund’s manager may discontinue any temporary voluntary fee limitation or recoup amounts previously waived and/or reimbursed. In addition, the recent adoption of more stringent regulations governing the management of money market funds could have a negative effect on the fund’s yield. Risk of increase in expenses. Your actual costs of investing in the fund may be higher than the expenses shown in “Annual fund operating expenses” for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets are lower than estimated, or if a fee limitation is changed or terminated. Structured securities risk. The payment and credit qualities of structured securities derive from their underlying assets, and they may behave in ways not anticipated by the fund, or they may not receive tax, accounting or regulatory treatment anticipated by the fund. Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in obligations that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. Foreign investments risk. The fund’s investments in securities of foreign issuers or issuers with significant exposure to foreign markets involve additional risk. Foreign countries in which the fund may invest may have markets that are less liquid, less regulated and more volatile than U.S. markets. The value of the fund’s investments may decline because of factors affecting the particular issuer as well as foreign markets and issuers generally, such as unfavorable government actions, and political or financial instability. Lack of information may also affect the value of these securities. Prepayment or call risk. Many issuers have a right to prepay their securities. If interest rates fall, an issuer may exercise this right. If this happens, the fund will be forced to reinvest prepayment proceeds at a time when yields on securities available in the market are lower than the yield on the prepaid security. Extension risk. If interest rates rise, repayments of fixed income securities may occur more slowly than anticipated by the market. This may drive the prices of these securities down because their interest rates are lower than the current interest rate and they remain outstanding longer. Portfolio selection risk. The value of your investment may decrease if the subadviser’s judgment about the quality, relative yield or value of, or market trends affecting, a particular security or sector, or about interest rates generally, is incorrect. Redemption risk. The fund may experience heavy redemptions, particularly during periods of declining or illiquid markets, that could cause the fund to liquidate its assets at inopportune times or at a loss or depressed value and that could affect the fund’s ability to maintain a $1.00 share price. In addition, the fund may suspend redemptions when permitted by applicable regulations. These risks are discussed in more detail later in this Prospectus or in the statement of additional information (“SAI”). The fund invests in securities through an underlying fund: Liquid Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Liquid Reserves Portfolio. The fund invests in securities through an underlying fund: Prime Cash Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Prime Cash Reserves Portfolio. The fund’s past performance is not necessarily an indication of how the fund will perform in the future. Performance Total returns (%) Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in municipal securities and interests in municipal securities that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualFundOperatingExpensesWesternAssetInstitutionalCashReserves column period compact * ~</div> An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The accompanying bar chart and table provide some indication of the risks of investing in the fund. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class A shares), a class of the fund that is invested in the same portfolio of securities as Investor Shares. The table shows the average annual total returns of Institutional Shares. No performance information is presented for Investor Shares because there were no Investor Shares outstanding during the calendar years shown. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. The fund makes updated performance information available at the fund’s website, http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class), or by calling the fund at 1-877-721-1926 or 1-203-703-6002. The fund’s past performance is not necessarily an indication of how the fund will perform in the future. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Performance Performance The accompanying bar chart and table provide some indication of the risks of investing in the fund. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class A shares). The table shows the average annual total returns of each class of the fund’s shares offered through this Prospectus that has been in operation for at least one full calendar year. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. The fund makes updated performance information available at the fund’s website, http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class), or by calling the fund at 1-877-721-1926 or 1-203-703-6002. The fund’s past performance is not necessarily an indication of how the fund will perform in the future. <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualTotalReturnsWesternAssetInstitutionalCashReservesBarChart column period compact * ~</div> Total returns (%) The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class A shares). The fund invests in securities through an underlying fund: Tax Free Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Tax Free Reserves Portfolio. 1-877-721-1926 or 1-203-703-6002 http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class) The fund’s past performance is not necessarily an indication of how the fund will perform in the future. <div style="display:none">~ http://www.leggmason.com/role/ScheduleAverageAnnualTotalReturnsTransposedWesternAssetInstitutionalCashReserves column period compact * ~</div> Total returns (%) Calendar Years ended December 31 Best quarter (12/31/2006): 1.28 Worst quarter (09/30/2011): 0.01 The year-to-date return as of the most recent calendar quarter, which ended 09/30/2012, was 0.03 0.0108 0.013 0.0319 0.0502 0.0527 0.0298 Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. 0.0062 0.0021 The year-to-date return as of the most recent calendar quarter 0.0017 2012-09-30 0.0005 Best quarter 2007-06-30 0.009 Worst quarter 2011-12-31 0.0002 <div style="display:none">~ http://www.leggmason.com/role/ScheduleShareholderFeesWesternAssetInstitutionalU.S.TreasuryReserves column period compact * ~</div> The accompanying bar chart and table provide some indication of the risks of investing in the fund. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class A shares). The table shows the average annual total returns of each class of the fund’s shares offered through this Prospectus that has been in operation for at least one full calendar year. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. The fund makes updated performance information available at the fund’s website, http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class), or by calling the fund at 1-877-721-1926 or 1-203-703-6002. The fund’s past performance is not necessarily an indication of how the fund will perform in the future. The fund invests in securities through an underlying fund: Government Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Government Portfolio. <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualFundOperatingExpensesWesternAssetInstitutionalU.S.TreasuryReserves column period compact * ~</div> Calendar Years ended December 31 Best quarter (12/31/2006): 1.34 Worst quarter (09/30/2011): 0.03 The year-to-date return as of the most recent calendar quarter, which ended 09/30/2012, was 0.15 Average annual total returns (for periods ended December 31, 2011) (%) 0.0016 0.0127 0.0151 <div style="display:none">~ http://www.leggmason.com/role/ScheduleExpenseExampleTransposedWesternAssetInstitutionalU.S.TreasuryReserves column period compact * ~</div> The year-to-date return as of the most recent calendar quarter 2012-09-30 0.0003 Best quarter The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class A shares). 2006-12-31 0.0128 Worst quarter 2011-09-30 0.0001 Average annual total returns (for periods ended December 31, 2011) (%) <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualTotalReturnsWesternAssetInstitutionalU.S.TreasuryReservesBarChart column period compact * ~</div> 1-877-721-1926 or 1-203-703-6002 0.0154 0.0095 0.0116 0.0304 0.0483 0.0502 0.0185 0.0246 0.011 0.0131 0.0039 0.032 0.0009 0.0499 0.0004 0.0532 0.0311 0.0068 0.0023 0.0017 An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class) 0.0004 0.0158 The fund’s past performance is not necessarily an indication of how the fund will perform in the future. 0.0194 <div style="display:none">~ http://www.leggmason.com/role/ScheduleAverageAnnualTotalReturnsTransposedWesternAssetInstitutionalU.S.TreasuryReserves column period compact * ~</div> Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. 0.0185 Average annual total returns (for periods ended December 31, 2011) (%) Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. 0.011 0.0131 0.032 0.0499 0.0532 0.0311 0.0068 0.0023 0.0017 Total returns (%) Calendar Years ended December 31 Best quarter (12/31/2006): 1.32 Worst quarter (09/30/2011): 0.03 The year-to-date return as of the most recent calendar quarter, which ended 09/30/2012, was 0.15 Calendar Years ended December 31 Best quarter (12/31/2006): 1.34 Worst quarter (09/30/2011): 0.03 The year-to-date return as of the most recent calendar quarter, which ended 09/30/2012, was 0.15 0.0017 0.0183 0.0217 The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class A shares). 2002-10-02 Calendar Years ended December 31 Best quarter (09/30/2007): 0.88 Worst quarter (03/31/2010): 0.02 The year-to-date return as of the most recent calendar quarter, which ended 09/30/2012, was 0.04 Total returns (%) <div style="display:none">~ http://www.leggmason.com/role/ScheduleShareholderFeesWesternAssetInstitutionalGovernmentReserves column period compact * ~</div> Average annual total returns (for periods ended December 31, 2011) (%) <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualFundOperatingExpensesWesternAssetInstitutionalGovernmentReserves column period compact * ~</div> 0.0017 0.0188 0.0218 <div style="display:none">~ http://www.leggmason.com/role/ScheduleExpenseExampleTransposedWesternAssetInstitutionalGovernmentReserves column period compact * ~</div> Best quarter <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualTotalReturnsWesternAssetInstitutionalGovernmentReservesBarChart column period compact * ~</div> http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class) The year-to-date return as of the most recent calendar quarter 2012-09-30 0.0015 Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. 2006-12-31 0.0132 Worst quarter “Other expenses” for Investor Shares are estimated for the current fiscal year. Actual expenses may differ from estimates. 2011-09-30 0.0003 <div style="display:none">~ http://www.leggmason.com/role/ScheduleAverageAnnualTotalReturnsTransposedWesternAssetInstitutionalGovernmentReserves column period compact * ~</div> Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. 1-877-721-1926 or 1-203-703-6002 <div style="display:none">~ http://www.leggmason.com/role/ScheduleShareholderFeesWesternAssetInstitutionalTaxFreeReserves column period compact * ~</div> http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class) Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. 1-877-721-1926 or 1-203-703-6002 The fund’s past performance is not necessarily an indication of how the fund will perform in the future. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class A shares), a class of the fund that is invested in the same portfolio of securities as Investor Shares. <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualFundOperatingExpensesWesternAssetInstitutionalTaxFreeReserves column period compact * ~</div> http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class) 1-877-721-1926 or 1-203-703-6002 <div style="display:none">~ http://www.leggmason.com/role/ScheduleExpenseExampleTransposedWesternAssetInstitutionalTaxFreeReserves column period compact * ~</div> The year-to-date return as of the most recent calendar quarter 2012-09-30 0.0015 “Other expenses” for Investor Shares are estimated for the current fiscal year. Actual expenses may differ from estimates. Best quarter 2006-12-31 0.0134 Worst quarter 2011-09-30 0.0003 <div style="display:none">~ http://www.leggmason.com/role/ScheduleAverageAnnualTotalReturnsTransposedWesternAssetInstitutionalTaxFreeReserves column period compact * ~</div> Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in obligations that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in obligations that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in obligations that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. Total returns (%) Average annual total returns (for periods ended December 31, 2011) (%) 0.0017 0.0188 0.0218 The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class A shares), a class of the fund that is invested in the same portfolio of securities as Investor Shares. The table shows the average annual total returns of Institutional Shares. No performance information is presented for Investor Shares because there were no Investor Shares outstanding during the calendar years shown. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. The year-to-date return as of the most recent calendar quarter 2012-09-30 0.0004 Best quarter 2007-09-30 0.0088 Worst quarter 2010-03-31 0.0002 0.0134 0.0089 0.0104 0.0223 0.0327 0.0347 0.0216 0.0038 0.0019 0.0016 The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class O shares), a class of the fund that is invested in the same portfolio of securities as Investor Shares. The fund’s past performance is not necessarily an indication of how the fund will perform in the future. Average annual total returns (for periods ended December 31, 2011) (%) 0.0016 The fund invests in securities through an underlying fund: Prime Cash Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Prime Cash Reserves Portfolio. 0.0127 0.0151 <div style="display:none">~ http://www.leggmason.com/role/ScheduleShareholderFeesWesternAssetInstitutionalAMTFreeMunicipalMoneyMarketFund column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualFundOperatingExpensesWesternAssetInstitutionalAMTFreeMunicipalMoneyMarketFund column period compact * ~</div> Calendar Years ended December 31 Best quarter (06/30/2007): 0.90 Worst quarter (12/31/2011): 0.02 The year-to-date return as of the most recent calendar quarter, which ended 09/30/2012, was 0.05 <div style="display:none">~ http://www.leggmason.com/role/ScheduleExpenseExampleTransposedWesternAssetInstitutionalAMTFreeMunicipalMoneyMarketFund column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualTotalReturnsWesternAssetInstitutionalAMTFreeMunicipalMoneyMarketFundBarChart column period compact * ~</div> The year-to-date return as of the most recent calendar quarter 2012-09-30 0.0015 Best quarter 2006-12-31 0.0134 Worst quarter 2011-09-30 0.0003 <div style="display:none">~ http://www.leggmason.com/role/ScheduleAverageAnnualTotalReturnsTransposedWesternAssetInstitutionalAMTFreeMunicipalMoneyMarketFund column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleShareholderFeesWesternAssetInstitutionalLiquidReservesInvestorShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualFundOperatingExpensesWesternAssetInstitutionalLiquidReservesInvestorShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleShareholderFeesWesternAssetInstitutionalCashReservesInvestorShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualFundOperatingExpensesWesternAssetInstitutionalCashReservesInvestorShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualTotalReturnsWesternAssetInstitutionalLiquidReservesInvestorSharesBarChart column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleShareholderFeesWesternAssetInstitutionalLiquidReserves column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualFundOperatingExpensesWesternAssetInstitutionalLiquidReserves column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleExpenseExampleTransposedWesternAssetInstitutionalLiquidReserves column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleExpenseExampleTransposedWesternAssetInstitutionalCashReservesInvestorShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualTotalReturnsWesternAssetInstitutionalLiquidReservesBarChart column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAverageAnnualTotalReturnsTransposedWesternAssetInstitutionalLiquidReserves column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleExpenseExampleTransposedWesternAssetInstitutionalLiquidReservesInvestorShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualTotalReturnsWesternAssetInstitutionalCashReservesInvestorSharesBarChart column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAverageAnnualTotalReturnsTransposedWesternAssetInstitutionalLiquidReservesInvestorShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAverageAnnualTotalReturnsTransposedWesternAssetInstitutionalCashReservesInvestorShares column period compact * ~</div> Western Asset Institutional Government Reserves Investment objective Western Asset Institutional Tax Free Reserves Investment objective The fund’s investment objectives are to provide shareholders with high levels of current income exempt from federal income taxes, preservation of capital and liquidity. Fees and expenses of the fund The accompanying table describes the fees and expenses that you may pay if you buy and hold Investor Shares of the fund. Shareholder fees (fees paid directly from your investment) (%) Example The fund seeks maximum current income to the extent consistent with preservation of capital and the maintenance of liquidity. This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes:<ul type="square"><li style="margin-left:-20px">You invest $10,000 in the fund for the time periods indicated</li><li style="margin-left:-20px">Your investment has a 5% return each year and the fund’s operating expenses remain the same</li><li style="margin-left:-20px">You reinvest all distributions and dividends without a sales charge</li></ul>Although your actual costs may be higher or lower, based on these assumptions your costs would be: Fees and expenses of the fund The accompanying table describes the fees and expenses that you may pay if you buy and hold Investor Shares of the fund. Shareholder fees (fees paid directly from your investment) (%) Annual fund operating expenses (expenses that you pay each year as a percentage of the value of your investment) (%) Number of years you own your shares ($) Example Principal investment strategies Number of years you own your shares ($) Certain risks The fund invests in securities through an underlying fund: Government Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Government Portfolio. Performance The accompanying bar chart and table provide some indication of the risks of investing in the fund. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares, a class of the fund that is invested in the same portfolio of securities as Investor Shares. The table shows the average annual total returns of Institutional Shares. No performance information is presented for Investor Shares because there were no Investor Shares outstanding during the calendar years shown. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. The fund makes updated performance information available at the fund’s website, http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class), or by calling the fund at 1-877-721-1926 or 1-203-703-6002. The fund’s past performance is not necessarily an indication of how the fund will perform in the future. Total returns (%) Calendar Years ended December 31 Best quarter (06/30/2007): 0.90 Worst quarter (12/31/2011): 0.02 The year-to-date return as of the most recent calendar quarter, which ended 09/30/2012, was 0.05 Average annual total returns (for periods ended December 31, 2011) (%) 485BPOS Principal investment strategies Principal investment strategies The fund is a money market fund which invests exclusively in short-term U.S. government obligations, including U.S. Treasuries and securities issued or guaranteed by the U.S. government or its agencies, authorities, instrumentalities or sponsored entities and in repurchase agreements. These securities may pay interest at fixed, floating or adjustable rates or may be issued at a discount. U.S. government obligations are not necessarily backed by the full faith and credit of the United States. Although the fund invests in U.S. government obligations, an investment in the fund is neither insured nor guaranteed by the U.S. government. The fund invests in securities that, at the time of purchase, are rated by one or more rating agencies in the highest short term rating category or, if not rated, are determined by the subadviser to be of equivalent quality. As a money market fund, the fund tries to maintain a share price of $1.00, and must follow strict rules as to the credit quality, liquidity, diversification and maturity of its investments. Where required by these rules, the fund’s subadviser or Board of Trustees (the “Board”) will decide whether a security should be held or sold in the event of credit downgrades or certain other events occurring after purchase. Certain risks An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. There is no assurance that the fund will meet its investment objective. The fund could underperform other short-term debt instruments or money market funds, or you could lose money, as a result of risks such as: Market and interest rate risk. There may be changes in interest rates, lack of liquidity or other disruptions in the bond markets or other adverse market events and conditions. The financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities of issuers worldwide. In response to the crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. The withdrawal of this support, failure of efforts in response to the crisis, or investor perception that these efforts are not succeeding could negatively affect financial markets generally as well as the value and liquidity of certain securities. In addition, policy and legislative changes in the United States and in other countries are changing many aspects of financial regulation. The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time. Credit risk. An issuer or obligor of a security held by the fund or a counterparty to a financial contract with the fund may default or its credit may be downgraded, or the value of assets underlying a security may decline. Yield risk. The amount of income received by the fund will go up or down depending on day-to-day variations in short-term interest rates, and when interest rates are very low the fund’s expenses could absorb all or a significant portion of the fund’s income. If interest rates increase, the fund’s yield may not increase proportionately. For example, the fund’s manager may discontinue any temporary voluntary fee limitation or recoup amounts previously waived and/or reimbursed. In addition, the recent adoption of more stringent regulations governing the management of money market funds could have a negative effect on the fund’s yield. Risk of increase in expenses. Your actual costs of investing in the fund may be higher than the expenses shown in “Annual fund operating expenses” for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets are lower than estimated, or if a fee limitation is changed or terminated. Portfolio selection risk. The value of your investment may decrease if the subadviser’s judgment about the quality, relative yield or value of, or market trends affecting, a particular security or sector, or about interest rates generally, is incorrect. Redemption risk. The fund may experience heavy redemptions, particularly during periods of declining or illiquid markets, that could cause the fund to liquidate its assets at inopportune times or at a loss or depressed value and that could affect the fund’s ability to maintain a $1.00 share price. In addition, the fund may suspend redemptions when permitted by applicable regulations. These risks are discussed in more detail later in this Prospectus or in the statement of additional information (“SAI”). Performance The accompanying bar chart and table provide some indication of the risks of investing in the fund. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class A shares), a class of the fund that is invested in the same portfolio of securities as Investor Shares. The table shows the average annual total returns of Institutional Shares. No performance information is presented for Investor Shares because there were no Investor Shares outstanding during the calendar years shown. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. The fund makes updated performance information available at the fund’s website, http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class), or by calling the fund at 1-877-721-1926 or 1-203-703-6002. The fund’s past performance is not necessarily an indication of how the fund will perform in the future. Total returns (%) Calendar Years ended December 31 Best quarter (12/31/2006): 1.28 Worst quarter (09/30/2011): 0.01 The year-to-date return as of the most recent calendar quarter, which ended 09/30/2012, was 0.03 Average annual total returns (for periods ended December 31, 2011) (%) The fund is a money market fund which, under normal market conditions, invests at least 80% of its assets in short-term high quality municipal obligations and interests in municipal obligations that pay interest that is exempt from federal income tax, including the federal alternative minimum tax. Municipal securities include debt obligations issued by any of the 50 states and their political subdivisions, agencies and public authorities, certain other governmental issuers (such as Puerto Rico, the U.S. Virgin Islands and Guam) and other qualifying issuers. These securities include participation or other interests in municipal securities and other structured securities such as variable rate demand obligations, tender option bonds, partnership interests and swap-based securities, many of which may be issued or backed by U.S. or non-U.S. banks. Some municipal securities, such as general obligation issues, are backed by the issuer’s taxing authority, while other municipal securities, such as revenue issues, are backed only by revenues from certain facilities or other sources and not by the issuer itself. The fund invests in securities that, at the time of purchase, are rated by one or more rating agencies in the highest short-term rating category (or, with respect to not more than 3% of its total assets, in the second highest category) or, if not rated, are determined by the subadviser to be of equivalent quality. Under normal circumstances, the fund may invest up to 20% of its assets in investments that pay interest that may be subject to regular federal income tax and/or the federal alternative minimum tax, although for temporary or defensive purposes, the fund may invest an unlimited amount in such securities. As a money market fund, the fund tries to maintain a share price of $1.00, and must follow strict rules as to the credit quality, liquidity, diversification and maturity of its investments. Where required by these rules, the fund’s subadviser or Board of Trustees (the “Board”) will decide whether a security should be held or sold in the event of credit downgrades or certain other events occurring after purchase. This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes:<ul type="square"><li style="margin-left:-20px">You invest $10,000 in the fund for the time periods indicated</li><li style="margin-left:-20px">Your investment has a 5% return each year and the fund’s operating expenses remain the same</li><li style="margin-left:-20px">You reinvest all distributions and dividends without a sales charge</li></ul>Although your actual costs may be higher or lower, based on these assumptions your costs would be: “Other expenses” for Investor Shares are estimated for the current fiscal year. Actual expenses may differ from estimates. The fund invests in securities through an underlying fund: Government Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Government Portfolio. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. The fund invests in securities through an underlying fund: Liquid Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Liquid Reserves Portfolio. The fund’s past performance is not necessarily an indication of how the fund will perform in the future. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class A shares), a class of the fund that is invested in the same portfolio of securities as Investor Shares. 1-877-721-1926 or 1-203-703-6002 http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class) An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. There is no assurance that the fund will meet its investment objective. The fund could underperform other short-term municipal debt instruments or money market funds, or you could lose money, as a result of risks such as: Market and interest rate risk. There may be changes in interest rates, lack of liquidity or other disruptions in the bond markets or other adverse market events and conditions. The financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities of issuers worldwide. In response to the crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. The withdrawal of this support, failure of efforts in response to the crisis, or investor perception that these efforts are not succeeding could negatively affect financial markets generally as well as the value and liquidity of certain securities. In addition, policy and legislative changes in the United States and in other countries are changing many aspects of financial regulation. The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time. Credit risk. An issuer or obligor of a security held by the fund or a counterparty to a financial contract with the fund may default or its credit may be downgraded, or the value of assets underlying a security may decline. Yield risk. The amount of income received by the fund will go up or down depending on day-to-day variations in short-term interest rates, and when interest rates are very low the fund’s expenses could absorb all or a significant portion of the fund’s income. If interest rates increase, the fund’s yield may not increase proportionately. For example, the fund’s manager may discontinue any temporary voluntary fee limitation or recoup amounts previously waived and/or reimbursed. In addition, the recent adoption of more stringent regulations governing the management of money market funds could have a negative effect on the fund’s yield. Risk of increase in expenses. Your actual costs of investing in the fund may be higher than the expenses shown in “Annual fund operating expenses” for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets are lower than estimated, or if a fee limitation is changed or terminated. Tax risk. The income on the fund’s municipal securities could become subject to federal income tax due to noncompliant conduct by issuers, unfavorable legislation or litigation or adverse interpretations by regulatory authorities. Structured securities risk. The payment and credit qualities of structured securities derive from their underlying assets, and they may behave in ways not anticipated by the fund, or they may not receive tax, accounting or regulatory treatment anticipated by the fund. Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in municipal securities and interests in municipal securities that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. Risks relating to investments in municipal securities. Municipal issuers may be adversely affected by rising health care costs, increasing unfunded pension liabilities, and by the phasing out of federal programs providing financial support. Unfavorable conditions and developments relating to projects financed with municipal securities can result in lower revenues to issuers of municipal securities. Issuers often depend on revenues from these projects to make principal and interest payments. The value of municipal securities can also be adversely affected by changes in the financial condition of one or more individual municipal issuers or insurers of municipal issuers, regulatory and political developments, tax law changes or other legislative actions, and by uncertainties and public perceptions concerning these and other factors. Prepayment or call risk. Many issuers have a right to prepay their securities. If interest rates fall, an issuer may exercise this right. If this happens, the fund will be forced to reinvest prepayment proceeds at a time when yields on securities available in the market are lower than the yield on the prepaid security. Extension risk. If interest rates rise, repayments of fixed income securities may occur more slowly than anticipated by the market. This may drive the prices of these securities down because their interest rates are lower than the current interest rate and they remain outstanding longer. Portfolio selection risk. The value of your investment may decrease if the subadviser’s judgment about the quality, relative yield or value of, or market trends affecting, a particular security or sector, or about interest rates generally, is incorrect. Redemption risk. The fund may experience heavy redemptions, particularly during periods of declining or illiquid markets, that could cause the fund to liquidate its assets at inopportune times or at a loss or depressed value and that could affect the fund’s ability to maintain a $1.00 share price. In addition, the fund may suspend redemptions when permitted by applicable regulations. These risks are discussed in more detail later in this Prospectus or in the statement of additional information (“SAI”). The fund is classified as “non-diversified,” which means it may invest a larger percentage of its assets in a smaller number of issuers than a diversified fund. However, the fund intends to comply with the diversification requirements applicable to money market funds which limit the fund’s ability to invest in the obligations of a single issuer. Annual fund operating expenses (expenses that you pay each year as a percentage of the value of your investment) (%) The fund invests in securities through an underlying fund: Tax Free Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Tax Free Reserves Portfolio. 0.0017 Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in municipal securities and interests in municipal securities that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. The fund is classified as “non-diversified,” which means it may invest a larger percentage of its assets in a smaller number of issuers than a diversified fund. However, the fund intends to comply with the diversification requirements applicable to money market funds which limit the fund’s ability to invest in the obligations of a single issuer. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares, a class of the fund that is invested in the same portfolio of securities as Investor Shares. 1-877-721-1926 or 1-203-703-6002 http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class) The fund’s past performance is not necessarily an indication of how the fund will perform in the future. 0.014 0.0089 0.0102 0.0225 0.0327 0.035 0.0213 0.0041 0.0018 0.0016 0.014 0.0089 0.0102 0.0225 0.0327 0.035 0.0213 0.0041 0.0018 0.0016 The year-to-date return as of the most recent calendar quarter 2012-09-30 0.0003 Best quarter 2006-12-31 0.0128 Worst quarter 2011-09-30 0.0001 0 0 0.0024 0.001 0.0005 0.0039 -0.0004 0.0035 36 117 211 485 December 31, 2014 The accompanying table describes the fees and expenses that you may pay if you buy and hold Investor Shares of the fund. Example Number of years you own your shares ($) The fund invests in securities through an underlying fund: U.S. Treasury Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of U.S. Treasury Reserves Portfolio. 0.0016 <a name="tx445850_25"></a>Certain risks 0.0127 0 0.0151 0 0.0018 0.001 0.0002 0.003 31 97 169 380 0.0002 0.0122 0.0168 0 0 0.002 0.001 0.0002 0.0032 33 103 180 405 The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class A shares), a class of the fund that is invested in the same portfolio of securities as Investor Shares. The table shows the average annual total returns of Institutional Shares. No performance information is presented for Investor Shares because there were no Investor Shares outstanding during the calendar years shown. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. <div style="display:none">~ http://www.leggmason.com/role/ScheduleShareholderFeesWesternAssetInstitutionalGovernmentReservesInvestorShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualFundOperatingExpensesWesternAssetInstitutionalGovernmentReservesInvestorShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleExpenseExampleTransposedWesternAssetInstitutionalGovernmentReservesInvestorShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualTotalReturnsWesternAssetInstitutionalGovernmentReservesInvestorSharesBarChart column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAverageAnnualTotalReturnsTransposedWesternAssetInstitutionalGovernmentReservesInvestorShares column period compact * ~</div> Western Asset Institutional U.S. Treasury Reserves Investment objective Fees and expenses of the fund Shareholder fees (fees paid directly from your investment) (%) 0 0 0.0021 0.002 0.0002 0.0043 -0.0003 Annual fund operating expenses (expenses that you pay each year as a percentage of the value of your investment) (%) 0.004 “Other expenses” for Investor Shares are estimated for the current fiscal year. Actual expenses may differ from estimates. This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes:<ul type="square"><li style="margin-left:-20px">You invest $10,000 in the fund for the time periods indicated</li><li style="margin-left:-20px">Your investment has a 5% return each year and the fund’s operating expenses remain the same</li><li style="margin-left:-20px">You reinvest all distributions and dividends without a sales charge</li></ul>Although your actual costs may be higher or lower, based on these assumptions your costs would be: Western Asset Institutional Cash Reserves Investment objective The fund’s investment objective is to provide shareholders with liquidity and as high a level of current income as is consistent with preservation of capital. Fees and expenses of the fund The accompanying table describes the fees and expenses that you may pay if you buy and hold Administrative Shares of the fund. Shareholder fees (fees paid directly from your investment) (%) Principal investment strategies 0 0 41 132 235 537 An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. There is no assurance that the fund will meet its investment objective. The fund could underperform other short-term debt instruments or money market funds, or you could lose money, as a result of risks such as: Market and interest rate risk. There may be changes in interest rates, lack of liquidity or other disruptions in the bond markets or other adverse market events and conditions. The financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities of issuers worldwide. In response to the crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. The withdrawal of this support, failure of efforts in response to the crisis, or investor perception that these efforts are not succeeding could negatively affect financial markets generally as well as the value and liquidity of certain securities. In addition, policy and legislative changes in the United States and in other countries are changing many aspects of financial regulation. The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time. Credit risk. An issuer or obligor of a security held by the fund or a counterparty to a financial contract with the fund may default or its credit may be downgraded, or the value of assets underlying a security may decline. Yield risk. The amount of income received by the fund will go up or down depending on day-to-day variations in short-term interest rates, and when interest rates are very low the fund’s expenses could absorb all or a significant portion of the fund’s income. If interest rates increase, the fund’s yield may not increase proportionately. For example, the fund’s manager may discontinue any temporary voluntary fee limitation or recoup amounts previously waived and/or reimbursed. In addition, the recent adoption of more stringent regulations governing the management of money market funds could have a negative effect on the fund’s yield. Risk of increase in expenses. Your actual costs of investing in the fund may be higher than the expenses shown in “Annual fund operating expenses” for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets are lower than estimated, or if a fee limitation is changed or terminated. Portfolio selection risk. The value of your investment may decrease if the subadviser’s judgment about the quality, relative yield or value of, or market trends affecting, a particular security or sector, or about interest rates generally, is incorrect. Redemption risk. The fund may experience heavy redemptions, particularly during periods of declining or illiquid markets, that could cause the fund to liquidate its assets at inopportune times or at a loss or depressed value and that could affect the fund’s ability to maintain a $1.00 share price. In addition, the fund may suspend redemptions when permitted by applicable regulations. These risks are discussed in more detail later in this Prospectus or in the statement of additional information (“SAI”). Annual fund operating expenses (expenses that you pay each year as a percentage of the value of your investment) (%) 0.002 0.002 0.0003 0.0043 -0.0003 0.004 An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Performance Western Asset Institutional Liquid Reserves Investment objective The fund’s investment objective is to provide shareholders with liquidity and as high a level of current income as is consistent with preservation of capital. Fees and expenses of the fund The accompanying table describes the fees and expenses that you may pay if you buy and hold Administrative Shares of the fund. Shareholder fees (fees paid directly from your investment) (%) Annual fund operating expenses (expenses that you pay each year as a percentage of the value of your investment) (%) Example This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes:<ul type="square"><li style="margin-left:-20px">You invest $10,000 in the fund for the time periods indicated</li><li style="margin-left:-20px">Your investment has a 5% return each year and the fund's operating expenses remain the same</li><li style="margin-left:-20px">You reinvest all distributions and dividends without a sales charge</li></ul>Although your actual costs may be higher or lower, based on these assumptions your costs would be: Number of years you own your shares ($) The bar chart shows changes in the fund’s performance from year to year for Institutional Shares, a class of the fund that is invested in the same portfolio of securities as Investor Shares. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares, a class of the fund that is invested in the same portfolio of securities as Investor Shares. The table shows the average annual total returns of Institutional Shares. No performance information is presented for Investor Shares because there were no Investor Shares outstanding during the calendar years shown. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. The fund is a money market fund which invests in high quality, U.S. dollar-denominated short-term debt securities that, at the time of purchase, are rated by one or more rating agencies in the highest short-term rating category or, if not rated, are determined by the subadviser to be of equivalent quality. The fund may invest in all types of money market instruments, including bank obligations, commercial paper and asset-backed securities, structured investments, repurchase agreements and other short-term debt securities. These instruments may be issued or guaranteed by all types of issuers, including U.S. and foreign banks and other private issuers, the U.S. government or any of its agencies or instrumentalities, U.S. states and municipalities, or foreign governments. These securities may pay interest at fixed, floating or adjustable rates, or may be issued at a discount. The fund may invest without limit in bank obligations, such as certificates of deposit, fixed time deposits and bankers’ acceptances. The fund generally limits its investments in foreign securities to U.S. dollar denominated obligations of issuers, including banks and foreign governments, located in the major industrialized countries, although with respect to bank obligations, the branches of the banks issuing the obligations may be located in The Bahamas or the Cayman Islands. As a money market fund, the fund tries to maintain a share price of $1.00, and must follow strict rules as to the credit quality, liquidity, diversification and maturity of its investments. Where required by these rules, the fund’s subadviser or Board of Trustees (the “Board”) will decide whether a security should be held or sold in the event of credit downgrades or certain other events occurring after purchase. 41 Principal investment strategies 132 235 537 0.0158 Certain risks 0.0194 0.0004 http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class) 1-877-721-1926 or 1-203-703-6002 The fund’s past performance is not necessarily an indication of how the fund will perform in the future. 0.0152 0.0083 0.0102 0.0279 0.0459 0.0442 0.0158 December 31, 2014 0.0013 0.0002 0.0002 December 31, 2014 “Other expenses” for Administrative Shares are estimated for the current fiscal year. Actual expenses may differ from estimates. An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. There is no assurance that the fund will meet its investment objective. The fund could underperform other short-term debt instruments or money market funds, or you could lose money, as a result of risks such as: Market and interest rate risk. There may be changes in interest rates, lack of liquidity or other disruptions in the bond markets or other adverse market events and conditions. The financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities of issuers worldwide. In response to the crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. The withdrawal of this support, failure of efforts in response to the crisis, or investor perception that these efforts are not succeeding could negatively affect financial markets generally as well as the value and liquidity of certain securities. In addition, policy and legislative changes in the United States and in other countries are changing many aspects of financial regulation. The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time. Credit risk. An issuer or obligor of a security held by the fund or a counterparty to a financial contract with the fund may default or its credit may be downgraded, or the value of assets underlying a security may decline. Yield risk. The amount of income received by the fund will go up or down depending on day-to-day variations in short-term interest rates, and when interest rates are very low the fund’s expenses could absorb all or a significant portion of the fund’s income. If interest rates increase, the fund’s yield may not increase proportionately. For example, the fund’s manager may discontinue any temporary voluntary fee limitation or recoup amounts previously waived and/or reimbursed. In addition, the recent adoption of more stringent regulations governing the management of money market funds could have a negative effect on the fund’s yield. Risk of increase in expenses. Your actual costs of investing in the fund may be higher than the expenses shown in “Annual fund operating expenses” for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets are lower than estimated, or if a fee limitation is changed or terminated. Structured securities risk. The payment and credit qualities of structured securities derive from their underlying assets, and they may behave in ways not anticipated by the fund, or they may not receive tax, accounting or regulatory treatment anticipated by the fund. Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in obligations that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. Foreign investments risk. The fund’s investments in securities of foreign issuers or issuers with significant exposure to foreign markets involve additional risk. Foreign countries in which the fund may invest may have markets that are less liquid, less regulated and more volatile than U.S. markets. The value of the fund’s investments may decline because of factors affecting the particular issuer as well as foreign markets and issuers generally, such as unfavorable government actions, and political or financial instability. Lack of information may also affect the value of these securities. Prepayment or call risk. Many issuers have a right to prepay their securities. If interest rates fall, an issuer may exercise this right. If this happens, the fund will be forced to reinvest prepayment proceeds at a time when yields on securities available in the market are lower than the yield on the prepaid security. Extension risk. If interest rates rise, repayments of fixed income securities may occur more slowly than anticipated by the market. This may drive the prices of these securities down because their interest rates are lower than the current interest rate and they remain outstanding longer. Portfolio selection risk. The value of your investment may decrease if the subadviser’s judgment about the quality, relative yield or value of, or market trends affecting, a particular security or sector, or about interest rates generally, is incorrect. Redemption risk. The fund may experience heavy redemptions, particularly during periods of declining or illiquid markets, that could cause the fund to liquidate its assets at inopportune times or at a loss or depressed value and that could affect the fund’s ability to maintain a $1.00 share price. In addition, the fund may suspend redemptions when permitted by applicable regulations. These risks are discussed in more detail later in this Prospectus or in the statement of additional information (“SAI”). Performance The fund invests in securities through an underlying fund: U.S. Treasury Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of U.S. Treasury Reserves Portfolio. Total returns (%) Calendar Years ended December 31 Best quarter (12/31/2006): 1.22 Worst quarter (03/31/2010): 0.00 The year-to-date return as of the most recent calendar quarter, which ended 09/30/2012, was 0.01 Example This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes:<ul type="square"><li style="margin-left:-20px">You invest $10,000 in the fund for the time periods indicated</li><li style="margin-left:-20px">Your investment has a 5% return each year and the fund’s operating expenses remain the same</li><li style="margin-left:-20px">You reinvest all distributions and dividends without a sales charge</li></ul>Although your actual costs may be higher or lower, based on these assumptions your costs would be: Number of years you own your shares ($) The fund invests in securities through an underlying fund: Prime Cash Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Prime Cash Reserves Portfolio. Principal investment strategies The year-to-date return as of the most recent calendar quarter 2012-09-30 0.0001 Best quarter 2006-12-31 0.0122 Worst quarter 2010-03-31 0 Average annual total returns (for periods ended December 31, 2011) (%) The accompanying bar chart and table provide some indication of the risks of investing in the fund. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class A shares), a class of the fund that is invested in the same portfolio of securities as Administrative Shares. The table shows the average annual total returns of Institutional Shares. No performance information is presented for Administrative Shares because there were no Administrative Shares outstanding during the calendar years shown. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. The fund makes updated performance information available at the fund’s website, http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class), or by calling the fund at 1-877-721-1926 or 1-203-703-6002. The fund’s past performance is not necessarily an indication of how the fund will perform in the future. Calendar Years ended December 31 Best quarter (12/31/2006): 1.34 Worst quarter (09/30/2011): 0.03 The year-to-date return as of the most recent calendar quarter, which ended 09/30/2012, was 0.15 0.0154 0.0095 0.0116 0.0304 0.0483 0.0502 0.0246 0.0039 0.0009 0.0004 0.011 0.0131 0.032 0.0499 0.0532 0.0311 0.0068 0.0023 0.0017 Total returns (%) Average annual total returns (for periods ended December 31, 2011) (%) 0.0017 0.0188 0.0218 “Other expenses” for Administrative Shares are estimated for the current fiscal year. Actual expenses may differ from estimates. December 31, 2014 Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in municipal securities and interests in municipal securities that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. The fund is a money market fund which invests in high quality, U.S. dollar-denominated short-term debt securities that, at the time of purchase, are rated by one or more rating agencies in the highest short-term rating category or, if not rated, are determined by the subadviser to be of equivalent quality. The fund may invest in all types of money market instruments, including bank obligations, commercial paper and asset-backed securities, structured investments, repurchase agreements and other short-term debt securities. These instruments may be issued or guaranteed by all types of issuers, including U.S. and foreign banks and other private issuers, the U.S. government or any of its agencies or instrumentalities, U.S. states and municipalities, or foreign governments. These securities may pay interest at fixed, floating or adjustable rates, or may be issued at a discount. The fund may invest without limit in bank obligations, such as certificates of deposit, fixed time deposits and bankers’ acceptances. The fund generally limits its investments in foreign securities to U.S. dollar denominated obligations of issuers, including banks and foreign governments, located in the major industrialized countries, although with respect to bank obligations, the branches of the banks issuing the obligations may be located in The Bahamas or the Cayman Islands. As a money market fund, the fund tries to maintain a share price of $1.00, and must follow strict rules as to the credit quality, liquidity, diversification and maturity of its investments. Where required by these rules, the fund’s subadviser or Board of Trustees (the “Board”) will decide whether a security should be held or sold in the event of credit downgrades or certain other events occurring after purchase. Certain risks An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. There is no assurance that the fund will meet its investment objective. The fund could underperform other short-term debt instruments or money market funds, or you could lose money, as a result of risks such as: Market and interest rate risk. There may be changes in interest rates, lack of liquidity or other disruptions in the bond markets or other adverse market events and conditions. The financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities of issuers worldwide. In response to the crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. The withdrawal of this support, failure of efforts in response to the crisis, or investor perception that these efforts are not succeeding could negatively affect financial markets generally as well as the value and liquidity of certain securities. In addition, policy and legislative changes in the United States and in other countries are changing many aspects of financial regulation. The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time. Credit risk. An issuer or obligor of a security held by the fund or a counterparty to a financial contract with the fund may default or its credit may be downgraded, or the value of assets underlying a security may decline. Yield risk. The amount of income received by the fund will go up or down depending on day-to-day variations in short-term interest rates, and when interest rates are very low the fund’s expenses could absorb all or a significant portion of the fund’s income. If interest rates increase, the fund’s yield may not increase proportionately. For example, the fund’s manager may discontinue any temporary voluntary fee limitation or recoup amounts previously waived and/or reimbursed. In addition, the recent adoption of more stringent regulations governing the management of money market funds could have a negative effect on the fund’s yield. Risk of increase in expenses. Your actual costs of investing in the fund may be higher than the expenses shown in “Annual fund operating expenses” for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets are lower than estimated, or if a fee limitation is changed or terminated. Structured securities risk. The payment and credit qualities of structured securities derive from their underlying assets, and they may behave in ways not anticipated by the fund, or they may not receive tax, accounting or regulatory treatment anticipated by the fund. Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in obligations that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. Foreign investments risk. The fund’s investments in securities of foreign issuers or issuers with significant exposure to foreign markets involve additional risk. Foreign countries in which the fund may invest may have markets that are less liquid, less regulated and more volatile than U.S. markets. The value of the fund’s investments may decline because of factors affecting the particular issuer as well as foreign markets and issuers generally, such as unfavorable government actions, and political or financial instability. Lack of information may also affect the value of these securities. Prepayment or call risk. Many issuers have a right to prepay their securities. If interest rates fall, an issuer may exercise this right. If this happens, the fund will be forced to reinvest prepayment proceeds at a time when yields on securities available in the market are lower than the yield on the prepaid security. Extension risk. If interest rates rise, repayments of fixed income securities may occur more slowly than anticipated by the market. This may drive the prices of these securities down because their interest rates are lower than the current interest rate and they remain outstanding longer. Portfolio selection risk. The value of your investment may decrease if the subadviser’s judgment about the quality, relative yield or value of, or market trends affecting, a particular security or sector, or about interest rates generally, is incorrect. Redemption risk. The fund may experience heavy redemptions, particularly during periods of declining or illiquid markets, that could cause the fund to liquidate its assets at inopportune times or at a loss or depressed value and that could affect the fund’s ability to maintain a $1.00 share price. In addition, the fund may suspend redemptions when permitted by applicable regulations. These risks are discussed in more detail later in this Prospectus or in the statement of additional information (“SAI”). Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. <div style="display:none">~ http://www.leggmason.com/role/ScheduleShareholderFeesWesternAssetInstitutionalU.S.TreasuryReservesInvestorShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualFundOperatingExpensesWesternAssetInstitutionalU.S.TreasuryReservesInvestorShares column period compact * ~</div> The fund invests in securities through an underlying fund: Liquid Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Liquid Reserves Portfolio. The fund invests in securities through an underlying fund: Liquid Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Liquid Reserves Portfolio. <div style="display:none">~ http://www.leggmason.com/role/ScheduleExpenseExampleTransposedWesternAssetInstitutionalU.S.TreasuryReservesInvestorShares column period compact * ~</div> Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in obligations that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. Western Asset Institutional U.S. Treasury Reserves Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualTotalReturnsWesternAssetInstitutionalU.S.TreasuryReservesInvestorSharesBarChart column period compact * ~</div> The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class A shares), a class of the fund that is invested in the same portfolio of securities as Administrative Shares. http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class) 1-877-721-1926 or 1-203-703-6002 <div style="display:none">~ http://www.leggmason.com/role/ScheduleAverageAnnualTotalReturnsTransposedWesternAssetInstitutionalU.S.TreasuryReservesInvestorShares column period compact * ~</div> The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class A shares), a class of the fund that is invested in the same portfolio of securities as Administrative Shares. The table shows the average annual total returns of Institutional Shares. No performance information is presented for Administrative Shares because there were no Administrative Shares outstanding during the calendar years shown. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. Western Asset Institutional AMT Free Municipal Money Market Fund Investment objective The fund seeks current income that is exempt from federal income tax to the extent consistent with preservation of capital and the maintenance of liquidity. Fees and expenses of the fund The accompanying table describes the fees and expenses that you may pay if you buy and hold Investor Shares of the fund. Shareholder fees (fees paid directly from your investment) (%) Annual fund operating expenses (expenses that you pay each year as a percentage of the value of your investment) (%) Performance The accompanying bar chart and table provide some indication of the risks of investing in the fund. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class O shares), a class of the fund that is invested in the same portfolio of securities as Administrative Shares. The table shows the average annual total returns of Institutional Shares. No performance information is presented for Administrative Shares because there were no Administrative Shares outstanding during the calendar years shown. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. The fund makes updated performance information available at the fund’s website, http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class), or by calling the fund at 1-877-721-1926 or 1-203-703-6002. The fund’s past performance is not necessarily an indication of how the fund will perform in the future. Investment objective The fund’s investment objective is to provide shareholders with liquidity and as high a level of current income from U.S. government obligations as is consistent with preservation of capital. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class O shares), a class of the fund that is invested in the same portfolio of securities as Administrative Shares. 1-877-721-1926 or 1-203-703-6002 http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class) Fees and expenses of the fund The fund’s past performance is not necessarily an indication of how the fund will perform in the future. The accompanying table describes the fees and expenses that you may pay if you buy and hold Administrative Shares of the fund. Shareholder fees (fees paid directly from your investment) (%) Example This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes:<ul type="square"><li style="margin-left:-20px">You invest $10,000 in the fund for the time periods indicated</li><li style="margin-left:-20px">Your investment has a 5% return each year and the fund’s operating expenses remain the same</li><li style="margin-left:-20px">You reinvest all distributions and dividends without a sales charge</li></ul>Although your actual costs may be higher or lower, based on these assumptions your costs would be: 0 0 Number of years you own your shares ($) Principal investment strategies The fund is a money market fund which, under normal circumstances, will invest substantially all of its assets in short-term high quality municipal securities whose interest is exempt from federal income tax, including the federal alternative minimum tax. Municipal securities include debt obligations issued by any of the 50 states and their political subdivisions, agencies and public authorities, certain other governmental issuers (such as Puerto Rico, the U.S. Virgin Islands and Guam) and other qualifying issuers. These securities include participation or other interests in municipal securities and other structured securities such as variable rate demand obligations, tender option bonds, partnership interests and swap-based securities, many of which may be issued or backed by U.S. or non-U.S. banks. Some municipal securities, such as general obligation issues, are backed by the issuer’s taxing authority, while other municipal securities, such as revenue issues, are backed only by revenues from certain facilities or other sources and not by the issuer itself. The fund invests in securities that, at the time of purchase, are rated by one or more rating agencies in the highest short-term rating category (or, with respect to not more than 3% of its total assets, in the second highest category) or, if not rated, are determined by the subadviser to be of equivalent quality. The interest paid on municipal securities purchased by the fund is excluded from gross income for regular federal income tax purposes, and, as noted above, will not typically be subject to the federal alternative minimum tax. As a result, the rate of interest paid on these securities normally is lower than the rate of interest paid on fully taxable securities. Under normal circumstances, the fund must invest at least 80% of its net assets in short-term high quality municipal obligations and interests in municipal obligations that pay interest that is exempt from federal income tax, including the federal alternative minimum tax. Although the fund will ordinarily not invest in securities the interest on which is subject to regular federal income tax or the federal alternative minimum tax, when the subadviser believes that suitable AMT-free municipal securities are not available, the fund may temporarily invest up to 20% of its assets in investments that pay interest that may be subject to federal income tax or the federal alternative minimum tax. In addition, the fund may depart from its principal investment strategies in response to unusually adverse market, economic or political conditions, as described under “More on the funds’ investment strategies, investments and risks—Defensive investing.” As a money market fund, the fund tries to maintain a share price of $1.00, and must follow strict rules as to the credit quality, liquidity, diversification and maturity of its investments. Where required by these rules, the fund’s subadviser or Board of Trustees (the “Board”) will decide whether a security should be held or sold in the event of credit downgrades or certain other events occurring after purchase. Certain risks An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. There is no assurance that the fund will meet its investment objective. The fund could underperform other short-term municipal debt instruments or money market funds, or you could lose money, as a result of risks such as: Market and interest rate risk. There may be changes in interest rates, lack of liquidity or other disruptions in the bond markets or other adverse market events and conditions. The financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities of issuers worldwide. In response to the crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. The withdrawal of this support, failure of efforts in response to the crisis, or investor perception that these efforts are not succeeding could negatively affect financial markets generally as well as the value and liquidity of certain securities. In addition, policy and legislative changes in the United States and in other countries are changing many aspects of financial regulation. The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time. Credit risk. An issuer or obligor of a security held by the fund or a counterparty to a financial contract with the fund may default or its credit may be downgraded, or the value of assets underlying a security may decline. Yield risk. The amount of income received by the fund will go up or down depending on day-to-day variations in short-term interest rates, and when interest rates are very low the fund’s expenses could absorb all or a significant portion of the fund’s income. If interest rates increase, the fund’s yield may not increase proportionately. For example, the fund’s manager may discontinue any temporary voluntary fee limitation or recoup amounts previously waived and/or reimbursed. In addition, the recent adoption of more stringent regulations governing the management of money market funds could have a negative effect on the fund’s yield. Risk of increase in expenses. Your actual costs of investing in the fund may be higher than the expenses shown in “Annual fund operating expenses” for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets are lower than estimated, or if a fee limitation is changed or terminated. Tax risk. The income on the fund’s municipal securities could become subject to federal income tax due to noncompliant conduct by issuers, unfavorable legislation or litigation or adverse interpretations by regulatory authorities. Structured securities risk. The payment and credit qualities of structured securities derive from their underlying assets, and they may behave in ways not anticipated by the fund, or they may not receive tax, accounting or regulatory treatment anticipated by the fund. Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in municipal securities and interests in municipal securities that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. Risks relating to investments in municipal securities. Municipal issuers may be adversely affected by rising health care costs, increasing unfunded pension liabilities, and by the phasing out of federal programs providing financial support. Unfavorable conditions and developments relating to projects financed with municipal securities can result in lower revenues to issuers of municipal securities. Issuers often depend on revenues from these projects to make principal and interest payments. The value of municipal securities can also be adversely affected by changes in the financial condition of one or more individual municipal issuers or insurers of municipal issuers, regulatory and political developments, tax law changes or other legislative actions, and by uncertainties and public perceptions concerning these and other factors. Prepayment or call risk. Many issuers have a right to prepay their securities. If interest rates fall, an issuer may exercise this right. If this happens, the fund will be forced to reinvest prepayment proceeds at a time when yields on securities available in the market are lower than the yield on the prepaid security. Extension risk. If interest rates rise, repayments of fixed income securities may occur more slowly than anticipated by the market. This may drive the prices of these securities down because their interest rates are lower than the current interest rate and they remain outstanding longer. Portfolio selection risk. The value of your investment may decrease if the subadviser’s judgment about the quality, relative yield or value of, or market trends affecting, a particular security or sector, or about interest rates generally, is incorrect. Redemption risk. The fund may experience heavy redemptions, particularly during periods of declining or illiquid markets, that could cause the fund to liquidate its assets at inopportune times or at a loss or depressed value and that could affect the fund’s ability to maintain a $1.00 share price. In addition, the fund may suspend redemptions when permitted by applicable regulations. These risks are discussed in more detail later in this Prospectus or in the statement of additional information ("SAI"). Performance The accompanying bar chart and table provide some indication of the risks of investing in the fund. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class A shares), a class of the fund that is invested in the same portfolio of securities as Investor Shares. The table shows the average annual total returns of Institutional Shares. No performance information is presented for Investor Shares because there were no Investor Shares outstanding during the calendar years shown. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. The fund makes updated performance information available at the fund’s website, http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class), or by calling the fund at 1-877-721-1926 or 1-203-703-6002. The fund’s past performance is not necessarily an indication of how the fund will perform in the future. Annual fund operating expenses (expenses that you pay each year as a percentage of the value of your investment) (%) Total returns (%) Total returns (%) Calendar Years ended December 31 Best quarter (12/31/2006): 1.32 Worst quarter (09/30/2011): 0.03 The year-to-date return as of the most recent calendar quarter, which ended 09/30/2012, was 0.15 Calendar Years ended December 31 Best quarter (09/30/2007): 0.88 Worst quarter (03/31/2010): 0.02 The year-to-date return as of the most recent calendar quarter, which ended 09/30/2012, was 0.04 The year-to-date return as of the most recent calendar quarter 0.0018 Average annual total returns (for periods ended December 31, 2011) (%) 2012-09-30 0.002 0.0015 0.0002 Best quarter 0.004 2006-12-31 0.0134 Worst quarter 2011-09-30 0.0003 0.0134 0.0089 0.0104 0.0223 0.0327 0.0347 0.0216 0.0038 The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class O shares), a class of the fund that is invested in the same portfolio of securities as Administrative Shares. The table shows the average annual total returns of Institutional Shares. No performance information is presented for Administrative Shares because there were no Administrative Shares outstanding during the calendar years shown. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. 0.0019 0.0016 Average annual total returns (for periods ended December 31, 2011) (%) The year-to-date return as of the most recent calendar quarter 2012-09-30 0.0015 Best quarter 2006-12-31 0.0132 Worst quarter 2011-09-30 0.0003 0.0017 0.0183 0.0217 2002-10-02 <div style="display:none">~ http://www.leggmason.com/role/ScheduleShareholderFeesWesternAssetInstitutionalLiquidReservesAdministrativeShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualFundOperatingExpensesWesternAssetInstitutionalLiquidReservesAdministrativeShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleExpenseExampleTransposedWesternAssetInstitutionalLiquidReservesAdministrativeShares column period compact * ~</div> Best quarter 0.0088 2007-09-30 Worst quarter 0.0002 2010-03-31 The year-to-date return as of the most recent calendar quarter 0.0004 2012-09-30 Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in municipal securities and interests in municipal securities that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualTotalReturnsWesternAssetInstitutionalLiquidReservesAdministrativeSharesBarChart column period compact * ~</div> Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class A shares), a class of the fund that is invested in the same portfolio of securities as Investor Shares. “Other expenses” for Administrative Shares are estimated for the current fiscal year. Actual expenses may differ from estimates. 1-877-721-1926 or 1-203-703-6002 http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class) The fund’s past performance is not necessarily an indication of how the fund will perform in the future. Example <div style="display:none">~ http://www.leggmason.com/role/ScheduleAverageAnnualTotalReturnsTransposedWesternAssetInstitutionalLiquidReservesAdministrativeShares column period compact * ~</div> This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes:<ul type="square"><li style="margin-left:-20px">You invest $10,000 in the fund for the time periods indicated</li><li style="margin-left:-20px">Your investment has a 5% return each year and the fund’s operating expenses remain the same</li><li style="margin-left:-20px">You reinvest all distributions and dividends without a sales charge</li></ul>Although your actual costs may be higher or lower, based on these assumptions your costs would be: Number of years you own your shares ($) “Other expenses” for Investor Shares are estimated for the current fiscal year. Actual expenses may differ from estimates. 41 129 225 506 <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualTotalReturnsWesternAssetInstitutionalTaxFreeReservesBarChart column period compact * ~</div> The fund invests in securities through an underlying fund: U.S. Treasury Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of U.S. Treasury Reserves Portfolio. The fund invests in securities through an underlying fund: U.S. Treasury Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of U.S. Treasury Reserves Portfolio. The fund’s investment objective is to provide shareholders with liquidity and as high a level of current income from U.S. government obligations as is consistent with preservation of capital. Principal investment strategies The fund is a money market fund which invests all of its assets in direct obligations of the U.S. Treasury, including U.S. Treasury bills, notes and bonds. The fund will not enter into repurchase agreements, but may enter into reverse repurchase agreements to satisfy redemption requests or for other temporary or emergency purposes. Although the fund invests in U.S. government obligations, an investment in the fund is neither insured nor guaranteed by the U.S. government. As a money market fund, the fund tries to maintain a share price of $1.00, and must follow strict rules as to the credit quality, liquidity, diversification and maturity of its investments. Where required by these rules, the fund’s subadviser or Board of Trustees (the “Board”) will decide whether a security should be held or sold in the event of credit downgrades or certain other events occurring after purchase. Certain risks December 31, 2014 The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class A shares), a class of the fund that is invested in the same portfolio of securities as Investor Shares. The table shows the average annual total returns of Institutional Shares. No performance information is presented for Investor Shares because there were no Investor Shares outstanding during the calendar years shown. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. There is no assurance that the fund will meet its investment objective. The fund could underperform other short-term debt instruments or money market funds, or you could lose money, as a result of risks such as: Market and interest rate risk. There may be changes in interest rates, lack of liquidity or other disruptions in the bond markets or other adverse market events and conditions. The financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities of issuers worldwide. In response to the crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. The withdrawal of this support, failure of efforts in response to the crisis, or investor perception that these efforts are not succeeding could negatively affect financial markets generally as well as the value and liquidity of certain securities. In addition, policy and legislative changes in the United States and in other countries are changing many aspects of financial regulation. The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time. Credit risk. An issuer or obligor of a security held by the fund or a counterparty to a financial contract with the fund may default or its credit may be downgraded, or the value of assets underlying a security may decline. Yield risk. The amount of income received by the fund will go up or down depending on day-to-day variations in short-term interest rates, and when interest rates are very low the fund’s expenses could absorb all or a significant portion of the fund’s income. If interest rates increase, the fund’s yield may not increase proportionately. For example, the fund’s manager may discontinue any temporary voluntary fee limitation or recoup amounts previously waived and/or reimbursed. In addition, the recent adoption of more stringent regulations governing the management of money market funds could have a negative effect on the fund’s yield. Risk of increase in expenses. Your actual costs of investing in the fund may be higher than the expenses shown in “Annual fund operating expenses” for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets are lower than estimated, or if a fee limitation is changed or terminated. Portfolio selection risk. The value of your investment may decrease if the subadviser’s judgment about the quality, relative yield or value of, or market trends affecting, a particular security or sector, or about interest rates generally, is incorrect. Redemption risk. The fund may experience heavy redemptions, particularly during periods of declining or illiquid markets, that could cause the fund to liquidate its assets at inopportune times or at a loss or depressed value and that could affect the fund’s ability to maintain a $1.00 share price. In addition, the fund may suspend redemptions when permitted by applicable regulations. These risks are discussed in more detail later in this Prospectus or in the statement of additional information (“SAI”). 0 0 The accompanying bar chart and table provide some indication of the risks of investing in the fund. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares, a class of the fund that is invested in the same portfolio of securities as Investor Shares. The table shows the average annual total returns of Institutional Shares. No performance information is presented for Investor Shares because there were no Investor Shares outstanding during the calendar years shown. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. The fund makes updated performance information available at the fund’s website, http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class), or by calling the fund at 1-877-721-1926 or 1-203-703-6002. The fund’s past performance is not necessarily an indication of how the fund will perform in the future. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. 0.0025 0.001 0.0006 Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. 0.0041 -0.0006 0.0035 An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Performance 36 119 217 505 The accompanying bar chart and table provide some indication of the risks of investing in the fund. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares, a class of the fund that is invested in the same portfolio of securities as Administrative Shares. The table shows the average annual total returns of Institutional Shares. No performance information is presented for Administrative Shares because there were no Administrative Shares outstanding during the calendar years shown. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. The fund makes updated performance information available at the fund’s website, http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class), or by calling the fund at 1-877-721-1926 or 1-203-703-6002. The fund’s past performance is not necessarily an indication of how the fund will perform in the future. 0.0016 0.0127 0.0151 The bar chart shows changes in the fund’s performance from year to year for Institutional Shares, a class of the fund that is invested in the same portfolio of securities as Administrative Shares. 1-877-721-1926 or 1-203-703-6002 http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class) The fund’s past performance is not necessarily an indication of how the fund will perform in the future. Total returns (%) Calendar Years ended December 31 Best quarter (12/31/2006): 1.22 Worst quarter (03/31/2010): 0.00 The year-to-date return as of the most recent calendar quarter, which ended 09/30/2012, was 0.01 The year-to-date return as of the most recent calendar quarter 2012-09-30 0.0001 Best quarter 2006-12-31 0.0122 Worst quarter 2010-03-31 0 Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. <div style="display:none">~ http://www.leggmason.com/role/ScheduleShareholderFeesWesternAssetInstitutionalAMTFreeMunicipalMoneyMarketFundInvestorShares column period compact * ~</div> Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. 0.0152 0.0083 0.0102 0.0279 0.0459 0.0442 0.0158 0.0013 0.0002 0.0002 0.0185 0.0108 0.013 0.0319 0.0502 0.0527 0.0298 0.0062 0.0021 0.0017 Average annual total returns (for periods ended December 31, 2011) (%) <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualFundOperatingExpensesWesternAssetInstitutionalAMTFreeMunicipalMoneyMarketFundInvestorShares column period compact * ~</div> 0.0002 0.0122 <div style="display:none">~ http://www.leggmason.com/role/ScheduleExpenseExampleTransposedWesternAssetInstitutionalAMTFreeMunicipalMoneyMarketFundInvestorShares column period compact * ~</div> 0.0168 <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualTotalReturnsWesternAssetInstitutionalAMTFreeMunicipalMoneyMarketFundInvestorSharesBarChart column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAverageAnnualTotalReturnsTransposedWesternAssetInstitutionalAMTFreeMunicipalMoneyMarketFundInvestorShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleShareholderFeesWesternAssetInstitutionalU.S.TreasuryReservesAdministrativeShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualFundOperatingExpensesWesternAssetInstitutionalU.S.TreasuryReservesAdministrativeShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleExpenseExampleTransposedWesternAssetInstitutionalU.S.TreasuryReservesAdministrativeShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualTotalReturnsWesternAssetInstitutionalU.S.TreasuryReservesAdministrativeSharesBarChart column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAverageAnnualTotalReturnsTransposedWesternAssetInstitutionalU.S.TreasuryReservesAdministrativeShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleShareholderFeesWesternAssetInstitutionalCashReservesAdministrativeShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualFundOperatingExpensesWesternAssetInstitutionalCashReservesAdministrativeShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleExpenseExampleTransposedWesternAssetInstitutionalCashReservesAdministrativeShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualTotalReturnsWesternAssetInstitutionalCashReservesAdministrativeSharesBarChart column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAverageAnnualTotalReturnsTransposedWesternAssetInstitutionalCashReservesAdministrativeShares column period compact * ~</div> Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in obligations that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Western Asset Institutional Government Reserves Investment objective The fund seeks maximum current income to the extent consistent with preservation of capital and the maintenance of liquidity. Fees and expenses of the fund The accompanying table describes the fees and expenses that you may pay if you buy and hold Administrative Shares of the fund. Shareholder fees (fees paid directly from your investment) (%) 0 0 Annual fund operating expenses (expenses that you pay each year as a percentage of the value of your investment) (%) 0.002 0.002 0.0002 0.0042 -0.0002 0.004 “Other expenses” for Administrative Shares are estimated for the current fiscal year. Actual expenses may differ from estimates. December 31, 2014 Example This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes:<ul type="square"><li style="margin-left:-20px">You invest $10,000 in the fund for the time periods indicated</li><li style="margin-left:-20px">Your investment has a 5% return each year and the fund’s operating expenses remain the same</li><li style="margin-left:-20px">You reinvest all distributions and dividends without a sales charge</li></ul>Although your actual costs may be higher or lower, based on these assumptions your costs would be: Number of years you own your shares ($) 41 133 231 525 The fund invests in securities through an underlying fund: Government Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Government Portfolio. The fund invests in securities through an underlying fund: Government Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Government Portfolio. Principal investment strategies The fund is a money market fund which invests exclusively in short-term U.S. government obligations, including U.S. Treasuries and securities issued or guaranteed by the U.S. government or its agencies, authorities, instrumentalities or sponsored entities and in repurchase agreements. These securities may pay interest at fixed, floating or adjustable rates or may be issued at a discount. U.S. government obligations are not necessarily backed by the full faith and credit of the United States. Although the fund invests in U.S. government obligations, an investment in the fund is neither insured nor guaranteed by the U.S. government. The fund invests in securities that, at the time of purchase, are rated by one or more rating agencies in the highest short term rating category or, if not rated, are determined by the subadviser to be of equivalent quality. As a money market fund, the fund tries to maintain a share price of $1.00, and must follow strict rules as to the credit quality, liquidity, diversification and maturity of its investments. Where required by these rules, the fund’s subadviser or Board of Trustees (the “Board”) will decide whether a security should be held or sold in the event of credit downgrades or certain other events occurring after purchase. Certain risks <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualTotalReturnsWesternAssetInstitutionalTaxFreeReservesInvestorSharesBarChart column period compact * ~</div> 0 0 An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. There is no assurance that the fund will meet its investment objective. The fund could underperform other short-term debt instruments or money market funds, or you could lose money, as a result of risks such as: Market and interest rate risk. There may be changes in interest rates, lack of liquidity or other disruptions in the bond markets or other adverse market events and conditions. The financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities of issuers worldwide. In response to the crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. The withdrawal of this support, failure of efforts in response to the crisis, or investor perception that these efforts are not succeeding could negatively affect financial markets generally as well as the value and liquidity of certain securities. In addition, policy and legislative changes in the United States and in other countries are changing many aspects of financial regulation. The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time. Credit risk. An issuer or obligor of a security held by the fund or a counterparty to a financial contract with the fund may default or its credit may be downgraded, or the value of assets underlying a security may decline. Yield risk. The amount of income received by the fund will go up or down depending on day-to-day variations in short-term interest rates, and when interest rates are very low the fund’s expenses could absorb all or a significant portion of the fund’s income. If interest rates increase, the fund’s yield may not increase proportionately. For example, the fund’s manager may discontinue any temporary voluntary fee limitation or recoup amounts previously waived and/or reimbursed. In addition, the recent adoption of more stringent regulations governing the management of money market funds could have a negative effect on the fund’s yield. Risk of increase in expenses. Your actual costs of investing in the fund may be higher than the expenses shown in “Annual fund operating expenses” for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets are lower than estimated, or if a fee limitation is changed or terminated. Portfolio selection risk. The value of your investment may decrease if the subadviser’s judgment about the quality, relative yield or value of, or market trends affecting, a particular security or sector, or about interest rates generally, is incorrect. Redemption risk. The fund may experience heavy redemptions, particularly during periods of declining or illiquid markets, that could cause the fund to liquidate its assets at inopportune times or at a loss or depressed value and that could affect the fund’s ability to maintain a $1.00 share price. In addition, the fund may suspend redemptions when permitted by applicable regulations. These risks are discussed in more detail later in this Prospectus or in the statement of additional information ("SAI"). Western Asset Institutional Tax Free Reserves Investment objective The fund’s investment objectives are to provide shareholders with high levels of current income exempt from federal income taxes, preservation of capital and liquidity. Fees and expenses of the fund The accompanying table describes the fees and expenses that you may pay if you buy and hold Administrative Shares of the fund. Shareholder fees (fees paid directly from your investment) (%) Annual fund operating expenses (expenses that you pay each year as a percentage of the value of your investment) (%) 0.0024 Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. 0.002 0.0005 0.0049 -0.0009 0.004 Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. Example This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes:<ul type="square"><li style="margin-left:-20px">You invest $10,000 in the fund for the time periods indicated</li><li style="margin-left:-20px">Your investment has a 5% return each year and the fund’s operating expenses remain the same</li><li style="margin-left:-20px">You reinvest all distributions and dividends without a sales charge</li></ul>Although your actual costs may be higher or lower, based on these assumptions your costs would be: Number of years you own your shares ($) 0 41 139 256 0 598 0.0025 0.002 0.0006 0.0051 -0.0011 0.004 <div style="display:none">~ http://www.leggmason.com/role/ScheduleShareholderFeesWesternAssetInstitutionalTaxFreeReservesInvestorShares column period compact * ~</div> 41 141 263 619 An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund invests in securities through an underlying fund: Tax Free Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Tax Free Reserves Portfolio. Principal investment strategies The fund is a money market fund which, under normal market conditions, invests at least 80% of its assets in short-term high quality municipal obligations and interests in municipal obligations that pay interest that is exempt from federal income tax, including the federal alternative minimum tax. Municipal securities include debt obligations issued by any of the 50 states and their political subdivisions, agencies and public authorities, certain other governmental issuers (such as Puerto Rico, the U.S. Virgin Islands and Guam) and other qualifying issuers. These securities include participation or other interests in municipal securities and other structured securities such as variable rate demand obligations, tender option bonds, partnership interests and swap-based securities, many of which may be issued or backed by U.S. or non-U.S. banks. Some municipal securities, such as general obligation issues, are backed by the issuer’s taxing authority, while other municipal securities, such as revenue issues, are backed only by revenues from certain facilities or other sources and not by the issuer itself. The fund invests in securities that, at the time of purchase, are rated by one or more rating agencies in the highest short-term rating category (or, with respect to not more than 3% of its total assets, in the second highest category) or, if not rated, are determined by the subadviser to be of equivalent quality. Under normal circumstances, the fund may invest up to 20% of its assets in investments that pay interest that may be subject to regular federal income tax and/or the federal alternative minimum tax, although for temporary or defensive purposes, the fund may invest an unlimited amount in such securities. As a money market fund, the fund tries to maintain a share price of $1.00, and must follow strict rules as to the credit quality, liquidity, diversification and maturity of its investments. Where required by these rules, the fund’s subadviser or Board of Trustees (the “Board”) will decide whether a security should be held or sold in the event of credit downgrades or certain other events occurring after purchase. Certain risks Performance <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualFundOperatingExpensesWesternAssetInstitutionalTaxFreeReservesInvestorShares column period compact * ~</div> 0.0016 0.0127 0.0151 <div style="display:none">~ http://www.leggmason.com/role/ScheduleExpenseExampleTransposedWesternAssetInstitutionalTaxFreeReservesInvestorShares column period compact * ~</div> The accompanying bar chart and table provide some indication of the risks of investing in the fund. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class A shares), a class of the fund that is invested in the same portfolio of securities as Administrative Shares. The table shows the average annual total returns of Institutional Shares. No performance information is presented for Administrative Shares because there were no Administrative Shares outstanding during the calendar years shown. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. The fund makes updated performance information available at the fund’s website, http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class), or by calling the fund at 1-877-721-1926 or 1-203-703-6002. The fund’s past performance is not necessarily an indication of how the fund will perform in the future. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class A shares), a class of the fund that is invested in the same portfolio of securities as Administrative Shares. 1-877-721-1926 or 1-203-703-6002 http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class) 0.0134 0.0089 0.0104 0.0223 0.0327 0.0347 The fund’s past performance is not necessarily an indication of how the fund will perform in the future. 0.0216 0.0038 0.0019 0.0016 Total returns (%) Calendar Years ended December 31 Best quarter (12/31/2006): 1.28 Worst quarter (09/30/2011): 0.01 The year-to-date return as of the most recent calendar quarter, which ended 09/30/2012, was 0.03 Western Asset Institutional AMT Free Municipal Money Market Fund Investment objective The fund seeks current income that is exempt from federal income tax to the extent consistent with preservation of capital and the maintenance of liquidity. Fees and expenses of the fund The year-to-date return as of the most recent calendar quarter 2012-09-30 Shareholder fees (fees paid directly from your investment) (%) 0.0003 Best quarter Annual fund operating expenses (expenses that you pay each year as a percentage of the value of your investment) (%) 2006-12-31 0.0128 <div style="display:none">~ http://www.leggmason.com/role/ScheduleAverageAnnualTotalReturnsTransposedWesternAssetInstitutionalTaxFreeReservesInvestorShares column period compact * ~</div> Worst quarter This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes:<ul type="square"><li style="margin-left:-20px">You invest $10,000 in the fund for the time periods indicated</li><li style="margin-left:-20px">Your investment has a 5% return each year and the fund’s operating expenses remain the same</li><li style="margin-left:-20px">You reinvest all distributions and dividends without a sales charge</li></ul>Although your actual costs may be higher or lower, based on these assumptions your costs would be: 2011-09-30 0.0001 Number of years you own your shares ($) Principal investment strategies Certain risks An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. There is no assurance that the fund will meet its investment objective. The fund could underperform other short-term municipal debt instruments or money market funds, or you could lose money, as a result of risks such as: Market and interest rate risk. There may be changes in interest rates, lack of liquidity or other disruptions in the bond markets or other adverse market events and conditions. The financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities of issuers worldwide. In response to the crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. The withdrawal of this support, failure of efforts in response to the crisis, or investor perception that these efforts are not succeeding could negatively affect financial markets generally as well as the value and liquidity of certain securities. In addition, policy and legislative changes in the United States and in other countries are changing many aspects of financial regulation. The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time. Credit risk. An issuer or obligor of a security held by the fund or a counterparty to a financial contract with the fund may default or its credit may be downgraded, or the value of assets underlying a security may decline. Yield risk. The amount of income received by the fund will go up or down depending on day-to-day variations in short-term interest rates, and when interest rates are very low the fund’s expenses could absorb all or a significant portion of the fund’s income. If interest rates increase, the fund’s yield may not increase proportionately. For example, the fund’s manager may discontinue any temporary voluntary fee limitation or recoup amounts previously waived and/or reimbursed. In addition, the recent adoption of more stringent regulations governing the management of money market funds could have a negative effect on the fund’s yield. Risk of increase in expenses. Your actual costs of investing in the fund may be higher than the expenses shown in “Annual fund operating expenses” for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets are lower than estimated, or if a fee limitation is changed or terminated. Tax risk. The income on the fund’s municipal securities could become subject to federal income tax due to noncompliant conduct by issuers, unfavorable legislation or litigation or adverse interpretations by regulatory authorities. Structured securities risk. The payment and credit qualities of structured securities derive from their underlying assets, and they may behave in ways not anticipated by the fund, or they may not receive tax, accounting or regulatory treatment anticipated by the fund. Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in municipal securities and interests in municipal securities that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. Risks relating to investments in municipal securities. Municipal issuers may be adversely affected by rising health care costs, increasing unfunded pension liabilities, and by the phasing out of federal programs providing financial support. Unfavorable conditions and developments relating to projects financed with municipal securities can result in lower revenues to issuers of municipal securities. Issuers often depend on revenues from these projects to make principal and interest payments. The value of municipal securities can also be adversely affected by changes in the financial condition of one or more individual municipal issuers or insurers of municipal issuers, regulatory and political developments, tax law changes or other legislative actions, and by uncertainties and public perceptions concerning these and other factors. Prepayment or call risk. Many issuers have a right to prepay their securities. If interest rates fall, an issuer may exercise this right. If this happens, the fund will be forced to reinvest prepayment proceeds at a time when yields on securities available in the market are lower than the yield on the prepaid security. Extension risk. If interest rates rise, repayments of fixed income securities may occur more slowly than anticipated by the market. This may drive the prices of these securities down because their interest rates are lower than the current interest rate and they remain outstanding longer. Portfolio selection risk. The value of your investment may decrease if the subadviser’s judgment about the quality, relative yield or value of, or market trends affecting, a particular security or sector, or about interest rates generally, is incorrect. Redemption risk. The fund may experience heavy redemptions, particularly during periods of declining or illiquid markets, that could cause the fund to liquidate its assets at inopportune times or at a loss or depressed value and that could affect the fund’s ability to maintain a $1.00 share price. In addition, the fund may suspend redemptions when permitted by applicable regulations. These risks are discussed in more detail later in this Prospectus or in the statement of additional information (“SAI”). Performance The accompanying bar chart and table provide some indication of the risks of investing in the fund. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class A shares), a class of the fund that is invested in the same portfolio of securities as Administrative Shares. The table shows the average annual total returns of Institutional Shares. No performance information is presented for Administrative Shares because there were no Administrative Shares outstanding during the calendar years shown. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. The fund makes updated performance information available at the fund’s website, http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class), or by calling the fund at 1-877-721-1926 or 1-203-703-6002. The fund’s past performance is not necessarily an indication of how the fund will perform in the future. Total returns (%) Calendar Years ended December 31 Best quarter (09/30/2007): 0.88 Worst quarter (03/31/2010): 0.02 The year-to-date return as of the most recent calendar quarter, which ended 09/30/2012, was 0.04 Average annual total returns (for periods ended December 31, 2011) (%) The accompanying table describes the fees and expenses that you may pay if you buy and hold Administrative Shares of the fund. The fund is a money market fund which, under normal circumstances, will invest substantially all of its assets in short-term high quality municipal securities whose interest is exempt from federal income tax, including the federal alternative minimum tax. Municipal securities include debt obligations issued by any of the 50 states and their political subdivisions, agencies and public authorities, certain other governmental issuers (such as Puerto Rico, the U.S. Virgin Islands and Guam) and other qualifying issuers. These securities include participation or other interests in municipal securities and other structured securities such as variable rate demand obligations, tender option bonds, partnership interests and swap-based securities, many of which may be issued or backed by U.S. or non-U.S. banks. Some municipal securities, such as general obligation issues, are backed by the issuer’s taxing authority, while other municipal securities, such as revenue issues, are backed only by revenues from certain facilities or other sources and not by the issuer itself. The fund invests in securities that, at the time of purchase, are rated by one or more rating agencies in the highest short-term rating category (or, with respect to not more than 3% of its total assets, in the second highest category) or, if not rated, are determined by the subadviser to be of equivalent quality. The interest paid on municipal securities purchased by the fund is excluded from gross income for regular federal income tax purposes, and, as noted above, will not typically be subject to the federal alternative minimum tax. As a result, the rate of interest paid on these securities normally is lower than the rate of interest paid on fully taxable securities. Under normal circumstances, the fund must invest at least 80% of its net assets in short-term high quality municipal obligations and interests in municipal obligations that pay interest that is exempt from federal income tax, including the federal alternative minimum tax. Although the fund will ordinarily not invest in securities the interest on which is subject to regular federal income tax or the federal alternative minimum tax, when the subadviser believes that suitable AMT-free municipal securities are not available, the fund may temporarily invest up to 20% of its assets in investments that pay interest that may be subject to federal income tax or the federal alternative minimum tax. In addition, the fund may depart from its principal investment strategies in response to unusually adverse market, economic or political conditions, as described under “More on the funds’ investment strategies, investments and risks – Defensive investing.” As a money market fund, the fund tries to maintain a share price of $1.00, and must follow strict rules as to the credit quality, liquidity, diversification and maturity of its investments. Where required by these rules, the fund’s subadviser or Board of Trustees (the “Board”) will decide whether a security should be held or sold in the event of credit downgrades or certain other events occurring after purchase. Example December 31, 2014 The fund invests in securities through an underlying fund: Tax Free Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Tax Free Reserves Portfolio. “Other expenses” for Administrative Shares are estimated for the current fiscal year. Actual expenses may differ from estimates. <div style="display:none">~ http://www.leggmason.com/role/ScheduleShareholderFeesWesternAssetInstitutionalAMTFreeMunicipalMoneyMarketFundAdministrativeShares column period compact * ~</div> 0.0154 <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualFundOperatingExpensesWesternAssetInstitutionalAMTFreeMunicipalMoneyMarketFundAdministrativeShares column period compact * ~</div> 0.0095 0.0116 0.0304 0.0483 0.0502 0.0246 An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. There is no assurance that the fund will meet its investment objective. The fund could underperform other short-term municipal debt instruments or money market funds, or you could lose money, as a result of risks such as: Market and interest rate risk. There may be changes in interest rates, lack of liquidity or other disruptions in the bond markets or other adverse market events and conditions. The financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities of issuers worldwide. In response to the crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. The withdrawal of this support, failure of efforts in response to the crisis, or investor perception that these efforts are not succeeding could negatively affect financial markets generally as well as the value and liquidity of certain securities. In addition, policy and legislative changes in the United States and in other countries are changing many aspects of financial regulation. The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time. Credit risk. An issuer or obligor of a security held by the fund or a counterparty to a financial contract with the fund may default or its credit may be downgraded, or the value of assets underlying a security may decline. Yield risk. The amount of income received by the fund will go up or down depending on day-to-day variations in short-term interest rates, and when interest rates are very low the fund’s expenses could absorb all or a significant portion of the fund’s income. If interest rates increase, the fund’s yield may not increase proportionately. For example, the fund’s manager may discontinue any temporary voluntary fee limitation or recoup amounts previously waived and/or reimbursed. In addition, the recent adoption of more stringent regulations governing the management of money market funds could have a negative effect on the fund’s yield. Risk of increase in expenses. Your actual costs of investing in the fund may be higher than the expenses shown in “Annual fund operating expenses” for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets are lower than estimated, or if a fee limitation is changed or terminated. Tax risk. The income on the fund’s municipal securities could become subject to federal income tax due to noncompliant conduct by issuers, unfavorable legislation or litigation or adverse interpretations by regulatory authorities. Structured securities risk. The payment and credit qualities of structured securities derive from their underlying assets, and they may behave in ways not anticipated by the fund, or they may not receive tax, accounting or regulatory treatment anticipated by the fund. Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in municipal securities and interests in municipal securities that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. Risks relating to investments in municipal securities. Municipal issuers may be adversely affected by rising health care costs, increasing unfunded pension liabilities, and by the phasing out of federal programs providing financial support. Unfavorable conditions and developments relating to projects financed with municipal securities can result in lower revenues to issuers of municipal securities. Issuers often depend on revenues from these projects to make principal and interest payments. The value of municipal securities can also be adversely affected by changes in the financial condition of one or more individual municipal issuers or insurers of municipal issuers, regulatory and political developments, tax law changes or other legislative actions, and by uncertainties and public perceptions concerning these and other factors. Prepayment or call risk. Many issuers have a right to prepay their securities. If interest rates fall, an issuer may exercise this right. If this happens, the fund will be forced to reinvest prepayment proceeds at a time when yields on securities available in the market are lower than the yield on the prepaid security. Extension risk. If interest rates rise, repayments of fixed income securities may occur more slowly than anticipated by the market. This may drive the prices of these securities down because their interest rates are lower than the current interest rate and they remain outstanding longer. Portfolio selection risk. The value of your investment may decrease if the subadviser’s judgment about the quality, relative yield or value of, or market trends affecting, a particular security or sector, or about interest rates generally, is incorrect. Redemption risk. The fund may experience heavy redemptions, particularly during periods of declining or illiquid markets, that could cause the fund to liquidate its assets at inopportune times or at a loss or depressed value and that could affect the fund’s ability to maintain a $1.00 share price. In addition, the fund may suspend redemptions when permitted by applicable regulations. These risks are discussed in more detail later in this Prospectus or in the statement of additional information (“SAI”). The fund is classified as “non-diversified,” which means it may invest a larger percentage of its assets in a smaller number of issuers than a diversified fund. However, the fund intends to comply with the diversification requirements applicable to money market funds which limit the fund’s ability to invest in the obligations of a single issuer. 0.0039 0.0009 0.0004 Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in municipal securities and interests in municipal securities that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. The fund is classified as “non-diversified,” which means it may invest a larger percentage of its assets in a smaller number of issuers than a diversified fund. However, the fund intends to comply with the diversification requirements applicable to money market funds which limit the fund’s ability to invest in the obligations of a single issuer. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. <div style="display:none">~ http://www.leggmason.com/role/ScheduleExpenseExampleTransposedWesternAssetInstitutionalAMTFreeMunicipalMoneyMarketFundAdministrativeShares column period compact * ~</div> An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Performance The accompanying bar chart and table provide some indication of the risks of investing in the fund. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares, a class of the fund that is invested in the same portfolio of securities as Administrative Shares. The table shows the average annual total returns of Institutional Shares. No performance information is presented for Administrative Shares because there were no Administrative Shares outstanding during the calendar years shown. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. The fund makes updated performance information available at the fund’s website, http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class), or by calling the fund at 1-877-721-1926 or 1-203-703-6002. The fund’s past performance is not necessarily an indication of how the fund will perform in the future. <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualTotalReturnsWesternAssetInstitutionalAMTFreeMunicipalMoneyMarketFundAdministrativeSharesBarChart column period compact * ~</div> The bar chart shows changes in the fund’s performance from year to year for Institutional Shares, a class of the fund that is invested in the same portfolio of securities as Administrative Shares. 1-877-721-1926 or 1-203-703-6002 http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class) Average annual total returns (for periods ended December 31, 2011) (%) <div style="display:none">~ http://www.leggmason.com/role/ScheduleAverageAnnualTotalReturnsTransposedWesternAssetInstitutionalAMTFreeMunicipalMoneyMarketFundAdministrativeShares column period compact * ~</div> 0.0004 0.0158 0.0194 <div style="display:none">~ http://www.leggmason.com/role/ScheduleShareholderFeesWesternAssetInstitutionalGovernmentReservesAdministrativeShares column period compact * ~</div> 0.0016 0.0127 0.0151 <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualFundOperatingExpensesWesternAssetInstitutionalGovernmentReservesAdministrativeShares column period compact * ~</div> The fund’s past performance is not necessarily an indication of how the fund will perform in the future. Total returns (%) Calendar Years ended December 31 Best quarter (06/30/2007): 0.90 Worst quarter (12/31/2011): 0.02 The year-to-date return as of the most recent calendar quarter, which ended 09/30/2012, was 0.05 <div style="display:none">~ http://www.leggmason.com/role/ScheduleExpenseExampleTransposedWesternAssetInstitutionalGovernmentReservesAdministrativeShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualTotalReturnsWesternAssetInstitutionalGovernmentReservesAdministrativeSharesBarChart column period compact * ~</div> Average annual total returns (for periods ended December 31, 2011) (%) <div style="display:none">~ http://www.leggmason.com/role/ScheduleAverageAnnualTotalReturnsTransposedWesternAssetInstitutionalGovernmentReservesAdministrativeShares column period compact * ~</div> 0.014 0.0089 0.0102 0.0225 0.0327 0.035 0.0213 0.0041 0.0018 0.0016 The year-to-date return as of the most recent calendar quarter 2012-09-30 0.0005 Best quarter 2007-06-30 0.009 Worst quarter 2011-12-31 0.0002 The fund is a money market fund which invests all of its assets in direct obligations of the U.S. Treasury, including U.S. Treasury bills, notes and bonds. The fund will not enter into repurchase agreements, but may enter into reverse repurchase agreements to satisfy redemption requests or for other temporary or emergency purposes. Although the fund invests in U.S. government obligations, an investment in the fund is neither insured nor guaranteed by the U.S. government. As a money market fund, the fund tries to maintain a share price of $1.00, and must follow strict rules as to the credit quality, liquidity, diversification and maturity of its investments. Where required by these rules, the fund’s subadviser or Board of Trustees (the “Board”) will decide whether a security should be held or sold in the event of credit downgrades or certain other events occurring after purchase. <div style="display:none">~ http://www.leggmason.com/role/ScheduleShareholderFeesWesternAssetInstitutionalTaxFreeReservesAdministrativeShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualFundOperatingExpensesWesternAssetInstitutionalTaxFreeReservesAdministrativeShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleExpenseExampleTransposedWesternAssetInstitutionalTaxFreeReservesAdministrativeShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAverageAnnualTotalReturnsTransposedWesternAssetInstitutionalTaxFreeReservesAdministrativeShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualTotalReturnsWesternAssetInstitutionalTaxFreeReservesAdministrativeSharesBarChart column period compact * ~</div> Western Asset Institutional Cash Reserves Investment objective The fund’s investment objective is to provide shareholders with liquidity and as high a level of current income as is consistent with preservation of capital. Fees and expenses of the fund The accompanying table describes the fees and expenses that you may pay if you buy and hold Class S shares of the fund. 0 0 Annual fund operating expenses (expenses that you pay each year as a percentage of the value of your investment) (%) 0.002 0.0025 0.0003 0.0048 -0.0003 0.0045 Example Western Asset Institutional Government Reserves Investment objective The fund seeks maximum current income to the extent consistent with preservation of capital and the maintenance of liquidity. Fees and expenses of the fund The accompanying table describes the fees and expenses that you may pay if you buy and hold Premium Shares of the fund. Shareholder fees (fees paid directly from your investment) (%) Annual fund operating expenses (expenses that you pay each year as a percentage of the value of your investment) (%) Example Number of years you own your shares ($) The fund invests in securities through an underlying fund: Government Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Government Portfolio. Principal investment strategies The fund is a money market fund which invests exclusively in short-term U.S. government obligations, including U.S. Treasuries and securities issued or guaranteed by the U.S. government or its agencies, authorities, instrumentalities or sponsored entities and in repurchase agreements. These securities may pay interest at fixed, floating or adjustable rates or may be issued at a discount. U.S. government obligations are not necessarily backed by the full faith and credit of the United States. Although the fund invests in U.S. government obligations, an investment in the fund is neither insured nor guaranteed by the U.S. government. The fund invests in securities that, at the time of purchase, are rated by one or more rating agencies in the highest short-term rating category or, if not rated, are determined by the subadviser to be of equivalent quality. As a money market fund, the fund tries to maintain a share price of $1.00, and must follow strict rules as to the credit quality, liquidity, diversification and maturity of its investments. Where required by these rules, the fund’s subadviser or Board of Trustees (the “Board”) will decide whether a security should be held or sold in the event of credit downgrades or certain other events occurring after purchase. Certain risks An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. There is no assurance that the fund will meet its investment objective. The fund could underperform other short-term debt instruments or money market funds, or you could lose money, as a result of risks such as: Market and interest rate risk. There may be changes in interest rates, lack of liquidity or other disruptions in the bond markets or other adverse market events and conditions. The financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities of issuers worldwide. In response to the crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. The withdrawal of this support, failure of efforts in response to the crisis, or investor perception that these efforts are not succeeding could negatively affect financial markets generally as well as the value and liquidity of certain securities. In addition, policy and legislative changes in the United States and in other countries are changing many aspects of financial regulation. The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time. Credit risk. An issuer or obligor of a security held by the fund or a counterparty to a financial contract with the fund may default or its credit may be downgraded, or the value of assets underlying a security may decline. Yield risk. The amount of income received by the fund will go up or down depending on day-to-day variations in short-term interest rates, and when interest rates are very low the fund’s expenses could absorb all or a significant portion of the fund’s income. If interest rates increase, the fund’s yield may not increase proportionately. For example, the fund’s manager may discontinue any temporary voluntary fee limitation or recoup amounts previously waived and/or reimbursed. In addition, the recent adoption of more stringent regulations governing the management of money market funds could have a negative effect on the fund’s yield. Risk of increase in expenses. Your actual costs of investing in the fund may be higher than the expenses shown in “Annual fund operating expenses” for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets are lower than estimated, or if a fee limitation is changed or terminated. Portfolio selection risk. The value of your investment may decrease if the subadviser’s judgment about the quality, relative yield or value of, or market trends affecting, a particular security or sector, or about interest rates generally, is incorrect. Redemption risk. The fund may experience heavy redemptions, particularly during periods of declining or illiquid markets, that could cause the fund to liquidate its assets at inopportune times or at a loss or depressed value and that could affect the fund’s ability to maintain a $1.00 share price. In addition, the fund may suspend redemptions when permitted by applicable regulations. These risks are discussed in more detail later in this Prospectus or in the statement of additional information (“SAI”). The fund invests in securities through an underlying fund: Government Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Government Portfolio. An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Performance The accompanying bar chart and table provide some indication of the risks of investing in the fund. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class A shares), a class of the fund that is invested in the same portfolio of securities as Premium Shares. The table shows the average annual total returns of Institutional Shares. No performance information is presented for Premium Shares because there were no Premium Shares outstanding during the calendar years shown. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. The fund makes updated performance information available at the fund’s website, http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class), or by calling the fund at 1-877-721-1926 or 1-203-703-6002. The fund’s past performance is not necessarily an indication of how the fund will perform in the future. 1-877-721-1926 or 1-203-703-6002 http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class) The fund’s past performance is not necessarily an indication of how the fund will perform in the future. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. Total returns (%) Average annual total returns (for periods ended December 31, 2011) (%) This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes:<ul type="square"><li style="margin-left:-20px">You invest $10,000 in the fund for the time periods indicated</li><li style="margin-left:-20px">Your investment has a 5% return each year and the fund’s operating expenses remain the same</li><li style="margin-left:-20px">You reinvest all distributions and dividends without a sales charge</li></ul>Although your actual costs may be higher or lower, based on these assumptions your costs would be: The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class A shares), a class of the fund that is invested in the same portfolio of securities as Premium Shares. The table shows the average annual total returns of Institutional Shares. No performance information is presented for Premium Shares because there were no Premium Shares outstanding during the calendar years shown. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. Number of years you own your shares ($) 46 148 263 598 Principal investment strategies The fund is a money market fund which invests in high quality, U.S. dollar-denominated short-term debt securities that, at the time of purchase, are rated by one or more rating agencies in the highest short-term rating category or, if not rated, are determined by the subadviser to be of equivalent quality. The fund may invest in all types of money market instruments, including bank obligations, commercial paper and asset-backed securities, structured investments, repurchase agreements and other short-term debt securities. These instruments may be issued or guaranteed by all types of issuers, including U.S. and foreign banks and other private issuers, the U.S. government or any of its agencies or instrumentalities, U.S. states and municipalities, or foreign governments. These securities may pay interest at fixed, floating or adjustable rates, or may be issued at a discount. The fund may invest without limit in bank obligations, such as certificates of deposit, fixed time deposits and bankers’ acceptances. The fund generally limits its investments in foreign securities to U.S. dollar denominated obligations of issuers, including banks and foreign governments, located in the major industrialized countries, although with respect to bank obligations, the branches of the banks issuing the obligations may be located in The Bahamas or the Cayman Islands. As a money market fund, the fund tries to maintain a share price of $1.00, and must follow strict rules as to the credit quality, liquidity, diversification and maturity of its investments. Where required by these rules, the fund’s subadviser or Board of Trustees (the “Board”) will decide whether a security should be held or sold in the event of credit downgrades or certain other events occurring after purchase. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class A shares), a class of the fund that is invested in the same portfolio of securities as Premium Shares. Certain risks Western Asset Institutional Cash Reserves Investment objective Fees and expenses of the fund Shareholder fees (fees paid directly from your investment) (%) Annual fund operating expenses (expenses that you pay each year as a percentage of the value of your investment) (%) Example Number of years you own your shares ($) Calendar Years ended December 31 Best quarter (12/31/2006): 1.28 Worst quarter (09/30/2011): 0.01 The year-to-date return as of the most recent calendar quarter, which ended 09/30/2012, was 0.03 An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. There is no assurance that the fund will meet its investment objective. The fund could underperform other short-term debt instruments or money market funds, or you could lose money, as a result of risks such as: Market and interest rate risk. There may be changes in interest rates, lack of liquidity or other disruptions in the bond markets or other adverse market events and conditions. The financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities of issuers worldwide. In response to the crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. The withdrawal of this support, failure of efforts in response to the crisis, or investor perception that these efforts are not succeeding could negatively affect financial markets generally as well as the value and liquidity of certain securities. In addition, policy and legislative changes in the United States and in other countries are changing many aspects of financial regulation. The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time. Credit risk. An issuer or obligor of a security held by the fund or a counterparty to a financial contract with the fund may default or its credit may be downgraded, or the value of assets underlying a security may decline. Yield risk. The amount of income received by the fund will go up or down depending on day-to-day variations in short-term interest rates, and when interest rates are very low the fund’s expenses could absorb all or a significant portion of the fund’s income. If interest rates increase, the fund’s yield may not increase proportionately. For example, the fund’s manager may discontinue any temporary voluntary fee limitation or recoup amounts previously waived and/or reimbursed. In addition, the recent adoption of more stringent regulations governing the management of money market funds could have a negative effect on the fund’s yield. Risk of increase in expenses. Your actual costs of investing in the fund may be higher than the expenses shown in “Annual fund operating expenses” for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets decrease, or if a fee limitation is changed or terminated. Structured securities risk. The payment and credit qualities of structured securities derive from their underlying assets, and they may behave in ways not anticipated by the fund, or they may not receive tax, accounting or regulatory treatment anticipated by the fund. Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in obligations that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. Foreign investments risk. The fund’s investments in securities of foreign issuers or issuers with significant exposure to foreign markets involve additional risk. Foreign countries in which the fund may invest may have markets that are less liquid, less regulated and more volatile than U.S. markets. The value of the fund’s investments may decline because of factors affecting the particular issuer as well as foreign markets and issuers generally, such as unfavorable government actions, and political or financial instability. Lack of information may also affect the value of these securities. Prepayment or call risk. Many issuers have a right to prepay their securities. If interest rates fall, an issuer may exercise this right. If this happens, the fund will be forced to reinvest prepayment proceeds at a time when yields on securities available in the market are lower than the yield on the prepaid security. Extension risk. If interest rates rise, repayments of fixed income securities may occur more slowly than anticipated by the market. This may drive the prices of these securities down because their interest rates are lower than the current interest rate and they remain outstanding longer. Portfolio selection risk. The value of your investment may decrease if the subadviser’s judgment about the quality, relative yield or value of, or market trends affecting, a particular security or sector, or about interest rates generally, is incorrect. Redemption risk. The fund may experience heavy redemptions, particularly during periods of declining or illiquid markets, that could cause the fund to liquidate its assets at inopportune times or at a loss or depressed value and that could affect the fund’s ability to maintain a $1.00 share price. In addition, the fund may suspend redemptions when permitted by applicable regulations. These risks are discussed in more detail later in this Prospectus or in the statement of additional information (“SAI”). Performance The year-to-date return as of the most recent calendar quarter 2012-09-30 0.0003 Worst quarter The accompanying bar chart and table provide some indication of the risks of investing in the fund. The bar chart shows changes in the fund’s performance from year to year for Class S shares. The table shows the average annual total returns of each class of the fund’s shares offered through this Prospectus that has been in operation for at least one full calendar year. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. The fund makes updated performance information available at the fund’s website, http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class), or by calling the fund at 1-877-721-1926 or 1-203-703-6002. The fund’s past performance is not necessarily an indication of how the fund will perform in the future. 2011-09-30 0.0001 Best quarter 2006-12-31 0.0128 Total returns (%) 0.0154 0.0095 0.0116 0.0304 0.0483 0.0502 0.0246 0.0039 0.0009 0.0004 Calendar Years ended December 31 Best quarter (12/31/2006): 1.27 Worst quarter (03/31/2010): 0.00 The year-to-date return as of the most recent calendar quarter, which ended 09/30/2012, was 0.01 Principal investment strategies Certain risks Performance Total returns (%) Average annual total returns (for periods ended December 31, 2011) (%) Calendar Years ended December 31 Best quarter (12/31/2006): 1.31 Worst quarter (09/30/2011): 0.02 The year-to-date return as of the most recent calendar quarter, which ended 09/30/2012, was 0.11 The fund’s investment objective is to provide shareholders with liquidity and as high a level of current income as is consistent with preservation of capital. The accompanying table describes the fees and expenses that you may pay if you buy and hold Premium Shares of the fund. This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes:<ul type="square"><li style="margin-left:-20px">You invest $10,000 in the fund for the time periods indicated</li><li style="margin-left:-20px">Your investment has a 5% return each year and the fund’s operating expenses remain the same</li><li style="margin-left:-20px">You reinvest all distributions and dividends without a sales charge</li></ul>Although your actual costs may be higher or lower, based on these assumptions your costs would be: The fund invests in securities through an underlying fund: Prime Cash Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Prime Cash Reserves Portfolio. An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. There is no assurance that the fund will meet its investment objective. The fund could underperform other short-term debt instruments or money market funds, or you could lose money, as a result of risks such as: Market and interest rate risk. There may be changes in interest rates, lack of liquidity or other disruptions in the bond markets or other adverse market events and conditions. The financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities of issuers worldwide. In response to the crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. The withdrawal of this support, failure of efforts in response to the crisis, or investor perception that these efforts are not succeeding could negatively affect financial markets generally as well as the value and liquidity of certain securities. In addition, policy and legislative changes in the United States and in other countries are changing many aspects of financial regulation. The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time. Credit risk. An issuer or obligor of a security held by the fund or a counterparty to a financial contract with the fund may default or its credit may be downgraded, or the value of assets underlying a security may decline. Yield risk. The amount of income received by the fund will go up or down depending on day-to-day variations in short-term interest rates, and when interest rates are very low the fund’s expenses could absorb all or a significant portion of the fund’s income. If interest rates increase, the fund’s yield may not increase proportionately. For example, the fund’s manager may discontinue any temporary voluntary fee limitation or recoup amounts previously waived and/or reimbursed. In addition, the recent adoption of more stringent regulations governing the management of money market funds could have a negative effect on the fund’s yield. Risk of increase in expenses. Your actual costs of investing in the fund may be higher than the expenses shown in “Annual fund operating expenses” for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets are lower than estimated, or if a fee limitation is changed or terminated. Structured securities risk. The payment and credit qualities of structured securities derive from their underlying assets, and they may behave in ways not anticipated by the fund, or they may not receive tax, accounting or regulatory treatment anticipated by the fund. Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in obligations that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. Foreign investments risk. The fund’s investments in securities of foreign issuers or issuers with significant exposure to foreign markets involve additional risk. Foreign countries in which the fund may invest may have markets that are less liquid, less regulated and more volatile than U.S. markets. The value of the fund’s investments may decline because of factors affecting the particular issuer as well as foreign markets and issuers generally, such as unfavorable government actions, and political or financial instability. Lack of information may also affect the value of these securities. Prepayment or call risk. Many issuers have a right to prepay their securities. If interest rates fall, an issuer may exercise this right. If this happens, the fund will be forced to reinvest prepayment proceeds at a time when yields on securities available in the market are lower than the yield on the prepaid security. Extension risk. If interest rates rise, repayments of fixed income securities may occur more slowly than anticipated by the market. This may drive the prices of these securities down because their interest rates are lower than the current interest rate and they remain outstanding longer. Portfolio selection risk. The value of your investment may decrease if the subadviser’s judgment about the quality, relative yield or value of, or market trends affecting, a particular security or sector, or about interest rates generally, is incorrect. Redemption risk. The fund may experience heavy redemptions, particularly during periods of declining or illiquid markets, that could cause the fund to liquidate its assets at inopportune times or at a loss or depressed value and that could affect the fund’s ability to maintain a $1.00 share price. In addition, the fund may suspend redemptions when permitted by applicable regulations. These risks are discussed in more detail later in this Prospectus or in the statement of additional information ("SAI"). The accompanying bar chart and table provide some indication of the risks of investing in the fund. The bar chart shows changes in the fund’s performance from year to year for Class L shares, a class of the fund that is invested in the same portfolio of securities as Premium Shares. The table shows the average annual total returns of Class L shares. No performance information is presented for Premium Shares because there were no Premium Shares outstanding during the periods shown. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. The fund makes updated performance information available at the fund’s website, http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class), or by calling the fund at 1-877-721-1926 or 1-203-703-6002. The fund’s past performance is not necessarily an indication of how the fund will perform in the future. The fund is a money market fund which invests in high quality, U.S. dollar-denominated short-term debt securities that, at the time of purchase, are rated by one or more rating agencies in the highest short-term rating category or, if not rated, are determined by the subadviser to be of equivalent quality. The fund may invest in all types of money market instruments, including bank obligations, commercial paper and asset-backed securities, structured investments, repurchase agreements and other short-term debt securities. These instruments may be issued or guaranteed by all types of issuers, including U.S. and foreign banks and other private issuers, the U.S. government or any of its agencies or instrumentalities, U.S. states and municipalities, or foreign governments. These securities may pay interest at fixed, floating or adjustable rates, or may be issued at a discount. The fund may invest without limit in bank obligations, such as certificates of deposit, fixed time deposits and bankers’ acceptances. The fund generally limits its investments in foreign securities to U.S. dollar denominated obligations of issuers, including banks and foreign governments, located in the major industrialized countries, although with respect to bank obligations, the branches of the banks issuing the obligations may be located in The Bahamas or the Cayman Islands. As a money market fund, the fund tries to maintain a share price of $1.00, and must follow strict rules as to the credit quality, liquidity, diversification and maturity of its investments. Where required by these rules, the fund’s subadviser or Board of Trustees (the “Board”) will decide whether a security should be held or sold in the event of credit downgrades or certain other events occurring after purchase. 0 0 0.002 0.001 0.0002 0.0032 Best quarter 2006-12-31 0.0127 Worst quarter 2010-03-31 0 The year-to-date return as of the most recent calendar quarter 2012-09-30 0.0001 0.0149 0.0087 0.0109 0.0298 0.0481 0.0506 0.0277 0.0039 0.0003 0.0002 Average annual total returns (for periods ended December 31, 2011) (%) 0.0002 0.0163 0.0194 December 31, 2014 The fund invests in securities through an underlying fund: Prime Cash Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Prime Cash Reserves Portfolio. The fund invests in securities through an underlying fund: Prime Cash Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Prime Cash Reserves Portfolio. Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in obligations that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. “Other expenses” for Premium Shares are estimated for the current fiscal year. Actual expenses may differ from estimates. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. The fund invests in securities through an underlying fund: Prime Cash Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Prime Cash Reserves Portfolio. An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The bar chart shows changes in the fund’s performance from year to year for Class S shares. Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in obligations that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. 1-877-721-1926 or 1-203-703-6002 Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class) Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. The fund’s past performance is not necessarily an indication of how the fund will perform in the future. The bar chart shows changes in the fund’s performance from year to year for Class L shares, a class of the fund that is invested in the same portfolio of securities as Premium Shares. 1-877-721-1926 or 1-203-703-6002 http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class) The fund’s past performance is not necessarily an indication of how the fund will perform in the future. The bar chart shows changes in the fund’s performance from year to year for Class L shares, a class of the fund that is invested in the same portfolio of securities as Premium Shares. The table shows the average annual total returns of Class L shares. No performance information is presented for Premium Shares because there were no Premium Shares outstanding during the periods shown. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. 0.0164 0.0103 0.0125 0.0314 0.0496 0.0522 0.0292 0.0058 0.0017 0.0012 <div style="display:none">~ http://www.leggmason.com/role/ScheduleShareholderFeesWesternAssetInstitutionalCashReservesClassS column period compact * ~</div> The year-to-date return as of the most recent calendar quarter 2012-09-30 0.0011 Best quarter 2006-12-31 0.0131 Worst quarter 2011-09-30 0.0002 <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualFundOperatingExpensesWesternAssetInstitutionalCashReservesClassS column period compact * ~</div> 0 <div style="display:none">~ http://www.leggmason.com/role/ScheduleExpenseExampleTransposedWesternAssetInstitutionalCashReservesClassS column period compact * ~</div> 0 0.002 0.001 0.0003 0.0033 <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualTotalReturnsWesternAssetInstitutionalCashReservesClassSBarChart column period compact * ~</div> 34 106 <div style="display:none">~ http://www.leggmason.com/role/ScheduleAverageAnnualTotalReturnsTransposedWesternAssetInstitutionalCashReservesClassS column period compact * ~</div> 186 418 “Other expenses” for Premium Shares are estimated for the current fiscal year. Actual expenses may differ from estimates. 0.0012 0.0178 0.0209 33 103 180 405 <div style="display:none">~ http://www.leggmason.com/role/ScheduleShareholderFeesWesternAssetInstitutionalCashReservesPremiumShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualFundOperatingExpensesWesternAssetInstitutionalCashReservesPremiumShares column period compact * ~</div> 0.0004 0.0158 0.0194 <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualTotalReturnsWesternAssetInstitutionalCashReservesPremiumSharesBarChart column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleExpenseExampleTransposedWesternAssetInstitutionalCashReservesPremiumShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAverageAnnualTotalReturnsTransposedWesternAssetInstitutionalCashReservesPremiumShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleShareholderFeesWesternAssetInstitutionalGovernmentReservesPremiumShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualFundOperatingExpensesWesternAssetInstitutionalGovernmentReservesPremiumShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleExpenseExampleTransposedWesternAssetInstitutionalGovernmentReservesPremiumShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualTotalReturnsWesternAssetInstitutionalGovernmentReservesPremiumSharesBarChart column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAverageAnnualTotalReturnsTransposedWesternAssetInstitutionalGovernmentReservesPremiumShares column period compact * ~</div> This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes:<ul type="square"><li style="margin-left:-20px">You invest $10,000 in the fund for the time periods indicated</li><li style="margin-left:-20px">Your investment has a 5% return each year and the fund’s operating expenses remain the same</li><li style="margin-left:-20px">You reinvest all distributions and dividends without a sales charge</li></ul>Although your actual costs may be higher or lower, based on these assumptions your costs would be: Shareholder fees (fees paid directly from your investment) (%) Western Asset Institutional AMT Free Municipal Money Market Fund Investment objective The fund seeks current income that is exempt from federal income tax to the extent consistent with preservation of capital and the maintenance of liquidity. Fees and expenses of the fund The accompanying table describes the fees and expenses that you may pay if you buy and hold Premium Shares of the fund. Shareholder fees (fees paid directly from your investment) (%) Annual fund operating expenses (expenses that you pay each year as a percentage of the value of your investment) (%) “Other expenses” for Premium Shares are estimated for the current fiscal year. Actual expenses may differ from estimates. Example Number of years you own your shares ($) Principal investment strategies Certain risks An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. Performance Total returns (%) Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in municipal securities and interests in municipal securities that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. 1-877-721-1926 or 1-203-703-6002 http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class) The accompanying bar chart and table provide some indication of the risks of investing in the fund. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class A shares), a class of the fund that is invested in the same portfolio of securities as Premium Shares. The table shows the average annual total returns of Institutional Shares. No performance information is presented for Premium Shares because there were no Premium Shares outstanding during the calendar years shown. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. The fund makes updated performance information available at the fund’s website, http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class), or by calling the fund at 1-877-721-1926 or 1-203-703-6002. The fund’s past performance is not necessarily an indication of how the fund will perform in the future. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class A shares), a class of the fund that is invested in the same portfolio of securities as Premium Shares. Investment objective The fund’s past performance is not necessarily an indication of how the fund will perform in the future. The fund’s investment objective is to provide shareholders with liquidity and as high a level of current income as is consistent with preservation of capital. Fees and expenses of the fund The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class A shares), a class of the fund that is invested in the same portfolio of securities as Premium Shares. The table shows the average annual total returns of Institutional Shares. No performance information is presented for Premium Shares because there were no Premium Shares outstanding during the calendar years shown. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. Shareholder fees (fees paid directly from your investment) (%) Average annual total returns (for periods ended December 31, 2011) (%) 0 0 Annual fund operating expenses (expenses that you pay each year as a percentage of the value of your investment) (%) 0.002 0.0027 0.0003 0.005 -0.0005 0.0045 Calendar Years ended December 31 Best quarter (09/30/2007): 0.88 Worst quarter (03/31/2010): 0.02 The year-to-date return as of the most recent calendar quarter, which ended 09/30/2012, was 0.04 December 31, 2014 The year-to-date return as of the most recent calendar quarter 2012-09-30 0.0004 Best quarter 2007-09-30 0.0088 Worst quarter 2010-03-31 0.0002 0.0134 0.0089 0.0104 0.0223 0.0327 0.0347 0.0216 0.0038 0.0019 0.0016 An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. There is no assurance that the fund will meet its investment objective. The fund could underperform other short-term municipal debt instruments or money market funds, or you could lose money, as a result of risks such as: Market and interest rate risk. There may be changes in interest rates, lack of liquidity or other disruptions in the bond markets or other adverse market events and conditions. The financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities of issuers worldwide. In response to the crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. The withdrawal of this support, failure of efforts in response to the crisis, or investor perception that these efforts are not succeeding could negatively affect financial markets generally as well as the value and liquidity of certain securities. In addition, policy and legislative changes in the United States and in other countries are changing many aspects of financial regulation. The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time. Credit risk. An issuer or obligor of a security held by the fund or a counterparty to a financial contract with the fund may default or its credit may be downgraded, or the value of assets underlying a security may decline. Yield risk. The amount of income received by the fund will go up or down depending on day-to-day variations in short-term interest rates, and when interest rates are very low the fund’s expenses could absorb all or a significant portion of the fund’s income. If interest rates increase, the fund’s yield may not increase proportionately. For example, the fund’s manager may discontinue any temporary voluntary fee limitation or recoup amounts previously waived and/or reimbursed. In addition, the recent adoption of more stringent regulations governing the management of money market funds could have a negative effect on the fund’s yield. Risk of increase in expenses. Your actual costs of investing in the fund may be higher than the expenses shown in “Annual fund operating expenses” for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets are lower than estimated, or if a fee limitation is changed or terminated. Tax risk. The income on the fund’s municipal securities could become subject to federal income tax due to noncompliant conduct by issuers, unfavorable legislation or litigation or adverse interpretations by regulatory authorities. Structured securities risk. The payment and credit qualities of structured securities derive from their underlying assets, and they may behave in ways not anticipated by the fund, or they may not receive tax, accounting or regulatory treatment anticipated by the fund. Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in municipal securities and interests in municipal securities that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. Risks relating to investments in municipal securities. Municipal issuers may be adversely affected by rising health care costs, increasing unfunded pension liabilities, and by the phasing out of federal programs providing financial support. Unfavorable conditions and developments relating to projects financed with municipal securities can result in lower revenues to issuers of municipal securities. Issuers often depend on revenues from these projects to make principal and interest payments. The value of municipal securities can also be adversely affected by changes in the financial condition of one or more individual municipal issuers or insurers of municipal issuers, regulatory and political developments, tax law changes or other legislative actions, and by uncertainties and public perceptions concerning these and other factors. Prepayment or call risk. Many issuers have a right to prepay their securities. If interest rates fall, an issuer may exercise this right. If this happens, the fund will be forced to reinvest prepayment proceeds at a time when yields on securities available in the market are lower than the yield on the prepaid security. Extension risk. If interest rates rise, repayments of fixed income securities may occur more slowly than anticipated by the market. This may drive the prices of these securities down because their interest rates are lower than the current interest rate and they remain outstanding longer. Portfolio selection risk. The value of your investment may decrease if the subadviser’s judgment about the quality, relative yield or value of, or market trends affecting, a particular security or sector, or about interest rates generally, is incorrect. Redemption risk. The fund may experience heavy redemptions, particularly during periods of declining or illiquid markets, that could cause the fund to liquidate its assets at inopportune times or at a loss or depressed value and that could affect the fund’s ability to maintain a $1.00 share price. In addition, the fund may suspend redemptions when permitted by applicable regulations. These risks are discussed in more detail later in this Prospectus or in the statement of additional information (“SAI”). The fund is a money market fund which, under normal circumstances, will invest substantially all of its assets in short-term high quality municipal securities whose interest is exempt from federal income tax, including the federal alternative minimum tax. Municipal securities include debt obligations issued by any of the 50 states and their political subdivisions, agencies and public authorities, certain other governmental issuers (such as Puerto Rico, the U.S. Virgin Islands and Guam) and other qualifying issuers. These securities include participation or other interests in municipal securities and other structured securities such as variable rate demand obligations, tender option bonds, partnership interests and swap-based securities, many of which may be issued or backed by U.S. or non-U.S. banks. Some municipal securities, such as general obligation issues, are backed by the issuer’s taxing authority, while other municipal securities, such as revenue issues, are backed only by revenues from certain facilities or other sources and not by the issuer itself. The fund invests in securities that, at the time of purchase, are rated by one or more rating agencies in the highest short-term rating category (or, with respect to not more than 3% of its total assets, in the second highest category) or, if not rated, are determined by the subadviser to be of equivalent quality. The interest paid on municipal securities purchased by the fund is excluded from gross income for regular federal income tax purposes, and, as noted above, will not typically be subject to the federal alternative minimum tax. As a result, the rate of interest paid on these securities normally is lower than the rate of interest paid on fully taxable securities. Under normal circumstances, the fund must invest at least 80% of its net assets in short-term high quality municipal obligations and interests in municipal obligations that pay interest that is exempt from federal income tax, including the federal alternative minimum tax. Although the fund will ordinarily not invest in securities the interest on which is subject to regular federal income tax or the federal alternative minimum tax, when the subadviser believes that suitable AMT-free municipal securities are not available, the fund may temporarily invest up to 20% of its assets in investments that pay interest that may be subject to federal income tax or the federal alternative minimum tax. In addition, the fund may depart from its principal investment strategies in response to unusually adverse market, economic or political conditions, as described under “More on the funds’ investment strategies, investments and risks—Defensive investing.” As a money market fund, the fund tries to maintain a share price of $1.00, and must follow strict rules as to the credit quality, liquidity, diversification and maturity of its investments. Where required by these rules, the fund’s subadviser or Board of Trustees (the “Board”) will decide whether a security should be held or sold in the event of credit downgrades or certain other events occurring after purchase. This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes:<ul type="square"><li style="margin-left:-20px">You invest $10,000 in the fund for the time periods indicated</li><li style="margin-left:-20px">Your investment has a 5% return each year and the fund’s operating expenses remain the same</li><li style="margin-left:-20px">You reinvest all distributions and dividends without a sales charge</li></ul>Although your actual costs may be higher or lower, based on these assumptions your costs would be: Western Asset Institutional Cash Reserves Investment objective The fund’s investment objective is to provide shareholders with liquidity and as high a level of current income as is consistent with preservation of capital. Fees and expenses of the fund The accompanying table describes the fees and expenses that you may pay if you buy and hold Class L shares of the fund. Shareholder fees (fees paid directly from your investment) (%) Annual fund operating expenses (expenses that you pay each year as a percentage of the value of your investment) (%) Example This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes:<ul type="square"><li style="margin-left:-20px">You invest $10,000 in the fund for the time periods indicated</li><li style="margin-left:-20px">Your investment has a 5% return each year and the fund’s operating expenses remain the same</li><li style="margin-left:-20px">You reinvest all distributions and dividends without a sales charge</li></ul>Although your actual costs may be higher or lower, based on these assumptions your costs would be: Number of years you own your shares ($) The fund invests in securities through an underlying fund: Prime Cash Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Prime Cash Reserves Portfolio. Principal investment strategies The fund is a money market fund which invests in high quality, U.S. dollar-denominated short-term debt securities that, at the time of purchase, are rated by one or more rating agencies in the highest short-term rating category or, if not rated, are determined by the subadviser to be of equivalent quality. The fund may invest in all types of money market instruments, including bank obligations, commercial paper and asset-backed securities, structured investments, repurchase agreements and other short-term debt securities. These instruments may be issued or guaranteed by all types of issuers, including U.S. and foreign banks and other private issuers, the U.S. government or any of its agencies or instrumentalities, U.S. states and municipalities, or foreign governments. These securities may pay interest at fixed, floating or adjustable rates, or may be issued at a discount. The fund may invest without limit in bank obligations, such as certificates of deposit, fixed time deposits and bankers’ acceptances. The fund generally limits its investments in foreign securities to U.S. dollar denominated obligations of issuers, including banks and foreign governments, located in the major industrialized countries, although with respect to bank obligations, the branches of the banks issuing the obligations may be located in The Bahamas or the Cayman Islands. As a money market fund, the fund tries to maintain a share price of $1.00, and must follow strict rules as to the credit quality, liquidity, diversification and maturity of its investments. Where required by these rules, the fund’s subadviser or Board of Trustees (the “Board”) will decide whether a security should be held or sold in the event of credit downgrades or certain other events occurring after purchase. Certain risks An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. There is no assurance that the fund will meet its investment objective. The fund could underperform other short-term debt instruments or money market funds, or you could lose money, as a result of risks such as: Market and interest rate risk. There may be changes in interest rates, lack of liquidity or other disruptions in the bond markets or other adverse market events and conditions. The financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities of issuers worldwide. In response to the crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. The withdrawal of this support, failure of efforts in response to the crisis, or investor perception that these efforts are not succeeding could negatively affect financial markets generally as well as the value and liquidity of certain securities. In addition, policy and legislative changes in the United States and in other countries are changing many aspects of financial regulation. The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time. Credit risk. An issuer or obligor of a security held by the fund or a counterparty to a financial contract with the fund may default or its credit may be downgraded, or the value of assets underlying a security may decline. Yield risk. The amount of income received by the fund will go up or down depending on day-to-day variations in short-term interest rates, and when interest rates are very low the fund’s expenses could absorb all or a significant portion of the fund’s income. If interest rates increase, the fund’s yield may not increase proportionately. For example, the fund’s manager may discontinue any temporary voluntary fee limitation or recoup amounts previously waived and/or reimbursed. In addition, the recent adoption of more stringent regulations governing the management of money market funds could have a negative effect on the fund’s yield. Risk of increase in expenses. Your actual costs of investing in the fund may be higher than the expenses shown in “Annual fund operating expenses” for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets decrease, or if a fee limitation is changed or terminated. Structured securities risk. The payment and credit qualities of structured securities derive from their underlying assets, and they may behave in ways not anticipated by the fund, or they may not receive tax, accounting or regulatory treatment anticipated by the fund. Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in obligations that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. Foreign investments risk. The fund’s investments in securities of foreign issuers or issuers with significant exposure to foreign markets involve additional risk. Foreign countries in which the fund may invest may have markets that are less liquid, less regulated and more volatile than U.S. markets. The value of the fund’s investments may decline because of factors affecting the particular issuer as well as foreign markets and issuers generally, such as unfavorable government actions, and political or financial instability. Lack of information may also affect the value of these securities. Prepayment or call risk. Many issuers have a right to prepay their securities. If interest rates fall, an issuer may exercise this right. If this happens, the fund will be forced to reinvest prepayment proceeds at a time when yields on securities available in the market are lower than the yield on the prepaid security. Extension risk. If interest rates rise, repayments of fixed income securities may occur more slowly than anticipated by the market. This may drive the prices of these securities down because their interest rates are lower than the current interest rate and they remain outstanding longer. Portfolio selection risk. The value of your investment may decrease if the subadviser’s judgment about the quality, relative yield or value of, or market trends affecting, a particular security or sector, or about interest rates generally, is incorrect. Redemption risk. The fund may experience heavy redemptions, particularly during periods of declining or illiquid markets, that could cause the fund to liquidate its assets at inopportune times or at a loss or depressed value and that could affect the fund’s ability to maintain a $1.00 share price. In addition, the fund may suspend redemptions when permitted by applicable regulations. These risks are discussed in more detail later in this Prospectus or in the statement of additional information ("SAI"). Performance The accompanying bar chart and table provide some indication of the risks of investing in the fund. The bar chart shows changes in the fund’s performance from year to year for Class L shares. The table shows the average annual total returns of each class of the fund’s shares offered through this Prospectus that has been in operation for at least one full calendar year. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. The fund makes updated performance information available at the fund’s website, http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class), or by calling the fund at 1-877-721-1926 or 1-203-703-6002. The fund’s past performance is not necessarily an indication of how the fund will perform in the future. Total returns (%) Calendar Years ended December 31 Best quarter (12/31/2006):1.31 Worst quarter (09/30/2011): 0.02 The year-to-date return as of the most recent calendar quarter, which ended 09/30/2012, was 0.11 Average annual total returns (for periods ended December 31, 2011) (%) 0 0 0.0025 0.001 The fund invests in securities through an underlying fund: Prime Cash Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Prime Cash Reserves Portfolio. 0.0006 Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in obligations that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. 0.0041 Western Asset Institutional Liquid Reserves Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The bar chart shows changes in the fund’s performance from year to year for Class L shares. Investment objective 1-877-721-1926 or 1-203-703-6002 http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class) The fund’s past performance is not necessarily an indication of how the fund will perform in the future. The fund’s investment objective is to provide shareholders with liquidity and as high a level of current income as is consistent with preservation of capital. The year-to-date return as of the most recent calendar quarter 2012-09-30 0.0011 Best quarter Fees and expenses of the fund 2006-12-31 0.0131 Worst quarter 2011-09-30 The accompanying table describes the fees and expenses that you may pay if you buy and hold SVB Securities Liquid Reserves Shares of the fund. 0.0002 42 132 230 517 Shareholder fees (fees paid directly from your investment) (%) 0 0 Example 0.0164 0.0016 0.0103 0.0127 0.0125 0.0151 0.0314 0.0496 0.0522 0.0292 0.0058 0.0017 Annual fund operating expenses (expenses that you pay each year as a percentage of the value of your investment) (%) 0.0012 This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes: <ul type="square"><li style="margin-left:-20px"> You invest $10,000 in the fund for the time periods indicated</li><li style="margin-left:-20px">Your investment has a 5% return each year and the fund’s operating expenses remain the same</li><li style="margin-left:-20px">You reinvest all distributions and dividends without a sales charge</li></ul>Although your actual costs may be higher or lower, based on these assumptions your costs would be: 46 150 269 0.0021 619 0.0045 <div style="display:none">~ http://www.leggmason.com/role/ScheduleShareholderFeesWesternAssetInstitutionalAMTFreeMunicipalMoneyMarketFundPremiumShares column period compact * ~</div> 0.0004 0.007 -0.001 0.006 The fund invests in securities through an underlying fund: Prime Cash Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Prime Cash Reserves Portfolio. The fund invests in securities through an underlying fund: Prime Cash Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Prime Cash Reserves Portfolio. <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualFundOperatingExpensesWesternAssetInstitutionalAMTFreeMunicipalMoneyMarketFundPremiumShares column period compact * ~</div> Principal investment strategies <div style="display:none">~ http://www.leggmason.com/role/ScheduleExpenseExampleTransposedWesternAssetInstitutionalAMTFreeMunicipalMoneyMarketFundPremiumShares column period compact * ~</div> 0 0 The fund is a money market fund which invests in high quality, U.S. dollar-denominated short-term debt securities that, at the time of purchase, are rated by one or more rating agencies in the highest short-term rating category or, if not rated, are determined by the subadviser to be of equivalent quality. The fund may invest in all types of money market instruments, including bank obligations, commercial paper and asset-backed securities, structured investments, repurchase agreements and other short-term debt securities. These instruments may be issued or guaranteed by all types of issuers, including U.S. and foreign banks and other private issuers, the U.S. government or any of its agencies or instrumentalities, U.S. states and municipalities, or foreign governments. These securities may pay interest at fixed, floating or adjustable rates, or may be issued at a discount. The fund may invest without limit in bank obligations, such as certificates of deposit, fixed time deposits and bankers’ acceptances. The fund generally limits its investments in foreign securities to U.S. dollar denominated obligations of issuers, including banks and foreign governments, located in the major industrialized countries, although with respect to bank obligations, the branches of the banks issuing the obligations may be located in The Bahamas or the Cayman Islands. As a money market fund, the fund tries to maintain a share price of $1.00, and must follow strict rules as to the credit quality, liquidity, diversification and maturity of its investments. Where required by these rules, the fund’s subadviser or Board of Trustees (the “Board”) will decide whether a security should be held or sold in the event of credit downgrades or certain other events occurring after purchase. Example 0.002 Certain risks 0.001 0.0003 0.0033 Number of years you own your shares ($) <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualTotalReturnsWesternAssetInstitutionalAMTFreeMunicipalMoneyMarketFundPremiumSharesBarChart column period compact * ~</div> -0.0003 0.003 61 203 369 850 <div style="display:none">~ http://www.leggmason.com/role/ScheduleAverageAnnualTotalReturnsTransposedWesternAssetInstitutionalAMTFreeMunicipalMoneyMarketFundPremiumShares column period compact * ~</div> This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes:<ul type="square"><li style="margin-left:-20px">You invest $10,000 in the fund for the time periods indicated</li><li style="margin-left:-20px">Your investment has a 5% return each year and the fund’s operating expenses remain the same</li><li style="margin-left:-20px">You reinvest all distributions and dividends without a sales charge</li></ul>Although your actual costs may be higher or lower, based on these assumptions your costs would be: 31 100 180 413 The fund invests in securities through an underlying fund: Liquid Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Liquid Reserves Portfolio. Principal investment strategies 0.0012 0.0178 0.0209 The fund is a money market fund which invests in high quality, U.S. dollar-denominated short-term debt securities that, at the time of purchase, are rated by one or more rating agencies in the highest short-term rating category or, if not rated, are determined by the subadviser to be of equivalent quality. The fund may invest in all types of money market instruments, including bank obligations, commercial paper and asset-backed securities, structured investments, repurchase agreements and other short-term debt securities. These instruments may be issued or guaranteed by all types of issuers, including U.S. and foreign banks and other private issuers, the U.S. government or any of its agencies or instrumentalities, U.S. states and municipalities, or foreign governments. These securities may pay interest at fixed, floating or adjustable rates, or may be issued at a discount. The fund may invest without limit in bank obligations, such as certificates of deposit, fixed time deposits and bankers’ acceptances. The fund generally limits its investments in foreign securities to U.S. dollar denominated obligations of issuers, including banks and foreign governments, located in the major industrialized countries, although with respect to bank obligations, the branches of the banks issuing the obligations may be located in The Bahamas or the Cayman Islands. As a money market fund, the fund tries to maintain a share price of $1.00, and must follow strict rules as to the credit quality, liquidity, diversification and maturity of its investments. Where required by these rules, the fund’s subadviser or Board of Trustees (the “Board”) will decide whether a security should be held or sold in the event of credit downgrades or certain other events occurring after purchase. Certain risks <div style="display:none">~ http://www.leggmason.com/role/ScheduleShareholderFeesWesternAssetInstitutionalCashReservesClassL column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualFundOperatingExpensesWesternAssetInstitutionalCashReservesClassL column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleExpenseExampleTransposedWesternAssetInstitutionalCashReservesClassL column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualTotalReturnsWesternAssetInstitutionalCashReservesClassLBarChart column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAverageAnnualTotalReturnsTransposedWesternAssetInstitutionalCashReservesClassL column period compact * ~</div> An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. There is no assurance that the fund will meet its investment objective. The fund could underperform other short-term debt instruments or money market funds, or you could lose money, as a result of risks such as: Market and interest rate risk. There may be changes in interest rates, lack of liquidity or other disruptions in the bond markets or other adverse market events and conditions. The financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities of issuers worldwide. In response to the crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. The withdrawal of this support, failure of efforts in response to the crisis, or investor perception that these efforts are not succeeding could negatively affect financial markets generally as well as the value and liquidity of certain securities. In addition, policy and legislative changes in the United States and in other countries are changing many aspects of financial regulation. The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time. Credit risk. An issuer or obligor of a security held by the fund or a counterparty to a financial contract with the fund may default or its credit may be downgraded, or the value of assets underlying a security may decline. Yield risk. The amount of income received by the fund will go up or down depending on day-to-day variations in short-term interest rates, and when interest rates are very low the fund’s expenses could absorb all or a significant portion of the fund’s income. If interest rates increase, the fund’s yield may not increase proportionately. For example, the fund’s manager may discontinue any temporary voluntary fee limitation or recoup amounts previously waived and/or reimbursed. In addition, the recent adoption of more stringent regulations governing the management of money market funds could have a negative effect on the fund’s yield. Risk of increase in expenses. Your actual costs of investing in the fund may be higher than the expenses shown in “Annual fund operating expenses” for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets decrease, or if a fee limitation is changed or terminated. Structured securities risk. The payment and credit qualities of structured securities derive from their underlying assets, and they may behave in ways not anticipated by the fund, or they may not receive tax, accounting or regulatory treatment anticipated by the fund. Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in obligations that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. Foreign investments risk. The fund’s investments in securities of foreign issuers or issuers with significant exposure to foreign markets involve additional risk. Foreign countries in which the fund may invest may have markets that are less liquid, less regulated and more volatile than U.S. markets. The value of the fund’s investments may decline because of factors affecting the particular issuer as well as foreign markets and issuers generally, such as unfavorable government actions, and political or financial instability. Lack of information may also affect the value of these securities. Prepayment or call risk. Many issuers have a right to prepay their securities. If interest rates fall, an issuer may exercise this right. If this happens, the fund will be forced to reinvest prepayment proceeds at a time when yields on securities available in the market are lower than the yield on the prepaid security. Extension risk. If interest rates rise, repayments of fixed income securities may occur more slowly than anticipated by the market. This may drive the prices of these securities down because their interest rates are lower than the current interest rate and they remain outstanding longer. Portfolio selection risk. The value of your investment may decrease if the subadviser’s judgment about the quality, relative yield or value of, or market trends affecting, a particular security or sector, or about interest rates generally, is incorrect. Redemption risk. The fund may experience heavy redemptions, particularly during periods of declining or illiquid markets, that could cause the fund to liquidate its assets at inopportune times or at a loss or depressed value and that could affect the fund’s ability to maintain a $1.00 share price. In addition, the fund may suspend redemptions when permitted by applicable regulations. These risks are discussed in more detail later in this Prospectus or in the statement of additional information (“SAI”). An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. There is no assurance that the fund will meet its investment objective. The fund could underperform other short-term debt instruments or money market funds, or you could lose money, as a result of risks such as: Market and interest rate risk. There may be changes in interest rates, lack of liquidity or other disruptions in the bond markets or other adverse market events and conditions. The financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities of issuers worldwide. In response to the crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. The withdrawal of this support, failure of efforts in response to the crisis, or investor perception that these efforts are not succeeding could negatively affect financial markets generally as well as the value and liquidity of certain securities. In addition, policy and legislative changes in the United States and in other countries are changing many aspects of financial regulation. The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time. Credit risk. An issuer or obligor of a security held by the fund or a counterparty to a financial contract with the fund may default or its credit may be downgraded, or the value of assets underlying a security may decline. Yield risk. The amount of income received by the fund will go up or down depending on day-to-day variations in short-term interest rates, and when interest rates are very low the fund’s expenses could absorb all or a significant portion of the fund’s income. If interest rates increase, the fund’s yield may not increase proportionately. For example, the fund’s manager may discontinue any temporary voluntary fee limitation or recoup amounts previously waived and/or reimbursed. In addition, the recent adoption of more stringent regulations governing the management of money market funds could have a negative effect on the fund’s yield. Risk of increase in expenses. Your actual costs of investing in the fund may be higher than the expenses shown in “Annual fund operating expenses” for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets decrease, or if a fee limitation is changed or terminated. Structured securities risk. The payment and credit qualities of structured securities derive from their underlying assets, and they may behave in ways not anticipated by the fund, or they may not receive tax, accounting or regulatory treatment anticipated by the fund. Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in obligations that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. Foreign investments risk. The fund’s investments in securities of foreign issuers or issuers with significant exposure to foreign markets involve additional risk. Foreign countries in which the fund may invest may have markets that are less liquid, less regulated and more volatile than U.S. markets. The value of the fund’s investments may decline because of factors affecting the particular issuer as well as foreign markets and issuers generally, such as unfavorable government actions, and political or financial instability. Lack of information may also affect the value of these securities. Prepayment or call risk. Many issuers have a right to prepay their securities. If interest rates fall, an issuer may exercise this right. If this happens, the fund will be forced to reinvest prepayment proceeds at a time when yields on securities available in the market are lower than the yield on the prepaid security. Extension risk. If interest rates rise, repayments of fixed income securities may occur more slowly than anticipated by the market. This may drive the prices of these securities down because their interest rates are lower than the current interest rate and they remain outstanding longer. Portfolio selection risk. The value of your investment may decrease if the subadviser’s judgment about the quality, relative yield or value of, or market trends affecting, a particular security or sector, or about interest rates generally, is incorrect. Redemption risk. The fund may experience heavy redemptions, particularly during periods of declining or illiquid markets, that could cause the fund to liquidate its assets at inopportune times or at a loss or depressed value and that could affect the fund’s ability to maintain a $1.00 share price. In addition, the fund may suspend redemptions when permitted by applicable regulations. These risks are discussed in more detail later in this Prospectus or in the statement of additional information (“SAI”). Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in obligations that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. Performance Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Western Asset Institutional Liquid Reserves The accompanying bar chart and table provide some indication of the risks of investing in the fund. The bar chart shows changes in the fund’s performance from year to year for SVB Securities Liquid Reserves Shares. The table shows the average annual total returns of each class of the fund’s shares offered through this Prospectus that has been in operation for at least one full calendar year. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. The fund makes updated performance information available by calling your Service Agent at 1-800-303-7371. The fund’s past performance is not necessarily an indication of how the fund will perform in the future. Investment objective Fees and expenses of the fund Performance Shareholder fees (fees paid directly from your investment) (%) The accompanying bar chart and table provide some indication of the risks of investing in the fund. The bar chart shows changes in the fund’s performance from year to year for SVB Securities Horizon Shares. The table shows the average annual total returns of each class of the fund’s shares offered through this Prospectus that has been in operation for at least one full calendar year. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. The fund makes updated performance information available by calling your Service Agent at 1-800-303-7371. The fund’s past performance is not necessarily an indication of how the fund will perform in the future. Annual fund operating expenses (expenses that you pay each year as a percentage of the value of your investment) (%) Example Total returns (%) Number of years you own your shares ($) Principal investment strategies Certain risks Performance Calendar Years ended December 31 Best quarter (12/31/2006): 1.22 Worst quarter (03/31/2011): 0.00 The year-to-date return as of the most recent calendar quarter, which ended 09/30/2012, was 0.01 Total returns (%) Average annual total returns (for periods ended December 31, 2011) (%) Calendar Years ended December 31 Best quarter (12/31/2006): 1.31 Worst quarter (09/30/2011): 0.01 The year-to-date return as of the most recent calendar quarter, which ended 09/30/2012, was 0.09 The bar chart shows changes in the fund’s performance from year to year for SVB Securities Horizon Shares. The fund’s investment objective is to provide shareholders with liquidity and as high a level of current income as is consistent with preservation of capital. The fund’s past performance is not necessarily an indication of how the fund will perform in the future. Average annual total returns (for periods ended December 31, 2011) (%) The accompanying table describes the fees and expenses that you may pay if you buy and hold SVB Securities Institutional Liquid Reserves Shares of the fund. This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes:<ul type="square"><li style="margin-left:-20px">You invest $10,000 in the fund for the time periods indicated</li><li style="margin-left:-20px">Your investment has a 5% return each year and the fund’s operating expenses remain the same</li><li style="margin-left:-20px">You reinvest all distributions and dividends without a sales charge</li></ul>Although your actual costs may be higher or lower, based on these assumptions your costs would be: The fund invests in securities through an underlying fund: Liquid Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Liquid Reserves Portfolio. The fund is a money market fund which invests in high quality, U.S. dollar-denominated short-term debt securities that, at the time of purchase, are rated by one or more rating agencies in the highest short-term rating category or, if not rated, are determined by the subadviser to be of equivalent quality. The fund may invest in all types of money market instruments, including bank obligations, commercial paper and asset-backed securities, structured investments, repurchase agreements and other short-term debt securities. These instruments may be issued or guaranteed by all types of issuers, including U.S. and foreign banks and other private issuers, the U.S. government or any of its agencies or instrumentalities, U.S. states and municipalities, or foreign governments. These securities may pay interest at fixed, floating or adjustable rates, or may be issued at a discount. The fund may invest without limit in bank obligations, such as certificates of deposit, fixed time deposits and bankers’ acceptances. The fund generally limits its investments in foreign securities to U.S. dollar denominated obligations of issuers, including banks and foreign governments, located in the major industrialized countries, although with respect to bank obligations, the branches of the banks issuing the obligations may be located in The Bahamas or the Cayman Islands. As a money market fund, the fund tries to maintain a share price of $1.00, and must follow strict rules as to the credit quality, liquidity, diversification and maturity of its investments. Where required by these rules, the fund’s subadviser or Board of Trustees (the “Board”) will decide whether a security should be held or sold in the event of credit downgrades or certain other events occurring after purchase. An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. There is no assurance that the fund will meet its investment objective. The fund could underperform other short-term debt instruments or money market funds, or you could lose money, as a result of risks such as: Market and interest rate risk. There may be changes in interest rates, lack of liquidity or other disruptions in the bond markets or other adverse market events and conditions. The financial crisis that began in 2008 has caused a significant decline in the value and liquidity of many securities of issuers worldwide. In response to the crisis, the U.S. and other governments and the Federal Reserve and certain foreign central banks have taken steps to support financial markets. The withdrawal of this support, failure of efforts in response to the crisis, or investor perception that these efforts are not succeeding could negatively affect financial markets generally as well as the value and liquidity of certain securities. In addition, policy and legislative changes in the United States and in other countries are changing many aspects of financial regulation. The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time. Credit risk. An issuer or obligor of a security held by the fund or a counterparty to a financial contract with the fund may default or its credit may be downgraded, or the value of assets underlying a security may decline. Yield risk. The amount of income received by the fund will go up or down depending on day-to-day variations in short-term interest rates, and when interest rates are very low the fund’s expenses could absorb all or a significant portion of the fund’s income. If interest rates increase, the fund’s yield may not increase proportionately. For example, the fund’s manager may discontinue any temporary voluntary fee limitation or recoup amounts previously waived and/or reimbursed. In addition, the recent adoption of more stringent regulations governing the management of money market funds could have a negative effect on the fund’s yield. Risk of increase in expenses. Your actual costs of investing in the fund may be higher than the expenses shown in “Annual fund operating expenses” for a variety of reasons. For example, expense ratios may be higher than those shown if average net assets decrease, or if a fee limitation is changed or terminated. Structured securities risk. The payment and credit qualities of structured securities derive from their underlying assets, and they may behave in ways not anticipated by the fund, or they may not receive tax, accounting or regulatory treatment anticipated by the fund. Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in obligations that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. Foreign investments risk. The fund’s investments in securities of foreign issuers or issuers with significant exposure to foreign markets involve additional risk. Foreign countries in which the fund may invest may have markets that are less liquid, less regulated and more volatile than U.S. markets. The value of the fund’s investments may decline because of factors affecting the particular issuer as well as foreign markets and issuers generally, such as unfavorable government actions, and political or financial instability. Lack of information may also affect the value of these securities. Prepayment or call risk. Many issuers have a right to prepay their securities. If interest rates fall, an issuer may exercise this right. If this happens, the fund will be forced to reinvest prepayment proceeds at a time when yields on securities available in the market are lower than the yield on the prepaid security. Extension risk. If interest rates rise, repayments of fixed income securities may occur more slowly than anticipated by the market. This may drive the prices of these securities down because their interest rates are lower than the current interest rate and they remain outstanding longer. Portfolio selection risk. The value of your investment may decrease if the subadviser’s judgment about the quality, relative yield or value of, or market trends affecting, a particular security or sector, or about interest rates generally, is incorrect. Redemption risk. The fund may experience heavy redemptions, particularly during periods of declining or illiquid markets, that could cause the fund to liquidate its assets at inopportune times or at a loss or depressed value and that could affect the fund’s ability to maintain a $1.00 share price. In addition, the fund may suspend redemptions when permitted by applicable regulations. These risks are discussed in more detail later in this Prospectus or in the statement of additional information ("SAI"). 0.0001 0.0156 1-800-303-7371 The accompanying bar chart and table provide some indication of the risks of investing in the fund. The bar chart shows changes in the fund’s performance from year to year for SVB Securities Institutional Liquid Reserves Shares. The table shows the average annual total returns of each class of the fund’s shares offered through this Prospectus that has been in operation for at least one full calendar year. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. The fund makes updated performance information available by calling your Service Agent at 1-800-303-7371. The fund’s past performance is not necessarily an indication of how the fund will perform in the future. 0.018 Total returns (%) Calendar Years ended December 31 Best quarter (12/31/2006): 1.27 Worst quarter (03/31/2010): 0.01 The year-to-date return as of the most recent calendar quarter, which ended 09/30/2012, was 0.01 December 31, 2014 The year-to-date return as of the most recent calendar quarter 2012-09-30 0.0001 December 31, 2014 Best quarter The fund invests in securities through an underlying fund: Liquid Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Liquid Reserves Portfolio. 2006-12-31 0.0127 Worst quarter Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in obligations that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. 2010-03-31 0.0001 An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Best quarter 2006-12-31 Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. 0.0122 Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. Worst quarter 2011-03-31 0 The bar chart shows changes in the fund’s performance from year to year for SVB Securities Institutional Liquid Reserves Shares. The year-to-date return as of the most recent calendar quarter 2012-09-30 1-800-303-7371 0.0001 The fund’s past performance is not necessarily an indication of how the fund will perform in the future. The year-to-date return as of the most recent calendar quarter 2012-09-30 0.0009 Best quarter 2006-12-31 0.0131 Worst quarter 2011-09-30 0.0068 0.0001 0.0083 0.0114 0.0303 0.0483 0.0506 0.0277 0.0041 0.0005 0.0002 0.0144 0.007 0.0089 Average annual total returns (for periods ended December 31, 2011) (%) 0.0275 0.0181 0.0106 0.0452 0.0126 0.0485 0.0312 0.0489 0.0266 0.0521 0.0034 0.0303 0.0001 0.0058 0.0001 0.0002 0.0013 0.0009 0.0164 0 0 December 31, 2014 0.0021 0.001 The fund invests in securities through an underlying fund: Liquid Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Liquid Reserves Portfolio. 0.0002 0.0033 -0.0009 0.0024 Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in obligations that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. Number of years you own your shares ($) Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. 25 88 168 402 The bar chart shows changes in the fund’s performance from year to year for SVB Securities Liquid Reserves Shares. 1-800-303-7371 The fund’s past performance is not necessarily an indication of how the fund will perform in the future. 0.0009 0.0179 0.021 <div style="display:none">~ http://www.leggmason.com/role/ScheduleShareholderFeesWesternAssetInstitutionalCashReservesSVBSecuritiesHorizonShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleShareholderFeesWesternAssetInstitutionalLiquidReservesSVBSecuritiesLiquidReservesShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualFundOperatingExpensesWesternAssetInstitutionalCashReservesSVBSecuritiesHorizonShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualFundOperatingExpensesWesternAssetInstitutionalLiquidReservesSVBSecuritiesLiquidReservesShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleExpenseExampleTransposedWesternAssetInstitutionalCashReservesSVBSecuritiesHorizonShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleExpenseExampleTransposedWesternAssetInstitutionalLiquidReservesSVBSecuritiesLiquidReservesShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualTotalReturnsWesternAssetInstitutionalCashReservesSVBSecuritiesHorizonSharesBarChart column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualTotalReturnsWesternAssetInstitutionalLiquidReservesSVBSecuritiesLiquidReservesSharesBarChart column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAverageAnnualTotalReturnsTransposedWesternAssetInstitutionalCashReservesSVBSecuritiesHorizonShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAverageAnnualTotalReturnsTransposedWesternAssetInstitutionalLiquidReservesSVBSecuritiesLiquidReservesShares column period compact * ~</div> The bar chart shows changes in the fund’s performance from year to year for Institutional Shares, a class of the fund that is invested in the same portfolio of securities as Administrative Shares. The table shows the average annual total returns of Institutional Shares. No performance information is presented for Administrative Shares because there were no Administrative Shares outstanding during the calendar years shown. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. <div style="display:none">~ http://www.leggmason.com/role/ScheduleShareholderFeesWesternAssetInstitutionalLiquidReservesSVBSecuritiesInstitutionalLiquidReservesShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualFundOperatingExpensesWesternAssetInstitutionalLiquidReservesSVBSecuritiesInstitutionalLiquidReservesShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleExpenseExampleTransposedWesternAssetInstitutionalLiquidReservesSVBSecuritiesInstitutionalLiquidReservesShares column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAnnualTotalReturnsWesternAssetInstitutionalLiquidReservesSVBSecuritiesInstitutionalLiquidReservesSharesBarChart column period compact * ~</div> <div style="display:none">~ http://www.leggmason.com/role/ScheduleAverageAnnualTotalReturnsTransposedWesternAssetInstitutionalLiquidReservesSVBSecuritiesInstitutionalLiquidReservesShares column period compact * ~</div> Western Asset Institutional Cash Reserves Best quarter 2007-09-30 0.0088 Worst quarter 2010-03-31 0.0002 The year-to-date return as of the most recent calendar quarter 2012-09-30 0.0004 The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class A shares), a class of the fund that is invested in the same portfolio of securities as Administrative Shares. 1-877-721-1926 or 1-203-703-6002 http://www.leggmason.com/individualinvestors/products/mutual-funds/annualized_performance (select share class) The fund’s past performance is not necessarily an indication of how the fund will perform in the future. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class A shares), a class of the fund that is invested in the same portfolio of securities as Administrative Shares. The table shows the average annual total returns of Institutional Shares. No performance information is presented for Administrative Shares because there were no Administrative Shares outstanding during the calendar years shown. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. The accompanying table describes the fees and expenses that you may pay if you buy and hold SVB Securities Horizon Shares of the fund. December 31, 2014 “Other expenses” for Administrative Shares are estimated for the current fiscal year. Actual expenses may differ from estimates. Risks associated with concentration in the banking industry. The fund may invest a significant portion of its assets in municipal securities and interests in municipal securities that are issued or backed by U.S. and non-U.S. banks, and thus will be more susceptible to negative events affecting the worldwide banking industry. Additionally, you should be aware that a very small number of money market funds in other fund complexes have, in the past, “broken the buck,” which means that investors did not receive $1.00 per share for their investment in those funds, and any money market fund may do so in the future. You should also be aware that the fund’s manager and its affiliates are under no obligation to provide financial support to the fund or take other measures to ensure that you receive $1.00 per share for your investment in the fund. You should not invest in the fund with the expectation that any such action will be taken. An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares, a class of the fund that is invested in the same portfolio of securities as Administrative Shares. The table shows the average annual total returns of Institutional Shares. No performance information is presented for Administrative Shares because there were no Administrative Shares outstanding during the calendar years shown. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. 0.0187 The fund invests in securities through an underlying fund: Tax Free Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Tax Free Reserves Portfolio. “Other expenses” for Investor Shares are estimated for the current fiscal year. Actual expenses may differ from estimates. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares, a class of the fund that is invested in the same portfolio of securities as Investor Shares. The table shows the average annual total returns of Institutional Shares. No performance information is presented for Investor Shares because there were no Investor Shares outstanding during the calendar years shown. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. Best quarter 2007-06-30 0.009 Worst quarter 2011-12-31 0.0002 The year-to-date return as of the most recent calendar quarter 2012-09-30 0.0005 The fund invests in securities through an underlying fund: Prime Cash Reserves Portfolio. The information above reflects the direct expenses of the fund and its allocated share of expenses of Prime Cash Reserves Portfolio. The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class A shares), a class of the fund that is invested in the same portfolio of securities as Administrative Shares. The table shows the average annual total returns of Institutional Shares. No performance information is presented for Administrative Shares because there were no Administrative Shares outstanding during the calendar years shown. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. The fund’s past performance is not necessarily an indication of how the fund will perform in the future. The fund’s past performance is not necessarily an indication of how the fund will perform in the future. <div style="display:none">~ http://www.leggmason.com/role/ScheduleExpenseExampleTransposedWesternAssetInstitutionalCashReserves column period compact * ~</div> The bar chart shows changes in the fund’s performance from year to year for Institutional Shares (formerly Class O shares), a class of the fund that is invested in the same portfolio of securities as Investor Shares. The table shows the average annual total returns of Institutional Shares. No performance information is presented for Investor Shares because there were no Investor Shares outstanding during the calendar years shown. Performance for classes other than those shown may vary from the performance shown to the extent the expenses for those classes differ. The manager has agreed to waive fees and/or reimburse operating expenses (other than interest, brokerage, taxes, extraordinary expenses and acquired fund fees and expenses) so that total annual operating expenses are not expected to exceed 0.20% for Institutional Shares. This arrangement cannot be terminated prior to December 31, 2014 without the Board of Trustees' consent. Additional amounts may be voluntarily waived and/or reimbursed from time to time. The manager is permitted to recapture any such amounts waived and/or reimbursed to the class during the same fiscal year if the class' total annual operating expenses have fallen to a level below the limit described above. "Other expenses" for Investor Shares are estimated for the current fiscal year. Actual expenses may differ from estimates. The manager has agreed to waive fees and/or reimburse operating expenses (other than interest, brokerage, taxes, extraordinary expenses and acquired fund fees and expenses) so that total annual operating expenses are not expected to exceed 0.23% for Institutional Shares. This arrangement cannot be terminated prior to December 31, 2014 without the Board of Trustees' consent. Additional amounts may be voluntarily waived and/or reimbursed from time to time. The manager is permitted to recapture any such amounts waived and/or reimbursed to the class during the same fiscal year if the class' total annual operating expenses have fallen to a level below the limit described above. The manager has agreed to waive fees and/or reimburse operating expenses (other than interest, brokerage, taxes, extraordinary expenses and acquired fund fees and expenses) so that total annual operating expenses are not expected to exceed 0.35% for Investor Shares. This arrangement cannot be terminated prior to December 31, 2014 without the Board of Trustees’ consent. Additional amounts may be voluntarily waived and/or reimbursed from time to time. The manager is permitted to recapture any such amounts waived and/or reimbursed to the class during the same fiscal year if the class’ total annual operating expenses have fallen to a level below the limit described above. The manager has agreed to waive fees and/or reimburse operating expenses (other than interest, brokerage, taxes, extraordinary expenses and acquired fund fees and expenses) so that total annual operating expenses are not expected to exceed 0.40% for Administrative Shares. This arrangement cannot be terminated prior to December 31, 2014 without the Board of Trustees' consent. Additional amounts may be voluntarily waived and/or reimbursed from time to time. The manager is permitted to recapture any such amounts waived and/or reimbursed to the class during the same fiscal year if the class' total annual operating expenses have fallen to a level below the limit described above. "Other expenses" for Administrative Shares are estimated for the current fiscal year. Actual expenses may differ from estimates. The manager has agreed to waive fees and/or reimburse operating expenses (other than interest, brokerage, taxes, extraordinary expenses and acquired fund fees and expenses) so that total annual operating expenses are not expected to exceed 0.45% for Class S shares. This arrangement cannot be terminated prior to December 31, 2014 without the Board of Trustees' consent. Additional amounts may be voluntarily waived and/or reimbursed from time to time. The manager is permitted to recapture any such amounts waived and/or reimbursed to the class during the same fiscal year if the class' total annual operating expenses have fallen to a level below the limit described above. The manager has agreed to waive fees and/or reimburse operating expenses (other than interest, brokerage, taxes, extraordinary expenses and acquired fund fees and expenses) so that total annual operating expenses are not expected to exceed 0.30% for Class L shares. This arrangement cannot be terminated prior to December 31, 2014 without the Board of Trustees' consent. Additional amounts may be voluntarily waived and/or reimbursed from time to time. The manager is permitted to recapture any such amounts waived and/or reimbursed to the class during the same fiscal year if the class' total annual operating expenses have fallen to a level below the limit described above. "Other expenses" for Premium Shares are estimated for the current fiscal year. Actual expenses may differ from estimates. The manager has agreed to waive fees and/or reimburse operating expenses (other than interest, brokerage, taxes, extraordinary expenses and acquired fund fees and expenses) so that total annual operating expenses are not expected to exceed 0.60% for SVB Securities Liquid Reserves Shares. This arrangement cannot be terminated prior to December 31, 2014 without the Board of Trustees' consent. Additional amounts may be voluntarily waived and/or reimbursed from time to time. The manager is permitted to recapture any such amounts waived and/or reimbursed to the class during the same fiscal year if the class' total annual operating expenses have fallen to a level below the limit described above. The manager has agreed to waive fees and/or reimburse operating expenses (other than interest, brokerage, taxes, extraordinary expenses and acquired fund fees and expenses) so that total annual operating expenses are not expected to exceed 0.24% for SVB Securities Institutional Liquid Reserves Shares. This arrangement cannot be terminated prior to December 31, 2014 without the Board of Trustees' consent. Additional amounts may be voluntarily waived and/or reimbursed from time to time. The manager is permitted to recapture any such amounts waived and/or reimbursed to the class during the same fiscal year if the class' total annual operating expenses have fallen to a level below the limit described above. The manager has agreed to waive fees and/or reimburse operating expenses (other than interest, brokerage, taxes, extraordinary expenses and acquired fund fees and expenses) so that total annual operating expenses are not expected to exceed 0.45% for SVB Securities Horizon Shares. This arrangement cannot be terminated prior to December 31, 2014 without the Board of Trustees' consent. Additional amounts may be voluntarily waived and/or reimbursed from time to time. The manager is permitted to recapture any such amounts waived and/or reimbursed to the class during the same fiscal year if the class' total annual operating expenses have fallen to a level below the limit described above.