UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number 811-06740

Legg Mason Partners Institutional Trust

(Exact name of registrant as specified in charter)

620 Eighth Avenue, 49^th Floor, New York, NY 10018

(Address of principal executive offices) (Zip code)

Robert I. Frenkel, Esq.

Legg Mason & Co., LLC

100 First Stamford Place

Stamford, CT 06902

(Name and address of agent for service)

Registrant’s telephone number, including area code: 1-877-721-1926

Date of fiscal year end: October 31

Date of reporting period: January 31, 2014

ITEM 1. SCHEDULE OF INVESTMENTS.

LEGG MASON PARTNERS INSTITUTIONAL TRUST

WESTERN ASSET SMASH SERIES EC FUND

FORM N-Q

JANUARY 31, 2014

WESTERN ASSET SMASH SERIES EC FUND

Schedule of investments (unaudited) January 31, 2014

SECURITY	RATE			MATURITY DATE		FACE AMOUNT†			VALUE
SOVEREIGN BONDS - 30.3%
Brazil - 2.8%
Federative Republic of Brazil, Notes		10.000	%		1/1/17		6,219,000	BRL	$	2,406,893
Federative Republic of Brazil, Notes		10.000	%		1/1/21		455,000	BRL		162,539
Total Brazil										2,569,432
Colombia - 1.7%
Republic of Colombia, Senior Bonds		5.625	%		2/26/44		1,540,000			1,505,350
Hungary - 1.3%
Hungary Government Bond, Senior Notes		5.750	%		11/22/23		1,200,000			1,189,500
Mexico - 19.1%
United Mexican States, Bonds		8.000	%		6/11/20		39,835,000	MXN		3,310,424
United Mexican States, Bonds		6.500	%		6/9/22		182,156,000	MXN		13,704,835
United Mexican States, Bonds		10.000	%		12/5/24		2,000,000	MXN		188,006
Total Mexico										17,203,265
Poland - 2.7%
Republic of Poland, Senior Notes		4.000	%		1/22/24		2,500,000			2,463,687
Turkey - 2.7%
Republic of Turkey, Senior Bonds		5.750	%		3/22/24		2,480,000			2,433,500
TOTAL SOVEREIGN BONDS (Cost - $29,588,160)										27,364,734
ASSET-BACKED SECURITIES - 0.7%
Greenpoint Manufactured Housing, 1999-2 A2		2.920	%		3/18/29		700,000			613,571	(a)
Greenpoint Manufactured Housing, 2001-2 IA2		3.670	%		2/20/32		25,000			22,905	(a)
Greenpoint Manufactured Housing, 2001-2 IIA2		3.667	%		3/13/32		25,000			22,512	(a)
TOTAL ASSET-BACKED SECURITIES (Cost - $648,430)										658,988
CORPORATE BONDS & NOTES - 25.8%
CONSUMER DISCRETIONARY - 3.3%
Automobiles - 0.1%
Ford Motor Credit Co., LLC, Senior Notes		8.000	%		12/15/16		50,000			59,052
Hotels, Restaurants & Leisure - 1.3%
Caesars Entertainment Operating Co. Inc., Senior Secured Notes		11.250	%		6/1/17		300,000			306,000
Hilton Worldwide Finance LLC/Hilton Worldwide Finance Corp., Senior Notes		5.625	%		10/15/21		850,000			881,344	(b)
Total Hotels, Restaurants & Leisure										1,187,344
Media - 1.9%
CCO Holdings LLC/CCO Holdings Capital Corp., Senior Notes		5.250	%		9/30/22		910,000			879,287
DISH DBS Corp., Senior Notes		6.750	%		6/1/21		540,000			577,800
DISH DBS Corp., Senior Notes		5.000	%		3/15/23		220,000			206,800
UPCB Finance III Ltd., Senior Secured Notes		6.625	%		7/1/20		100,000			106,500	(b)
Total Media										1,770,387
TOTAL CONSUMER DISCRETIONARY										3,016,783
CONSUMER STAPLES - 1.3%
Beverages - 1.3%
Hawk Acquisition Subordinated Inc., Senior Secured Notes		4.250	%		10/15/20		1,200,000			1,176,000	(b)
ENERGY - 6.7%
Energy Equipment & Services - 0.6%
Atwood Oceanics Inc., Senior Notes		6.500	%		2/1/20		20,000			21,400
CGG, Senior Notes		6.500	%		6/1/21		320,000			327,200
Key Energy Services Inc., Senior Notes		6.750	%		3/1/21		240,000			247,800
Total Energy Equipment & Services										596,400

See Notes to Schedule of Investments.

1

WESTERN ASSET SMASH SERIES EC FUND

Schedule of investments (unaudited) (cont’d) January 31, 2014

SECURITY	RATE			MATURITY DATE		FACE AMOUNT†		VALUE
Oil, Gas & Consumable Fuels - 6.1%
Arch Coal Inc., Senior Notes		7.000	%		6/15/19		50,000	$	39,063
Chesapeake Energy Corp., Senior Notes		7.250	%		12/15/18		5,000		5,825
CONSOL Energy Inc., Senior Notes		8.250	%		4/1/20		250,000		272,188
Continental Resources Inc., Senior Notes		5.000	%		9/15/22		120,000		123,900
Energy Transfer Equity LP, Senior Notes		7.500	%		10/15/20		500,000		565,625
Enterprise Products Operating LLC, Junior Subordinated Notes		8.375	%		8/1/66		310,000		345,071	(a)
Kinder Morgan Inc., Senior Secured Notes		5.625	%		11/15/23		1,000,000		989,761	(b)
MarkWest Energy Partners LP/MarkWest Energy Finance Corp., Senior Notes		5.500	%		2/15/23		290,000		292,900
Peabody Energy Corp., Senior Notes		6.500	%		9/15/20		30,000		31,575
Petroleos Mexicanos, Notes		6.375	%		1/23/45		1,150,000		1,152,982	(b)
Plains Exploration & Production Co., Senior Notes		8.625	%		10/15/19		60,000		65,850
QEP Resources Inc., Senior Notes		6.875	%		3/1/21		40,000		43,300
Range Resources Corp., Senior Notes		5.000	%		8/15/22		770,000		767,112
Regency Energy Partners LP/Regency Energy Finance Corp., Senior Notes		6.500	%		7/15/21		30,000		32,025
Samson Investment Co., Senior Notes		10.500	%		2/15/20		510,000		563,550	(b)
Williams Cos. Inc., Debentures		7.500	%		1/15/31		152,000		162,613
Williams Cos. Inc., Senior Notes		8.750	%		3/15/32		17,000		20,223
Total Oil, Gas & Consumable Fuels									5,473,563
TOTAL ENERGY									6,069,963
FINANCIALS - 3.6%
Commercial Banks - 0.8%
CIT Group Inc., Senior Notes		5.000	%		8/1/23		710,000		703,788
Consumer Finance - 1.8%
Ally Financial Inc., Senior Notes		3.500	%		1/27/19		1,460,000		1,443,575
SLM Corp., Medium-Term Notes, Senior Notes		8.000	%		3/25/20		170,000		190,400
Total Consumer Finance									1,633,975
Diversified Financial Services - 1.0%
International Lease Finance Corp., Senior Notes		8.750	%		3/15/17		770,000		899,937
TOTAL FINANCIALS									3,237,700
HEALTH CARE - 1.2%
Health Care Providers & Services - 1.2%
HCA Inc., Debentures		7.500	%		11/15/95		10,000		8,750
HCA Inc., Senior Secured Notes		7.250	%		9/15/20		590,000		642,362
Tenet Healthcare Corp., Senior Secured Notes		6.000	%		10/1/20		400,000		421,750	(b)
TOTAL HEALTH CARE									1,072,862
INDUSTRIALS - 0.9%
Airlines - 0.2%
DAE Aviation Holdings Inc., Senior Notes		11.250	%		8/1/15		65,000		65,041	(b)
Delta Air Lines Inc., Pass-Through Certificates, Secured Notes		8.021	%		8/10/22		87,936		98,268
Total Airlines									163,309
Commercial Services & Supplies - 0.7%
Taylor Morrison Communities Inc./Monarch Communities Inc., Senior Notes		5.250	%		4/15/21		670,000		653,250	(b)
TOTAL INDUSTRIALS									816,559
INFORMATION TECHNOLOGY - 1.0%
IT Services - 0.1%
First Data Corp., Senior Secured Notes		6.750	%		11/1/20		50,000		52,875	(b)

See Notes to Schedule of Investments.

2

WESTERN ASSET SMASH SERIES EC FUND

Schedule of investments (unaudited) (cont’d) January 31, 2014

SECURITY	RATE			MATURITY DATE		FACE AMOUNT†		VALUE
Software - 0.9%
Activision Blizzard Inc., Senior Notes		5.625	%		9/15/21		800,000	$	830,000	(b)
TOTAL INFORMATION TECHNOLOGY									882,875
MATERIALS - 1.7%
Chemicals - 0.2%
Eagle Spinco Inc., Senior Notes		4.625	%		2/15/21		220,000		215,875	(b)
Containers & Packaging - 0.7%
Ball Corp., Senior Notes		4.000	%		11/15/23		500,000		458,750
Reynolds Group Issuer Inc./Reynolds Group Issuer LLC/Reynolds Group Issuer (Luxembourg) SA, Senior Secured Notes		7.125	%		4/15/19		120,000		127,500
Total Containers & Packaging									586,250
Metals & Mining - 0.8%
Steel Dynamics Inc., Senior Notes		6.375	%		8/15/22		650,000		711,750
TOTAL MATERIALS									1,513,875
TELECOMMUNICATION SERVICES - 2.5%
Diversified Telecommunication Services - 0.8%
Intelsat Jackson Holdings SA, Senior Notes		5.500	%		8/1/23		780,000		747,825	(b)
Wireless Telecommunication Services - 1.7%
Sprint Capital Corp., Senior Notes		6.875	%		11/15/28		970,000		931,200
Sprint Corp., Senior Notes		7.875	%		9/15/23		550,000		588,500	(b)
Total Wireless Telecommunication Services									1,519,700
TOTAL TELECOMMUNICATION SERVICES									2,267,525
UTILITIES - 3.6%
Independent Power Producers & Energy Traders - 3.6%
AES Corp., Senior Notes		8.000	%		6/1/20		900,000		1,046,250
AES Corp., Senior Notes		7.375	%		7/1/21		90,000		100,125
Calpine Corp., Senior Secured Notes		7.500	%		2/15/21		8,000		8,780	(b)
Calpine Corp., Senior Secured Notes		7.875	%		1/15/23		872,000		965,740	(b)
Calpine Corp., Senior Secured Notes		5.875	%		1/15/24		60,000		59,850	(b)
Dynegy Roseton LLC/Dynegy Danskammer LLC Pass-Through Trust, Secured Bonds		7.670	%		11/8/16		100,000		0	(c)(d)(e)
Energy Future Intermediate Holding Co. LLC/EFIH Finance Inc., Senior Secured Notes		10.000	%		12/1/20		870,000		924,375
Mirant Mid Atlantic LLC, Pass-Through Certificates		10.060	%		12/30/28		165,630		171,427
TOTAL UTILITIES									3,276,547
TOTAL CORPORATE BONDS & NOTES (Cost - $23,061,641)									23,330,689
SENIOR LOANS - 28.8%
CONSUMER DISCRETIONARY - 13.9%
Auto Components - 1.5%
Schaeffler AG, USD Term Loan C		4.250	%		1/27/17		1,350,000		1,363,214	(f)
Diversified Consumer Services - 2.1%
McGraw-Hill Global Education Holdings LLC, Term Loan		9.000	%		3/22/19		892,500		910,908	(f)
ServiceMaster Co., New Term Loan		4.250	%		1/31/17		990,000		987,989	(f)
Total Diversified Consumer Services									1,898,897
Hotels, Restaurants & Leisure - 4.3%
Caesars Entertainment Operating Co., Extended Term Loan B6		5.489	%		1/26/18		830,324		800,225	(f)
Caesars Entertainment Operating Co., Term Loan B4		9.500	%		10/31/16		964,824		975,980	(f)
Dunkin Brands Inc., Term Loan B3		3.750	%		2/14/20		1,148,284		1,154,025	(f)
Equinox Holdings Inc., Repriced Term Loan B		4.500 - 5.500	%		1/31/20		992,500		1,003,045	(f)
Total Hotels, Restaurants & Leisure									3,933,275

See Notes to Schedule of Investments.

3

WESTERN ASSET SMASH SERIES EC FUND

Schedule of investments (unaudited) (cont’d) January 31, 2014

SECURITY	RATE			MATURITY DATE		FACE AMOUNT†		VALUE
Media - 4.6%
Charter Communications Operating LLC, Term Loan F		3.000	%		1/31/21		497,500	$	496,101	(f)
Univision Communications Inc., Term Loan C4		4.000	%		3/1/20		1,240,050		1,248,446	(f)
Virgin Media Investment Holdings Ltd., USD Term Loan B		3.500	%		6/8/20		2,370,000		2,378,445	(f)
Total Media									4,122,992
Specialty Retail - 1.0%
Gymboree Corp., Initial Term Loan		5.000	%		2/23/18		1,000,000		906,500	(f)
Textiles, Apparel & Luxury Goods - 0.4%
Phillips-Van Heusen Corp., Term Loan B		3.250	%		2/13/20		335,308		337,901	(f)
TOTAL CONSUMER DISCRETIONARY									12,562,779
CONSUMER STAPLES - 3.6%
Food & Staples Retailing - 0.9%
Supervalu Inc., REFI Term Loan B		5.000	%		3/21/19		764,162		769,074	(f)
Food Products - 2.7%
AdvancePierre Foods Inc., Term Loan		5.750	%		7/10/17		744,361		746,532	(f)
Del Monte Foods Co., Term Loan		4.000	%		3/8/18		972,221		978,541	(f)
H.J. Heinz Co., Term Loan B1		3.250	%		6/7/19		746,250		752,872	(f)
Total Food Products									2,477,945
TOTAL CONSUMER STAPLES									3,247,019
ENERGY - 1.7%
Oil, Gas & Consumable Fuels - 1.7%
Chesapeake Energy Corp., New Unsecured Term Loan		5.750	%		12/1/17		1,500,000		1,536,874	(f)
HEALTH CARE - 2.2%
Pharmaceuticals - 2.2%
Convatec Inc., Term Loan		4.000	%		12/22/16		969,597		978,687	(f)
Par Pharmaceutical Cos. Inc., REFI Term Loan B		4.250	%		9/30/19		987,525		994,931	(f)
TOTAL HEALTH CARE									1,973,618
INDUSTRIALS - 6.8%
Airlines - 2.2%
Delta Air Lines Inc., New Term Loan B		3.500	%		4/20/17		1,989,796		2,008,029	(f)
Commercial Services & Supplies - 1.2%
ADS Waste Holdings Inc., New Term Loan B		4.250	%		10/9/19		1,030,296		1,037,460	(f)
Electrical Equipment - 1.1%
Generac Power Systems Inc., Term Loan B		3.500	%		5/31/20		995,000		1,000,386	(f)
Machinery - 2.3%
Silver II U.S. Holdings LLC, Term Loan		4.000	%		12/13/19		2,057,946		2,071,360	(f)
TOTAL INDUSTRIALS									6,117,235
INFORMATION TECHNOLOGY - 0.1%
IT Services - 0.1%
First Data Corp., Extended 2018 Term Loan B		4.158	%		3/23/18		146,234		146,910	(f)
MATERIALS - 0.3%
Metals & Mining - 0.3%
FMG Resources (August 2006) Pty Ltd., New Term Loan B		4.250	%		6/28/19		266,812		270,148	(f)

See Notes to Schedule of Investments.

4

WESTERN ASSET SMASH SERIES EC FUND

Schedule of investments (unaudited) (cont’d) January 31, 2014

SECURITY	RATE			MATURITY DATE		FACE AMOUNT†		VALUE
UTILITIES - 0.2%
Independent Power Producers & Energy Traders - 0.2%
Windsor Financing LLC, Term Loan B		6.250	%		12/5/17		168,555	$	173,612	(f)
TOTAL SENIOR LOANS (Cost - $25,973,250)									26,028,195
						SHARES
COMMON STOCKS - 0.2%
INDUSTRIALS - 0.2%
Marine - 0.2%
DeepOcean Group Holding AS (Cost - $113,913)							4,873		142,355	(c)(d)
PREFERRED STOCKS - 1.0%
FINANCIALS - 1.0%
Consumer Finance - 1.0%
GMAC Capital Trust I (Cost - $818,341)		8.125	%				32,991		903,294	(a)
TOTAL INVESTMENTS BEFORE SHORT-TERM INVESTMENTS (Cost - $80,203,735)									78,428,255
						FACE AMOUNT†
SHORT-TERM INVESTMENTS - 9.5%
Repurchase Agreements - 9.5%
Barclays Capital Inc. repurchase agreement dated 1/31/14; Proceeds at maturity - $6,400,005; (Fully collateralized by U.S. government obligations, 0.750% due 10/31/17; Market value - $6,528,060)		0.010	%		2/3/14		6,400,000		6,400,000
State Street Bank & Trust Co. repurchase agreement dated 1/31/14; Proceeds at maturity - $2,134,000; (Fully collateralized by U.S. government obligations, 2.375% due 10/31/14; Market value - $2,178,134)		0.000	%		2/3/14		2,134,000		2,134,000
TOTAL SHORT-TERM INVESTMENTS (Cost - $8,534,000)									8,534,000
TOTAL INVESTMENTS - 96.3% (Cost - $88,737,735#)									86,962,255
Other Assets in Excess of Liabilities - 3.7%									3,349,608
TOTAL NET ASSETS - 100.0%								$	90,311,863

† Face amount denominated in U.S. dollars, unless otherwise noted.

(a) Variable rate security. Interest rate disclosed is as of the most recent information available.

(b) Security is exempt from registration under Rule 144A of the Securities Act of 1933. This security may be resold in transactions that are exempt from registration, normally to qualified institutional buyers. This security has been deemed liquid pursuant to guidelines approved by the Board of Trustees, unless otherwise noted.

(c) Illiquid security.

(d) Security is valued in good faith in accordance with procedures approved by the Board of Trustees (See Note 1).

(e) Value is less than $1.

(f) Interest rates disclosed represent the effective rates on senior loans. Ranges in interest rates are attributable to multiple contracts under the same loan.

# Aggregate cost for federal income tax purposes is substantially the same.

Abbreviations used in this schedule:

BRL	— Brazilian Real
MXN	— Mexican Peso

See Notes to Schedule of Investments.

5

Notes to Schedule of Investments (unaudited)

1. Organization and significant accounting policies

Western Asset SMASh Series EC Fund (the “Fund”) is a separate non-diversified investment series of Legg Mason Partners Institutional Trust (the “Trust”). The Trust, a Maryland statutory trust, is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company.

Shares of the Fund may be purchased only by or on behalf of separately managed account clients where an affiliate of Legg Mason Partners Fund Advisor, LLC (“LMPFA”) has an agreement to serve as investment adviser or subadviser (each affiliate, a “Managed Account Adviser”) to the account with the managed account program or sponsor (the “Program Sponsor”) (typically, a registered investment adviser or broker/dealer) or directly with the client. Shareholders of the Fund pay fees to their separately managed account sponsor, some of which are paid to affiliates of LMPFA in lieu of a management fee being charged by LMPFA to the Fund.

The following are significant accounting policies consistently followed by the Fund and are in conformity with U.S. generally accepted accounting principles (“GAAP”).

(a) Investment valuation. The valuations for fixed income securities (which may include, but are not limited to, corporate, government, municipal, mortgage-backed, collateralized mortgage obligations and asset-backed securities) and certain derivative instruments are typically the prices supplied by independent third party pricing services, which may use market prices or broker/dealer quotations or a variety of valuation techniques and methodologies. The independent third party pricing services use inputs that are observable such as issuer details, interest rates, yield curves, prepayment speeds, credit risks/spreads, default rates and quoted prices for similar securities. Short-term fixed income securities that will mature in 60 days or less are valued at amortized cost, unless it is determined that using this method would not reflect an investment’s fair value. Futures contracts are valued daily at the settlement price established by the board of trade or exchange on which they are traded. Equity securities for which market quotations are available are valued at the last reported sales price or official closing price on the primary market or exchange on which they trade. When the Fund holds securities or other assets that are denominated in a foreign currency, the Fund will normally use the currency exchange rates as of 4:00 p.m. (Eastern Time). If independent third party pricing services are unable to supply prices for a portfolio investment, or if the prices supplied are deemed by the manager to be unreliable, the market price may be determined by the manager using quotations from one or more broker/dealers or at the transaction price if the security has recently been purchased and no value has yet been obtained from a pricing service or pricing broker. When reliable prices are not readily available, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded, but before the Fund calculates its net asset value, the Fund values these securities as determined in accordance with procedures approved by the Fund’s Board of Trustees.

The Board of Trustees is responsible for the valuation process and has delegated the supervision of the daily valuation process to the Legg Mason North American Fund Valuation Committee (the “Valuation Committee”). The Valuation Committee, pursuant to the policies adopted by the Board of Trustees, is responsible for making fair value determinations, evaluating the effectiveness of the Fund’s pricing policies, and reporting to the Board of Trustees. When determining the reliability of third party pricing information for investments owned by the Fund, the Valuation Committee, among other things, conducts due diligence reviews of pricing vendors, monitors the daily change in prices and reviews transactions among market participants.

The Valuation Committee will consider pricing methodologies it deems relevant and appropriate when making fair value determinations. Examples of possible methodologies include, but are not limited to, multiple of earnings; discount from market of a similar freely traded security; discounted cash-flow analysis; book value or a multiple thereof; risk premium/yield analysis; yield to maturity; and/or fundamental investment analysis. The Valuation Committee will also consider factors it deems relevant and appropriate in light of the facts and circumstances. Examples of possible factors include, but are not limited to, the type of security; the issuer’s financial statements; the purchase price of the security; the discount from market value of unrestricted securities of the same class at the time of purchase; analysts’ research and observations from financial institutions; information regarding any transactions or offers with respect to the security; the existence of merger proposals or tender offers affecting the security; the price and extent of public trading in similar securities of the issuer or comparable companies; and the existence of a shelf registration for restricted securities.

For each portfolio security that has been fair valued pursuant to the policies adopted by the Board of Trustees, the fair value price is compared against the last available and next available market quotations. The Valuation Committee reviews the results of such back testing monthly and fair valuation occurrences are reported to the Board of Trustees quarterly.

The Fund uses valuation techniques to measure fair value that are consistent with the market approach and/or income approach, depending on the type of security and the particular circumstance. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable securities. The income approach uses valuation techniques to discount estimated future cash flows to present value.

6

Notes to Schedule of Investments (unaudited) (continued)

GAAP establishes a disclosure hierarchy that categorizes the inputs to valuation techniques used to value assets and liabilities at measurement date. These inputs are summarized in the three broad levels listed below:

• Level 1 – quoted prices in active markets for identical investments

• Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

• Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The inputs or methodologies used to value securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used in valuing the Fund’s assets and liabilities carried at fair value:

ASSETS
DESCRIPTION	QUOTED PRICES (LEVEL 1)		OTHER SIGNIFICANT OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)			TOTAL
Long-term investments†:
Sovereign bonds		—	$	27,364,734		—		$	27,364,734
Asset-backed securities		—		658,988		—			658,988
Corporate bonds & notes		—		23,330,689	$	0	*		23,330,689
Senior loans		—		26,028,195		—			26,028,195
Common stocks		—		—		142,355			142,355
Preferred stocks	$	903,294		—		—			903,294
Total long-term investments	$	903,294	$	77,382,606	$	142,355		$	78,428,255
Short-term investments†		—		8,534,000		—			8,534,000
Total investments	$	903,294	$	85,916,606	$	142,355		$	86,962,255
Other financial instruments:
Futures contracts	$	63,835		—		—		$	63,835
Forward foreign currency contracts		—	$	652,324		—			652,324
OTC credit default swaps on credit indices - sell protection‡		—		1,432,877		—			1,432,877
Total other financial instruments	$	63,835	$	2,085,201		—		$	2,149,036
Total	$	967,129	$	88,001,807	$	142,355		$	89,111,291
LIABILITIES
DESCRIPTION	QUOTED PRICES (LEVEL 1)		OTHER SIGNIFICANT OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)			TOTAL
Other financial instruments:
Futures contracts	$	129,930		—		—		$	129,930
Forward foreign currency contracts		—	$	216,778		—			216,778
Total	$	129,930	$	216,778		—		$	346,708

† See Schedule of Investments for additional detailed categorizations.

* Amount represents less than $1.

‡ Values include any premiums paid or received with respect to swap contracts.

(b) Repurchase agreements. The Fund may enter into repurchase agreements with institutions that its investment adviser has determined are creditworthy. Each repurchase agreement is recorded at cost. Under the terms of a typical repurchase agreement, the Fund acquires a debt security subject to an obligation of the seller to repurchase, and of the Fund to resell, the security at an agreed-upon price and time, thereby determining the yield during the Fund’s holding period. When entering into repurchase agreements, it is the Fund’s policy that its custodian or a third party custodian, acting on the Fund’s behalf, take possession of the

7

Notes to Schedule of Investments (unaudited) (continued)

underlying collateral securities, the market value of which, at all times, at least equals the principal amount of the repurchase transaction, including accrued interest. To the extent that any repurchase transaction maturity exceeds one business day, the value of the collateral is marked-to-market and measured against the value of the agreement in an effort to ensure the adequacy of the collateral. If the counterparty defaults, the Fund generally has the right to use the collateral to satisfy the terms of the repurchase transaction. However, if the market value of the collateral declines during the period in which the Fund seeks to assert its rights or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by the Fund may be delayed or limited.

(c) Futures contracts. The Fund uses futures contracts generally to gain exposure to, or hedge against, changes in interest rates or gain exposure to, or hedge against, changes in certain asset classes. A futures contract represents a commitment for the future purchase or sale of an asset at a specified price on a specified date.

Upon entering into a futures contract, the Fund is required to deposit cash or cash equivalents with a broker in an amount equal to a certain percentage of the contract amount. This is known as the ‘‘initial margin’’ and subsequent payments (‘‘variation margin’’) are made or received by the Fund each day, depending on the daily fluctuation in the value of the contract. For certain futures, including foreign denominated futures, variation margin is not settled daily, but is recorded as a net variation margin payable or receivable. Futures contracts are valued daily at the settlement price established by the board of trade or exchange on which they are traded.

Futures contracts involve, to varying degrees, risk of loss. In addition, there is the risk that the Fund may not be able to enter into a closing transaction because of an illiquid secondary market.

(d) Forward foreign currency contracts. The Fund enters into a forward foreign currency contract to hedge against foreign currency exchange rate risk on its non-U.S. dollar denominated securities or to facilitate settlement of a foreign currency denominated portfolio transaction. A forward foreign currency contract is an agreement between two parties to buy and sell a currency at a set price with delivery and settlement at a future date. The contract is marked-to-market daily and the change in value is recorded by the Fund as an unrealized gain or loss. When a forward foreign currency contract is closed, through either delivery or offset by entering into another forward foreign currency contract, the Fund recognizes a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value of the contract at the time it is closed.

When entering into a forward foreign currency contract, the Fund bears the risk of an unfavorable change in the foreign exchange rate underlying the forward foreign currency contract. Risks may also arise upon entering into these contracts from the potential inability of the counterparties to meet the terms of their contracts.

(e) Swap agreements. The Fund invests in swaps for the purpose of managing its exposure to interest rate, credit or market risk, or for other purposes. The use of swaps involves risks that are different from those associated with other portfolio transactions. Swap agreements are privately negotiated in the over-the-counter market (“OTC Swaps”) or may be executed on a registered exchange (“Centrally Cleared Swaps”). Unlike Centrally Cleared Swaps, the Fund has credit exposure to the counterparties of OTC Swaps.

Swap contracts are marked-to-market daily and changes in value are recorded as unrealized appreciation (depreciation). The daily change in valuation of Centrally Cleared Swaps, if any, is recorded as a receivable or payable for variation margin. Gains or losses are realized upon termination of the swap agreement. Collateral, in the form of restricted cash or securities, may be required to be held in segregated accounts with the Fund’s custodian in compliance with the terms of the swap contracts. Securities posted as collateral for swap contracts are identified in the Schedule of Investments.

The Fund’s maximum exposure in the event of a defined credit event on a credit default swap to sell protection is the notional amount. During the period ended January 31, 2014, the total notional value of all credit default swaps to sell protection is $19,000,000. This amount would be offset by the value of the swap’s reference entity, upfront premiums received on the swap and any amounts received from the settlement of a credit default swap where the Fund bought protection for the same referenced security/entity.

For average notional amounts of swaps held during the period ended January 31, 2014, see Note 3.

Credit default swaps

The Fund enters into credit default swap (“CDS”) contracts for investment purposes, to manage its credit risk or to add leverage. CDS agreements involve one party making a stream of payments to another party in exchange for the right to receive a specified return in the event of a default by a third party, typically corporate or sovereign issuers, on a specified obligation, or in the event of a write-down, principal shortfall, interest shortfall or default of all or part of the referenced entities comprising a credit index. The Fund may use a CDS to provide protection against defaults of the issuers (i.e., to reduce risk where the Fund has exposure to an issuer) or to take an active long or short position with respect to the likelihood of a particular issuer’s default. As a seller of

8

Notes to Schedule of Investments (unaudited) (continued)

protection, the Fund generally receives an upfront payment or a stream of payments throughout the term of the swap provided that there is no credit event. If the Fund is a seller of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the maximum potential amount of future payments (undiscounted) that the Fund could be required to make under a credit default swap agreement would be an amount equal to the notional amount of the agreement. These amounts of potential payments will be partially offset by any recovery of values from the respective referenced obligations. As a seller of protection, the Fund effectively adds leverage to its portfolio because, in addition to its total net assets, the Fund is subject to investment exposure on the notional amount of the swap. As a buyer of protection, the Fund generally receives an amount up to the notional value of the swap if a credit event occurs.

Implied spreads are the theoretical prices a lender receives for credit default protection. When spreads rise, market perceived credit risk rises and when spreads fall, market perceived credit risk falls. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to enter into the agreement. Wider credit spreads and decreasing market values, when compared to the notional amount of the swap, represent a deterioration of the referenced entity’s credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement. Credit spreads utilized in determining the period end market value of credit default swap agreements on corporate or sovereign issues are disclosed in the Notes to the Schedule of Investments and serve as an indicator of the current status of the payment/performance risk and represent the likelihood or risk of default for credit derivatives. For credit default swap agreements on asset-backed securities and credit indices, the quoted market prices and resulting values, particularly in relation to the notional amount of the contract as well as the annual payment rate, serve as an indication of the current status of the payment/performance risk.

The Fund’s maximum risk of loss from counterparty risk, as the protection buyer, is the fair value of the contract (this risk is mitigated by the posting of collateral by the counterparty to the Fund to cover the Fund’s exposure to the counterparty). As the protection seller, the Fund’s maximum risk is the notional amount of the contract. Credit default swaps are considered to have credit risk-related contingent features since they require payment by the protection seller to the protection buyer upon the occurrence of a defined credit event.

Entering into a CDS agreement involves, to varying degrees, elements of credit, market and documentation risk. Such risks involve the possibility that there will be no liquid market for these agreements, that the counterparty to the agreement may default on its obligation to perform or disagree as to the meaning of the contractual terms in the agreement, and that there will be unfavorable changes in net interest rates.

(f) Loan participations. The Fund may invest in loans arranged through private negotiation between one or more financial institutions. The Fund’s investment in any such loan may be in the form of a participation in or an assignment of the loan. In connection with purchasing participations, the Fund generally will have no right to enforce compliance by the borrower with the terms of the loan agreement related to the loan, or any rights of off-set against the borrower and the Fund may not benefit directly from any collateral supporting the loan in which it has purchased the participation.

The Fund assumes the credit risk of the borrower, the lender that is selling the participation and any other persons interpositioned between the Fund and the borrower. In the event of the insolvency of the lender selling the participation, the Fund may be treated as a general creditor of the lender and may not benefit from any off-set between the lender and the borrower.

(g) Foreign currency translation. Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts based upon prevailing exchange rates on the date of valuation. Purchases and sales of investment securities and income and expense items denominated in foreign currencies are translated into U.S. dollar amounts based upon prevailing exchange rates on the respective dates of such transactions.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. dollar denominated transactions as a result of, among other factors, the possibility of lower levels of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability.

(h) Credit and market risk. The Fund invests in high-yield and emerging market instruments that are subject to certain credit and market risks. The yields of high-yield and emerging market debt obligations reflect, among other things, perceived credit and market risks. The Fund’s investments in securities rated below investment grade typically involve risks not associated with higher rated securities including, among others, greater risk related to timely and ultimate payment of interest and principal, greater market price volatility and less liquid secondary market trading. The consequences of political, social, economic or diplomatic changes may have disruptive effects on the market prices of investments held by the Fund. The Fund’s investments in non-U.S. dollar denominated securities may also result in foreign currency losses caused by devaluations and exchange rate fluctuations.

(i) Foreign investment risks. The Fund’s investments in foreign securities may involve risks not present in domestic investments. Since securities may be denominated in foreign currencies, may require settlement in foreign currencies or pay interest or dividends in foreign currencies, changes in the relationship of these foreign currencies to the U.S. dollar can

9

Notes to Schedule of Investments (unaudited) (continued)

significantly affect the value of the investments and earnings of the Fund. Foreign investments may also subject the Fund to foreign government exchange restrictions, expropriation, taxation or other political, social or economic developments, all of which affect the market and/or credit risk of the investments.

(j) Other risks. Consistent with its objective to seek high current income, the Fund may invest in instruments whose values and interest rates are linked to foreign currencies, interest rates, indices or some other financial indicator. The value at maturity or interest rates for these instruments will increase or decrease according to the change in the indicator to which they are indexed, amongst other factors. These securities are generally more volatile in nature, and the risk of loss of principal may be greater.

(k) Counterparty risk and credit-risk-related contingent features of derivative instruments. The Fund may invest in certain securities or engage in other transactions, where the Fund is exposed to counterparty credit risk in addition to broader market risks. The Fund may invest in securities of issuers, which may also be considered counterparties as trading partners in other transactions. This may increase the risk of loss in the event of default or bankruptcy by the counterparty or if the counterparty otherwise fails to meet its contractual obligations. The Fund’s investment manager attempts to mitigate counterparty risk by (i) periodically assessing the creditworthiness of its trading partners, (ii) monitoring and/or limiting the amount of its net exposure to each individual counterparty based on its assessment and (iii) requiring collateral from the counterparty for certain transactions. Market events and changes in overall economic conditions may impact the assessment of such counterparty risk by the investment manager. In addition, declines in the values of underlying collateral received may expose the Fund to increased risk of loss.

The Fund has entered into master agreements with certain of its derivative counterparties that provide for general obligations, representations, agreements, collateral, events of default or termination and credit related contingent features. The credit related contingent features include, but are not limited to, a percentage decrease in the Fund’s net assets or NAV over a specified period of time. If these credit related contingent features were triggered, the derivatives counterparty could terminate the positions and demand payment or require additional collateral.

Collateral requirements differ by type of derivative. Collateral or margin requirements are set by the broker or exchange clearing house for exchange traded derivatives while collateral terms are contract specific for over-the-counter traded derivatives. Securities pledged as collateral, if any, to cover the obligations of the Fund under derivative contracts, are noted in the Schedule of Investments.

As of January 31, 2014, the Fund held forward foreign currency contracts with credit related contingent features which had a liability position of $216,778. If a contingent feature in the master agreements would have been triggered, the Fund would have been required to pay this amount to its derivatives counterparties. As of January 31, 2014, the Fund had posted with its counterparties cash and/or securities as collateral to cover the net liability of these derivatives amounting to $92,000, which could be used to reduce the required payment.

(l) Security transactions. Security transactions are accounted for on a trade date basis.

2. Investments

At January 31, 2014, the aggregate gross unrealized appreciation and depreciation of investments for federal income tax purposes were substantially as follows:

Gross unrealized appreciation	$	1,051,312
Gross unrealized depreciation		(2,826,792	)
Net unrealized depreciation	$	(1,775,480	)

At January 31, 2014, the Fund had the following open futures contracts:

	Number of Contracts		Expiration Date		Basis Value		Market Value		Unrealized Gain (Loss)
Contracts to Buy:
U.S. Treasury 5-Year Notes		221		3/14	$	26,719,273	$	26,658,125	$	(61,148	)
U.S. Treasury Ultra Long-Term Bonds		8		3/14		1,112,089		1,150,500		38,411
									$	(22,737	)
Contracts to Sell:
Euro Bund		8		3/14		1,373,824		1,348,400		25,424
U.S. Treasury 10-Year Notes		183		3/14		22,943,468		23,012,250		(68,782	)
									$	(43,358	)
Net unrealized loss on open futures contracts									$	(66,095	)

10

Notes to Schedule of Investments (unaudited) (continued)

At January 31, 2014, the Fund had the following open forward foreign currency contracts:

Foreign Currency	Counterparty	Local Currency		Market Value		Settlement Date		Unrealized Gain (Loss)
Contracts to Buy:
Australian Dollar	Citibank N.A.		4,000,000	$	3,497,298		2/18/14	$	(67,702	)
Euro	Citibank N.A.		100,000		134,870		2/18/14		(1,859	)
Euro	Citibank N.A.		88,066		118,775		2/18/14		827
									(68,734	)
Contracts to Sell:
Australian Dollar	Citibank N.A.		4,000,000		3,497,298		2/18/14		269,662
Euro	Citibank N.A.		8,842,879		11,926,431		2/18/14		(103,811	)
Euro	Credit Suisse London		295,013		397,885		2/18/14		(441	)
Euro	Morgan Stanley & Co.		2,500,000		3,371,761		2/18/14		(39,736	)
Euro	State Street Bank & Trust Co.		150,000		202,306		2/18/14		(2,462	)
Euro	UBS AG London		740,963		999,340		2/18/14		(767	)
Japanese Yen	Barclays Bank PLC		332,388,000		3,253,490		2/18/14		120,031
Japanese Yen	Citibank N.A.		818,450,000		8,011,176		2/18/14		245,945
Euro	Morgan Stanley & Co.		2,300,000		3,102,114		4/16/14		15,859
									504,280
Net unrealized gain on open forward foreign currency contracts								$	435,546

At January 31, 2014, the Fund held the following open swap contracts:

OTC CREDIT DEFAULT SWAPS ON CREDIT INDICES - SELL PROTECTION1
SWAP COUNTERPARTY (REFERENCE ENTITY)	NOTIONAL AMOUNT2		TERMINATION DATE		PERIODIC PAYMENTS RECEIVED BY THE FUND†		MARKET VALUE3		UPFRONT PREMIUMS PAID (RECEIVED)		UNREALIZED APPRECIATION
Barclays Capital Inc. (Markit CDX.NA.HY.20 Index)	$	19,000,000		6/20/18		5.000% quarterly	$	1,432,877	$	722,315	$	710,562

(1) If the Fund is a seller of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.

(2) The maximum potential amount the Fund could be required to pay as a seller of credit protection or receive as a buyer of credit protection if a credit event occurs as defined under the terms of that particular swap agreement.

(3) The quoted market prices and resulting values for credit default swap agreements on asset-backed securities and credit indices serve as an indicator of the current status of the payment/performance risk and represent the likelihood of an expected liability (or profit) for the credit derivative should the notional amount of the swap agreement be closed/sold as of the period end. Decreasing market values (sell protection) or increasing market values (buy protection) when compared to the notional amount of the swap, represent a deterioration of the referenced entity’s credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement.

† Percentage shown is an annual percentage rate.

3. Derivative instruments and hedging activities

GAAP requires enhanced disclosure about an entity’s derivative and hedging activities.

11

Notes to Schedule of Investments (unaudited) (continued)

The following is a summary of the Fund’s derivative instruments categorized by risk exposure at January 31, 2014.

	Futures Contracts					Forward Foreign Currency Contracts
Primary Underlying Risk	Unrealized Appreciation		Unrealized Depreciation			Unrealized Appreciation		Unrealized Depreciation			Swap Contracts, at value		Total
Interest Rate Risk	$	38,411	$	(129,930	)		—		—			—	$	(91,519	)
Foreign Exchange Risk		25,424		—		$	652,324	$	(216,778	)		—		460,970
Credit Risk		—		—			—		—		$	1,432,877		1,432,877
Total	$	63,835	$	(129,930	)	$	652,324	$	(216,778	)	$	1,432,877	$	1,802,328

During the period ended January 31, 2014, the volume of derivative activity for the Fund was as follows:

	Average Market Value
Futures contracts (to buy)	$	32,572,698
Futures contracts (to sell)		19,984,845
Forward foreign currency contracts (to buy)		2,214,260
Forward foreign currency contracts (to sell)		35,396,820
	Average Notional Balance
Credit default swap contracts (to sell protection)	$	20,000,000

12

ITEM 2. CONTROLS AND PROCEDURES.

(a) The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a- 3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the disclosure controls and procedures required by Rule 30a-3(b) under the 1940 Act and 15d-15(b) under the Securities Exchange Act of 1934

(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant’s last fiscal quarter that have materially affected, or are likely to materially affect the registrant’s internal control over financial reporting.

ITEM 3. EXHIBITS.

Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are attached hereto.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Legg Mason Partners Institutional Trust

By:	/s/    KENNETH D. FULLER
	Kenneth D. Fuller
	Chief Executive Officer
Date:	March 25, 2014

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:	/s/    KENNETH D. FULLER
	Kenneth D. Fuller
	Chief Executive Officer
Date:	March 25, 2014
By:	/s/    RICHARD F. SENNETT
	Richard F. Sennett
	Principal Financial Officer
Date:	March 25, 2014