UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT

INVESTMENT COMPANIES

Investment Company Act file number: 811-08294

ALLIANCEBERNSTEIN EXCHANGE RESERVES

(Exact name of registrant as specified in charter)

1345 Avenue of the Americas, New York, New York 10105

(Address of principal executive offices) (Zip code)

Joseph J. Mantineo

AllianceBernstein L.P.

1345 Avenue of the Americas

New York, New York 10105

(Name and address of agent for service)

Registrant’s telephone number, including area code: (800) 221-5672

Date of fiscal year end: September 30, 2010

Date of reporting period: March 31, 2010

ITEM 1. REPORTS TO STOCKHOLDERS.

SEMI-ANNUAL REPORT

AllianceBernstein

Exchange Reserves

March 31, 2010

Semi-Annual Report

An investment in the Fund is not a deposit in a bank 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.

Distribution of this report other than to shareholders must be preceded or accompanied by the Fund’s current prospectus, which contains further information about the Fund.

The Fund files its complete schedule of portfolio holdings with the Commission for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Forms N-Q are available on the Commission’s web site at www.sec.gov. The Fund’s Forms N-Q may also be reviewed and copied at the Commission’s Public Reference Room in Washington, DC; information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330.

AllianceBernstein Investments, Inc. is an affiliate of AllianceBernstein L.P., the manager of the AllianceBernstein funds, and is a member of FINRA.

AllianceBernstein^® and the AB Logo are registered trademarks and service marks used by permission of the owner, AllianceBernstein L.P.

FUND EXPENSES

(unaudited)

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions and (2) ongoing costs, including management fees; distribution (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period as indicated below.

Actual Expenses

The table below provides information about actual account values and actual expenses. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed annual rate of return of 5% before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds by comparing this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), or contingent deferred sales charges on redemptions. Therefore, the hypothetical example is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Beginning Account Value October 1, 2009				Ending Account Value March 31, 2010				Expenses Paid During Period*
	Actual		Hypothetical		Actual		Hypothetical**		Actual		Hypothetical
Class A	$	1,000	$	1,000	$	1,000.10	$	1,023.64	$	1.30	$	1.31
Class B	$	1,000	$	1,000	$	1,000.05	$	1,023.54	$	1.40	$	1.41
Class C	$	1,000	$	1,000	$	1,000.07	$	1,023.59	$	1.35	$	1.36
Advisor Class	$	1,000	$	1,000	$	1,000.10	$	1,023.64	$	1.30	$	1.31
Class R	$	1,000	$	1,000	$	1,000.06	$	1,023.59	$	1.35	$	1.36
Class K	$	1,000	$	1,000	$	1,000.20	$	1,023.73	$	1.20	$	1.21
Class I	$	1,000	$	1,000	$	1,000.72	$	1,024.23	$	0.70	$	0.71

* Expenses are equal to the classes’ annualized expense ratios of 0.26%, 0.28%, 0.27%, 0.26%, 0.27%, 0.24% and 0.14%, respectively, multiplied by the average account value over the period, multiplied by 182/365 ( to reflect the one-half year period).

** Assumes 5% return before expenses.

ALLIANCEBERNSTEIN EXCHANGE RESERVES  • 1

Fund Expenses

PORTFOLIO OF INVESTMENTS

March 31, 2010 (unaudited)

	Yield*	Principal Amount (000)		U.S. $ Value
SHORT-TERM INVESTMENTS – 100.2%
U.S. Government & Government Sponsored Agency Obligations – 30.9%
Bank of America Corp. – FDIC Insured 9/13/10(a)	0.29%	$	13,400	$	13,400,000
7/29/10(a)	0.30%		12,000		12,000,000
Citigroup Funding, Inc. – FDIC Insured 7/30/10(a)	0.35%		23,200		23,200,000
Federal Farm Credit Bank 7/08/10(a)	0.13%		20,000		20,000,948
Federal Home Loan Bank 7/20/11(a)	0.15%		5,000		4,995,737
7/27/10(a)	0.18%		10,000		9,999,560
7/28/10(a)	0.20%		10,000		10,000,000
Federal Home Loan Mortgage Corp. 7/12/10(a)	0.15%		10,000		9,999,407
7/14/10(a)	0.15%		10,000		10,000,000
9/03/10(a)	0.23%		10,000		10,000,000
8/24/10(a)	0.23%		10,000		10,000,000
Federal National Mortgage Association 8/11/11(a)	0.14%		5,000		4,996,916
7/13/10(a)	0.14%		10,000		10,000,000
8/05/10(a)	0.20%		10,000		9,998,671
9/19/11(a)	0.20%		5,000		4,997,071
					163,588,310
Municipal Obligations – 29.1%
Allen Cnty OH Hosp (Catholic Healthcare Partners) 10/01/31(b)	0.29%		1,300		1,300,000
Assn Bay Area Govt CA Non-Prof (Francis W. Parker School) 9/01/35(b)	0.29%		4,865		4,865,000
Colorado Ed Cul Fac Auth (Natl Jewish Fed Bd Prog) 12/01/37(b)	0.30%		1,390		1,390,000
Colorado Edl & Cultural Facs Auth (Natl Jewish Fed Bd Prog) 7/01/36(b)	0.30%		3,455		3,455,000
Series D 10/01/38(b)	0.30%		6,000		6,000,000
Dallas Forth Worth Tex Intl (United Parcel Service) 5/01/32(b)	0.29%		19,000		19,000,000
Houston TX Hgr Ed Fin Corp. (Rice University) Series 2008 A 5/15/48(b)	0.36%		7,000		7,000,000

2 •  ALLIANCEBERNSTEIN EXCHANGE RESERVES

Portfolio of Investments

	Yield*	Principal Amount (000)		U.S. $ Value
Jackson Cnty MS PCR (Chevron Corporation) 6/01/23(b)	0.28%	$	18,000	$	18,000,000
Lincoln Cnty WY PCR (Exxon Capital Ventures) 7/01/17(b)	0.26%		10,800		10,800,000
Loudoun Cnty IDA Rev (Howard Hughes Med) Series 03A 2/15/38(b)	0.26%		6,575		6,575,000
Loudoun Cnty VA IDA (Howard Hughes Med) 2/15/38(b)	0.26%		12,250		12,250,000
Lower Neches Valley Auth TX (Exxon Mobil Corporation) 5/01/22(b)	0.32%		2,500		2,500,000
Massachusetts Dev Fin Agy (Smith College) 7/01/24(b)	0.26%		1,700		1,700,000
Massachusetts Hlth & Ed Facs Auth (Harvard Univ) Series 99R 11/01/49(b)	0.27%		2,200		2,200,000
Massachusetts Hlth & Ed Facs Auth (Wellesley College) 7/01/22(b)	0.25%		2,900		2,900,000
Massachusetts St Dev Fin 10/01/42(b)	0.26%		12,695		12,695,000
New York NY Hsg Auth 11/01/41(b)	0.27%		8,000		8,000,000
Ohio Air Quality Dev Auth 11/01/40(b)	0.32%		4,000		4,000,000
Valdez AK Marine Terminal (Exxon Mobil Corporation) Series 1993B 12/01/33(b)	0.32%		5,500		5,500,000
Valdez AK Marine Terminal (BP Amoco) Series 03B 7/01/37(b)	0.30%		24,000		24,000,000
					154,130,000
Certificate of Deposit – 17.5%
Barclays Bank PLC NY 10/01/10(a)	0.48%		16,000		16,000,000
Rabobank Nederland NV NY 6/16/10	0.29%		11,000		11,000,000
9/20/10	0.32%		11,000		11,000,000
Royal Bank of Canada NY 12/09/10(a)	0.23%		13,300		13,300,000
3/10/11(a)	0.23%		4,500		4,500,000

ALLIANCEBERNSTEIN EXCHANGE RESERVES  • 3

Portfolio of Investments

	Yield*	Principal Amount (000)		U.S. $ Value
Societe Generale NY 7/20/10	0.29%	$	8,000	$	7,999,749
Toronto Dominion Bank NY 2/04/11(a)	0.23%		9,000		9,000,000
8/26/10	0.27%		9,200		9,200,000
Westpac Banking Corp. NY 12/01/10(a)	0.26%		10,700		10,700,000
					92,699,749
Commercial Paper – 15.0%
Banco Santander Central Hispano SA 10/12/10	0.52%		17,000		16,952,362
CBA (Delaware) Finance 4/12/10	0.22%		18,700		18,698,744
HSBC USA, Inc. 5/03/10	0.24%		18,500		18,496,054
Straight-A Funding LLC 4/05/10(c)	0.14%		6,300		6,299,902
4/19/10(c)	0.16%		6,300		6,299,496
6/02/10(c)	0.20%		13,000		12,995,522
					79,742,080
Corporates – Investment Grades – 4.0%
Kreditanstalt Fuer Wiederaufba 6/15/10	4.25%		5,700		5,746,458
Pfizer, Inc. 3/15/11(a)	2.21%		5,600		5,705,537
Wells Fargo & Co. 8/20/10(a)	0.47%		9,900		9,907,120
					21,359,115
Repurchase Agreements – 3.7%
Mizuho Securities USA Zero Coupon, 03/31/10 due 4/01/10 in the amount of $19,700,000 (collateralized by $18,827,300 U.S. Treasury Notes & U.S. Treasury Inflation Index, 3.375% to 4.50%, due 9/30/11 to 4/15/28, value $20,094,060)			19,700		19,700,000
Total Investments – 100.2% (cost $531,219,254)					531,219,254
Other assets less liabilities – (0.2)%					(827,595	)
Net Assets – 100.0%				$	530,391,659

(a) Floating Rate Security. Stated interest rate was in effect at March 31, 2010.

(b) Variable Rate Demand Notes (VRDN) are instruments whose interest rates change on a specific date (such as coupon date or interest payment date) or whose interest rates vary

4 •  ALLIANCEBERNSTEIN EXCHANGE RESERVES

Portfolio of Investments

with changes in a designated base rate (such as the prime interest rate). This instrument is payable on demand and is secured by letters of credit or other credit support agreements from major banks.

(c) Security is exempt from registration under Rule 144A of the Securities Act of 1933. These securities are considered liquid and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At March 31, 2010, the aggregate market value of these securities amounted to $25,594,920 or 4.8% of net assets.

* Represents annualized yield from date of purchase for discount securities, and stated interest rate for interest-bearing securities.

Glossary:

FDIC – Federal Deposit Insurance Corporation

IDA – Industrial Development Authority/Agency

PCR – Pollution Control Revenue Bond

See notes to financial statements.

ALLIANCEBERNSTEIN EXCHANGE RESERVES  • 5

Portfolio of Investments

STATEMENT OF ASSETS & LIABILITIES

March 31, 2010 (unaudited)

Assets
Investments in securities, at value (cost $531,219,254)	$	531,219,254
Cash		27,149
Receivable for shares of beneficial interest sold		982,692
Interest receivable		192,908
Receivable due from Adviser		153,653
Total assets		532,575,656
Liabilities
Payable for shares of beneficial interest redeemed		1,834,167
Transfer Agent fee payable		124,753
Distribution fee payable		120,258
Administrative fee payable		9,889
Dividends payable		1,843
Accrued expenses		93,087
Total liabilities		2,183,997
Net Assets	$	530,391,659
Composition of Net Assets
Shares of beneficial interest, at par	$	530,384
Additional paid-in capital		529,887,314
Accumulated net realized loss on investment transactions		(26,039	)
	$	530,391,659

Net Asset Value Per Share—unlimited shares authorized, $.001 par value

Class	Net Assets		Shares Outstanding	Net Asset Value
A	$	252,680,504	252,675,256	$	1.00
B	$	45,913,833	45,911,377	$	1.00
C	$	29,989,578	29,988,425	$	1.00
Advisor	$	144,936,714	144,938,101	$	1.00
R	$	7,861,328	7,861,328	$	1.00
K	$	44,889,462	44,889,443	$	1.00
I	$	4,120,240	4,120,212	$	1.00

See notes to financial statements.

6 •  ALLIANCEBERNSTEIN EXCHANGE RESERVES

Statement of Assets & Liabilities

STATEMENT OF OPERATIONS

Six Months Ended March 31, 2010 (unaudited)

Investment Income
Interest				$	772,593
Expenses
Advisory fee (see Note B)	$	686,559
Distribution fee—Class A		404,063
Distribution fee—Class B		202,613
Distribution fee—Class C		86,537
Distribution fee—Class R		16,466
Distribution fee—Class K		53,047
Transfer agency—Class A		232,666
Transfer agency—Class B		57,542
Transfer agency—Class C		32,922
Transfer agency—Advisor Class		118,154
Transfer agency—Class R		8,562
Transfer agency—Class K		42,437
Transfer agency—Class I		535
Registration fees		84,217
Custodian		72,560
Administrative		56,853
Printing		46,770
Trustees’ fees		26,262
Legal		18,104
Audit		17,686
Miscellaneous		40,447
Total expenses		2,305,002
Less: expenses waived and reimbursed by the Adviser (see Note B)		(809,601	)
Less: expenses waived and reimbursed by the Distributor (see Note C)		(762,726	)
Less: expenses waived by the Transfer Agent (see Note B)		(12,558	)
Net expenses					720,117
Net investment income					52,476
Net Increase in Net Assets from Operations				$	52,476

See notes to financial statements.

ALLIANCEBERNSTEIN EXCHANGE RESERVES  • 7

Statement of Operations

STATEMENT OF CHANGES IN NET ASSETS

	Six Months Ended March 31, 2010 (unaudited)			Year Ended September 30, 2009
Increase (Decrease) in Net Assets from Operations
Net investment income	$	52,476		$	3,690,829
Net realized gain (loss) on investment transactions		–0	–		(24	)
Net increase in net assets from operations		52,476			3,690,805
Dividends to Shareholders from
Net investment income
Class A		(24,314	)		(1,853,092	)
Class B		(2,419	)		(209,114	)
Class C		(2,435	)		(257,905	)
Advisor Class		(11,352	)		(1,062,585	)
Class R		(365	)		(44,261	)
Class K		(7,625	)		(206,817	)
Class I		(3,966	)		(57,033	)
Transactions in Shares of Beneficial Interest
Net decrease		(32,658,779	)		(16,134,894	)
Total decrease		(32,658,779	)		(16,134,896	)
Net Assets
Beginning of period		563,050,438			579,185,334
End of Period	$	530,391,659		$	563,050,438

See notes to financial statements.

8 •  ALLIANCEBERNSTEIN EXCHANGE RESERVES

Statement of Changes in Net Assets

NOTES TO FINANCIAL STATEMENTS

March 31, 2010 (unaudited)

NOTE A

Significant Accounting Policies

AllianceBernstein Exchange Reserves (the “Fund”), is registered under the Investment Company Act of 1940 as a diversified, open-end investment company. The Fund’s investment objective is to provide maximum current income to the extent consistent with safety of principal and liquidity. The Fund offers, as described in the prospectus, Class A, Class B, Class C, Advisor Class, Class R, Class K and Class I shares. All seven classes of shares have identical voting, dividend, liquidation and other rights, except that the classes bear different distribution and transfer agency expenses. Each class has exclusive voting rights with respect to its distribution plan.

Class A shares are sold for cash without an initial sales charge at the time of purchase. On cash purchases of $1,000,000 or more, however, a contingent deferred sales charge (“CDSC”) equal to 1% of the lesser of net asset value at the time of redemption or original cost if redeemed within one year may be charged. Class A shares may be exchanged for Class A shares of other AllianceBernstein Mutual Funds, subject, in the case of Class A shares of the Fund that were purchased for cash, to any applicable initial sales charge at the time of exchange. Class A shares of the Fund also are offered in exchange for Class A shares of other AllianceBernstein Mutual Funds without any sales charge at the time of purchase, but on Class A shares that were received in exchange for AllianceBernstein Mutual Fund Class A shares that were not subject to an initial sales charge when originally purchased for cash because the purchase was of $1,000,000 or more, a 1% CDSC may be assessed if shares of the Fund are redeemed within one year of the AllianceBernstein Mutual Fund Class A shares originally purchased for cash.

Class B shares are sold for cash, to the extent described in the prospectus, without an initial sales charge. However, a CDSC is charged if shares are redeemed within four years after purchase. The CDSC charge declines from 4% to zero depending on the period of time the shares are held. Effective January 31, 2009, sales of Class B shares of the Fund to new investors were suspended. Class B shares will only be issued (i) upon the exchange of Class B shares from another AllianceBernstein Fund, (ii) for purposes of dividend reinvestment, (iii) through the Fund’s Automatic Investment Program (the “Program”) for accounts that established the Program prior to January 31, 2009, and (iv) for purchases of additional shares by Class B shareholders as of January 31, 2009. The ability to establish a new Program for accounts containing Class B shares was suspended as of January 31, 2009. Class B shares purchased for cash will automatically convert to Class A shares after eight years. Class B shares may be exchanged, to the extent described in the prospectus, for Class B shares of other AllianceBernstein Mutual Funds. Class B shares also are offered in exchange, to the extent described in the prospectus, for Class B shares of other AllianceBernstein Mutual Funds without an initial sales charge. However, a CDSC may be charged if shares are redeemed within a certain number of years of the original purchase of

ALLIANCEBERNSTEIN EXCHANGE RESERVES  • 9

Notes to Financial Statements

AllianceBernstein Mutual Fund Class B shares. When redemption occurs, the applicable CDSC schedule is that which applied to the AllianceBernstein Mutual Fund Class B shares originally purchased for cash at the time of their purchase.

Class C shares are sold for cash or in exchange for Class C shares of another AllianceBernstein Mutual Fund without an initial sales charge at the time of purchase. Class C shares are subject to a CDSC of 1% on redemptions made within the first year after purchase. Class C shares do not convert to any other class of shares of the Fund. Class C shares may be exchanged for Class C shares of other AllianceBernstein Mutual Funds.

Advisor Class shares are sold for cash or in exchange for Advisor Class shares of another AllianceBernstein Mutual Fund without an initial sales charge or CDSC and are not subject to ongoing distribution expenses.

Class R, Class K, and Class I shares are sold for cash or in exchange of the same class of shares of another AllianceBernstein Mutual Fund without an initial sales charge or CDSC. Class I shares are not subject to ongoing distribution expenses.

The financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) which require management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and amounts of income and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the Fund.

1. Security Valuation

Securities in which the Fund invests are traded primarily in the over-the-counter market and are valued at amortized cost, which approximates market value. Under such method a portfolio instrument is valued at cost and any premium or discount is amortized or accreted, respectively, on a constant basis to maturity.

2. Fair Value Measurements

In accordance with U.S. GAAP regarding fair value measurements, fair value is defined as the price that the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The U.S. GAAP disclosure requirements establish a framework for measuring fair value, and a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Fund. Unobservable inputs reflect the Fund’s own assumptions about the assumptions that market participants would use in pricing the asset or liability

10 •  ALLIANCEBERNSTEIN EXCHANGE RESERVES

Notes to Financial Statements

based on the best information available in the circumstances. Each investment is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three-tier hierarchy of inputs is summarized 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 following table summarizes the valuation of the Fund’s investments by the above fair value hierarchy levels as of March 31, 2010:

Investments in Securities	Level 1		Level 2		Level 3		Total
U.S. Government & Government Sponsored Agency Obligations	$	—	$	163,588,310	$	—	$	163,588,310
Municipal Obligations		—		154,130,000		—		154,130,000
Certificate of Deposit		—		92,699,749		—		92,699,749
Commercial Paper		—		79,742,080		—		79,742,080
Corporates—Investment Grades		—		21,359,115		—		21,359,115
Repurchase Agreements		—		19,700,000		—		19,700,000
Total	$	—	$	531,219,254	$	—	$	531,219,254

3. Taxes

It is the Fund’s policy to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its investment company taxable income and net realized gains, if any, to shareholders. Therefore, no provisions for federal income or excise taxes are required.

In accordance with U.S. GAAP requirements regarding accounting for uncertainties in income taxes, management has analyzed the Fund’s tax positions taken on federal and state income tax returns for all open tax years (the current and the prior three tax years) and has concluded that no provision for income tax is required in the Fund’s financial statements.

4. Dividends

The Fund declares dividends daily and automatically reinvests such dividends in additional shares at net asset value. Net realized capital gains on investments, if any, are expected to be distributed annually.

5. Class Allocations

All income earned and expenses incurred by the Fund are borne on a pro-rata basis by each outstanding class of shares, based on the proportionate interest in the Fund represented by the net assets of such class, except for class specific

ALLIANCEBERNSTEIN EXCHANGE RESERVES  • 11

Notes to Financial Statements

expenses which are allocated to the respective class. Realized and unrealized gains and losses are allocated among the various share classes based on respective net assets.

6. Investment Income and Investment Transactions

Interest income is accrued daily and includes amortization of premiums and accretions of discounts as adjustments to interest income. Investment transactions are accounted for on the date the securities are purchased or sold. It is the Fund’s policy to take possession of securities as collateral under repurchase agreements and to determine on a daily basis that the value of such securities are sufficient to cover the value of the repurchase agreements.

7. Repurchase Agreements

It is the Fund’s policy that its custodian or designated subcustodian take control of securities as collateral under repurchase agreements and to determine on a daily basis that the value of such securities are sufficient to cover the value of the repurchase agreements. If the seller defaults and the value of the collateral declines or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of collateral by the Fund may be delayed or limited.

NOTE B

Advisory Fee and Other Transactions with Affiliates

The Fund pays AllianceBernstein L.P. (the “Adviser”) an Advisory fee at the annual rate of .25% on the first $1.25 billion of average daily net assets; .24% on the next $.25 billion; .23% on the next $.25 billion; .22% on the next $.25 billion; .21% on the next $1 billion; and .20% in excess of $3 billion. For the six months ended March 31, 2010, the Adviser has voluntarily agreed to waive a portion of such fees in the amount of $759,665.

Pursuant to the investment advisory agreement, the Fund may reimburse the Adviser for certain legal and accounting services provided to the Fund by the Adviser. For the six months ended March 31, 2010, such fee amounted to $56,853. For the six months ended March 31, 2010, the Adviser has voluntarily agreed to waive a portion of such fees in the amount of $49,936.

The Fund compensates AllianceBernstein Investor Services, Inc. (“ABIS”), a wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for providing personnel and facilities to perform transfer agency services for the Fund. ABIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. Such compensation retained by ABIS amounted to $289,661 for the six months ended March 31, 2010.

For the six months ended March 31, 2010, the Transfer Agent has voluntarily agreed to waive a portion of transfer agency fees in the amount of $1,976 and $10,582 for Class R and Class K shares, respectively.

12 •  ALLIANCEBERNSTEIN EXCHANGE RESERVES

Notes to Financial Statements

AllianceBernstein Investments, Inc. (the “Distributor”), a wholly-owned subsidiary of the Adviser, serves as the distributor of the Fund’s shares. The Distributor has advised the Fund that it has received $3,085, $64,490 and $3,450 in contingent deferred sales charges imposed upon redemptions by shareholders of Class A, Class B and Class C shares, respectively, for the six months ended March 31, 2010.

NOTE C

Distribution Services Agreement

The Fund has adopted a Distribution Services Agreement (“the Agreement”) pursuant to Rule 12b-1 under the Investment Company Act of 1940 for Class A, Class B, Class C, Class R and Class K. Under the Agreement, the Fund pays distribution and servicing fees to the Distributor at an annual rate of .30% of the Fund’s average daily net assets attributable to Class A shares, 1% of the Fund’s average daily net assets attributable to Class B shares, .75% of the Fund’s average daily net assets attributable to Class C shares, .50% of the Fund’s average daily net assets attributable to Class R shares and .25% of the Fund’s average daily net assets attributable to Class K shares. There are no distribution and servicing fees on the Advisor Class and Class I shares. The fees are accrued daily and paid monthly. The Agreement provides that the Distributor will use such payments in their entirety for distribution assistance and promotional activities. For the six months ended March 31, 2010, the Distributor has voluntarily agreed to waive a portion of the distribution fees in the amount of $404,063, $202,613, $86,537, $16,466 and $53,047 for Class A, B, C, R and K shares, respectively, limiting the effective annual rate to 0% for the Class A, Class B, Class C, Class R and Class K shares.

NOTE D

Investment Transactions, Income Taxes and Distributions to Shareholders

At March 31, 2010, the cost of investments for federal income tax purposes was the same as the cost for financial reporting purposes. The tax character of distributions to be paid for the year ending September 30, 2010 will be determined at the end of the current fiscal year. The tax character of distributions paid during the fiscal years ended September 30, 2009 and September 30, 2008 were as follows:

	2009		2008
Distributions paid from:
Ordinary income	$	3,690,829	$	14,469,159
Total taxable distributions		3,690,829		14,469,159
Total distributions paid	$	3,690,829	$	14,469,159

ALLIANCEBERNSTEIN EXCHANGE RESERVES  • 13

Notes to Financial Statements

As of September 30, 2009, the components of accumulated earnings/(deficit) on a tax basis were as follows:

Undistributed ordinary income	$	4,210
Accumulated capital and other losses		(26,039	)(a)
Total accumulated earnings/(deficit)	$	(21,829	)(b)

^(a) At September 30, 2009, the Fund had a capital loss carryforward of $26,039, of which $21,851 expires in 2010, $3,012 expires in the year 2013, $1,152 expires in 2014, and $24 expires in 2017. To the extent that any net capital loss carryforward is used to offset future capital gains, it is probable that these gains will not be distributed to shareholders.

^(b) The difference between book-basis and tax-basis components of accumulated earnings/(deficit) is attributable to dividends payable.

NOTE E

Transactions in Shares of Beneficial Interest

Transactions, all at $1.00 per share, were as follows:

	Shares
	Six Months Ended March 31, 2010 (unaudited)		Year Ended September 30, 2009
Class A
Shares sold	51,083,704		238,266,543
Shares issued in reinvestment of dividends	24,304		1,853,103
Shares converted from Class B	3,619,426		10,521,463
Shares redeemed	(89,636,868	)	(250,843,066	)
Net decrease	(34,909,434	)	(201,957	)
Class B
Shares sold	3,902,524		57,592,148
Shares issued in reinvestment of dividends	2,416		209,109
Shares converted to Class A	(3,619,426	)	(10,521,463	)
Shares redeemed	(16,659,484	)	(46,817,106	)
Net increase (decrease)	(16,373,970	)	462,688
Class C
Shares sold	6,724,174		51,278,226
Shares issued in reinvestment of dividends	2,434		257,905
Shares redeemed	(16,690,189	)	(59,604,457	)
Net decrease	(9,963,581	)	(8,068,326	)
Advisor Class
Shares sold	33,437,669		21,221,580
Shares issued in reinvestment of dividends	11,352		1,062,585
Shares redeemed	(10,271,567	)	(41,783,888	)
Net increase (decrease)	23,177,454		(19,499,723	)

14 •  ALLIANCEBERNSTEIN EXCHANGE RESERVES

Notes to Financial Statements

	Shares
	Six Months Ended March 31, 2010 (unaudited)		Year Ended September 30, 2009
Class R
Shares sold	8,656,981		12,683,525
Shares issued in reinvestment of dividends	365		44,261
Shares redeemed	(6,471,753	)	(16,630,744	)
Net increase (decrease)	2,185,593		(3,902,958	)
Class K
Shares sold	46,766,251		71,561,715
Shares issued in reinvestment of dividends	7,625		206,817
Shares redeemed	(41,082,354	)	(58,164,853	)
Net increase	5,691,522		13,603,679
Class I
Shares sold	915,932		4,928,833
Shares issued in reinvestment of dividends	3,966		57,033
Shares redeemed	(3,386,261	)	(3,514,163	)
Net increase (decrease)	(2,466,363	)	1,471,703

NOTE F

Risks Involved in Investing in the Fund

Money Market Fund Risk—Money market funds are sometimes unable to maintain a net asset value (“NAV”) at $1.00 per share and, as it is generally referred to, “break the buck.” In that event, an investor in a money market fund would, upon redemption, receive less than $1.00 per share. The Fund’s shareholders should not rely on or expect an affiliate of the Fund to purchase distressed assets from the Fund, make capital infusions, enter into credit support agreements or take other actions to prevent the Fund from breaking the buck. In addition, significant redemptions by large investors in the Fund could have a material adverse effect on the Fund’s other shareholders. The Fund’s NAV could be affected by forced selling during periods of high redemption pressures and/or illiquid markets.

Interest Rate Risk and Credit Risk—The Fund’s primary risks are interest rate risk and credit risk. Because the Fund invests in short-term securities, a decline in interest rates will affect the Fund’s yield as the securities mature or are sold and the Fund purchases new short-term securities with a lower yield. Generally, an increase in interest rates causes the value of a debt instrument to decrease. The change in value for shorter-term securities is usually smaller than for securities with longer maturities. In addition, if interest rates remain low for an extended period of time, the Fund may have difficulties in maintaining a positive yield, paying expenses out of the Fund’s assets, or maintaining a stable $1.00 NAV.

Credit risk is the possibility that a security’s credit rating will be downgraded or that the issuer of the security will default (fail to make scheduled interest and

ALLIANCEBERNSTEIN EXCHANGE RESERVES  • 15

Notes to Financial Statements

principal payments). Credit quality can change rapidly in certain market environments and the default of a single holding could have the potential to cause significant NAV deterioration.

Indemnification Risk—In the ordinary course of business, the Fund enters into contracts that contain a variety of indemnifications. The Fund’s maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these indemnification provisions and expects the risk of loss thereunder to be remote. As such, the Fund has not accrued any liability in connection with these indemnification provisions.

NOTE G

Legal Proceedings

On October 2, 2003, a purported class action complaint entitled Hindo, et al. v. AllianceBernstein Growth & Income Fund, et al. (“Hindo Complaint”) was filed against the Adviser, Alliance Capital Management Holding L.P. (“Alliance Holding”), Alliance Capital Management Corporation, AXA Financial, Inc., the AllianceBernstein Funds, certain officers of the Adviser (“AllianceBernstein defendants”), and certain other unaffiliated defendants, as well as unnamed Doe defendants. The Hindo Complaint was filed in the United States District Court for the Southern District of New York by alleged shareholders of two of the AllianceBernstein Funds. The Hindo Complaint alleges that certain of the AllianceBernstein defendants failed to disclose that they improperly allowed certain hedge funds and other unidentified parties to engage in “late trading” and “market timing” of AllianceBernstein Fund securities, violating Sections 11 and 15 of the Securities Act, Sections 10(b) and 20(a) of the Exchange Act and Sections 206 and 215 of the Advisers Act. Plaintiffs seek an unspecified amount of compensatory damages and rescission of their contracts with the Adviser, including recovery of all fees paid to the Adviser pursuant to such contracts.

Following October 2, 2003, 43 additional lawsuits making factual allegations generally similar to those in the Hindo Complaint were filed in various federal and state courts against the Adviser and certain other defendants. On September 29, 2004, plaintiffs filed consolidated amended complaints with respect to four claim types: mutual fund shareholder claims; mutual fund derivative claims; derivative claims brought on behalf of Alliance Holding; and claims brought under ERISA by participants in the Profit Sharing Plan for Employees of the Adviser. All four complaints include substantially identical factual allegations, which appear to be based in large part on the Order of the SEC dated December 18, 2003 as amended and restated January 15, 2004 (“SEC Order”) and the New York State Attorney General Assurance of Discontinuance dated September 1, 2004 (“NYAG Order”).

On April 21, 2006, the Adviser and attorneys for the plaintiffs in the mutual fund shareholder claims, mutual fund derivative claims, and ERISA claims entered into a confidential memorandum of understanding containing their agreement to settle these claims. The agreement will be documented by a stip-

16 •  ALLIANCEBERNSTEIN EXCHANGE RESERVES

Notes to Financial Statements

ulation of settlement and will be submitted for court approval at a later date. The settlement amount ($30 million), which the Adviser previously accrued and disclosed, has been disbursed. The derivative claims brought on behalf of Alliance Holding, in which plaintiffs seek an unspecified amount of damages, remain pending.

It is possible that these matters and/or other developments resulting from these matters could result in increased redemptions of the AllianceBernstein Mutual Funds’ shares or other adverse consequences to the AllianceBernstein Mutual Funds. This may require the AllianceBernstein Mutual Funds to sell investments held by those funds to provide for sufficient liquidity and could also have an adverse effect on the investment performance of the AllianceBernstein Mutual Funds. However, the Adviser believes that these matters are not likely to have a material adverse effect on its ability to perform advisory services relating to the AllianceBernstein Mutual Funds.

NOTE H

Department of Treasury’s Temporary Guarantee Program for Money Market Funds

During the prior reporting period the Fund participated in the U.S. Treasury’s Temporary Guarantee Program for Money Market Funds (the “Program”). The initial term of the Program was from September 18, 2008 to December 18, 2008 and its term was then extended to September 18, 2009. The Program applied to shares of the Fund held by shareholders as of the close of business as of September 19, 2008 (the “Covered Shareholders”). Subject to the limitations discussed below, the Program protected Covered Shareholders if the Fund “broke the buck”, meaning that the stable NAV of $1.00 per share that the Fund seeks to maintain fell below $.995 per share (the “Guarantee Event”). In order to qualify for this protection, the Fund must have liquidated within approximately 30 days after the Guarantee Event. The Treasury would have covered any shortfall between the NAV at the time of liquidation and $1.00 per share.

Because payments under the Program continued to apply to Covered Shareholders based on the number of shares held on September 19, 2008, a shareholder would have received no payments for any increase in the number of the Fund’s shares held after that date. If a shareholder closed his or her account, the shareholder would not have been covered by the Program. If the number of shares held in an account fluctuated after September 19, 2008 due to purchases and sales of shares during the Program period, a shareholder would have been covered for the number of shares held in the account as of the close of business on September 19, 2008 or the number of shares held on the date of the Guarantee Event, whichever would have been less. Initial purchases of shares by new shareholders after September 19, 2008 were not eligible for coverage under the Program.

The Fund paid a fee to the Treasury for its participation in the Program based on the Fund’s aggregate NAV on September 19, 2008. The fee for the Fund’s

ALLIANCEBERNSTEIN EXCHANGE RESERVES  • 17

Notes to Financial Statements

participation in the Program from May 1, 2009 until September 18, 2009 was 0.015% of its aggregate NAV on September 19, 2008. This was in addition to the fee paid by the Fund for its initial participation in the Program of 0.01% and for its participation in the first extension of the Program until April 30, 2009 of 0.015%, both of which were based on the Fund’s aggregate NAV on September 19, 2008. The Program extension payment amounts, when combined with prior payment amounts, equated to 0.04% (on an annualized basis) of the Fund’s asset base over the entire extended program term. The Program ended on September 18, 2009.

NOTE I

Subsequent Events

1. Amendments to Rule 2a-7

As a money market fund, the Fund must meet the requirements of Securities and Exchange Commission (“Commission”) Rule 2a-7 under the Investment Company Act of 1940. The Rule imposes strict conditions on the investment quality, maturity, and diversification of the Fund’s investments. Effective May 5, 2010, the Commission adopted amendments to Rule 2a-7. Among other things, the amended Rule 2a-7 requires that the Fund’s investments have (i) a remaining maturity of no more than 397 days, (ii) a weighted average maturity that does not exceed 60 days, and (iii) a weighted average life that does not exceed 120 days. Rule 2a-7 imposes daily and weekly liquidity standards that require the Fund to hold investments of at least 10% and 30% of its total assets, respectively, in liquid assets. Rule 2a-7 also limits the Fund’s investments in illiquid securities to 5% of its total assets.

2. Change of Independent Registered Public Accounting Firm

On May 5, 2010, Ernst & Young LLP (“E&Y”) was selected as the Fund’s independent registered public accounting firm for the 2010 fiscal year. A majority of the Fund’s Board of Trustees, including a majority of the Independent Trustees, approved the appointment of E&Y. The predecessor independent registered public accounting firm’s reports on the Fund’s financial statements for each of the years ended March 31, 2009 and 2008 contained no adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles. During such fiscal periods there were no disagreements between the Fund and the predecessor independent registered public accounting firm on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which such disagreements, if not resolved to the satisfaction of the predecessor independent registered public accounting firm, would have caused them to make reference to the subject matter of the disagreement in connection with their reports on the financial statements for such periods.

Management has evaluated subsequent events for possible recognition or disclosure in the financial statements through the date the financial statements are issued.

18 •  ALLIANCEBERNSTEIN EXCHANGE RESERVES

Notes to Financial Statements

FINANCIAL HIGHLIGHTS

Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each Period

	Class A
	Six Months Ended March 31, 2010 (unaudited)		Year Ended September 30,
			2009		2008		2007		2006		2005
Net asset value, beginning of period	$  1.00		$  1.00		$  1.00		$  1.00		$  1.00		$  1.00
Income From Investment Operations
Net investment income	.0001	(a)	.0057	(a)	.0272		.0446		.0381		.0161
Net realized gain (loss) on investment transactions	– 0	–	.00	(b)	– 0	–	– 0	–	– 0	–	.00	(b)
Net increase in net asset value from operations	.0001		.0057		.0272		.0446		.0381		.0161
Less: Dividends
Dividends from net investment income	(.0001	)	(.0057	)	(.0272	)	(.0446	)	(.0381	)	(.0161	)
Net asset value, end of period	$  1.00		$  1.00		$  1.00		$  1.00		$  1.00		$  1.00
Total Return
Total investment return based on net asset value(c)	.01	%	.57	%	2.76	%	4.55	%	3.87	%	1.63	%
Ratios/Supplemental Data
Net assets, end of period (in millions)	$253		$288		$288		$257		$278		$264
Ratio to average net assets of:
Expenses, net of waivers/ reimbursements	.26	%(d)	.76	%	.82	%	.91	%(e)	.91	%(f)	1.13	%
Expenses, before waivers/ reimbursements	.86	%(d)	.83	%	.82	%	.91	%(e)	.91	%(f)	1.13	%
Net investment income	.02	%(a)(d)	.58	%(a)	2.69	%	4.46	%	3.82	%(f)	1.62	%

See footnote summary on page 26.

ALLIANCEBERNSTEIN EXCHANGE RESERVES  • 19

Financial Highlights

Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each Period

	Class B
	Six Months Ended March 31, 2010 (unaudited)		Year Ended September 30,
			2009		2008		2007		2006		2005
Net asset value, beginning of period	$  1.00		$  1.00		$  1.00		$  1.00		$  1.00		$  1.00
Income From Investment Operations
Net investment income(a)	.0001		.0027		.0228		.0401		.0336		.0137
Net realized gain (loss) on investment transactions	– 0	–	.00	(b)	– 0	–	– 0	–	– 0	–	.00	(b)
Net increase in net asset value from operations	.0001		.0027		.0228		.0401		.0336		.0137
Less: Dividends
Dividends from net investment income	(.0001	)	(.0027	)	(.0228	)	(.0401	)	(.0336	)	(.0137	)
Net asset value, end of period	$  1.00		$  1.00		$  1.00		$  1.00		$  1.00		$  1.00
Total Return
Total investment return based on net asset value(c)	.01	%	.27	%	2.30	%	4.08	%	3.41	%	1.38	%
Ratios/Supplemental Data
Net assets, end of period (in millions)	$46		$62		$62		$54		$79		$112
Ratio to average net assets of:
Expenses, net of waivers/ reimbursements	.28	%(d)	1.08	%	1.27	%	1.36	%(e)	1.40	%(f)	1.36	%
Expenses, before waivers/ reimbursements	1.35	%(d)	1.59	%	1.52	%	1.61	%(e)	1.65	%(f)	1.61	%
Net investment income(a)	.01	%(d)	.28	%	2.25	%	4.01	%	3.30	%(f)	1.31	%

See footnote summary on page 26.

20 •  ALLIANCEBERNSTEIN EXCHANGE RESERVES

Financial Highlights

Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each Period

	Class C
	Six Months Ended March 31, 2010 (unaudited)		Year Ended September 30,
			2009		2008		2007		2006		2005
Net asset value, beginning of period	$  1.00		$  1.00		$  1.00		$  1.00		$  1.00		$  1.00
Income From Investment Operations
Net investment income(a)	.0001		.0043		.0252		.0426		.0361		.0161
Net realized gain (loss) on investment transactions	– 0	–	.00	(b)	– 0	–	– 0	–	– 0	–	.00	(b)
Net increase in net asset value from operations	.0001		.0043		.0252		.0426		.0361		.0161
Less: Dividends
Dividends from net investment income	(.0001	)	(.0043	)	(.0252	)	(.0426	)	(.0361	)	(.0161	)
Net asset value, end of period	$  1.00		$  1.00		$  1.00		$  1.00		$  1.00		$  1.00
Total Return
Total investment return based on net asset value(c)	.01	%	.43	%	2.55	%	4.34	%	3.67	%	1.63	%
Ratios/Supplemental Data
Net assets, end of period (in millions)	$30		$40		$48		$30		$30		$28
Ratio to average net assets of:
Expenses, net of waivers/reimbursements	.27	%(d)	.93	%	1.02	%	1.10	%(e)	1.11	%(f)	1.12	%
Expenses, before waivers/reimbursements	1.07	%(d)	1.30	%	1.27	%	1.35	%(e)	1.36	%(f)	1.37	%
Net investment income(a)	.01	%(d)	.47	%	2.39	%	4.27	%	3.63	%(f)	1.59	%

See footnote summary on page 26.

ALLIANCEBERNSTEIN EXCHANGE RESERVES  • 21

Financial Highlights

Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each Period

	Advisor Class
	Six Months Ended March 31, 2010 (unaudited)		Year Ended September 30,
			2009		2008		2007		2006		2005
Net asset value, beginning of period	$  1.00		$  1.00		$  1.00		$  1.00		$  1.00		$  1.00
Income From Investment Operations
Net investment income	.0001	(a)	.0081	(a)	.0302		.0476		.0411		.0211
Net realized gain (loss) on investment transactions	– 0	–	.00	(b)	– 0	–	– 0	–	– 0	–	.00	(b)
Net increase in net asset value from operations	.0001		.0081		.0302		.0476		.0411		.0211
Less: Dividends
Dividends from net investment income	(.0001	)	(.0081	)	(.0302	)	(.0476	)	(.0411	)	(.0211	)
Net asset value, end of period	$  1.00		$  1.00		$  1.00		$  1.00		$  1.00		$  1.00
Total Return
Total investment return based on net asset value(c)	.01	%	.82	%	3.06	%	4.86	%	4.19	%	2.14	%
Ratios/Supplemental Data
Net assets, end of period (in millions)	$145		$122		$141		$133		$94		$84
Ratio to average net assets of:
Expenses, net of waivers/ reimbursements	.26	%(d)	.51	%	.52	%	.60	%(e)	.61	%(f)	.55	%
Expenses, before waivers/ reimbursements	.55	%(d)	.53	%	.52	%	.60	%(e)	.61	%(f)	.55	%
Net investment income	.02	%(a)(d)	.86	%(a)	3.01	%	4.76	%	4.13	%(f)	2.17	%

See footnote summary on page 26.

22 •  ALLIANCEBERNSTEIN EXCHANGE RESERVES

Financial Highlights

Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each Period

	Class R
	Six Months Ended March 31, 2010 (unaudited)		Year Ended September 30,								March 1, 2005(g) to September 30, 2005
			2009		2008		2007		2006
Net asset value, beginning of period	$  1.00		$  1.00		$  1.00		$  1.00		$  1.00		$  1.00
Income From Investment Operations
Net investment income	.0001	(a)	.0045	(a)	.0246		.0423		.0372		.0126
Net realized gain on investment transactions	– 0	–	.00	(b)	– 0	–	– 0	–	– 0	–	.00	(b)
Net increase in net asset value from operations	.0001		.0045		.0246		.0423		.0372		.0126
Less: Dividends
Dividends from net investment income	(.0001	)	(.0045	)	(.0246	)	(.0423	)	(.0372	)	(.0126	)
Net asset value, end of period	$  1.00		$  1.00		$  1.00		$  1.00		$  1.00		$  1.00
Total Return
Total investment return based on net asset value(c)	.01	%	.45	%	2.49	%	4.31	%	3.79	%	1.26	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$7,861		$5,676		$9,579		$5,264		$38		$15
Ratio to average net assets of:
Expenses, net of waivers/ reimbursements	.27	%(d)	.92	%	1.08	%	1.20	%(e)	.98	%(f)	1.13	%(d)
Expenses, before waivers/ reimbursements	1.14	%(d)	1.06	%	1.08	%	1.20	%(e)	.98	%(f)	1.13	%(d)
Net investment income	.01	%(a)(d)	.58	%(a)	2.47	%	4.18	%	3.95	%(f)	2.09	%(d)

See footnote summary on page 26.

ALLIANCEBERNSTEIN EXCHANGE RESERVES  • 23

Financial Highlights

Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each Period

	Class K
	Six Months Ended March 31, 2010 (unaudited)		Year Ended September 30,								March 1, 2005(g) to September 30, 2005
			2009		2008		2007		2006
Net asset value, beginning of period	$  1.00		$  1.00		$  1.00		$  1.00		$  1.00		$  1.00
Income From Investment Operations
Net investment income	.0002	(a)	.0059	(a)	.0280		.0452		.0417		.0140
Net realized gain on investment transactions	– 0	–	.00	(b)	– 0	–	– 0	–	– 0	–	.00	(b)
Net increase in net asset value from operations	.0002		.0059		.0280		.0452		.0417		.0140
Less: Dividends
Dividends from net investment income	(.0002	)	(.0059	)	(.0280	)	(.0452	)	(.0417	)	(.0140	)
Net asset value, end of period	$  1.00		$  1.00		$  1.00		$  1.00		$  1.00		$  1.00
Total Return
Total investment return based on net asset value(c)	.02	%	.59	%	2.84	%	4.61	%	4.25	%	1.41	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$44,889		$39,198		$25,594		$18,172		$757		$10
Ratio to average net assets of:
Expenses, net of waivers/ reimbursements	.24	%(d)	.73	%	.75	%	.86	%(e)	.68	%(f)	.80	%(d)
Expenses, before waivers/ reimbursements	.83	%(d)	.81	%	.75	%	.86	%(e)	.68	%(f)	.80	%(d)
Net investment income	.04	%(a)(d)	.53	%(a)	2.63	%	4.50	%	4.20	%(f)	2.37	%(d)

See footnote summary on page 26.

24 •  ALLIANCEBERNSTEIN EXCHANGE RESERVES

Financial Highlights

Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each Period

	Class I
	Six Months Ended March 31, 2010 (unaudited)		Year Ended September 30,								March 1, 2005(g) to September 30, 2005
			2009		2008		2007		2006
Net asset value, beginning of period	$  1.00		$  1.00		$  1.00		$  1.00		$  1.00		$  1.00
Income From Investment Operations
Net investment income	.0007	(a)	.0089	(a)	.0316		.0485		.0424		.0154
Net realized gain on investment transactions	– 0	–	.00	(b)	– 0	–	– 0	–	– 0	–	.00	(b)
Net increase in net asset value from operations	.0007		.0089		.0316		.0485		.0424		.0154
Less: Dividends
Dividends from net investment income	(.0007	)	(.0089	)	(.0316	)	(.0485	)	(.0424	)	(.0154	)
Net asset value, end of period	$  1.00		$  1.00		$  1.00		$  1.00		$  1.00		$  1.00
Total Return
Total investment return based on net asset value(c)	.07	%	.89	%	3.20	%	4.96	%	4.33	%	1.55	%
Ratios/Supplemental Data
Net assets, end of period (in thousands)	$4,120		$6,586		$5,115		$5,157		$3,336		$307
Ratio to average net assets of:
Expenses, net of waivers/ reimbursements	.14	%(d)	.44	%	.38	%	.52	%(e)	.40	%(f)	.66	%(d)
Expenses, before waivers/ reimbursements	.40	%(d)	.46	%	.38	%	.52	%(e)	.40	%(f)	.66	%(d)
Net investment income	.15	%(a)(d)	.86	%(a)	3.16	%	4.85	%	4.69	%(f)	2.86	%(d)

See footnote summary on page 26.

ALLIANCEBERNSTEIN EXCHANGE RESERVES  • 25

Financial Highlights

(a) Net of fees waived and expenses reimbursed.

(b) Amount is less than $0.0001.

(c) Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption on the last day of the period. Total return does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Total investment return calculated for a period of less than one year is not annualized.

(d) Annualized.

(e) Ratios reflect expenses grossed up, where applicable, for expense offset arrangement with the Transfer Agent. For the period shown below, the net expense ratios were as follows:

	Year Ended September 30, 2007
Class A	.89	%
Class B	1.34	%
Class C	1.08	%
Advisor Class	.58	%
Class R	1.18	%
Class K	.84	%
Class I	.50	%

(f) The ratio includes expenses attributable to costs of proxy solicitation.

(g) Commencement of distributions.

See notes to financial statements.

26 •  ALLIANCEBERNSTEIN EXCHANGE RESERVES

Financial Highlights

AllianceBernstein Exchange Reserves

1345 Avenue of the Americas

New York, NY 10105

Toll-Free (800) 221-5672

TRUSTEES
William H. Foulk, Jr.(1), Chairman	Nancy P. Jacklin(1) Garry L. Moody(1) Marshall C. Turner, Jr.(1) Earl D. Weiner(1)
John H. Dobkin(1) Michael J. Downey(1) D. James Guzy(1)
OFFICERS
Robert M. Keith, President and Chief Executive Officer Philip L. Kirstein, Senior Vice President and Independent Compliance Officer Raymond J. Papera, Senior Vice President Maria R. Cona, Vice President	Edward J. Dombrowski, Vice President John Giaquinta, Vice President Emilie D. Wrapp, Secretary Joseph J. Mantineo, Treasurer and Chief Financial Officer Stephen Woetzel, Controller
Custodian and Accounting Agent	Transfer Agent
State Street Bank and Trust Company One Lincoln Street Boston, MA 02111	AllianceBernstein Investor Services, Inc. P.O. Box 786003 San Antonio, TX 78278-6003 Toll-Free (800) 221-5672
Legal Counsel	Principal Underwriter
Seward & Kissel LLP One Battery Park Plaza New York, NY 10004	AllianceBernstein Investments, Inc. 1345 Avenue of the Americas New York, NY 10105
Independent Registered Public Accounting Firm Ernst & Young LLP 5 Times Square New York, NY 10036

(1) Member of the Audit Committee, the Governance and Nominating Committee and the Independent Directors Committee. Mr. Foulk is the sole member of the Fair Value Pricing Committee.

ALLIANCEBERNSTEIN EXCHANGE RESERVES  • 27

Trustees

Information Regarding the Review and Approval of the Fund’s Advisory Agreement

The disinterested trustees (the “trustees”) of AllianceBernstein Exchange Reserves (the “Fund”) unanimously approved the continuance of the Fund’s Advisory Agreement with the Adviser at a meeting held on November 3-5, 2009.

Prior to approval of the continuance of the Advisory Agreement, the trustees had requested from the Adviser, and received and evaluated, extensive materials. They reviewed the proposed continuance of the Advisory Agreement with the Adviser and with experienced counsel who are independent of the Adviser, who advised on the relevant legal standards. The trustees also reviewed an independent evaluation prepared by the Fund’s Senior Officer (who is also the Fund’s Independent Compliance Officer) of the reasonableness of the advisory fee in the Advisory Agreement wherein the Senior Officer concluded that the contractual fee for the Fund was reasonable. The trustees also discussed the proposed continuance in private sessions with counsel and the Fund’s Senior Officer.

The trustees considered their knowledge of the nature and quality of the services provided by the Adviser to the Fund gained from their experience as trustees or directors of most of the registered investment companies advised by the Adviser, their overall confidence in the Adviser’s integrity and competence they have gained from that experience, the Adviser’s initiative in identifying and raising potential issues with the trustees and its responsiveness, frankness and attention to concerns raised by the trustees in the past, including the Adviser’s willingness to consider and implement organizational and operational changes designed to improve investment results and the services provided to the AllianceBernstein Funds. The trustees noted that they have four regular meetings each year, at each of which they receive presentations from the Adviser on the investment results of the Fund and review extensive materials and information presented by the Adviser.

The trustees also considered all other factors they believed relevant, including the specific matters discussed below. In their deliberations, the trustees did not identify any particular information that was all-important or controlling, and different trustees may have attributed different weights to the various factors. The trustees determined that the selection of the Adviser to manage the Fund and the overall arrangements between the Fund and the Adviser, as provided in the Advisory Agreement, including the advisory fee, were fair and reasonable in light of the services performed, expenses incurred and such other matters as the trustees considered relevant in the exercise of their business judgment. The material factors and conclusions that formed the basis for the trustees’ determinations included the following:

Nature, Extent and Quality of Services Provided

The trustees considered the scope and quality of services provided by the Adviser under the Advisory Agreement, including the quality of the investment research

28 •  ALLIANCEBERNSTEIN EXCHANGE RESERVES

capabilities of the Adviser and the other resources it has dedicated to performing services for the Fund. They also noted the professional experience and qualifications of the Fund’s portfolio management team and other senior personnel of the Adviser. The trustees also considered that the Advisory Agreement provides that the Fund will reimburse the Adviser for the cost to it of providing certain clerical, accounting, administrative and other services provided at the Fund’s request by employees of the Adviser or its affiliates. Requests for these reimbursements are approved by the trustees on a quarterly basis and, to the extent requested and paid, result in a higher rate of total compensation from the Fund to the Adviser than the fee rate stated in the Fund’s Advisory Agreement. The trustees noted that the methodology used to determine the reimbursement amounts had been reviewed by an independent consultant retained by the Fund’s Senior Officer. The quality of administrative and other services, including the Adviser’s role in coordinating the activities of the Fund’s other service providers, also were considered. The trustees concluded that, overall, they were satisfied with the nature, extent and quality of services provided to the Fund under the Advisory Agreement.

Costs of Services Provided and Profitability

The trustees reviewed a schedule of the revenues, expenses and related notes indicating the profitability of the Fund to the Adviser for calendar years 2007 and 2008 that had been prepared with an expense allocation methodology arrived at in consultation with an independent consultant retained by the Fund’s Senior Officer. The trustees reviewed the assumptions and methods of allocation used by the Adviser in preparing fund-specific profitability data and noted that there are a number of potentially acceptable allocation methodologies for information of this type. The trustees noted that the profitability information reflected all revenues and expenses of the Adviser’s relationship with the Fund, including those relating to its subsidiaries which provide transfer agency and distribution services to the Fund. The trustees recognized that it is difficult to make comparisons of profitability between fund advisory contracts because comparative information is not generally publicly available and is affected by numerous factors. The trustees focused on the profitability of the Adviser’s relationship with the Fund before taxes and distribution expenses. The trustees concluded that they were satisfied that the Adviser’s level of profitability from its relationship with the Fund was not unreasonable.

Fall-Out Benefits

The trustees considered the benefits to the Adviser and its affiliates from their relationships with the Fund other than the fees and expense reimbursements payable under the Advisory Agreement, including but not limited to benefits relating to soft dollar arrangements (whereby the Adviser receives brokerage and research services from many of the brokers and dealers that execute purchases and sales of securities on behalf of its clients on an agency basis), 12b-1 fees and sales charges received by the Fund’s principal underwriter (which is a wholly

ALLIANCEBERNSTEIN EXCHANGE RESERVES  • 29

owned subsidiary of the Adviser) in respect of certain classes of the Fund’s shares and transfer agency fees paid by the Fund to a wholly owned subsidiary of the Adviser. The trustees recognized that the Adviser’s profitability would be somewhat lower without these benefits. The trustees noted that since the Fund does not engage in brokerage transactions, the Adviser does not receive soft dollar benefits in respect of portfolio transactions of the Fund. The trustees understood that the Adviser also might derive reputational and other benefits from its association with the Fund.

Investment Results

In addition to the information reviewed by the trustees in connection with the meeting, the trustees receive detailed performance information for the Fund at each regular Board meeting during the year. At the November 2009 meeting, the trustees reviewed information prepared by Lipper showing the performance of the Class A Shares of the Fund as compared with that of a group of similar funds selected by Lipper (the “Performance Group”) and as compared with a broader array of funds selected by Lipper (the “Performance Universe”), and information prepared by the Adviser showing performance of the Class A Shares as compared with the Lipper Money Market Funds Average (the “Lipper Average”) and the Barclays Capital U.S. Treasury Bills Index (the “Index”), in each case for the 1-, 3-, 5- and 10-year periods ended July 31, 2009, and (in the case of comparisons with the Lipper Average) the since inception period (March 1994 inception). The trustees noted that on a net return basis, the Fund was in the 2nd quintile of the Performance Group and 3rd quintile of the Performance Universe for the 1-year period, 3rd quintile of the Performance Group and 5th quintile of the Performance Universe for the 3-year period and 5th quintile of the Performance Group and the Performance Universe for the 5- and 10-year periods, and on a gross return basis the Fund was in the 1st quintile of the Performance Group and 2nd quintile of the Performance Universe for the 1- and 3-year periods, 1st quintile of the Performance Group and 3rd quintile of the Performance Universe for the 5-year period and 3rd quintile of the Performance Group and 4th quintile of the Performance Universe for the 10-year period. The trustees also noted that the Fund lagged the Lipper Average in the 5- and 10-year and since inception periods but outperformed the Lipper Average in the 1- and 3-year periods and that the Fund lagged the Index in all periods reviewed. Based on their review, and taking into account the unusual market environment that money market funds faced in 2008 and 2009, and the fact that the Fund is conservatively managed, the trustees concluded that the Fund’s relative performance was satisfactory.

Advisory Fees and Other Expenses

The trustees considered the advisory fee rate paid by the Fund to the Adviser and information prepared by Lipper concerning advisory fee rates paid by other funds in the same Lipper category as the Fund at a common asset level. The

30 •  ALLIANCEBERNSTEIN EXCHANGE RESERVES

trustees recognized that it is difficult to make comparisons of advisory fees because there are variations in the services that are included in the fees paid by other funds.

The Adviser informed the trustees that there are no institutional products managed by it that have an investment style substantially similar to that of the Fund. The trustees reviewed the relevant fee information from the Adviser’s Form ADV and noted that the Adviser charged institutional clients lower fees for advising comparably sized accounts using strategies that differ from those of the Fund but which involved investments in securities of the same type that the Fund invests in (i.e., fixed income taxable securities). The trustees also noted that a portfolio of another AllianceBernstein fund advised by the Adviser has an investment style similar to that of the Fund yet pays a significantly higher advisory fee than the Fund, while a portfolio of another AllianceBernstein fund advised by the Adviser that invests in different types of money market securities, pays no advisory fee but is offered only as a cash management vehicle for selected institutional clients that pay advisory fees at various rates. The trustees further noted that the Adviser sub-advises another money market fund at a lower fee rate than the Fund, although such fund invests in different types of securities than the Fund.

The Adviser reviewed with the trustees the significantly greater scope of the services it provides to the Fund relative to institutional clients and sub-advised funds. The Adviser also noted that because mutual funds are constantly issuing and redeeming shares, they are more difficult to manage than an institutional account, where the assets tend to be relatively stable. In light of these facts, the trustees did not place significant weight on these fee comparisons.

The trustees also considered the total expense ratio of the Class A shares of the Fund in comparison to the fees and expenses of funds within two comparison groups created by Lipper: an Expense Group and an Expense Universe. Lipper described an Expense Group as a representative sample of funds similar to the Fund and an Expense Universe as a broader group, consisting of all funds in the Fund’s investment classification/objective with a similar load type as the Fund. The Class A expense ratio of the Fund was based on the Fund’s latest fiscal year. The trustees noted that it was likely that the expense ratios of some funds in the Fund’s Lipper category were lowered by waivers or reimbursements by those funds’ investment advisers, which in some cases were voluntary and perhaps temporary. The trustees view the expense ratio information as relevant to their evaluation of the Adviser’s services because the Adviser is responsible for coordinating services provided to the Fund by others.

The information reviewed by the trustees showed that, at the Fund’s current size, its contractual effective advisory fee rate of 25 basis points, plus the 2 basis point impact of the administrative expense reimbursement in the latest fiscal year, was lower than the Expense Group median. The trustees noted that the

ALLIANCEBERNSTEIN EXCHANGE RESERVES  • 31

Fund’s total expense ratio was higher than the Expense Group and the Expense Universe medians. The trustees also noted that the Adviser had reviewed with them steps being taken that are intended to reduce the expenses of the AllianceBernstein Funds generally. The trustees concluded that the Fund’s expense ratio was acceptable.

Economies of Scale

The trustees noted that the advisory fee schedule for the Fund contains breakpoints that reduce the fee rates on assets above specified levels. The trustees also considered presentations by an independent consultant discussing economies of scale in the mutual fund industry and for the AllianceBernstein Funds, as well as a presentation by the Adviser concerning certain of its views on economies of scale. The trustees believe that economies of scale may be realized (if at all) by the Adviser across a variety of products and services, and not only in respect of a single fund. The trustees noted that there is no established methodology for establishing breakpoints that give effect to the fund-specific services provided by a fund’s adviser and to the economies of scale that an adviser may realize in its overall mutual fund business or those components of it which directly or indirectly affect a fund’s operations. The trustees observed that in the mutual fund industry as a whole, as well as among funds similar to the Fund, there is no uniformity or pattern in the fees and asset levels at which breakpoints (if any) apply. The trustees also noted that the advisory agreements for many funds do not have breakpoints at all. Having taken these factors into account, the trustees concluded that the Fund’s breakpoint arrangements would result in a sharing of economies of scale in the event the Fund’s net assets exceed a breakpoint in the future.

32 •  ALLIANCEBERNSTEIN EXCHANGE RESERVES

THE FOLLOWING IS NOT PART OF THE SHAREHOLDER REPORT OR THE FINANCIAL STATEMENTS

SUMMARY OF SENIOR OFFICER’S EVALUATION OF INVESTMENT ADVISORY AGREEMENT¹

The following is a summary of the evaluation of the Investment Advisory Agreement between AllianceBernstein L.P. (the “Adviser”) and AllianceBernstein Exchange Reserves (the “Fund”).² The evaluation of the Investment Advisory Agreement was prepared by Philip L. Kirstein, the Senior Officer of the Fund, for the Trustees of the Fund, as required by the September 1, 2004 Assurance of Discontinuance (“AoD”) between the Adviser and the New York State Attorney General (the “NYAG”). The Senior Officer’s evaluation of the Investment Advisory Agreement is not meant to diminish the responsibility or authority of the Board of Trustees of the Fund to perform its duties pursuant to Section 15 of the Investment Company Act of 1940 (the “40 Act”) and applicable state law. The purpose of the summary is to provide shareholders with a synopsis of the independent evaluation of the reasonableness of the advisory fees proposed to be paid by the Fund which was provided to the Trustees in connection with their review of the proposed approval of the continuance of the Investment Advisory Agreement. The Senior Officer’s evaluation considered the following factors:

1. Advisory fees charged to institutional and other clients of the Adviser for like services;

2. Advisory fees charged by other mutual fund companies for like services;

3. Costs to the Adviser and its affiliates of supplying services pursuant to the advisory agreement, excluding any intra-corporate profit;

4. Profit margins of the Adviser and its affiliates from supplying such services;

5. Possible economies of scale as the Fund grows larger; and

6. Nature and quality of the Adviser’s services including the performance of the Fund.

1 It should be noted that the Senior Officer’s fee evaluation was completed on October 21, 2009.

2 Future references to the Fund do not include “AllianceBernstein.” References in the fee summary pertaining to performance and expense ratios refer to the Class A shares of the Fund.

ALLIANCEBERNSTEIN EXCHANGE RESERVES  • 33

FUND ADVISORY FEES, EXPENSE REIMBURSEMENTS & RATIOS

The Adviser proposed that the Fund pay the advisory fee set forth in the table below for receiving the services to be provided pursuant to the Investment Advisory Agreement.³ Also shown below are the Fund’s net assets as of September 30, 2008 and 2009.

Fund	Advisory Fee Based on % of Average Daily Net Assets	Net Assets 09/30/09 ($MIL)		Net Assets 09/30/08 ($MIL)
Exchange Reserves	25 bp on 1st $1.25 billion 24 bp on next $0.25 billion 23 bp on next $0.25 billion 22 bp on next $0.25 billion 21 bp on next $1.0 billion 20 bp on the balance	$	563.0	$	578.4

The Adviser is reimbursed as specified in the Investment Advisory Agreement for certain clerical, legal, accounting, administrative and other services provided to the Fund. During the most recently completed fiscal year, the Adviser received $103,107 (0.02% of the Fund’s average daily net assets) for such services.

Set forth below are the Fund’s total expense ratios, annualized for the most recent semi-annual period:

Fund	Total Expense Ratio			Fiscal Year 03/31/09
Exchange Reserves	Advisor Class Class A (net) Class B (net) Class B (gross) Class C (net) Class C (gross) Class R Class K Class I	0.52 0.82 1.34 1.61 1.04 1.29 1.02 0.80 0.46	%  %  %  %  %  %  %  %  %	September 30

Since the beginning of the Exchange Reserves’ fiscal year, AllianceBernstein Investments, Inc. (the “Principal Underwriter” or “ABI”) has been reimbursing 0.25% of the distribution services fees payable on Class B and Class C shares, effectively reducing the distribution services payable on those Classes from 1.00% to 0.75% and from 0.75% to 0.50%, respectively. This reimbursement has been in place in prior years.

In response to low interest rates⁴ in the marketplace that have depressed money market yield, the Adviser or its affiliates, beginning various dates in 2009, has

3 The Fund was not affected by the Adviser’s agreement with the NYAG since the Fund’s fee schedule already had lower breakpoints than the NYAG related fee schedule for AllianceBernstein Mutual Funds with a category of “Low Risk Income.”

4 The Federal Reserve has kept the Federal Funds Rate between zero and 0.25% since December 2008.

34 •  ALLIANCEBERNSTEIN EXCHANGE RESERVES

been waiving advisory fees and reimbursing additional expenses on its proprietary money market products, including Exchange Reserves, in order for those products to achieve a target yield of 0.01%.

I. ADVISORY FEES CHARGED TO INSTITUTIONAL AND OTHER CLIENTS

The advisory fees charged to investment companies which the Adviser manages and sponsors are normally higher than those charged to similar sized institutional accounts, including pension plans and sub-advised investment companies. The fee differential reflects, among other things, different services provided to such clients, and different liabilities assumed. Services provided by the Adviser to the Fund that are not provided to non-investment company clients and sub-advised investment companies include providing office space and personnel to serve as Fund Officers, who among other responsibilities make the certifications required under the Sarbanes–Oxley Act of 2002, and coordinating with and monitoring the Fund’s third party service providers such as Fund counsel, auditors, custodians, transfer agents and pricing services. The accounting, administrative, legal and compliance requirements for the Fund are more costly than those for institutional client assets due to the greater complexities and time required for investment companies, although as previously noted, a portion of these costs are reimbursed by the Fund to the Adviser. Also, retail mutual funds managed by the Adviser are widely held. Servicing the Fund’s investors is more time consuming and labor intensive compared to institutional clients since the Adviser needs to communicate with a more extensive network of financial intermediaries and shareholders. The Adviser also believes that it incurs substantial entrepreneurial risk when offering a new mutual fund since establishing a new mutual fund requires a large upfront investment and it may take a long time for the fund to achieve profitability since the fund must be priced to scale from inception in order to be competitive and assets are acquired one account at a time. In addition, managing the cash flow of an investment company may be more difficult than that of a stable pool of assets, such as an institutional account with little cash movement in either direction, particularly if the fund is in net redemption and the Adviser is frequently forced to sell securities to raise cash for redemptions. However, managing a fund with positive cash flow may be easier at times than managing a stable pool of assets.

Finally, in recent years, investment advisers have been sued by institutional clients and have suffered reputational damage both by the attendant publicity and outcomes other than complete victories. Accordingly, the legal and reputational risks associated with institutional accounts are greater than previously thought, although arguably still not equal to those related to the mutual fund industry.

Notwithstanding the Adviser’s view that managing an investment company is not comparable to managing other institutional accounts because the services provided are different, it is worth considering information regarding the advisory fees charged to institutional accounts with substantially similar investment styles

ALLIANCEBERNSTEIN EXCHANGE RESERVES  • 35

as the Fund. However, with respect to the Fund, the Adviser represented that there is no institutional product in the Adviser’s Form ADV that has a substantially similar investment style as the Fund.

The adviser manages the AllianceBernstein Variable Products Series Fund, Inc. (“AVPS”), which is available through variable annuity and variable life contracts offered by other financial institutions, offers policyholders the option to utilize certain AVPS portfolios as the investment option underlying their insurance contracts. Set forth below is the fee schedule of the AVPS portfolio that has a similar investment style as the Fund.⁵ Also shown is what would have been the effective advisory fee of the Fund had the advisory fee schedule of the AVPS portfolio been applicable to the Fund versus the Fund’s advisory fee based on September 30, 2009 net assets:

Fund	AVPS Portfolio	Fee Schedule	AVPS Effective Fee	Fund Advisory Fee
Exchange Reserves	Money Market Portfolio	0.45% on first $2.5 billion 0.40% on next $2.5 billion 0.35% on the balance	0.450%	0.250%

The Adviser also manages and sponsors retail mutual funds, which are organized in jurisdictions outside the United States, generally Luxembourg and Japan, and sold to non-United States resident investors. The Adviser charges the following “all-in” fee for Short Maturity Dollar, a Luxembourg fund, which has a somewhat similar investment style as the Fund:

Fund	Luxembourg Fund	Fee6
Exchange Reserves	Short Maturity Dollar Class A	1.05% on the 1st €100 million7 1.00% on the next €100 million 0.95% on the balance
	Class I (Institutional)	0.50% on the 1st €100 million 0.45% on the next €100 million 0.40% on the balance

The Adviser provides sub-advisory investment services to certain other investment companies managed by other fund families. The Adviser charges the following fees for the following sub-advisory relationship that has a somewhat similar investment style as that of the Fund. Also shown is what would have been

5 It should be noted that AVPS was affected by the settlement between the Adviser and the NYAG.

6 Each “all-in” fee shown is for the Class A shares of Short Maturity Dollar. This fee covers investment advisory services and distribution related services.

7 The Euro-U.S. dollar currency exchange rate quoted at 4 p.m. on September 21, 2009 by Reuters was €1 per $1.4676. At that currency exchange rate, €100 million would be equivalent to approximately $146.8 million. €200 million would be equivalent to approximately $293.6 million.

36 •  ALLIANCEBERNSTEIN EXCHANGE RESERVES

the effective advisory fee of the Fund had the fee schedule of the sub-advisory relationship been applicable to the Fund versus the Fund’s advisory fees based on September 30, 2009 net assets:

Fund		Sub-advised Fund Fee Schedule	Sub-advised Fund Effective Fee	Fund Advisory Fee
Exchange Reserves	Client #18	0.125% on first $100 million 0.10% on next $150 million 0.05% thereafter	0.077%	0.250%
		Client #1 Advisory and Administration Combined Fee Schedule: 0.50% on first $250 million 0.475% on next $250 million 0.45% on next $250 million 0.425% on next 250 million 0.40% on next $2.5 billion 0.375% on next $2.5 billion 0.36% on next $2.5 billion 0.35% on next 2.5 billion 0.34% thereafter	0.483%

It is fair to note that the services the Adviser provides pursuant to sub-advisory agreements are generally confined to the services related to the investment process; in other words, they are not as comprehensive as the services provided to the Fund by the Adviser. While it appears the sub-advisory relationship is paying a lower fee than the Fund, it is difficult to evaluate the relevance of such discounted fees due to differences in terms of the service provided, risks involved and other competitive factors between the Fund and sub-advisory relationship. There could also be various business reasons why an investment adviser would be willing to manage a sub-advisory relationship for a different fee level than it would be willing to manage investment company assets.

II. MANAGEMENT FEES CHARGED BY OTHER MUTUAL FUND COMPANIES FOR LIKE SERVICES.

Lipper, Inc. (“Lipper”), an analytical service that is not affiliated with the Adviser, compared the fees charged to the Fund with fees charged to other investment companies for similar services by other investment advisers. Lipper’s

8 This sub-advised fund has a more restrictive investment style than the Fund; the fund invests primarily in high-quality municipal short-term securities.

ALLIANCEBERNSTEIN EXCHANGE RESERVES  • 37

analysis included the Fund’s ranking with respect to the contractual management fee relative to the median of the Fund’s Lipper Expense Group (“EG”)⁹ at the approximate current asset level of the Fund.¹⁰

Lipper describes an EG as a representative sample of comparable funds. Lipper’s standard methodology for screening funds to be included in an EG entails the consideration of several fund criteria, including fund type, investment classification/objective, load type and similar 12b-1/non-12b-1 service fees, asset (size) comparability, and expense components and attributes. An EG will typically consist of seven to twenty funds.

Fund	Contractual Management Fee (%)11	Lipper Exp. Group Median (%)	Lipper Group Rank
Exchange Reserves	0.250	0.442	2/16

Lipper also compared the Fund’s most recently completed fiscal year total expense ratio to the medians of the Fund’s EG and Lipper Expense Universe (“EU”). The EU is as a broader group compared to the EG, consisting of all funds that have the same investment classification/objective and load type as the subject Fund.¹²

It should be noted that Lipper uses expense ratio data from financial statements of the most current fiscal year in their database. This has several implications: the total expense ratio of each fund that Lipper uses in their report is based on each fund’s average net assets during its fiscal year. Since funds have different fiscal year ends, the total expense ratios of the funds may cover different twelve month periods, depending on the funds’ fiscal year ends. This is the process that Lipper utilizes but given market conditions during 2008, especially the last three months of 2008, the effects on the funds’ total expense ratio caused by the

9 Lipper does not consider average account size when constructing EGs. Funds with relatively small average account sizes tend to have higher transfer agent expense ratios than comparable sized funds that have relatively large average account sizes. Note that there are limitations on Lipper expense category data because different funds categorize expenses differently.

10 The contractual management fee is calculated by Lipper using the Fund’s contractual management fee rate at a hypothetical asset level. The hypothetical asset level is based on the combined net assets of all classes of the Fund, rounded up to the next $25 million. Lipper’s total expense ratio information is based on the most recent annual report except as otherwise noted. A ranking of “1” means that the Fund has the lowest effective fee rate in the Lipper peer group.

11 The contractual management fee does not reflect any expense reimbursements made by the Fund to the Adviser for certain clerical, legal, accounting, administrative, and other services.

12 Except for asset (size) comparability, Lipper uses the same criteria for selecting an EG peer when selecting an EU. Unlike the EG, the EU allows for the same adviser to be represented by more than just one fund.

38 •  ALLIANCEBERNSTEIN EXCHANGE RESERVES

differences in fiscal year ends may be more pronounced in 2008 compared to other years under more normal market conditions.¹³

Fund	Expense Ratio (%)14	Lipper Exp. Group Median (%)	Lipper Group Rank	Lipper Exp. Universe Median (%)	Lipper Universe Rank
Exchange Reserves	0.824	0.687	14/16	0.602	112/125

Based on this analysis, the Fund has a more favorable ranking on a management fee basis than it does on a total expense ratio basis.

III. COSTS TO THE ADVISER AND ITS AFFILIATES OF SUPPLYING SERVICES PURSUANT TO THE ADVISORY FEE ARRANGEMENT, EXCLUDING ANY INTRA-CORPORATE PROFIT.

The Adviser utilizes two profitability reporting systems, which operate independently but are aligned with each other, to estimate the Adviser’s profitability in connection with investment advisory services provided to the Fund. The Senior Officer has retained a consultant to provide independent advice regarding the alignment of the two profitability systems as well as the methodologies and allocations utilized by both profitability systems. See Section IV for additional discussion.

IV. PROFIT MARGINS OF THE ADVISER AND ITS AFFILIATES FOR SUPPLYING SUCH SERVICES.

The profitability information for the Fund prepared by the Adviser for the Board of Trustees was reviewed by the Senior Officer and the consultant. The Adviser’s profitability from providing investment advisory services to the Fund was slightly higher in calendar year 2008, relative to 2007.

In addition to the Adviser’s direct profits from managing the Fund, certain of the Adviser’s affiliates have business relationships with the Fund and may earn a profit from providing other services to the Fund. The courts have referred to this type of business opportunity as “fall-out benefits” to the Adviser and indicated that such benefits should be factored into the evaluation of the total relationship between the Fund and the Adviser. Neither case law nor common business practice precludes the Adviser’s affiliates from earning a reasonable profit on this type of relationship provided the affiliates’ charges and services are competitive. These affiliates provide transfer agent and distribution related services to the Fund and receive transfer agent fees, Rule 12b-1 payments, and contingent deferred sales charges (“CDSC”).

13 To cite an example, the average net assets and total expense ratio of a fund with a fiscal year end of March 31, 2008 will not be reflective of the market declines that occurred in the second half of 2008, in contrast to a fund with a fiscal year end of December 31, 2008.

14 Most recently completed fiscal year Class A share total expense ratio.

ALLIANCEBERNSTEIN EXCHANGE RESERVES  • 39

AllianceBernstein Investments, Inc. (“ABI”), an affiliate of the Adviser, is the Fund’s principal underwriter. ABI and the Adviser have disclosed in the Fund’s prospectus that they may make revenue sharing payments from their own resources, in addition to revenues derived from sales loads and Rule 12b-1 fees, to firms that sell shares of the Fund. In 2008, ABI paid approximately 0.04% of the average monthly assets of the AllianceBernstein Mutual Funds or approximately $19 million for distribution services and educational support (revenue sharing payments).¹⁵ During the Fund’s most recently completed fiscal year, ABI received from the Fund $1,719,031 and $152,751 in Rule 12b-1¹⁶ and CDSC fees, respectively.¹⁷

Fees and reimbursements for out of pocket expenses charged by AllianceBernstein Investor Services, Inc. (“ABIS”), the affiliated transfer agent for the Fund, are charged on a per account basis, based on the level of service provided and the class of share held by the account. ABIS also receives a fee per shareholder sub-account for each account maintained by an intermediary on an omnibus basis. ABIS’ after-tax profitability was slightly higher in 2008 in comparison to 2007. During the Fund’s most recently completed fiscal year, ABIS received $553,610 in fees from the Fund.¹⁸

V. POSSIBLE ECONOMIES OF SCALE

The Adviser has indicated that economies of scale are being shared with shareholders through fee structures,¹⁹ subsidies and enhancement to services. Based on some of the professional literature that has considered economies of scale in the mutual fund industry, it is thought that to the extent economies of scale

15 ABI currently inserts the “Advance” in quarterly account statements and pays the incremental costs associated with the mailing. The incremental cost is less than what an “independent mailing” would cost.

16 During the Fund’s most recently completed fiscal year, ABI waived a portion of the Rule 12b-1 distribution fees in the amounts of $137,784 and $89,536, which reduced the effective annual rate to 0.75% and 0.50% for Class B and Class C shares, respectively. As mentioned previously on pages 5, ABI is waiving expenses, including 12b-1 fees, in order for the Fund to have a positive yield. Fiscal year to date through September 30, 2009, ABI has waived 0.05%, 0.25%, 0.10%, 0.12 and 0.05% in 12b-1 fees in respect of the Fund’s Class A, B, C, R and K shares, respectively.

17 With respect to Exchange Reserves, no front-end sales charge is imposed on the Fund’s Class A shares at the time of purchase. However, if Class A shares of the Fund are subsequently exchanged for Class A shares of another AllianceBernstein Mutual Fund, the front-end sales charge applicable to other AllianceBernstein Mutual Fund will be assessed at the time of the exchange.

18 The fees disclosed are net of any expense offsets with ABIS. An expense offset is created by the interest earned on the positive cash balance that occur within the transfer agent account as there is a one day lag with regards to money movement from the shareholder’s account to the transfer agent’s account and then the transfer agent’s account to the Fund’s account. During the Fund’s most recently completed fiscal year, the fees paid by the Fund to ABIS were reduced by $29,639 under the offset agreement between the Fund and ABIS.

19 Fee structures include fee reductions, pricing at scale and breakpoints in advisory fee schedules.

40 •  ALLIANCEBERNSTEIN EXCHANGE RESERVES

exist, they may more often exist across a fund family as opposed to a specific fund. This is because the costs incurred by the Adviser, such as investment research or technology for trading or compliance systems, can be spread across a greater asset base as the fund family increases in size. It is also possible that as the level of services required to operate a successful investment company has increased over time, and advisory firms have made such investments in their business to provide services, there may be a sharing of economies of scale without a reduction in advisory fees.

An independent consultant, retained by the Senior Officer, provided the Board of Trustees an update of the Deli²⁰ study on advisory fees and various fund characteristics. The independent consultant first reiterated the results of his previous two dimensional comparison analysis (fund size and family size) with the Board of Trustees.²¹ The independent consultant then discussed the results of the regression model that was utilized to study the effects of various factors on advisory fees. The regression model output indicated that the bulk of the variation in fees predicted were explained by various factors, but substantially by fund assets under management (“AUM”), family AUM, index fund indicator and investment style. The independent consultant also compared the advisory fees of the AllianceBernstein Mutual Funds to similar funds managed by 19 other large asset managers, regardless of fund size and the large asset manager’s proportion of mutual fund assets to non-mutual fund assets.

VI. NATURE AND QUALITY OF THE ADVISER’S SERVICES, INCLUDING THE PERFORMANCE OF THE FUND

With assets under management of approximately $498 billion as of September 30, 2009, the Adviser has the investment experience to manage and provide non-investment services (described in Section I) to the Fund.

20 The Deli study was originally published in 2002 based on 1997 data.

21 The two dimensional analysis showed patterns of lower advisory fees for funds with larger asset sizes and funds from larger family sizes compared to funds with smaller asset sizes and funds from smaller family sizes, which according to the independent consultant is indicative of a sharing of economies of scale and scope. However, in less liquid and active markets, such is not the case, as the empirical analysis showed potential for diseconomies of scale in those markets. The empirical analysis also showed diminishing economies of scale and scope as funds surpassed a certain high level of assets.

ALLIANCEBERNSTEIN EXCHANGE RESERVES  • 41

The information below, prepared by Lipper, shows the 1, 3, 5 and 10 year net and gross performance returns and rankings of the Fund²² relative to the Fund’s Lipper Performance Group (“PG”) and Lipper Performance Universe (“PU”)²³ for the periods ended July 31, 2009.²⁴

	Fund Return (Net)	PG Median (%)	PU Median (%)	PG Rank	PU Rank
1 year	0.87	0.67	0.91	6/16	84/147
3 year	2.89	2.92	3.09	9/16	114/141
5 year	2.68	2.86	2.97	13/16	117/132
10 year	2.48	2.76	2.88	13/13	113/117
	Fund Return (Gross)	PG Median (%)	PU Median (%)	PG Rank	PU Rank
1 year	1.71	1.45	1.51	1/16	42/147
3 year	3.78	3.67	3.72	2/16	47/141
5 year	3.64	3.59	3.62	3/16	55/132
10 year	3.47	3.47	3.53	6/13	78/117

22 The performance returns and rankings are for the Class A shares of the Fund. It should be noted that the net (not gross) performance returns of the Fund that are shown were provided by the Adviser. Lipper maintains its own database that includes the Fund’s performance returns. However, differences in the distribution price (ex-date versus payable date) and rounding differences may cause the Adviser’s own performance returns of the Fund to be one or two basis points different from Lipper. To maintain consistency in this evaluation, the performance returns of the Fund, as reported by the Adviser, are provided instead of Lipper.

23 The Fund’s PG is identical to the EG. The Fund’s PU is not identical to the Fund’s EU as the criteria for including/excluding a fund in/from a PU are somewhat different from that of an EU.

24 Note that the current Lipper investment classification/objective dictates the PG and PU throughout the life of the Fund even if the Fund may have had a different investment classification/objective at different points in time.

42 •  ALLIANCEBERNSTEIN EXCHANGE RESERVES

Set forth below are the 1, 3, 5 and 10 year and since inception net performance returns of the Fund (in bold)²⁵ versus its benchmark.²⁶

	Periods Ending July 31, 2009 Annualized Net Performance
	1 Year (%)	3 Year (%)	5 Year (%)	10 Year (%)	Since Inception (%)
Exchange Reserves	0.87	2.89	2.68	2.48	3.07
Lipper Money Market Funds Average	0.79	2.87	2.73	2.68	3.96
Barclays Capital U.S. Treasury Bills Index	1.13	3.25	3.23	3.22	N/A
Inception Date: March 25, 1994

CONCLUSION:

Based on the factors discussed above the Senior Officer’s conclusion is that the proposed advisory fee for the Fund is reasonable and within the range of what would have been negotiated at arms-length in light of all the surrounding circumstances. This conclusion in respect of the Fund is based on an evaluation of all of these factors and no single factor was dispositive.

Dated: November 25, 2009

25 The performance returns and risk measures shown in the table are for the Class A shares of the Fund.

26 The Adviser provided Portfolio and benchmark performance return information for periods through July 31, 2009.

ALLIANCEBERNSTEIN EXCHANGE RESERVES  • 43

THIS PAGE IS NOT PART OF THE SHAREHOLDER REPORT OR THE FINANCIAL STATEMENTS

ALLIANCEBERNSTEIN FAMILY OF FUNDS

Wealth Strategies Funds

Balanced Wealth Strategy

Wealth Appreciation Strategy

Conservative Wealth Strategy*

Tax-Managed Balanced Wealth Strategy

Tax-Managed Wealth Appreciation Strategy

Tax-Managed Conservative Wealth Strategy*

Blended Style Funds

U.S. Large Cap Portfolio

International Portfolio

Tax-Managed International Portfolio

Growth Funds

Domestic

Growth Fund

Large Cap Growth Fund

Small Cap Growth Portfolio

Small/Mid Cap Growth Fund

U.S. Strategic Research Portfolio*

Global & International

Global Growth Fund

Global Thematic Growth Fund

Greater China ‘97 Fund

International Growth Fund

Value Funds

Domestic

Balanced Shares

Core Opportunities Fund*

Growth & Income Fund

Small/Mid Cap Value Fund

Utility Income Fund

Value Fund

Global & International

Global Real Estate Investment Fund

Global Value Fund

International Value Fund

Taxable Bond Funds

Bond Inflation Strategy

Diversified Yield Fund

Global Bond Fund

High Income Fund

Intermediate Bond Portfolio

Short Duration Portfolio

Municipal Bond Funds

Arizona Municipal Bond    Inflation Strategy California High Income Massachusetts Michigan Minnesota National New Jersey New York Ohio Pennsylvania Virginia

Intermediate Municipal Bond Funds

Intermediate California

Intermediate Diversified

Intermediate New York

Closed-End Funds

AllianceBernstein Global High Income Fund

AllianceBernstein Income Fund

AllianceBernstein National Municipal Income Fund

Alliance California Municipal Income Fund

Alliance New York Municipal Income Fund

The Ibero-America Fund*

Inflation Strategies

Multi-Asset Inflation Strategy

Retirement Strategies Funds

2000 Retirement Strategy	2020 Retirement Strategy	2040 Retirement Strategy
2005 Retirement Strategy	2025 Retirement Strategy	2045 Retirement Strategy
2010 Retirement Strategy	2030 Retirement Strategy	2050 Retirement Strategy
2015 Retirement Strategy	2035 Retirement Strategy	2055 Retirement Strategy

We also offer Exchange Reserves,** which serves as the money market fund exchange vehicle for the AllianceBernstein mutual funds.

You should consider the investment objectives, risks, charges and expenses of any AllianceBernstein fund/portfolio carefully before investing. For free copies of our prospectuses, which contain this and other information, visit us online at www.alliancebernstein.com or contact your financial advisor. Please read the prospectus carefully before investing.

* Prior to December 31, 2009, Conservative Wealth Strategy was named Wealth Preservation Strategy, and Tax-Managed Conservative Wealth Strategy was named Tax-Managed Wealth Preservation Strategy. U.S. Strategic Research Portfolio was incepted on December 23, 2009. Prior to January 20, 2010, The Ibero-America Fund was named The Spain Fund. Prior to March 1, 2010, Core Opportunities Fund was named the Focused Growth & Income Fund.

** An investment in the Fund is not a deposit in a bank 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.

44 •  ALLIANCEBERNSTEIN EXCHANGE RESERVES

AllianceBernstein Family of Funds

EXC-0152-0310

ITEM 2. CODE OF ETHICS.

Not applicable when filing a semi-annual report to shareholders.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

Not applicable when filing a semi-annual report to shareholders.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Not applicable when filing a semi-annual report to shareholders.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

Not applicable to the registrant.

ITEM 6. SCHEDULE OF INVESTMENTS.

Please see Schedule of Investments contained in the Report to Shareholders included under Item 1 of this Form N-CSR.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable to the registrant.

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable to the registrant.

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

Not applicable to the registrant.

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

There have been no material changes to the procedures by which shareholders may recommend nominees to the Fund’s Board of Directors since the Fund last provided disclosure in response to this item.

ITEM 11. 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-2(c) under the Investment Company Act of 1940, as amended) are effective at the reasonable assurance level based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this document.

(b) There were no changes in the registrant’s internal controls over financial reporting that occurred during the second fiscal quarter of the period that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

ITEM 12. EXHIBITS.

The following exhibits are attached to this Form N-CSR:

EXHIBIT NO.	DESCRIPTION OF EXHIBIT
12(b)(1)	Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
12(b)(2)	Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
12(c)	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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.

(Registrant): AllianceBernstein Exchange Reserves
By:	/s/ Robert M. Keith
	Robert M. Keith President

Date: May 28, 2010

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/ Robert M. Keith
	Robert M. Keith President

Date: May 28, 2010

By:	/s/ Joseph J. Mantineo
	Joseph J. Mantineo Treasurer and Chief Financial Officer

Date: May 28, 2010