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 811-05812

Legg Mason Partners Premium Money Market Trust

(Exact name of registrant as specified in charter)

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

(Address of principal executive offices) (Zip code)

Robert I. Frenkel, Esq.

Legg Mason & Co., LLC

100 First Stamford Place

Stamford, CT 06902

(Name and address of agent for service)

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

Date of fiscal year end: August 31

Date of reporting period: August 31, 2016

ITEM 1. REPORT TO STOCKHOLDERS.

The Annual Report to Stockholders is filed herewith.

Annual Report August 31, 2016

WESTERN ASSET

PREMIUM LIQUID

RESERVES

INVESTMENT PRODUCTS: NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE

What’s inside
Letter from the president	II
Investment commentary	III
Fund overview	1
Portfolio at a glance — Liquid Reserves Portfolio	5
Fund expenses	6
Western Asset Premium Liquid Reserves
Statement of assets and liabilities	7
Statement of operations	8
Statements of changes in net assets	9
Financial highlights	10
Notes to financial statements	11
Report of independent registered public accounting firm	15
Additional information	16
Important tax information	22
Liquid Reserves Portfolio
Schedule of investments	23
Statement of assets and liabilities	30
Statement of operations	31
Statements of changes in net assets	32
Financial highlights	33
Notes to financial statements	34
Report of independent registered public accounting firm	38
Additional information	39

Fund objective

The Fund’s investment objective is to provide shareholders with liquidity and as high a level of current income as is consistent with preservation of capital.

Letter from the president

Dear Shareholder,

We are pleased to provide the annual report of Western Asset Premium Liquid Reserves for the twelve-month reporting period ended August 31, 2016. Please read on for a detailed look at prevailing economic and market conditions during the Fund’s reporting period and to learn how those conditions have affected Fund performance.

As always, we remain committed to providing you with excellent service and a full spectrum of investment choices. We also remain committed to supplementing the support you receive from your financial advisor. One way we accomplish this is through our website, www.leggmason.com. Here you can gain immediate access to market and investment information, including:

• Fund prices and performance,

• Market insights and commentaries from our portfolio managers, and

• A host of educational resources.

We look forward to helping you meet your financial goals.

Sincerely,

Jane Trust, CFA

President and Chief Executive Officer

September 30, 2016

II Western Asset Premium Liquid Reserves

Investment commentary

Economic review

The pace of U.S. economic activity fluctuated during the twelve months ended August 31, 2016 (the “reporting period”). Looking back, the U.S. Department of Commerce reported that third quarter 2015 U.S. gross domestic product (“GDP”)ⁱ growth was 2.0%. The U.S. Department of Commerce reported that revised fourth quarter 2015 and first quarter 2016 GDP growth moderated to 0.9% and 0.8%, respectively. The U.S. Department of Commerce’s final reading for second quarter 2016 GDP growth — released after the reporting period ended — was 1.4%. The improvement in GDP growth in the second quarter reflected an acceleration in personal consumption expenditures (“PCE”) and upturns in nonresidential fixed investment and exports.

While there was a pocket of weakness in May 2016, job growth in the U.S. was solid overall and a tailwind for the economy during the reporting period. When the period ended in August 2016, the unemployment rate was 4.9%, as reported by the U.S. Department of Labor. The percentage of longer-term unemployed declined over the period. In August 2016, 26.1% of Americans looking for a job had been out of work for more than six months, versus 26.6% when the period began.

After an extended period of maintaining the federal funds rateⁱⁱ at a historically low range between zero and 0.25%, the Federal Reserve Board (the “Fed”)ⁱⁱⁱ increased the rate at its meeting on December 16, 2015. This marked the first rate hike since 2006. In particular, the U.S. central bank raised the federal funds rate to a range between 0.25% and 0.50%. In its official statement after the December 2015 meeting, the Fed said, “The stance of monetary policy remains accommodative after this increase, thereby supporting further improvement in labor market conditions and a return to 2 percent inflation….The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run.” The Fed kept rates on hold at its meeting that concluded September 21, 2016 (after the reporting period ended), as well as during the prior meetings of the year. In the Fed’s statement after the September meeting it said, “The Committee judges that the case for an increase in the federal funds rate has strengthened but decided, for the time being, to wait for further evidence of continued progress toward its objectives. The stance of monetary policy remains accommodative, thereby supporting further improvement in labor market conditions and a return to 2 percent inflation.”

As always, thank you for your confidence in our stewardship of your assets.

Sincerely,

Jane Trust, CFA

President and Chief Executive Officer

September 30, 2016

All investments are subject to risk including the possible loss of principal. Past performance is no guarantee of future results.

Western Asset Premium Liquid Reserves III

Investment commentary (cont’d)

ⁱ  Gross domestic product (“GDP”) is the market value of all final goods and services produced within a country in a given period of time.

ⁱⁱ  The federal funds rate is the rate charged by one depository institution on an overnight sale of immediately available funds (balances at the Federal Reserve) to another depository institution; the rate may vary from depository institution to depository institution and from day to day.

ⁱⁱⁱ  The Federal Reserve Board (the “Fed”) is responsible for the formulation of U.S. policies designed to promote economic growth, full employment, stable prices and a sustainable pattern of international trade and payments.

IV Western Asset Premium Liquid Reserves

Fund overview

Q. What is the Fund’s investment strategy?

A. The Fund seeks to provide shareholders with liquidity and as high a level of current income as is consistent with preservation of capital. The Fund is a money market fund that invests in securities through an underlying mutual fund, Liquid Reserves Portfolio (the “Portfolio”), which has the same investment objective and strategies as the Fund. The Portfolio invests in high-quality, U.S. dollar-denominated short-term debt securities that, at the time of purchase, are rated by one or more rating agencies in the highest short-term rating category or, if not rated, that we determined to be of equivalent quality.

The Portfolio may invest in all types of money market instruments, including bank obligations, commercial paper and asset-backed securities, structured investments, repurchase agreements and other short-term debt securities. These instruments may be issued or guaranteed by all types of issuers, including U.S. and foreign banks and other private issuers, the U.S. government or any of its agencies or instrumentalities, U.S. states and municipalities, or foreign governments.

The Portfolio may invest without limit in bank obligations, such as certificates of deposit, fixed time deposits and bankers’ acceptances. The Portfolio generally limits its investments in foreign securities to U.S. dollar denominated obligations of issuers, including banks and foreign governments, located in the major industrialized countries, although with respect to bank obligations, the branches of the banks issuing the obligations may be located in The Bahamas or the Cayman Islands.

As a money market fund, the Fund must follow strict rules as to the credit quality, liquidity, diversification and maturity of its investments. In addition, on or about October 11, 2016, the share price of the Fund will fluctuate along with changes in the market-based value of fund assets. Because the share price of the Fund will fluctuate, it will have what is called a “floating net asset value”.

At Western Asset Management Company (“Western Asset”), the Fund’s and Portfolio’s subadviser, we utilize a fixed-income team approach, with decisions derived from interaction among various investment management sector specialists. The sector teams are comprised of Western Asset’s senior portfolio management personnel, research analysts and an in-house economist. Under this team approach, management of client fixed-income portfolios will reflect a consensus of interdisciplinary views within the Western Asset organization.

Q. What were the overall market conditions during the Fund’s reporting period?

A. Short-term Treasury yields moved higher, whereas long-term Treasury yields declined during the twelve months ended August 31, 2016. Two-year Treasury yields began the reporting period at 0.74% and ended the period at 0.80%. Their peak of 1.09% occurred on December 29, 2015 and they were as low as 0.56% on July 5, 2016. Ten-year Treasury yields were 2.21% at the beginning of the period and ended the period at 1.58%. Their peak of 2.36% was on November 9, 2015 and their low of 1.37% occurred on both July 5 and July 8, 2016.

Western Asset Premium Liquid Reserves 2016 Annual Report 1

Fund overview (cont’d)

After a prolonged period of maintaining the federal funds rateⁱ at a historically low range between zero and 0.25%, the Federal Reserve Board (the “Fed”)ⁱⁱ increased the rate at its meeting on December 16, 2015. In particular, the U.S. central bank raised the federal funds rate to a range between 0.25% and 0.50%. In its official statement after the December 2015 meeting, the Fed said it, “…expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run.” At each of its meetings thus far in 2016 (including the September 21, 2016 meeting — after the reporting period ended), the Fed kept rates on hold.

Q. How did we respond to these changing market conditions?

A. We maintained a cautious average maturity stance into the end of the 2015 calendar year with the Fed having just raised the target federal funds rate for the first time in almost a decade. Throughout 2016, yields on longer dated fixed rate securities remained fairly priced given the expected path of Fed policy. We also selectively added floating rate notes with spreads wider and the U.S. dollar LIBORⁱⁱⁱ moving higher.

Performance review

As of August 31, 2016, the seven-day current yield for Western Asset Premium Liquid Reserves was 0.18% and the seven-day effective yield, which reflects compounding, was 0.18%.¹

The Fund does not invest directly in securities but instead invests all of its investable assets in an underlying mutual fund, the Portfolio, which has the same investment objective and strategies, and substantially the same policies as the Fund. Unless otherwise indicated, references to the Fund include the underlying mutual fund, the Portfolio.

Western Asset Premium Liquid Reserves Yields as of August 31, 2016 (unaudited)
Seven-Day Current Yield1	0.18	%
Seven-Day Effective Yield1	0.18	%

The performance shown represents past performance. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown above. Yields will fluctuate. To obtain performance data current to the most recent month-end, please visit our website at www.leggmason.com/moneymarketfunds.

Absent fee waivers and/or expense reimbursements, the seven-day current yield and the seven-day effective yield would have been -0.04%.

The manager has voluntarily undertaken to limit Fund expenses. Such expense limitations may fluctuate daily and are voluntary and temporary and may be terminated by the manager at any time without notice.

You could lose money by investing in the Fund. Because the share price of the Fund will fluctuate, when you sell your shares they may be worth more or less than what you originally paid for

¹  The seven-day current yield reflects the amount of income generated by the investment during that seven-day period and assumes that the income is generated each week over a 365-day period. The yield is shown as a percentage of the investment. The seven-day effective yield is calculated similarly to the seven-day current yield but, when annualized, the income earned by an investment in the Fund is assumed to be reinvested. The effective yield typically will be slightly higher than the current yield because of the compounding effect of the assumed reinvestment.

2 Western Asset Premium Liquid Reserves 2016 Annual Report

them. The Fund may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the Fund’s liquidity falls below required minimums because of market conditions or other factors. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation (“FDIC”) or any other government agency. The Fund’s sponsor has no legal obligation to provide financial support to the Fund, and you should not expect that the sponsor will provide financial support to the Fund at any time.

Q. What were the most significant factors affecting Fund performance?

A. Rates on money market securities rose and spreads widened, creating an opportunity to reinvest at higher yields. Economic growth and inflationary expectations will likely be among the key factors in determining the timing of the next Fed policy action. Upcoming money market regulatory changes, commencing in October 2016, will have a significant impact on “prime money market funds^iv”, as well as short-term debt issuers.

Q. Were there any regulatory updates during the Fund’s reporting period?

A. The U.S. Securities and Exchange Commission (the “SEC”)^v has adopted certain reforms to the rules that govern money market funds (the “Reforms”). Under the Reforms, the Fund may no longer use the amortized cost method of valuation to seek to maintain a stable NAV of $1.00 per share. Instead, on or about October 11, 2016, the Fund will calculate its NAV based on the current market-based value of its portfolio securities. In addition, as of that date, the Fund will use “basis point^vi” rounding to calculate its share value to the nearest 1/100th of 1%, which means, that share prices will be rounded to four decimal places (i.e., $1.0000). In addition, no later than October 14, 2016, the Fund may impose fees upon the sale of shares or temporarily suspend the ability to sell shares if the Fund’s liquidity falls below required minimums because of market conditions or other factors.

Thank you for your investment in Western Asset Premium Liquid Reserves. As always, we appreciate that you have chosen us to manage your assets and we remain focused on seeking to achieve the Fund’s investment goals.

Sincerely,

Western Asset Management Company

September 20, 2016

RISKS: You could lose money by investing in the Fund. Because the share price of the Fund will fluctuate, effective on or about October 11, 2016, when you sell your shares they may be worth more or less than what you originally paid for them. Effective October 14, 2016, the Fund may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the Fund’s liquidity falls below required minimums because of market conditions or other factors. An investment in the Fund is not insured or guaranteed by the FDIC or any other government agency. The Fund’s sponsor has no legal obligation to provide financial support to the Fund, and you should not expect that the sponsor will provide financial support to the Fund at any time. The Fund will be more susceptible to negative events affecting the worldwide financial services sector as a significant portion of its assets may be invested in obligations that are issued or backed by U.S. and non-U.S. banks and other financial services companies. Please see the Fund’s prospectus for a more complete discussion of these and other risks, and the

Fund’s investment strategies.

Western Asset Premium Liquid Reserves 2016 Annual Report 3

Fund overview (cont’d)

All investments are subject to risk including the possible loss of principal. Past performance is no guarantee of future results.

The information provided is not intended to be a forecast of future events, a guarantee of future results or investment advice. Views expressed may differ from those of the firm as a whole.

ⁱ  The federal funds rate is the rate charged by one depository institution on an overnight sale of immediately available funds (balances at the Federal Reserve) to another depository institution; the rate may vary from depository institution to depository institution and from day to day.

ⁱⁱ  The Federal Reserve Board (the “Fed”) is responsible for the formulation of U.S. policies designed to promote economic growth, full employment, stable prices and a sustainable pattern of international trade and payments.

ⁱⁱⁱ  The London Interbank Offered Rate (“LIBOR”) is the interest rate offered by a specific group of London banks for U.S. dollar deposits of a stated maturity. LIBOR is used as a base index for setting rates of some adjustable rate financial instruments, including adjustable rate mortgages (“ARMs”).

^iv  “Prime money market funds” are money market funds that generally hold a variety of taxable short-term obligations issued by corporations and banks, as well as repurchase agreements and asset-backed commercial paper.

^v  The U.S. Securities and Exchange Commission (the “SEC”) is an agency of the U.S. government. It holds primary responsibility for enforcing the federal securities laws and regulating the securities industry, the nation’s stock and options exchanges, and other activities and organizations, including the electronic securities markets in the U.S.

^vi A basis point is one-hundredth (1/100 or 0.01) of one percent.

4 Western Asset Premium Liquid Reserves 2016 Annual Report

Portfolio at a glance^†(unaudited)

Liquid Reserves Portfolio

The Fund invests all of its investable assets in Liquid Reserves Portfolio, the investment breakdown of which is shown below.

Investment breakdown (%) as a percent of total investments

† The bar graph above represents the composition of the Portfolio’s investments as of August 31, 2016 and August 31, 2015. The Portfolio is actively managed. As a result, the composition of the Portfolio’s investments is subject to change at any time.

‡ Represents less than 0.1%.

Western Asset Premium Liquid Reserves 2016 Annual Report 5

Fund expenses (unaudited)

Example

As a shareholder of the Fund, you may incur two types of costs: (1) transaction costs and (2) ongoing costs, including management fees, service and/or 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.

This example is based on an investment of $1,000 invested on March 1, 2016 and held for the six months ended August 31, 2016.

Actual expenses

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

Hypothetical example for comparison purposes

The table below titled “Based on Hypothetical Total Return” provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio and an assumed rate of return of 5.00% per year 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 the information provided in this table to compare the ongoing costs of investing in the Fund and other funds. To do so, compare the 5.00% hypothetical example relating to the Fund with the 5.00% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table below are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the table 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 transaction costs were included, your costs would have been higher.

Based on actual total return1														Based on hypothetical total return1
Actual Total Return2		Beginning Account Value			Ending Account Value			Annualized Expense Ratio3			Expenses Paid During the Period4				Hypothetical Annualized Total Return			Beginning Account Value		Ending Account Value			Annualized Expense Ratio3			Expenses Paid During the Period4
	0.12%		$	1,000.00		$	1,001.20		0.43	%		$	2.16			5.00	%		$1,000.00		$	1,022.98		0.43	%		$	2.19

¹  For the six months ended August 31, 2016.

²  Assumes the reinvestment of all distributions, including returns of capital, if any, at net asset value. Total return is not annualized, as it may not be representative of the total return for the year. Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of fee waivers and/or expense reimbursements, the total return would have been lower. Past performance figure is no guarantee of future results.

³  Includes the Fund’s share of Liquid Reserves Portfolio’s allocated expenses.

⁴  Expenses (net of fee waivers and/or expense reimbursements) are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year (184), then divided by 366.

6 Western Asset Premium Liquid Reserves 2016 Annual Report

Statement of assets and liabilities

August 31, 2016

Assets:
Investment in Liquid Reserves Portfolio, at value	$	89,192,512
Receivable for Fund shares sold		541
Prepaid expenses		16,935
Total Assets		89,209,988
Liabilities:
Payable for Fund shares repurchased		46,024
Investment management fee payable		12,870
Distributions payable		11,599
Service and/or distribution fees payable		3,774
Trustees’ fees payable		147
Accrued expenses		63,578
Total Liabilities		137,992
Total Net Assets	$	89,071,996
Net Assets:
Par value (Note 3)	$	891
Paid-in capital in excess of par value		89,246,001
Undistributed net investment income		1,884
Accumulated net realized loss on investments allocated from Liquid Reserves Portfolio		(176,780)
Total Net Assets	$	89,071,996
Shares Outstanding		89,060,041
Net Asset Value		$1.00

See Notes to Financial Statements.

Western Asset Premium Liquid Reserves 2016 Annual Report 7

Statement of operations

For the Year Ended August 31, 2016

Investment Income:
Income from Liquid Reserves Portfolio	$	692,689
Allocated expenses from Liquid Reserves Portfolio		(176,166)
Allocated waiver from Liquid Reserves Portfolio		160,619
Other income		31,210
Total Investment Income		708,352
Expenses:
Investment management fee (Note 2)		561,971
Service and/or distribution fees (Note 2)		160,563
Transfer agent fees		31,434
Shareholder reports		30,170
Audit and tax fees		28,380
Legal fees		27,281
Registration fees		24,429
Fund accounting fees		6,300
Insurance		3,708
Trustees’ fees		2,702
Excise tax (Note 1)		6
Miscellaneous expenses		2,269
Total Expenses		879,213
Less: Fee waivers and/or expense reimbursements (Note 2)		(310,371)
Net Expenses		568,842
Net Investment Income		139,510
Net Realized Loss on Investments From Liquid Reserves Portfolio		(27,632)
Increase in Net Assets From Operations	$	111,878

See Notes to Financial Statements.

8 Western Asset Premium Liquid Reserves 2016 Annual Report

Statements of changes in net assets

For the Years Ended August 31,	2016		2015
Operations:
Net investment income	$	139,510	$	32,335
Net realized gain (loss)		(27,632)		27,025
Increase in Net Assets From Operations		111,878		59,360
Distributions to Shareholders From (Note 1):
Net investment income		(139,474)		(32,294)
Decrease in Net Assets From Distributions to Shareholders		(139,474)		(32,294)
Fund Share Transactions (Note 3):
Net proceeds from sale of shares		687,371,582		2,521,619,124
Reinvestment of distributions		99,520		10,089
Cost of shares repurchased		(916,770,530)		(2,404,183,990)
Increase (Decrease) in Net Assets From Fund Share Transactions		(229,299,428)		117,445,223
Increase (Decrease) in Net Assets		(229,327,024)		117,472,289
Net Assets:
Beginning of year		318,399,020		200,926,731
End of year*	$	89,071,996	$	318,399,020
*Includes undistributed net investment income of:		$1,884		$1,842

See Notes to Financial Statements.

Western Asset Premium Liquid Reserves 2016 Annual Report 9

Financial highlights

For a share of beneficial interest outstanding throughout each year ended August 31:
	20161			20151			20141			20131			2012
Net asset value, beginning of year		$1.000			$1.000			$1.000			$1.000			$1.000
Income (loss) from operations:
Net investment income		0.001			0.000	2		0.000	2		0.000	2		0.000	2
Net realized gain (loss)2		(0.000)			0.000			(0.000)			(0.000)			0.000
Total income from operations		0.001			0.000	2		0.000	2		0.000	2		0.000	2
Less distributions from:
Net investment income		(0.001)			(0.000)	2		(0.000)	2		(0.000)	2		(0.000)	2
Total distributions		(0.001)			(0.000)	2		(0.000)	2		(0.000)	2		(0.000)	2
Net asset value, end of year		$1.000			$1.000			$1.000			$1.000			$1.000
Total return3		0.13	%		0.01	%		0.01	%		0.01	%		0.01	%
Net assets, end of year (millions)		$89			$318			$201			$419			$445
Ratios to average net assets:
Gross expenses4		0.66	%5		0.61	%5		0.61	%5		0.60	%5		0.50	%
Net expenses4,6,7		0.36			0.21			0.19			0.26			0.32
Net investment income		0.09			0.01			0.01			0.01			0.01

¹  Per share amounts have been calculated using the average shares method.

²  Amount represents less than $0.0005 per share.

³  Performance figures may reflect fee waivers and/or expense reimbursements. In the absence of fee waivers and/or expense reimbursements, the total return would have been lower. Past performance is no guarantee of future results.

⁴  Includes the Fund’s share of Liquid Reserves Portfolio’s allocated expenses.

⁵  The gross expenses do not reflect the reduction of the Fund’s management fee by the amount paid by the Fund for its allocable share of the management fee paid by Liquid Reserves Portfolio.

⁶  As a result of an expense limitation arrangement, the ratio of total annual fund operating expenses, other than interest, brokerage, taxes, extraordinary expenses and acquired fund fees and expenses, to average net assets of the Fund did not exceed 0.45%. This expense limitation arrangement cannot be terminated prior to December 31, 2017 without the Board of Trustees’ consent. Additional amounts may be voluntarily waived and/or reimbursed from time to time.

⁷  Reflects fee waivers and/or expense reimbursements.

See Notes to Financial Statements.

10 Western Asset Premium Liquid Reserves 2016 Annual Report

Notes to financial statements

1. Organization and significant accounting policies

Western Asset Premium Liquid Reserves (the “Fund”) is a separate diversified investment series of Legg Mason Partners Premium Money Market Trust (the “Trust”). The Trust, a Maryland statutory trust, is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Fund invests all of its investable assets in Liquid Reserves Portfolio (the “Portfolio”), a separate investment series of Master Portfolio Trust, that has the same investment objective as the Fund.

The financial statements of the Portfolio, including the schedule of investments, are contained elsewhere in this report and should be read in conjunction with the Fund’s financial statements.

The following are significant accounting policies consistently followed by the Fund and are in conformity with U.S. generally accepted accounting principles (“GAAP”). Estimates and assumptions are required to be made regarding assets, liabilities and changes in net assets resulting from operations when financial statements are prepared. Changes in the economic environment, financial markets and any other parameters used in determining these estimates could cause actual results to differ. Subsequent events have been evaluated through the date the financial statements were issued.

(a) Investment valuation. The Fund records its investment in the Portfolio at value. The value of such investment in the Portfolio reflects the Fund’s proportionate interest (0.2% at August 31, 2016) in the net assets of the Portfolio.

GAAP establishes a disclosure hierarchy that categorizes the inputs to valuation techniques used to value assets and liabilities at measurement date. The disclosure and valuation of securities held by the Portfolio are discussed in Note 1(a) of the Portfolio’s Notes to Financial Statements, which are included elsewhere in this report.

(b) Investment transactions and investment income. Net investment income of the Portfolio is allocated pro rata, based on respective ownership interests, among the Fund and other investors in the Portfolio (the “Holders”) at the time of such determination. Gross realized gains and/or losses of the Portfolio are allocated to the Holders in a manner such that, the net asset values per share of each Holder, after each such allocation is closer to the total of all Holders’ net asset values divided by the aggregate number of shares outstanding for all Holders. The Fund also pays certain other expenses which can be directly attributed to the Fund.

(c) Distributions to shareholders. Distributions from net investment income on the shares of the Fund are declared each business day and are paid monthly. Distributions of net realized gains, if any, are declared at least annually. Distributions to shareholders of the Fund are recorded on the ex-dividend date and are determined in accordance with income tax regulations, which may differ from GAAP.

Western Asset Premium Liquid Reserves 2016 Annual Report 11

Notes to financial statements (cont’d)

(d) Federal and other taxes. It is the Fund’s policy to comply with the federal income and excise tax requirements of the Internal Revenue Code of 1986 (the “Code”), as amended, applicable to regulated investment companies. Accordingly, the Fund intends to distribute its taxable income and net realized gains, if any, to shareholders in accordance with timing requirements imposed by the Code. Therefore, no federal or state income tax provision is required in the Fund’s financial statements. However, due to the timing of when distributions are made by the Fund, the Fund may be subject to an excise tax of 4% of the amount by which 98% of the Fund’s annual taxable income and 98.2% of net realized gains exceed the distributions from such taxable income and realized gains for the calendar year. The Fund paid $6 of Federal excise taxes attributable to calendar year 2015 in March 2016.

Management has analyzed the Fund’s tax positions taken on income tax returns for all open tax years and has concluded that as of August 31, 2016, no provision for income tax is required in the Fund’s financial statements. The Fund’s federal and state income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.

(e) Reclassification. GAAP requires that certain components of net assets be reclassified to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset value per share. During the current year, the following reclassifications have been made:

	Undistributed Net Investment Income		Paid-in Capital
(a)	$	6	$	(6)

^(a)  Reclassifications are due to a non-deductible excise tax paid by the Fund.

2. Investment management agreement and other transactions with affiliates

Legg Mason Partners Fund Advisor, LLC (“LMPFA”) is the Fund’s and the Portfolio’s investment manager and Western Asset Management Company (“Western Asset”) is the Fund’s and the Portfolio’s subadviser. LMPFA and Western Asset are wholly-owned subsidiaries of Legg Mason, Inc. (“Legg Mason”).

Under the investment management agreement, the Fund pays an investment management fee, calculated daily and monthly, at an annual rate of 0.35% of the Fund’s average daily net assets.

Since the Fund invests all of its investable assets in Liquid Reserves Portfolio, the investment management fee of the Fund will be reduced by the investment management fee allocated to the Fund by Liquid Reserves Portfolio.

LMPFA provides administrative and certain oversight services to the Fund. LMPFA delegates to the subadviser the day-to-day portfolio management of the Fund. For its services, LMPFA pays 70% of the net management fee it receives from the Fund.

12 Western Asset Premium Liquid Reserves 2016 Annual Report

As a result of an expense limitation arrangement between the Fund and LMPFA, the ratio of total annual fund operating expenses, other than interest, brokerage, taxes, extraordinary expenses and acquired fund fees and expenses, to average net assets of the Fund did not exceed 0.45%. This expense limitation arrangement cannot be terminated prior to December 31, 2017 without the Board of Trustees’ consent. Additional amounts may be voluntarily waived and/or reimbursed from time to time.

During the year ended August 31, 2016, fees waived and/or expenses reimbursed amounted to $310,371.

LMPFA is permitted to recapture amounts waived and/or reimbursed to the Fund during the same fiscal year if the Fund’s total annual operating expenses have fallen to a level below the expense limitation (“expense cap”) in effect at the time the fees were earned or the expenses incurred. In no case will LMPFA recapture any amount that would result, on any particular business day of the Fund, in the Fund’s total annual operating expenses exceeding the expense cap or any other lower limit then in effect.

Legg Mason Investor Services, LLC, a wholly-owned broker-dealer subsidiary of Legg Mason, serves as the Fund’s sole and exclusive distributor.

The Fund has adopted a Rule 12b-1 shareholder services and distribution plan and under that plan the Fund pays service and/or distribution fees calculated at the annual rate not to exceed 0.10% of the Fund’s average daily net assets. Service and/or distribution fees are accrued daily and paid monthly. For the year ended August 31, 2016, the service and/or distribution fees paid amounted to $160,563, of which $148,482 was voluntarily waived. Such waiver is voluntary and may be reduced or terminated at any time.

All officers and one Trustee of the Trust are employees of Legg Mason or its affiliates and do not receive compensation from the Trust.

3. Shares of beneficial interest

At August 31, 2016, the Trust had an unlimited number of shares of beneficial interest authorized with a par value of $0.00001 per share.

Because the Fund has maintained a $1.00 net asset value per share from inception, the number of shares sold, shares issued on reinvestment of dividends declared, and shares repurchased, is equal to the dollar amount shown in the Statements of Changes in Net Assets for the corresponding fund share transactions.

4. Income tax information and distributions to shareholders

The tax character of distributions paid during the fiscal years ended August 31, was as follows:

	2016		2015
Distributions paid from:
Ordinary income	$	139,474	$	32,294

Western Asset Premium Liquid Reserves 2016 Annual Report 13

Notes to financial statements (cont’d)

As of August 31, 2016, there were no significant differences between the book and tax components of net assets.

As of August 31, 2016, the Fund had capital losses of $27,633 that have been deferred in the current year as either short-term or long-term losses. These losses will be deemed to occur on the first day of the next taxable year in the same character as they were originally deferred. These losses must be utilized before any of the Fund’s capital loss carryforward may be utilized.

As of August 31, 2016, the Fund had the following net capital loss carryforward remaining:

Year of Expiration	Amount
8/31/2017	$	(149,148	)

This amount will be available to offset any future taxable capital gains.

5. Money market fund reform

The U.S. Securities and Exchange Commission has adopted certain reforms to the rules that govern money market funds (the “Reforms”). Under the Reforms, the Fund may no longer use the amortized cost method of valuation to seek to maintain a stable NAV of $1.00 per share. Instead, on or about October 11, 2016, the Fund will calculate its NAV based on the current market-based value of its portfolio securities. In addition, as of that date, the Fund will use “basis point” rounding to calculate its share value to the nearest 1/100th of 1%, which means, that share prices will be rounded to four decimal places (i.e., $1.0000). In addition, no later than October 14, 2016, the Fund may impose fees upon the sale of shares or temporarily suspend the ability to sell shares if the Fund’s liquidity falls below required minimums because of market conditions or other factors.

6. Subsequent event

Subsequent to the year ended August 31, 2016, shareholder redemptions from the Fund exceeded 50% of Fund net assets as of August 31, 2016.

14 Western Asset Premium Liquid Reserves 2016 Annual Report

Report of independent registered public

accounting firm

The Board of Trustees and Shareholders

Legg Mason Partners Premium Money Market Trust:

We have audited the accompanying statement of assets and liabilities of Western Asset Premium Liquid Reserves (the “Fund”), a series of Legg Mason Partners Premium Money Market Trust, as of August 31, 2016, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of August 31, 2016, by examination of the underlying Liquid Reserves Portfolio. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Western Asset Premium Liquid Reserves as of August 31, 2016, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

New York, New York

October 20, 2016

Western Asset Premium Liquid Reserves 2016 Annual Report 15

Additional information (unaudited)

Information about Trustees and Officers

The business and affairs of Western Asset Premium Liquid Reserves (the “Fund”) are conducted by management under the supervision and subject to the direction of its Board of Trustees. The business address of each Trustee is c/o Jane Trust, Legg Mason, 100 International Drive, 11th Floor, Baltimore, Maryland 21202. Information pertaining to the Trustees and officers of the Fund is set forth below.

The Statement of Additional Information includes additional information about Trustees and is available, without charge, upon request by calling the Fund at 1-877-721-1926 or 1-203-103-6002.

Independent Trustees†:
Elliott J. Berv
Year of birth	1943
Position(s) with Trust	Trustee and Chairman
Term of office1 and length of time served2	Since 1989 (Chairman of the Board since 2016)
Principal occupation(s) during past five years	President and Chief Executive Officer, Catalyst (consulting) (since 1984); formerly, Chief Executive Officer, Rocket City Enterprises (media) (2000 to 2005)
Number of funds in fund complex overseen by Trustee	52
Other board memberships held by Trustee during past five years	None
Jane F. Dasher
Year of birth	1949
Position(s) with Trust	Trustee
Term of office1 and length of time served2	Since 1999
Principal occupation(s) during past five years	Chief Financial Officer, Long Light Capital, LLC, formerly known as Korsant Partners, LLC (a family investment company) (since 1997)
Number of funds in fund complex overseen by Trustee	52
Other board memberships held by Trustee during past five years	None
Mark T. Finn
Year of birth	1943
Position(s) with Trust	Trustee
Term of office1 and length of time served2	Since 1989
Principal occupation(s) during past five years	Adjunct Professor, College of William & Mary (since 2002); Chairman, Chief Executive Officer and Owner, Vantage Consulting Group, Inc. (investment management) (since 1988); Principal/Member, Balvan Partners (investment management) (2002 to 2009)
Number of funds in fund complex overseen by Trustee	52
Other board memberships held by Trustee during past five years	None

16 Western Asset Premium Liquid Reserves

Independent Trustees cont’d
Stephen R. Gross
Year of birth	1947
Position(s) with Trust	Trustee
Term of office1 and length of time served2	Since 1986
Principal occupation(s) during past five years	Chairman Emeritus (since 2011) and formerly, Chairman, HLB Gross Collins, P.C. (accounting and consulting firm) (1974 to 2011); Executive Director of Business Builders Team, LLC (since 2005); Principal, Gross Consulting Group, LLC (since 2011); CEO, Gross Capital Partners, LLC (since 2011); CEO, Trusted CFO Solutions, LLC (since 2011)
Number of funds in fund complex overseen by Trustee	52
Other board memberships held by Trustee during past five years	None
Richard E. Hanson, Jr.
Year of birth	1941
Position(s) with Trust	Trustee
Term of office1 and length of time served2	Since 1985
Principal occupation(s) during past five years	Retired; formerly, Headmaster, The New Atlanta Jewish Community High School, Atlanta, Georgia (1996 to 2000)
Number of funds in fund complex overseen by Trustee	52
Other board memberships held by Trustee during past five years	None
Diana R. Harrington
Year of birth	1940
Position(s) with Trust	Trustee
Term of office1 and length of time served2	Since 1992
Principal occupation(s) during past five years	Babson Distinguished Professor of Finance, Babson College (since 1992)
Number of funds in fund complex overseen by Trustee	52
Other board memberships held by Trustee during past five years	None
Susan M. Heilbron
Year of birth	1945
Position(s) with Trust	Trustee
Term of office1 and length of time served2	Since 1994
Principal occupation(s) during past five years	Retired; formerly, President, Lacey & Heilbron (communications consulting) (1990 to 2002); formerly, General Counsel and Executive Vice President, The Trump Organization (1986 to 1990); formerly, Senior Vice President, New York State Urban Development Corporation (1984 to 1986); formerly, Associate, Cravath, Swaine & Moore (1980 to 1984) and (1977 to 1979)
Number of funds in fund complex overseen by Trustee	52
Other board memberships held by Trustee during past five years	Formerly, Director, Lincoln Savings Bank, FSB (1991 to 1994); formerly, Director, Trump Shuttle, Inc. (air transportation) (1989 to 1990); formerly, Director, Alexander’s Inc. (department store) (1987 to 1990)

Western Asset Premium Liquid Reserves 17

Additional information (unaudited) (cont’d)

Information about Trustees and Officers

Independent Trustees cont’d
Susan B. Kerley
Year of birth	1951
Position(s) with Trust	Trustee
Term of office1 and length of time served2	Since 1992
Principal occupation(s) during past five years	Investment Consulting Partner, Strategic Management Advisors, LLC (investment consulting) (since 1990)
Number of funds in fund complex overseen by Trustee	52
Other board memberships held by Trustee during past five years	Director and Trustee (since 1990) and formerly, Chairman (2005 to 2012) of various series of MainStay Family of Funds (66 funds); Investment Company Institute (ICI) Board of Governors (2006 to 2014); ICI Executive Committee (2011 to 2014); Chairman of the Independent Directors Council (2012 to 2014)
Alan G. Merten
Year of birth	1941
Position(s) with Trust	Trustee
Term of office1 and length of time served2	Since 1990
Principal occupation(s) during past five years	President Emeritus (since 2012) and formerly, President, George Mason University (1996 to 2012)
Number of funds in fund complex overseen by Trustee	52
Other board memberships held by Trustee during past five years	Director Emeritus (since 2012) and formerly, Director, Cardinal Financial Corporation (2006 to 2012); Trustee, First Potomac Realty Trust (since 2005); Director, DeVry Inc. (educational services) (since 2012); formerly, Director, Xybernaut Corporation (information technology) (2004 to 2006); formerly, Director, Digital Net Holdings, Inc. (2003 to 2004); formerly, Director, Comshare, Inc. (information technology) (1985 to 2003)
R. Richardson Pettit
Year of birth	1942
Position(s) with Trust	Trustee
Term of office1 and length of time served2	Since 1990
Principal occupation(s) during past five years	Retired; Duncan Professor of Finance Emeritus, University of Houston (1977 to 2006); previous academic or management positions include: University of Washington, University of Pennsylvania and Purdue University
Number of funds in fund complex overseen by Trustee	52
Other board memberships held by Trustee during past five years	None

18 Western Asset Premium Liquid Reserves

Interested Trustee and Officer:
Jane Trust, CFA
Year of birth	1962
Position(s) with Trust	Trustee, President, and Chief Executive Officer
Term of office1 and length of time served2	Since 2015
Principal occupation(s) during past five years	Managing Director of Legg Mason & Co., LLC (“Legg Mason & Co.”) (since 2016); Officer and/or Trustee/Director of 159 funds associated with Legg Mason Partners Fund Advisor, LLC (“LMPFA”) or its affiliates (since 2015); President and Chief Executive Officer of LMPFA (since 2015); formerly, Senior Vice President of LMPFA (2015); formerly, Director of ClearBridge, LLC (formerly, Legg Mason Capital Management, LLC) (2007 to 2014); formerly, Managing Director of Legg Mason Investment Counsel & Trust Co. (2000 to 2007)
Number of funds in fund complex overseen by Trustee	152
Other board memberships held by Trustee during past five years	None
Additional Officers:
Ted P. Becker Legg Mason 620 Eighth Avenue, 49th Floor, New York, NY 10018
Year of birth	1951
Position(s) with Trust	Chief Compliance Officer
Term of office1 and length of time served2	Since 2007
Principal occupation(s) during past five years	Director of Global Compliance at Legg Mason (since 2006); Chief Compliance Officer of LMPFA (since 2006); Managing Director of Compliance of Legg Mason & Co. (since 2005); Chief Compliance Officer of certain mutual funds associated with Legg Mason & Co. or its affiliates (since 2006)
Susan Kerr Legg Mason 620 Eighth Avenue, 49th Floor, New York, NY 10018
Year of birth	1949
Position(s) with Trust	Chief Anti-Money Laundering Compliance Officer
Term of office1 and length of time served2	Since 2013
Principal occupation(s) during past five years	Assistant Vice President of Legg Mason & Co. and Legg Mason Investor Services, LLC (“LMIS”) (since 2010); Chief Anti-Money Laundering Compliance Officer of certain mutual funds associated with Legg Mason & Co. or its affiliates (since 2013) and Anti-Money Laundering Compliance Officer of LMIS (since 2012); Senior Compliance Officer of LMIS (since 2011); formerly, AML Consultant, DTCC (2010); formerly, AML Consultant, Rabobank Netherlands, (2009); formerly, First Vice President, Director of Marketing & Advertising Compliance and Manager of Communications Review Group at Citigroup Inc. (1996 to 2008)

Western Asset Premium Liquid Reserves 19

Additional information (unaudited) (cont’d)

Information about Trustees and Officers

Additional Officers cont’d
Jenna Bailey Legg Mason 100 First Stamford Place, 6th Floor, Stamford, CT 06902
Year of birth	1978
Position(s) with Trust	Identity Theft Prevention Officer
Term of office1 and length of time served2	Since 2015
Principal occupation(s) during past five years	Identity Theft Prevention Officer of certain mutual funds associated with Legg Mason & Co. or its affiliates (since 2015); Compliance Officer of Legg Mason & Co. (since 2013); Assistant Vice President of Legg Mason & Co. (since 2011); formerly, Associate Compliance Officer of Legg Mason & Co. (2011 to 2013); formerly, Risk Manager of U.S. Distribution of Legg Mason & Co. (2007 to 2011)
Robert I. Frenkel Legg Mason 100 First Stamford Place, 6th Floor, Stamford, CT 06902
Year of birth	1954
Position(s) with Trust	Secretary and Chief Legal Officer
Term of office1 and length of time served2	Since 2007
Principal occupation(s) during past five years	Vice President and Deputy General Counsel of Legg Mason (since 2006); Managing Director and General Counsel — U.S. Mutual Funds for Legg Mason & Co. (since 2006) and Legg Mason & Co. predecessors (since 1994); Secretary and Chief Legal Officer of certain mutual funds associated with Legg Mason & Co. or its affiliates (since 2006) and Legg Mason & Co. predecessors (prior to 2006)
Thomas C. Mandia Legg Mason 100 First Stamford Place, 6th Floor, Stamford, CT 06902
Year of birth	1962
Position(s) with Trust	Assistant Secretary
Term of office1 and length of time served2	Since 2007
Principal occupation(s) during past five years	Managing Director and Deputy General Counsel of Legg Mason & Co. (since 2005) and Legg Mason & Co. predecessors (prior to 2005); Secretary of LMPFA (since 2006); Assistant Secretary of certain mutual funds associated with Legg Mason & Co. or its affiliates (since 2006) and Legg Mason & Co. predecessors (prior to 2006); Secretary of LM Asset Services, LLC (“LMAS”) (since 2002) and Legg Mason Fund Asset Management, Inc. (“LMFAM”) (since 2013) (formerly registered investment advisers)

20 Western Asset Premium Liquid Reserves

Additional Officers cont’d
Richard F. Sennett Legg Mason 100 International Drive, 7th Floor, Baltimore, MD 21202
Year of birth	1970
Position(s) with Trust	Principal Financial Officer
Term of office1 and length of time served2	Since 2011
Principal occupation(s) during past five years	Principal Financial Officer and Treasurer of certain mutual funds associated with Legg Mason & Co. or its affiliates (since 2011 and since 2013); Managing Director of Legg Mason & Co. and Senior Manager of the Treasury Policy group for Legg Mason & Co.’s Global Fiduciary Platform (since 2011); formerly, Chief Accountant within the SEC’s Division of Investment Management (2007 to 2011); formerly, Assistant Chief Accountant within the SEC’s Division of Investment Management (2002 to 2007)
Steven Frank Legg Mason 620 Eighth Avenue, 49th Floor, New York, NY 10018
Year of birth	1967
Position(s) with Trust	Treasurer
Term of office1 and length of time served2	Since 2014
Principal occupation(s) during past five years	Director of Legg Mason & Co. (since 2015); Treasurer of certain mutual funds associated with Legg Mason & Co. or its affiliates (since 2010); formerly, Vice President of Legg Mason & Co. and Legg Mason & Co. predecessors (2002 to 2015); formerly, Controller of certain mutual funds associated with Legg Mason & Co. or its affiliates (prior to 2010)
Jeanne M. Kelly Legg Mason 620 Eighth Avenue, 49th Floor, New York, NY 10018
Year of birth	1951
Position(s) with Trust	Senior Vice President
Term of office1 and length of time served2	Since 2007
Principal occupation(s) during past five years	Senior Vice President of certain mutual funds associated with Legg Mason & Co. or its affiliates (since 2007); Senior Vice President of LMPFA (since 2006); President and Chief Executive Officer of LMAS and LMFAM (since 2015); Managing Director of Legg Mason & Co. (since 2005) and Legg Mason & Co. predecessors (prior to 2005); formerly, Senior Vice President of LMFAM (2013 to 2015)

† Trustees who are not “interested persons” of the Fund within the meaning of Section 2(a)(19) of the Investment Company Act of 1940, as amended (the “1940 Act”).

¹  Each Trustee and officer serves until his or her respective successor has been duly elected and qualified or until his or her earlier death, resignation, retirement or removal.

²  Indicates the earliest year in which the Trustee became a board member for a fund in the Legg Mason fund complex or the officer took such office.

Western Asset Premium Liquid Reserves 21

Important tax information (unaudited)

The following information is provided with respect to the distributions paid during the taxable year ended August 31, 2016:

Record date:	Daily	Daily
Payable date:	September 2015 - December 2015	January 2016 - August 2016
Interest from Federal Obligations	2.48%	6.19%

The law varies in each state as to whether and what percentage of dividend income attributable to Federal obligations is exempt from state income tax. We recommend that you consult with your tax adviser to determine if any portion of the dividends you received is exempt from state income taxes.

The following information is applicable to non-U.S. resident shareholders:

50% of the ordinary income distributions paid monthly by the Fund represent Qualified Net Interest Income and Qualified Short-Term Capital Gains eligible for exemption from U.S. withholding tax for nonresident aliens and foreign corporations.

Please retain this information for your records.

22 Western Asset Premium Liquid Reserves

Schedule of investments

August 31, 2016

Liquid Reserves Portfolio

Security	Rate			Maturity Date		Face Amount		Value
Short-Term Investments — 101.2%
Certificates of Deposit — 29.6%
Abbey National Treasury Services PLC		0.420	%		9/2/16	$	411,424,000	$	411,424,000
Abbey National Treasury Services PLC		0.410	%		9/7/16		51,636,000		51,636,000
Bank of Montreal		0.610	%		9/19/16		242,000,000		242,000,000
Bank of Montreal		0.630	%		9/20/16		238,928,000		238,927,997
Bank of Montreal		0.660	%		10/4/16		116,000,000		115,997,876
Bank of Montreal		0.900	%		1/4/17		246,750,000		246,750,000
Bank of Nova Scotia		0.860	%		9/8/16		475,000,000		475,000,000
Bank of Nova Scotia		0.904	%		1/3/17		437,784,000		437,784,000	(a)
Bank of Tokyo-Mitsubishi UFJ NY		0.764	%		10/3/16		198,856,000		198,856,000	(a)
BNP Paribas NY Branch		0.710	%		10/3/16		467,856,000		467,856,000
BNP Paribas NY Branch		1.128	%		2/13/17		149,100,000		149,100,000	(a)
Canadian Imperial Bank of Commerce		0.400	%		9/1/16		100,000,000		100,000,000
Canadian Imperial Bank of Commerce		0.870	%		9/14/16		81,800,000		81,800,000
Canadian Imperial Bank of Commerce		0.650	%		10/3/16		490,000,000		490,000,000
Canadian Imperial Bank of Commerce		0.894	%		1/3/17		452,784,000		452,784,000	(a)
Chase Bank USA N.A.		1.215	%		5/26/17		112,366,000		112,366,000	(a)
Citibank N.A.		0.650	%		10/3/16		500,000,000		500,000,000
Citibank N.A.		0.700	%		10/6/16		455,105,000		455,105,000
Citibank N.A.		0.720	%		10/24/16		272,820,000		272,820,000
Citibank N.A.		0.900	%		12/15/16		346,250,000		346,250,000
Credit Suisse NY		0.950	%		9/13/16		50,000,000		50,003,308
Credit Suisse NY		0.950	%		9/16/16		50,000,000		50,004,136
Credit Suisse NY		1.223	%		3/3/17		50,000,000		50,000,000	(a)
DnB NOR Bank ASA		0.390	%		9/7/16		86,590,000		86,590,000
Landesbank Hessen-Thuringen		0.610	%		9/22/16		139,356,000		139,356,000
Landesbank Hessen-Thuringen		0.650	%		10/4/16		150,000,000		150,000,000
Mitsubishi UFJ Trust & Banking NY		0.690	%		10/3/16		245,000,000		245,002,175
Mitsubishi UFJ Trust & Banking NY		0.880	%		10/5/16		96,300,000		96,300,453
Mitsubishi UFJ Trust & Banking NY		0.800	%		10/21/16		240,000,000		240,000,000
Mitsubishi UFJ Trust & Banking NY		1.020	%		12/22/16		151,819,000		151,819,000
Mizuho Bank Ltd.		0.744	%		10/3/16		443,856,000		443,856,000	(a)
Mizuho Bank Ltd.		0.750	%		10/13/16		38,928,000		38,928,000
Mizuho Bank Ltd.		0.800	%		10/21/16		243,250,000		243,250,000
Mizuho Bank Ltd.		0.900	%		11/22/16		186,854,000		186,854,000
National Bank of Canada		0.470	%		9/1/16		177,856,000		177,856,000
Natixis NY		0.860	%		10/31/16		417,856,000		417,856,000
Norinchukin Bank		0.460	%		9/7/16		100,000,000		100,000,000

See Notes to Financial Statements.

Liquid Reserves Portfolio 2016 Annual Report 23

Schedule of investments (cont’d)

August 31, 2016

Liquid Reserves Portfolio

Security	Rate			Maturity Date		Face Amount		Value
Certificates of Deposit — continued
Norinchukin Bank		0.650	%		9/9/16	$	26,938,000	$	26,938,000
Norinchukin Bank		0.660	%		9/16/16		174,428,000		174,428,721
Norinchukin Bank		0.600	%		9/26/16		272,500,000		272,500,000
Norinchukin Bank		0.600	%		9/29/16		195,000,000		195,000,000
Norinchukin Bank		0.900	%		11/22/16		190,747,000		190,747,000
Norinchukin Bank		0.900	%		11/28/16		70,070,000		70,070,000
Norinchukin Bank		0.900	%		11/29/16		73,963,000		73,963,000
Oversea-Chinese Banking Corp. Ltd.		0.600	%		9/8/16		77,856,000		77,856,000
Oversea-Chinese Banking Corp. Ltd.		0.410	%		9/9/16		221,590,000		221,590,000
Oversea-Chinese Banking Corp. Ltd.		0.560	%		9/20/16		295,000,000		295,000,000
Royal Bank of Canada		0.850	%		9/21/16		190,750,000		190,750,000
Royal Bank of Canada		0.940	%		11/1/16		195,418,000		195,489,345
Skandinaviska Enskilda Banken AB		0.850	%		10/21/16		69,058,000		69,067,481
Skandinaviska Enskilda Banken AB		0.910	%		12/14/16		107,325,000		107,325,000
Sumitomo Mitsui Banking Corp.		0.650	%		10/3/16		495,000,000		494,997,804
Sumitomo Mitsui Banking Corp.		0.744	%		10/3/16		202,856,000		202,856,000	(a)
Sumitomo Mitsui Banking Corp.		0.670	%		10/7/16		515,000,000		515,000,000
Sumitomo Mitsui Banking Corp.		0.800	%		10/17/16		238,928,000		238,928,000
Sumitomo Mitsui Trust & Banking Co., Ltd.		0.420	%		9/1/16		77,856,000		77,856,000
Sumitomo Mitsui Trust & Banking Co., Ltd.		0.420	%		9/6/16		71,410,000		71,410,000
Sumitomo Mitsui Trust & Banking Co., Ltd.		0.650	%		9/26/16		100,000,000		100,000,000
Sumitomo Mitsui Trust & Banking Co., Ltd.		0.690	%		9/27/16		75,000,000		74,999,990
Sumitomo Mitsui Trust & Banking Co., Ltd.		0.700	%		9/29/16		33,478,000		33,477,996
Sumitomo Mitsui Trust & Banking Co., Ltd.		0.700	%		10/5/16		244,464,000		244,464,000
Sumitomo Mitsui Trust & Banking Co., Ltd.		0.620	%		10/17/16		127,249,000		127,249,000
Sumitomo Mitsui Trust & Banking Co., Ltd.		0.900	%		10/21/16		480,000,000		480,000,000
Sumitomo Mitsui Trust & Banking Co., Ltd.		1.238	%		2/13/17		24,400,000		24,400,000	(a)
Toronto Dominion Bank NY		0.410	%		9/6/16		10,121,000		10,121,000
Toronto Dominion Bank NY		0.620	%		10/19/16		112,891,000		112,891,000
Toronto Dominion Bank NY		0.920	%		1/9/17		120,000,000		120,000,000
UBS AG		0.690	%		10/20/16		373,392,000		373,392,000
UBS AG		0.980	%		1/11/17		19,464,000		19,464,000
Wells Fargo Bank N.A.		0.850	%		9/1/16		125,000,000		125,000,000
Wells Fargo Bank N.A.		0.850	%		10/7/16		48,660,000		48,674,503
Wells Fargo Bank N.A.		1.000	%		12/12/16		18,200,000		18,200,000
Wells Fargo Bank N.A.		0.896	%		12/28/16		362,784,000		362,784,000	(a)
Westpac Banking Corp.		0.870	%		9/16/16		29,429,000		29,429,122
Total Certificates of Deposit									14,780,450,907

See Notes to Financial Statements.

24 Liquid Reserves Portfolio 2016 Annual Report

Liquid Reserves Portfolio

Security	Rate			Maturity Date		Face Amount		Value
Commercial Paper — 40.3%
Abbey National Treasury Services PLC		0.500	%		9/1/16	$	116,000,000	$	116,000,000	(b)
Abbey National Treasury Services PLC		0.500	%		9/1/16		77,856,000		77,856,000	(b)
Abbey National Treasury Services PLC		0.914	%		9/14/16		99,750,000		99,717,221	(b)
ABN AMRO Funding USA LLC		0.864	%		9/1/16		232,000,000		232,000,000	(b)(c)
ABN AMRO Funding USA LLC		0.651	%		10/3/16		142,000,000		141,917,956	(b)(c)
ABN AMRO Funding USA LLC		0.651	%		10/3/16		100,000,000		99,942,222	(b)(c)
ABN AMRO Funding USA LLC		0.651	%		10/7/16		253,000,000		252,835,550	(b)(c)
ABN AMRO Funding USA LLC		0.701	%		10/18/16		50,000,000		49,954,305	(b)(c)
ABN AMRO Funding USA LLC		0.701	%		10/19/16		170,000,000		169,841,333	(b)(c)
ABN AMRO Funding USA LLC		0.975	%		12/2/16		33,730,000		33,646,387	(b)(c)
ABN AMRO Funding USA LLC		1.003	%		12/21/16		31,142,000		31,045,979	(b)(c)
ANZ National International Ltd.		0.650	%		9/7/16		36,205,000		36,201,078	(b)(c)
ANZ National International Ltd.		0.874	%		9/9/16		85,000,000		84,983,567	(b)(c)
ANZ National International Ltd.		0.884	%		9/12/16		100,000,000		99,973,111	(b)(c)
ANZ National International Ltd.		0.914	%		1/5/17		100,000,000		99,681,500	(b)(c)
ANZ National International Ltd.		1.108	%		2/21/17		48,600,000		48,600,000	(a)(c)
ASB Finance Ltd.		0.844	%		9/2/16		75,000,000		74,998,250	(b)(c)
ASB Finance Ltd.		1.135	%		3/2/17		88,000,000		88,000,000	(a)(c)
Australia & New Zealand Banking Group Ltd.		0.601	%		9/16/16		455,000,000		454,886,250	(b)(c)
Australia & New Zealand Banking Group Ltd.		0.601	%		9/20/16		395,000,000		394,874,917	(b)(c)
Australia & New Zealand Banking Group Ltd.		0.601	%		9/21/16		95,571,000		95,539,143	(b)(c)
Australia & New Zealand Banking Group Ltd.		0.651	%		10/3/16		583,000,000		582,663,155	(b)(c)
Bank Nederlandse Gemeenten NV		0.420	%		9/6/16		225,000,000		224,986,875	(b)(c)
Bank Nederlandse Gemeenten NV		0.440	%		9/7/16		60,000,000		59,995,600	(b)(c)
Bank of Nova Scotia		0.850	%		9/20/16		116,784,000		116,731,609	(b)(c)
Bank of Nova Scotia		0.874	%		9/23/16		192,330,000		192,227,744	(b)(c)
Bank of Nova Scotia		0.651	%		9/27/16		100,000,000		99,953,056	(b)(c)
Bank of Nova Scotia		0.651	%		9/28/16		500,000,000		499,756,250	(b)(c)
Bank of Tokyo-Mitsubishi UFJ NY		0.300	%		9/1/16		475,000,000		475,000,000	(a)
BNP Paribas Fortis SA		0.300	%		9/1/16		485,000,000		485,000,000	(b)
BNP Paribas Fortis SA		1.003	%		12/1/16		184,700,000		184,233,120	(b)
BNP Paribas NY Branch		0.711	%		10/21/16		195,000,000		194,807,709	(b)
BNZ International Funding Ltd.		1.133	%		3/1/17		235,000,000		235,000,000	(a)(c)
Caisse des Depots et Consignations		0.701	%		10/4/16		78,010,000		77,959,944	(b)(d)
Caisse des Depots et Consignations		0.641	%		10/6/16		500,000,000		499,688,888	(b)(d)
Commonwealth Bank of Australia		0.601	%		9/19/16		245,000,000		244,926,500	(b)(c)
Commonwealth Bank of Australia		0.888	%		1/11/17		99,750,000		99,750,000	(a)(c)
Cooperatieve Rebobank U.A.		0.840	%		9/15/16		91,161,000		91,131,221	(b)

See Notes to Financial Statements.

Liquid Reserves Portfolio 2016 Annual Report 25

Schedule of investments (cont’d)

August 31, 2016

Liquid Reserves Portfolio

Security	Rate			Maturity Date		Face Amount		Value
Commercial Paper — continued
Cooperatieve Rebobank U.A.		0.751	%		11/14/16	$	35,035,000	$	34,980,988	(b)
CPPIB Capital Inc.		0.450	%		9/27/16		14,014,000		14,009,445	(b)(d)
Credit Agricole Corporate and Investment Bank		0.320	%		9/1/16		96,584,000		96,584,000	(b)
Credit Agricole Corporate and Investment Bank		0.470	%		9/6/16		450,000,000		449,970,625	(b)
Credit Agricole Corporate and Investment Bank		0.801	%		10/20/16		77,856,000		77,771,223	(b)
Credit Agricole Corporate and Investment Bank		0.862	%		10/31/16		245,000,000		244,648,834	(b)
Credit Suisse NY		1.005	%		9/19/16		172,270,000		172,183,865	(b)
Credit Suisse NY		1.005	%		9/19/16		19,464,000		19,454,268	(b)
Credit Suisse NY		0.782	%		9/29/16		177,700,000		177,592,195	(b)
Credit Suisse NY		0.782	%		9/29/16		77,856,000		77,808,767	(b)
Danske Corp.		0.620-0.859	%		9/1/16		144,948,000		144,948,000	(b)(c)
Danske Corp.		0.620-0.859	%		9/1/16		100,000,000		100,000,000	(b)(c)
Danske Corp.		0.601	%		9/19/16		390,000,000		389,883,000	(b)(c)
Danske Corp.		0.661	%		10/17/16		143,998,000		143,876,562	(b)(c)
DBS Bank Ltd.		0.591	%		9/8/16		200,000,000		199,977,055	(b)(c)
DBS Bank Ltd.		0.650	%		9/21/16		69,136,000		69,111,034	(b)(c)
DBS Bank Ltd.		0.651	%		9/23/16		100,000,000		99,960,889	(b)(c)
DBS Bank Ltd.		0.651	%		9/23/16		100,000,000		99,960,278	(b)(c)
DBS Bank Ltd.		0.651	%		10/11/16		31,142,000		31,119,509	(b)(c)
DBS Bank Ltd.		0.904	%		12/14/16		237,000,000		236,383,800	(b)(c)
DBS Bank Ltd.		0.913	%		12/20/16		166,784,000		166,320,248	(b)(c)
DnB NOR Bank ASA		0.864	%		9/1/16		89,000,000		89,000,000	(b)(c)
DnB NOR Bank ASA		0.884	%		9/12/16		95,000,000		94,974,456	(b)(c)
HSBC Bank PLC		1.008	%		11/18/16		38,400,000		38,316,800	(b)(c)
ING U.S. Funding LLC		0.702	%		9/7/16		250,000,000		249,970,833	(b)
ING U.S. Funding LLC		0.702	%		9/8/16		90,000,000		89,987,750	(b)
Kreditanstalt Fur Wiederaufbau International Finance Inc.		0.420	%		9/2/16		250,000,000		249,997,083	(b)
Landesbank Hessen-Thuringen		0.864	%		9/1/16		98,000,000		98,000,000	(b)(c)
Landesbank Hessen-Thuringen		0.884	%		9/21/16		142,500,000		142,430,333	(b)(c)
Landesbank Hessen-Thuringen		0.752	%		11/8/16		432,499,000		431,886,293	(b)(c)
Landesbank Hessen-Thuringen		0.955	%		12/1/16		239,750,000		239,174,267	(b)(c)
Mizuho Bank Ltd.		0.907	%		11/23/16		89,534,000		89,347,185	(b)(c)
National Australia Bank Ltd.		0.701	%		11/2/16		67,734,000		67,652,343	(b)(c)
National Bank of Canada		0.490	%		9/28/16		300,000,000		299,889,749	(b)(c)
National Bank of Canada		0.490	%		9/28/16		77,856,000		77,827,388	(b)(c)
Natixis NY		0.300	%		9/1/16		100,000,000		100,000,000	(b)
Nordea Bank AB		0.601	%		9/20/16		110,000,000		109,965,167	(b)(c)

See Notes to Financial Statements.

26 Liquid Reserves Portfolio 2016 Annual Report

Liquid Reserves Portfolio

Security	Rate			Maturity Date		Face Amount		Value
Commercial Paper — continued
Nordea Bank AB		0.601	%		9/20/16	$	23,356,000	$	23,348,604	(b)(c)
NRW Bank		0.611	%		9/15/16		179,500,000		179,457,419	(b)(c)
NRW Bank		0.621	%		9/19/16		107,000,000		106,966,830	(b)(c)
NRW Bank		0.621	%		9/20/16		245,000,000		244,919,831	(b)(c)
NRW Bank		0.621	%		9/20/16		70,000,000		69,980,050	(b)(c)
NRW Bank		0.546	%		9/21/16		500,000,000		499,848,611	(b)(c)
NRW Bank		0.546	%		9/22/16		500,000,000		499,841,041	(b)(c)
NRW Bank		0.621	%		9/23/16		379,250,000		379,106,306	(b)(c)
Ontario Teachers’ Finance Trust		0.905	%		9/1/16		100,000,000		100,000,000	(b)(c)
Ontario Teachers’ Finance Trust		0.900	%		9/6/16		77,856,000		77,846,268	(b)(c)
Ontario Teachers’ Finance Trust		0.995	%		12/20/16		92,310,000		92,030,762	(b)(c)
Oversea-Chinese Banking Corp. Ltd.		0.601	%		9/6/16		135,000,000		134,988,750	(b)(c)
Oversea-Chinese Banking Corp. Ltd.		0.712	%		10/24/16		163,928,000		163,756,650	(b)(c)
Oversea-Chinese Banking Corp. Ltd.		0.712	%		10/25/16		100,000,000		99,893,500	(b)(c)
Oversea-Chinese Banking Corp. Ltd.		0.752	%		11/10/16		35,000,000		34,948,958	(b)(c)
Sanofi		0.682	%		11/14/16		96,450,000		96,315,184	(b)(c)
Societe Generale		0.300-0.400	%		9/1/16		523,000,000		523,000,000	(b)(c)
Societe Generale		0.300-0.400	%		9/1/16		77,856,000		77,856,000	(b)(c)
Societe Generale		0.702	%		9/9/16		134,000,000		133,979,156	(b)(c)
Sumitomo Mitsui Banking Corp.		0.902	%		11/28/16		163,497,000		163,137,307	(b)(c)
Sumitomo Mitsui Trust & Banking Co., Ltd.		0.884	%		9/16/16		182,500,000		182,433,083	(b)(c)
Sumitomo Mitsui Trust & Banking Co., Ltd.		0.651	%		9/26/16		150,000,000		149,932,292	(b)(c)
Sumitomo Mitsui Trust & Banking Co., Ltd.		0.651	%		9/29/16		280,000,000		279,858,444	(b)(c)
Sumitomo Mitsui Trust & Banking Co., Ltd.		0.762	%		10/3/16		143,000,000		142,903,395	(b)(c)
Sumitomo Mitsui Trust & Banking Co., Ltd.		0.762	%		10/3/16		27,249,000		27,230,592	(b)(c)
Sumitomo Mitsui Trust & Banking Co., Ltd.		0.772	%		10/14/16		183,392,000		183,223,330	(b)(c)
Sumitomo Mitsui Trust & Banking Co., Ltd.		0.802	%		10/18/16		195,000,000		194,796,334	(b)(c)
Svenska Handelsbanken AB		0.830	%		9/7/16		33,478,000		33,473,369	(b)(c)
Svenska Handelsbanken AB		0.601	%		9/21/16		228,928,000		228,851,690	(b)(c)
Swedish Export Credit		0.834	%		9/23/16		288,000,000		287,853,920	(b)
Toronto Dominion Holdings USA		0.651	%		10/7/16		390,000,000		389,746,500	(b)(c)
Toronto Dominion Holdings USA		0.651	%		10/7/16		77,856,000		77,805,394	(b)(c)
Toronto Dominion Holdings USA		0.904	%		1/5/17		646,750,000		644,712,737	(b)(c)
United Overseas Bank Ltd.		0.440	%		9/9/16		200,000,000		199,980,445	(b)(c)
United Overseas Bank Ltd.		0.530	%		9/26/16		229,675,000		229,590,467	(b)(c)
United Overseas Bank Ltd.		0.712	%		10/7/16		212,856,000		212,704,872	(b)(c)
United Overseas Bank Ltd.		0.702	%		10/21/16		188,928,000		188,744,320	(b)(c)
Westpac Banking Corp.		0.864	%		9/16/16		100,000,000		99,964,167	(b)(c)
Total Commercial Paper									20,116,297,250

See Notes to Financial Statements.

Liquid Reserves Portfolio 2016 Annual Report 27

Schedule of investments (cont’d)

August 31, 2016

Liquid Reserves Portfolio

Security	Rate			Maturity Date		Face Amount		Value
Corporate Bonds & Notes — 0.0%
Coca-Cola Co.		1.800	%		9/1/16	$	22,030,000	$	22,030,000
Medium-Term Notes — 0.0%
Toronto-Dominion Bank		0.811	%		9/8/16		19,464,000		19,464,907
Time Deposits — 13.7%
BNP Paribas NY Branch		0.300	%		9/1/16		275,000,000		275,000,000
CIBC World Markets Corp.		0.300	%		9/1/16		381,905,000		381,905,000
Credit Agricole CIB		0.320	%		9/1/16		1,117,216,000		1,117,216,000
DNB Bank ASA		0.300	%		9/1/16		830,000,000		830,000,000
Natixis SA		0.300	%		9/1/16		1,150,000,000		1,150,000,000
Nordea Bank Finland PLC		0.290	%		9/1/16		405,000,000		405,000,000
Skandinaviska Enskilda Banken AB		0.300	%		9/1/16		900,000,000		900,000,000
Svenska Handelsbanken AB		0.300	%		9/1/16		875,000,000		875,000,000
Swedbank AB		0.300	%		9/1/16		880,000,000		880,000,000
Total Time Deposits									6,814,121,000
U.S. Government Agencies — 0.8%
Federal Home Loan Mortgage Corp. (FHLMC), Notes		0.564	%		4/27/17		377,856,000		377,805,836	(a)
U.S. Treasury Bills — 0.4%
U.S. Treasury Bills		0.475	%		6/22/17		180,000,000		179,304,690	(b)
U.S. Treasury Notes — 13.5%
U.S. Treasury Notes		0.388	%		10/31/16		1,192,389,000		1,192,367,302	(a)
U.S. Treasury Notes		0.409	%		4/30/17		1,331,819,000		1,331,837,509	(a)
U.S. Treasury Notes		0.412	%		7/31/17		2,108,454,000		2,108,209,796	(a)
U.S. Treasury Notes		0.503	%		10/31/17		616,280,000		616,129,396	(a)
U.S. Treasury Notes		0.607	%		1/31/18		18,296,000		18,308,794	(a)
U.S. Treasury Notes		0.525	%		4/30/18		1,132,065,000		1,132,163,652	(a)
U.S. Treasury Notes		0.509	%		7/31/18		320,000,000		320,016,441	(a)
Total U.S. Treasury Notes									6,719,032,890
Repurchase Agreements — 2.9%
Bank of America Corp. tri-party repurchase agreement dated 8/31/16; Proceeds at maturity — $1,151,309,722; (Fully collateralized by various U.S. government agency obligations and corporate bonds and notes, 0.000% to 8.875% due 9/1/16 to 10/15/97; Market value — $1,191,333,534)		0.500	%		11/21/16		1,150,000,000		1,150,000,000
Mitsubishi UFJ Trust & Banking Corp. tri-party repurchase agreement dated 8/24/16; Proceeds at maturity — $200,298,111; (Fully collateralized by various corporate bonds and notes and money market instruments, 0.000% to 6.191% due 10/5/16 to 12/1/45; Market value — $211,079,417)		0.654	%		11/21/16		200,000,000		200,000,000

See Notes to Financial Statements.

28 Liquid Reserves Portfolio 2016 Annual Report

Liquid Reserves Portfolio

Security	Rate			Maturity Date		Face Amount		Value
Repurchase Agreements — continued
Mitsubishi UFJ Trust & Banking Corp. tri-party repurchase agreement dated 8/24/16; Proceeds at maturity — $100,149,056; (Fully collateralized by various corporate bonds and notes, municipal bonds and money market instruments, 0.000% to 7.672% due 12/1/17 to 10/1/47; Market value — $105,000,002)		0.654	%		11/21/16	$	100,000,000	$	100,000,000
Total Repurchase Agreements									1,450,000,000
Total Investments — 101.2% (Cost — $50,478,507,480#)									50,478,507,480
Liabilities in Excess of Other Assets — (1.2)%									(575,336,084	)
Total Net Assets — 100.0%								$	49,903,171,396

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

^(b)  Rate shown represents yield-to-maturity.

^(c)  Commercial paper exempt from registration under Section 4(2) of the Securities Act of 1933. This security may be resold in transactions that are exempt from registration, normally to qualified institutional buyers. This security has been deemed liquid pursuant to guidelines approved by the Board of Trustees, unless otherwise noted.

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

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

See Notes to Financial Statements.

Liquid Reserves Portfolio 2016 Annual Report 29

Statement of assets and liabilities

August 31, 2016

Assets:
Investments, at value	$	50,478,507,480
Cash		650
Interest receivable		20,899,611
Total Assets		50,499,407,741
Liabilities:
Payable for securities purchased		594,590,000
Trustees’ fees payable		81,164
Accrued expenses		1,565,181
Total Liabilities		596,236,345
Total Net Assets	$	49,903,171,396
Represented by:
Paid-in-capital	$	49,903,171,396

See Notes to Financial Statements.

30 Liquid Reserves Portfolio 2016 Annual Report

Statement of operations

For the Year Ended August 31, 2016

Investment Income:
Interest	$	250,622,980
Expenses:
Investment management fee (Note 2)		52,782,907
Fund accounting fees		2,809,948
Legal fees		972,863
Trustees’ fees		964,887
Custody fees		324,368
Audit and tax fees		45,230
Miscellaneous expenses		95,894
Total Expenses		57,996,097
Less: Fee waivers and/or expense reimbursements (Note 2)		(52,782,907)
Net Expenses		5,213,190
Net Investment Income		245,409,790
Net Realized Gain on Investments		686,995
Increase in Net Assets From Operations	$	246,096,785

See Notes to Financial Statements.

Liquid Reserves Portfolio 2016 Annual Report 31

Statements of changes in net assets

For the Years Ended August 31,	2016		2015
Operations:
Net investment income	$	245,409,790	$	143,882,505
Net realized gain		686,995		701,909
Increase in Net Assets From Operations		246,096,785		144,584,414
Capital Transactions:
Proceeds from contributions		114,933,457,934		96,487,778,857
In-kind capital contributions (Note 3)		10,124,686,062		—
Value of withdrawals		(138,942,587,255)		(107,494,184,065)
Decrease in Net Assets From Capital Transaction		(13,884,443,259)		(11,006,405,208)
Decrease in Net Assets		(13,638,346,474)		(10,861,820,794)
Net Assets:
Beginning of year		63,541,517,870		74,403,338,664
End of year*	$	49,903,171,396	$	63,541,517,870

See Notes to Financial Statements.

32 Liquid Reserves Portfolio 2016 Annual Report

Financial highlights

For the years ended August 31:
	2016			2015			2014			2013			2012
Net assets, end of year (millions)		$49,903			$63,542			$74,403			$73,576			$61,127
Total return1		0.48	%		0.22	%		0.10	%		0.17	%		0.23	%
Ratios to average net assets:
Gross expenses		0.11	%		0.11	%		0.11	%		0.11	%		0.11	%
Net expenses2,3		0.01			0.01			0.10			0.10			0.10
Net investment income		0.46			0.21			0.10			0.17			0.23

¹  Performance figures may reflect compensating balance arrangements, fee waivers and/or expense reimbursements. In the absence of compensating balance arrangements, fee waivers and/or expense reimbursements, the total return would have been lower. Past performance is no guarantee of future results.

²  The investment manager has voluntarily agreed to waive and/or reimburse 0.10% of Portfolio expenses. This arrangement may be reduced or terminated under certain circumstances. Additional amounts may be voluntarily waived and/or reimbursed from time to time. Prior to August 18, 2014, as a result of a voluntary expense limitation arrangement, the ratio of expenses, other than interest, brokerage, taxes, extraordinary expenses and acquired fund fees and expenses, to average net assets of the Portfolio did not exceed 0.10%.

³  Reflects fee waivers and/or expense reimbursements.

See Notes to Financial Statements.

Liquid Reserves Portfolio 2016 Annual Report 33

Notes to financial statements

1. Organization and significant accounting policies

Liquid Reserves Portfolio (the “Portfolio”) is a separate diversified investment series of Master Portfolio Trust (the “Trust”). The Trust, a Maryland statutory trust, is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Declaration of Trust permits the Trustees to issue beneficial interests in the Portfolio. At August 31, 2016, all investors in the Portfolio were funds advised or administered by the manager of the Portfolio and/or its affiliates.

The following are significant accounting policies consistently followed by the Portfolio and are in conformity with U.S. generally accepted accounting principles (“GAAP”). Estimates and assumptions are required to be made regarding assets, liabilities and changes in net assets resulting from operations when financial statements are prepared. Changes in the economic environment, financial markets and any other parameters used in determining these estimates could cause actual results to differ. Subsequent events have been evaluated through the date the financial statements were issued.

(a) Investment valuation. In accordance with Rule 2a-7 under the 1940 Act, money market instruments are valued at amortized cost, which approximates market value. This method involves valuing portfolio securities at their cost and thereafter assuming a constant amortization to maturity of any discount or premium. The Portfolio’s use of amortized cost is subject to its compliance with certain conditions as specified by Rule 2a-7 under the 1940 Act.

The Board of Trustees is responsible for the valuation process and has delegated the supervision of the daily valuation process to the Legg Mason North Atlantic Fund Valuation Committee (the “Valuation Committee”). The Valuation Committee, pursuant to the policies adopted by the Board of Trustees, is responsible for making fair value determinations, evaluating the effectiveness of the Portfolio’s pricing policies, and reporting to the Board of Trustees.

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

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

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

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

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

34 Liquid Reserves Portfolio 2016 Annual Report

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

ASSETS
Description	Quoted Prices (Level 1)		Other Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Short-term investments†		—	$	50,478,507,480		—	$	50,478,507,480

† See Schedule of Investments for additional detailed categorizations.

(b) Repurchase agreements. The Portfolio may enter into repurchase agreements with institutions that its subadviser has determined are creditworthy. Each repurchase agreement is recorded at cost. Under the terms of a typical repurchase agreement, the Portfolio acquires a debt security subject to an obligation of the seller to repurchase, and of the Portfolio to resell, the security at an agreed-upon price and time, thereby determining the yield during the Portfolio’s holding period. When entering into repurchase agreements, it is the Portfolio’s policy that its custodian or a third party custodian, acting on the Portfolio’s behalf, take possession of the underlying collateral securities, the market value of which, at all times, at least equals the principal amount of the repurchase transaction, including accrued interest. To the extent that any repurchase transaction maturity exceeds one business day, the value of the collateral is marked-to-market and measured against the value of the agreement in an effort to ensure the adequacy of the collateral. If the counterparty defaults, the Portfolio generally has the right to use the collateral to satisfy the terms of the repurchase transaction. However, if the market value of the collateral declines during the period in which the Portfolio seeks to assert its rights or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by the Portfolio may be delayed or limited.

(c) Interest income and expenses. Interest income consists of interest accrued and discount earned (including both original issue and market discount adjusted for amortization of premium) on the investments of the Portfolio. Expenses of the Portfolio are accrued daily. The Portfolio bears all costs of its operations other than expenses specifically assumed by the manager.

(d) Method of allocation. Net investment income of the Portfolio is allocated pro rata, based on respective ownership interests, among the Fund and other investors in the Portfolio (the “Holders”) at the time of such determination. Gross realized gains and/or losses of the Portfolio are allocated to the Holders in a manner such that, the net asset values per share of each Holder, after each such allocation is closer to the total of all Holders’ net asset values divided by the aggregate number of shares outstanding for all Holders.

(e) Credit and market risk. Investments in securities that are collateralized by real estate mortgages are subject to certain credit and liquidity risks. When market conditions result in an increase in default rates of the underlying mortgages and the foreclosure values of underlying real estate properties are materially below the outstanding amount of these

Liquid Reserves Portfolio 2016 Annual Report 35

Notes to financial statements (cont’d)

underlying mortgages, collection of the full amount of accrued interest and principal on these investments may be doubtful. Such market conditions may significantly impair the value and liquidity of these investments and may result in a lack of correlation between their credit ratings and values.

(f) Compensating balance arrangements. The Portfolio has an arrangement with its custodian bank whereby a portion of the custodian’s fees is paid indirectly by credits earned on the Portfolio’s cash on deposit with the bank.

(g) Income taxes. The Portfolio is classified as a partnership for federal income tax purposes. As such, each investor in the Portfolio is treated as owner of its proportionate share of the net assets, income, expenses and realized and unrealized gains and losses of the Portfolio. Therefore, no federal income tax provision is required. It is intended that the Portfolio’s assets will be managed so an investor in the Portfolio can satisfy the requirements of Subchapter M of the Internal Revenue Code.

Management has analyzed the Portfolio’s tax positions taken on income tax returns for all open tax years and has concluded that as of August 31, 2016, no provision for income tax is required in the Portfolio’s financial statements. The Portfolio’s federal and state income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.

(h) Other. Purchases, maturities and sales of money market instruments are accounted for on the date of the transaction. Realized gains and losses are calculated on the identified cost basis.

2. Investment management agreement and other transactions with affiliates

Legg Mason Partners Fund Advisor, LLC (“LMPFA”) is the Portfolio’s investment manager and Western Asset Management Company (“Western Asset”) is the Portfolio’s subadviser. LMPFA and Western Asset are wholly-owned subsidiaries of Legg Mason, Inc. (“Legg Mason”).

Under the investment management agreement, the Portfolio pays an investment management fee, calculated daily and paid monthly, at an annual rate of 0.10% of the Portfolio’s average daily net assets.

LMPFA provides administrative and certain oversight services to the Portfolio. LMPFA delegates to the subadviser the day-to-day portfolio management of the Portfolio. For its services, LMPFA pays Western Asset 70% of the net management fee it receives from the Portfolio.

LMPFA has voluntarily agreed to waive and/or reimburse 0.10% of Portfolio expenses. This arrangement may be reduced or terminated under certain circumstances. Additional amounts may be voluntarily waived and/or reimbursed from time to time.

During the year ended August 31, 2016, fees waived and/or expenses reimbursed amounted to $52,782,907.

36 Liquid Reserves Portfolio 2016 Annual Report

LMPFA is permitted to recapture amounts waived and/or reimbursed to the Portfolio during the same fiscal year under certain circumstances.

All officers and one Trustee of the Trust are employees of Legg Mason or its affiliates and do not receive compensation from the Trust.

3. Investments

On August 29, 2016, Western Asset Institutional Cash Reserves Fund transferred all of its investable assets (including cash and receivables), with a value of $10,124,686,062, to the Portfolio in exchange for an interest in the Portfolio.

4. Derivative instruments and hedging activities

During the year ended August 31, 2016, the Portfolio did not invest in derivative instruments.

5. Money market fund reform

The U.S. Securities and Exchange Commission has adopted certain reforms to the rules that govern money market funds (the “Reforms”). Under the Reforms, the Portfolio may no longer use the amortized cost method of valuation to value its investments. Instead, on or about October 11, 2016, the Portfolio will value its investments using the current market-based value of its portfolio securities. In addition, no later than October 14, 2016, the Portfolio may impose fees upon the withdrawal of interests or temporarily suspend the withdrawal of interests if the Portfolio’s liquidity falls below required minimums because of market conditions or other factors. The Reforms require that feeder funds pass through to their investors such fees or gate imposed by a master fund in which a fund invests.

Liquid Reserves Portfolio 2016 Annual Report 37

Report of independent registered public

accounting firm

The Board of Trustees and Investors

Master Portfolio Trust:

We have audited the accompanying statement of assets and liabilities of Liquid Reserves Portfolio (the “Portfolio”), a series of Master Portfolio Trust, including the schedule of investments, as of August 31, 2016, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Portfolio’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of August 31, 2016, by correspondence with the custodian and broker or by other appropriate auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Liquid Reserves Portfolio as of August 31, 2016, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

New York, New York

October 20, 2016

38 Liquid Reserves Portfolio 2016 Annual Report

Additional information (unaudited)

Information about Trustees and Officers

The Trustees and Officers of the Fund also serve as the Trustees and Officers of the Portfolio. Information about the Trustees and Officers of the Fund can be found on pages 16 through 21 of this report.

Liquid Reserves Portfolio 39

Western Asset

Premium Liquid Reserves

Trustees

Elliott J. Berv*

Chairman

Jane F. Dasher

Mark T. Finn

Stephen R. Gross

Richard E. Hanson, Jr.

Diana R. Harrington

Susan M. Heilbron

Susan B. Kerley

Alan G. Merten

R. Richardson Pettit

Jane Trust

* Effective February 10, 2016, Mr. Berv became Chairman.

Investment manager

Legg Mason Partners Fund Advisor, LLC

Subadviser

Western Asset Management Company

Distributor

Legg Mason Investor Services, LLC

Custodian

State Street Bank and Trust Company

Transfer agent

Boston Financial Data Services, Inc.

2000 Crown Colony Drive

Quincy, MA 02169

Independent registered public accounting firm

KPMG LLP

345 Park Avenue

New York, NY 10154

Western Asset Premium Liquid Reserves

The Fund is a separate investment series of Legg Mason Partners Premium Money Market Trust, a Maryland statutory trust.

Western Asset Premium Liquid Reserves

Legg Mason Funds

620 Eighth Avenue, 49^th Floor

New York, NY 10018

The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Forms N-Q are available on the SEC’s website at www.sec.gov. The Fund’s Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington D.C., and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. To obtain information on Form N-Q, shareholders can call the Fund at 1-877-721-1926 or 1-203-703-6002.

Information on how the Fund voted proxies relating to portfolio securities during the prior 12-month period ended June 30th of each year and a description of the policies and procedures that the Fund uses to determine how to vote proxies related to portfolio transactions are available (1) without charge, upon request, by calling the Fund at 1-877-721-1926 or 1-203-703-6002, (2) at www.leggmason.com/moneymarketfunds and (3) on the SEC’s website at www.sec.gov.

This report is submitted for the general information of the shareholders of Western Asset Premium Liquid Reserves. This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by a current prospectus.

Investors should consider the Fund’s investment objective, risks, charges and expenses carefully before investing. The prospectus contains this and other important information about the Fund. Please read the prospectus carefully before investing.

www.leggmason.com

© 2016 Legg Mason Investor Services, LLC

Member FINRA, SIPC

Legg Mason Funds Privacy and Security Notice

Your Privacy and the Security of Your Personal Information is Very Important to the Legg Mason Funds

This Privacy and Security Notice (the “Privacy Notice”) addresses the Legg Mason Funds’ privacy and data protection practices with respect to nonpublic personal information the Funds receive. The Legg Mason Funds include any funds sold by the Funds’ distributor, Legg Mason Investor Services, LLC, as well as Legg Mason-sponsored closed-end funds and certain closed-end fund managed or sub-advised by Legg Mason or its affiliates. The provisions of this Privacy Notice apply to your information both while you are a shareholder and after you are no longer invested with the Funds.

The Type of Nonpublic Personal Information the Funds Collect About You

The Funds collect and maintain nonpublic personal information about you in connection with your shareholder account. Such information may include, but is not limited to:

• Personal information included on applications or other forms;

• Account balances, transactions, and mutual fund holdings and positions;

• Online account access user IDs, passwords, security challenge question responses; and

• Information received from consumer reporting agencies regarding credit history and creditworthiness (such as the amount of an individual’s total debt, payment history, etc.).

How the Funds Use Nonpublic Personal Information About You

The Funds do not sell or share your nonpublic personal information with third parties or with affiliates for their marketing purposes, or with other financial institutions or affiliates for joint marketing purposes, unless you have authorized the Funds to do so. The Funds do not disclose any nonpublic personal information about you except as may be required to perform transactions or services you have authorized or as permitted or required by law. The Funds may disclose information about you to:

• Employees, agents, and affiliates on a “need to know” basis to enable the Funds to conduct ordinary business or comply with obligations to government regulators;

• Service providers, including the Funds’ affiliates, who assist the Funds as part of the ordinary course of business (such as printing, mailing services, or processing or servicing your account with us) or otherwise perform services on the Funds’ behalf, including companies that may perform marketing services solely for the Funds;

• The Funds’ representatives such as legal counsel, accountants and auditors; and

• Fiduciaries or representatives acting on your behalf, such as an IRA custodian or trustee of a grantor trust.

NOT PART OF THE ANNUAL REPORT

Legg Mason Funds Privacy and Security Notice (cont’d)

Except as otherwise permitted by applicable law, companies acting on the Funds’ behalf are contractually obligated to keep nonpublic personal information the Funds provide to them confidential and to use the information the Funds share only to provide the services the Funds ask them to perform.

The Funds may disclose nonpublic personal information about you when necessary to enforce their rights or protect against fraud, or as permitted or required by applicable law, such as in connection with a law enforcement or regulatory request, subpoena, or similar legal process. In the event of a corporate action or in the event a Fund service provider changes, the Funds may be required to disclose your nonpublic personal information to third parties. While it is the Funds’ practice to obtain protections for disclosed information in these types of transactions, the Funds cannot guarantee their privacy policy will remain unchanged.

Keeping You Informed of the Funds’ Privacy and Security Practices

The Funds will notify you annually of their privacy policy as required by federal law. While the Funds reserve the right to modify this policy at any time they will notify you promptly if this privacy policy changes.

The Funds’ Security Practices

The Funds maintain appropriate physical, electronic and procedural safeguards designed to guard your nonpublic personal information. The Funds’ internal data security policies restrict access to your nonpublic personal information to authorized employees, who may use your nonpublic personal information for Fund business purposes only.

Although the Funds strive to protect your nonpublic personal information, they cannot ensure or warrant the security of any information you provide or transmit to them, and you do so at your own risk. In the event of a breach of the confidentiality or security of your nonpublic personal information, the Funds will attempt to notify you as necessary so you can take appropriate protective steps. If you have consented to the Funds using electronic communications or electronic delivery of statements, they may notify you under such circumstances using the most current email address you have on record with them.

In order for the Funds to provide effective service to you, keeping your account information accurate is very important. If you believe that your account information is incomplete, not accurate or not current, or if you have questions about the Funds’ privacy practices, write the Funds using the contact information on your account statements, email the Funds by clicking on the Contact Us section of the Funds’ website at www.leggmason.com, or contact the Fund at 1-877-721-1926.

NOT PART OF THE ANNUAL REPORT

www.leggmason.com

© 2016 Legg Mason Investor Services, LLC Member FINRA, SIPC

FDXX010348 10/16 SR16-2877

ITEM 2. CODE OF ETHICS.

The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

The Board of Trustees of the registrant has determined that Stephen R. Gross and Jane F. Dasher, possess the technical attributes identified in Instruction 2(b) of Item 3 to Form N-CSR to qualify as “audit committee financial experts,” and have designated Mr. Gross and Ms. Dasher as the Audit Committee’s financial experts. Mr. Gross and Ms. Dasher are “independent” Trustees pursuant to paragraph (a) (2) of Item 3 to Form N-CSR.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

a) Audit Fees. The aggregate fees billed in the last two fiscal years ending August 31, 2015 and August 31, 2016 (the “Reporting Periods”) for professional services rendered by the Registrant’s principal accountant (the “Auditor”) for the audit of the Registrant’s annual financial statements, or services that are normally provided by the Auditor in connection with the statutory and regulatory filings or engagements for the Reporting Periods, were $18,300 in 2015 and $37,200 in 2016.

b) Audit-Related Fees. The aggregate fees billed in the Reporting Period for assurance and related services by the Auditor that are reasonably related to the performance of the Registrant’s financial statements were $0 in 2015 and $0 in 2016.

c) Tax Fees. The aggregate fees billed in the Reporting Periods for professional services rendered by the Auditor for tax compliance, tax advice and tax planning (“Tax Services”) were $7,070 in 2015 and $7,140 in 2016. These services consisted of (i) review or preparation of U.S. federal, state, local and excise tax returns; (ii) U.S. federal, state and local tax planning, advice and assistance regarding statutory, regulatory or administrative developments, and (iii) tax advice regarding tax qualification matters and/or treatment of various financial instruments held or proposed to be acquired or held.

There were no fees billed for tax services by the Auditors to service affiliates during the Reporting Periods that required pre-approval by the Audit Committee.

d) All Other Fees. The aggregate fees billed in the Reporting Periods for products and services provided by the Auditor, other than the services reported in paragraphs (a) through (c) of this Item for the Legg Mason Partners Premium Money Market Trust were $0 in 2015 and $0 in 2016.

All Other Fees. There were no other non-audit services rendered by the Auditor to Legg Mason Partners Fund Advisors, LLC (“LMPFA”), and any entity controlling, controlled by or under common control with LMPFA that provided ongoing services to Legg Mason Partners Premium Money Market Trust requiring pre-approval by the Audit Committee in the Reporting Period.

(e) Audit Committee’s pre–approval policies and procedures described in paragraph (c) (7) of Rule 2-01 of Regulation S-X.

(1) The Charter for the Audit Committee (the “Committee”) of the Board of each registered investment company (the “Fund”) advised by LMPFA or one of their affiliates (each, an “Adviser”) requires that the Committee shall approve (a) all audit and permissible non-audit services to be provided to the Fund and (b) all permissible non-audit services to be provided by the Fund’s independent auditors to the Adviser and any Covered Service Providers if the engagement

relates directly to the operations and financial reporting of the Fund. The Committee may implement policies and procedures by which such services are approved other than by the full Committee.

The Committee shall not approve non-audit services that the Committee believes may impair the independence of the auditors. As of the date of the approval of this Audit Committee Charter, permissible non-audit services include any professional services (including tax services), that are not prohibited services as described below, provided to the Fund by the independent auditors, other than those provided to the Fund in connection with an audit or a review of the financial statements of the Fund. Permissible non-audit services may not include: (i) bookkeeping or other services related to the accounting records or financial statements of the Fund; (ii) financial information systems design and implementation; (iii) appraisal or valuation services, fairness opinions or contribution-in-kind reports; (iv) actuarial services; (v) internal audit outsourcing services; (vi) management functions or human resources; (vii) broker or dealer, investment adviser or investment banking services; (viii) legal services and expert services unrelated to the audit; and (ix) any other service the Public Company Accounting Oversight Board determines, by regulation, is impermissible.

Pre-approval by the Committee of any permissible non-audit services is not required so long as: (i) the aggregate amount of all such permissible non-audit services provided to the Fund, the Adviser and any service providers controlling, controlled by or under common control with the Adviser that provide ongoing services to the Fund (“Covered Service Providers”) constitutes not more than 5% of the total amount of revenues paid to the independent auditors during the fiscal year in which the permissible non-audit services are provided to (a) the Fund, (b) the Adviser and (c) any entity controlling, controlled by or under common control with the Adviser that provides ongoing services to the Fund during the fiscal year in which the services are provided that would have to be approved by the Committee; (ii) the permissible non-audit services were not recognized by the Fund at the time of the engagement to be non-audit services; and (iii) such services are promptly brought to the attention of the Committee and approved by the Committee (or its delegate(s)) prior to the completion of the audit.

(2) For the Legg Mason Partners Premium Money Market Trust, the percentage of fees that were approved by the audit committee, with respect to: Audit-Related Fees were 100% and 100% for 2015 and 2016; Tax Fees were 100% and 100% for 2015 and 2016; and Other Fees were 100% and 100% for 2015 and 2016.

(f) N/A

(g) Non-audit fees billed by the Auditor for services rendered to Legg Mason Partners Premium Money Market Trust, LMPFA and any entity controlling, controlled by, or under common control with LMPFA that provides ongoing services to Legg Mason Partners Premium Money Market Trust during the reporting period were $0 in 2016.

(h) Yes. Legg Mason Partners Premium Money Market Trust’s Audit Committee has considered whether the provision of non-audit services that were rendered to Service Affiliates, which were not pre-approved (not requiring pre-approval), is compatible with maintaining the Accountant’s independence. All services provided by the Auditor to the Legg Mason Partners Premium Money Market Trust or to Service Affiliates, which were required to be pre-approved, were pre-approved as required.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

a) The independent board members are acting as the registrant’s audit committee as specified in Section 3(a)(58)(B) of the Exchange Act. The Audit Committee consists of the following Board members:

Elliott J. Berv

Jane F. Dasher

Mark T. Finn

Stephen R. Gross

Richard E. Hanson, Jr.

Diana R. Harrington

Susan M. Heilbron

Susan B. Kerley

Alan G. Merten

R. Richardson Pettit

b) Not applicable.

ITEM 6. SCHEDULE OF INVESTMENTS.

Included herein under Item 1.

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

Not applicable.

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

Not applicable.

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

Not applicable.

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

Not applicable.

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- 3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the disclosure controls and procedures required by Rule 30a-3(b) under the 1940 Act and 15d-15(b) under the Securities Exchange Act of 1934.

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

ITEM 12. EXHIBITS.

(a) (1) Code of Ethics attached hereto.

Exhibit 99.CODE ETH

(a) (2) Certifications pursuant to section 302 of the Sarbanes-Oxley Act of 2002 attached hereto.

Exhibit 99.CERT

(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 attached hereto.

Exhibit 99.906CERT

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, there unto duly authorized.

Legg Mason Partners Premium Money Market Trust
By:	/s/ Jane Trust
	Jane Trust
	Chief Executive Officer
Date:	October 21, 2016

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/ Jane Trust
	Jane Trust
	Chief Executive Officer
Date:	October 21, 2016
By:	/s/ Richard F. Sennett
	Richard F. Sennett
	Principal Financial Officer
Date:	October 21, 2016