Montgomery Street Income Securities, Inc. (the Fund) is a closed-end, diversified management investment company. The primary investment objective of the Fund is to seek as high a level of current income as is consistent with prudent investment risks, from a diversified portfolio primarily of debt securities. Capital appreciation is a secondary objective. Capital appreciation is a secondary objective. The Fund may invest in the United States Government agencies or government sponsored enterprises. In the normal course of business the Fund trades and holds financial instruments. The Fund may buy and sell (write) call and put options on futures, currencies and swaps agreements (swaptions). Pacific Investment Management Company (PIMCO) acts as the Fund's investment adviser.