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: 811-7510 ACM Municipal Securities Income Fund, Inc. (Exact name of registrant as specified in charter) 1345 Avenue of the Americas, New York, New York 10105 (Address of principal executive offices) (Zip code) Mark R. Manley Alliance Capital Management, L.P. 1345 Avenue of the Americas New York, New York 10105 (Name and address of agent for service) Registrant's telephone number, including area code: (800) 221-5672 Date of fiscal year end: October 31, 2004 Date of reporting period: April 30, 2004 ITEM 1. REPORTS TO STOCKHOLDERS. [LOGO] ALLIANCEBERNSTEIN (SM) Investment Research and Management ACM Municipal Securities Income Fund Closed End Semi-Annual Report--April 30, 2004 Investment Products Offered o Are Not FDIC Insured o May Lose Value o Are Not Bank Guaranteed You may obtain a description of the Fund's proxy voting policies and procedures, without charge, upon request by visiting Alliance Capital's web site at www.alliancebernstein.com (click on Investors, then the "proxy voting policies and procedures" link on the left side of the page), or by going to the Securities and Exchange Commission's web site at www.sec.gov, or by calling Alliance Capital at (800) 227-4618. AllianceBernstein Investment Research and Management, Inc., is an affiliate of Alliance Capital Management L.P., the manager of the funds, and is a member of the NASD. June 25, 2004 Semi-Annual Report This report provides management's discussion of fund performance for ACM Municipal Securities Income Fund (the "Fund") for the semi-annual reporting period ended April 30, 2004. Investment Objective and Policies The Fund is a closed-end management investment company designed to provide high current income exempt from regular federal income tax. The Fund invests substantially all of its assets in investment grade municipal securities. Investment Results The following table provides performance data for the Fund and its benchmark, the Lehman Brothers (LB) Municipal Index, for the six- and 12-month periods ended April 30, 2004. For comparison, returns for the Lipper General Municipal Debt Funds (Leveraged) Average (the "Lipper Average") are also included. The funds that comprise the Lipper Average have generally similar investment objectives to the Fund, although some may have different investment policies and sales and management fees. ------------------------------------------------------------------------------- INVESTMENT RESULTS* Periods Ended April 30, 2004 Returns 6 Months 12 Months ----------------------- ACM Municipal Securities Income Fund (NAV) 2.99% 7.73% Lehman Brothers Municipal Index 1.19% 2.68% Lipper General Municipal Debt Funds (Leveraged) Average 2.21% 4.97% The Fund's market price per share on April 30, 2004 was $11.55. For additional Financial Highlights, please see pages 21-22. * The Fund's investment results are for the periods shown and are based on the net asset value (NAV) as of April 30, 2004. All fees and expenses related to the operation of the Fund have been deducted. Performance assumes reinvestment of distributions and does not account for taxes. Past performance is no guarantee of future results. The unmanaged Lehman Brothers (LB) Municipal Index does not reflect fees and expenses associated with the active management of a mutual fund portfolio. The Index is a total return performance benchmark for the long-term, investment grade, tax-exempt bond market. For the six- and 12-month periods ended April 30, 2004, the Lipper General Municipal Debt Funds (Leveraged) Average consisted of 65 and 64 funds, respectively. These funds have generally similar investment objectives to ACM Municipal Securities Income Fund, although some may have different investment policies and sales and management fees. An investor cannot invest directly in an index or average, and their results are not indicative of the performance for any specific investment, including ACM Municipal Securities Income Fund. ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- ACM Municipal Securities Income Fund o 1 For the six-month period ended April 30, 2004, the municipal bond market posted positive returns even though long municipal rates rose by 0.13%. During this period, the Fund outperformed its benchmark, the Lehman Brothers Municipal Index. The Fund's stronger relative performance was largely the result of certain holdings being advance refunded, as well as its overweight position in corporate-backed bonds. Security selection in the general obligation and tobacco settlement sectors also contributed positively to the Fund's performance. In addition, the Fund's leveraged structure benefited its performance, primarily because of historically low borrowing costs. During the six-month reporting period, the Fund also outperformed its peer group, as represented by the Lipper Average. Market Review and Investment Strategy From October 31, 2003 to April 30, 2004, long-term municipal bond yields increased by approximately 13 basis points. Over that time period, the long municipal bond market slightly underperformed the taxable bond market on a pre-tax basis, but outperformed on an after-tax basis. For example, the LB Municipal Index gained 1.19% during the six-month period ended April 30, 2004 while the LB U.S. Aggregate Index, representing taxable bonds, generated a pre-tax return of 1.25% over the same period. The Treasury bond component of the aggregate index posted a lower pre-tax return of 0.75%. As of April 30, 2004, 30-year municipal bonds were yielding approximately 95% of comparable maturity Treasury bonds. Continued weak economic conditions, as well as minimal concern for inflation, contributed to declining municipal bond yields through early March 2004. As signs of economic recovery emerged in the latter part of March and into early April, municipal bond yields started to rise in concert with taxable yields. In anticipation of a more imminent reaction by the U.S. Federal Reserve to the stronger economic indicators, the market began to push shorter maturity bond yields higher at a faster pace than longer maturity bonds. As a result, the difference between 30-year and five-year short-term municipal bond yields declined by 0.43%. The yield curve, a plot of bond yields sorted by ascending maturity, normally slopes upward for longer maturity bonds. When the difference in yield between short- and long-term bonds declines, the change in the shape of the curve is referred to as a "flattening." When the curve flattens, the cost, as measured by the decline in yield, of reducing interest rate sensitivity by moving from longer maturity bonds to shorter maturity bonds, declines. The prolonged low rate environment has resulted in an increased demand for lower-rated bonds that carry higher yields. As demand for those higher yielding bonds increased, the incremental difference in yield compared to better quality bonds declined. As a result, higher yielding bonds, in general, generated strong relative performance over the period. Given their lower credit profiles, the health care and industrial development sectors led the market in performance ------------------------------------------------------------------------------- 2 o ACM Municipal Securities Income Fund over the past six months. Two of the weakest performing sectors, pre-refunded bonds and housing bonds, were high credit quality sectors. Pre-refunded bonds typically have very short effective maturities so rising short-term rates hurt the performance of those securities. Continued concerns regarding increased refinancing activity limited price improvement in municipal housing bonds. Municipal housing bonds are secured by homeowners' mortgages. As homeowners prepay their mortgages, municipal housing bonds are redeemed at par (100% of face value). Typically, lower yields cause bond prices to increase, but if the market anticipates that a bond may be redeemed in the near term, it is unlikely to value the bonds at a price much above par. ------------------------------------------------------------------------------- ACM Municipal Securities Income Fund o 3 PORTFOLIO OF INVESTMENTS April 30, 2004 (unaudited) Standard Principal & Poor's Amount Rating (000) Value ------------------------------------------------------------------------------- Long-Term Municipal Bonds-171.3% Alabama-3.6% Jefferson Cnty Wtr and Swr Rev FGIC Ser 02B Prerefunded 8/01/12 @ 100 5.00%, 2/01/41 AAA $ 1,535 $ 1,660,778 Jefferson Cnty Wtr and Swr Rev FGIC Ser 02B 5.00%, 2/01/41 AAA 2,465 2,694,319 -------------- 4,355,097 -------------- Alaska-4.7% Alaska International Airport MBIA Ser 03B 5.00%, 10/01/26 AAA 1,000 995,950 Alaska Muni Bond Bank Auth MBIA Ser 03E 5.25%, 12/01/26 AAA 3,000 3,079,350 Alaska Muni Bond Bank Auth MBIA Ser 04G 5.00%, 2/15/22 AAA 1,585 1,610,629 -------------- 5,685,929 -------------- Arizona-1.3% Arizona Cap Facs Fin Corp (Arizona St Univ Proj) 6.25%, 9/01/32(a) Baa3 1,550 1,606,869 -------------- California-15.5% Burbank Redev Agy FGIC Ser 03 5.625%, 12/01/28 AAA 1,660 1,760,131 California Dept of Wtr Ser 02A 5.375%, 5/01/22(a) A3 2,000 2,050,840 California St General Obligation Ser 03 5.00%, 2/01/32 BBB 2,450 2,319,807 5.00%, 2/01/33 BBB 1,100 1,040,644 California St General Obligation Ser 04 5.00%, 2/01/33 BBB 1,000 946,040 Golden St Tobacco Settlement XLCA Ser 03B 5.50%, 6/01/33 AAA 3,000 3,097,170 ------------------------------------------------------------------------------- 4 o ACM Municipal Securities Income Fund Standard Principal & Poor's Amount Rating (000) Value ------------------------------------------------------------------------------- Golden St Tobacco Settlement RADIAN Ser 03B 5.50%, 6/01/43 AA $ 3,000 $ 3,004,110 Pomona Lease Rev AMBAC Ser 03 5.50%, 6/01/24 AAA 1,465 1,552,563 5.50%, 6/01/34 AAA 3,000 3,140,160 -------------- 18,911,465 -------------- Colorado-0.8% Colorado Toll Rev (Hwy E-470) Ser 00 Zero coupon, 9/01/35 BBB- 10,000 983,600 -------------- Connecticut-7.2% Connecticut Gaming Auth (Mohegan Tribe) Ser 01 6.25%, 1/01/31(b) BBB- 3,000 3,136,860 Connecticut St General Obligation MBIA Ser 412 8.64%, 12/01/11(b)(c) AAA 5,000 5,625,900 -------------- 8,762,760 -------------- District of Columbia-4.8% District of Columbia Tobacco Settlement Ser 01 6.75%, 5/15/40 BBB 6,320 5,805,173 -------------- Florida-17.0% Collier Cnty Hlth Fac Rev (The Moorings Proj) Ser 94 7.00%, 12/01/19 A- 2,000 2,093,620 Florida Hsg Fin Corp Rev MFHR (Westlake Apts) FSA Ser 02-D1 AMT 5.40%, 3/01/42 AAA 8,780 8,846,113 Florida Hsg Fin Corp Rev MFHR (Westminster Apts) FSA Ser 02-E1 AMT 5.40%, 4/01/42 AAA 2,850 2,875,764 Lee Cnty Hlth Fac Rev (Shell Point Village Proj) Ser 99A 5.50%, 11/15/29 BBB- 3,670 3,449,910 Miami Beach Hlth Fac Rev (Mount Sinai Med Ctr) 6.75%, 11/15/24(b) BB 2,000 1,963,040 ------------------------------------------------------------------------------- ACM Municipal Securities Income Fund o 5 Standard Principal & Poor's Amount Rating (000) Value ------------------------------------------------------------------------------- Orange Cnty Hlth Fac Rev (Orlando Regl Healthcare) Ser 02 5.75%, 12/01/32 A- $ 1,400 $ 1,431,276 -------------- 20,659,723 -------------- Hawaii-2.5% Hawaii Elec Rev XLCA Ser 03B AMT 5.00%, 12/01/22 AAA 3,000 2,989,110 -------------- Illinois-7.0% Chicago Arpt Rev (O'Hare Intl Arpt) XLCA Ser B-1 5.25%, 1/01/34 AAA 3,100 3,144,330 Chicago Hsg Agy SFMR (Mortgage Rev) GNMA/FNMA Ser 02B AMT 6.00%, 10/01/33 AAA 710 757,975 Cook Cnty Sch Dist FSA Ser 04 4.60%, 12/01/20(e) AAA 1,000 837,180 Illinois Dev Fin Auth Gas Rev (Peoples Gas Light) AMBAC Ser 03 5.00%, 2/01/33 AAA 2,000 1,969,920 Metropolitan Pier & Exposition Rev (McCormick Pl) MBIA Ser 02A 5.25%, 6/15/42 AAA 1,750 1,770,108 -------------- 8,479,513 -------------- Indiana-7.0% Indiana Bd Bk Rev FSA Ser 04B 5.00%, 2/01/21 AAA 1,100 1,127,203 Warrick Cnty Poll Ctl Rev (Southern IN Gas & Electric) Ser 93B AMT 6.00%, 5/01/23 A- 7,290 7,392,060 -------------- 8,519,263 -------------- Louisiana-0.1% Calcasieu Parish Hsg Agy SFMR (Mortgage Rev) GNMA Ser 97A AMT 6.40%, 4/01/32(a) Aaa 95 97,479 -------------- Maine-0.9% Jay Solid Waste Disp Rev (International Paper Co) Ser 99B AMT 6.20%, 9/01/19 BBB 1,000 1,065,440 -------------- ------------------------------------------------------------------------------- 6 o ACM Municipal Securities Income Fund Standard Principal & Poor's Amount Rating (000) Value ------------------------------------------------------------------------------- Massachusetts-11.8% Mass General Obligation Ser 02 Prerefunded 11/01/12 @ 100 5.25%, 11/01/30 AA- $ 3,310 $ 3,657,980 Mass General Obligation Ser 02 5.25%, 11/01/30 AA- 1,690 1,848,421 Mass Hlth & Ed Fac Hosp Rev (New England Med Ctr) MBIA Ser 94 9.48%, 7/01/18(c) AAA 5,000 5,247,300 Mass Hsg Fin Agy MFHR (Rental Rev) AMBAC Ser 00A AMT 6.00%, 7/01/41 AAA 2,965 3,086,624 Mass Hsg Fin Agy MFHR (Rental Rev) MBIA Ser 00H AMT 6.65%, 7/01/41 AAA 545 581,956 -------------- 14,422,281 -------------- Michigan-5.9% Michigan St Hosp Rev (Trinity Hlth) Ser 00A 6.00%, 12/01/27 AA- 3,000 3,190,950 Saginaw Hosp Fac Rev (Covenant Med Ctr) Ser 00F 6.50%, 7/01/30 A 3,775 4,049,631 -------------- 7,240,581 -------------- Minnesota-1.9% Bass Brook Poll Ctl Rev (Minnesota Pwr & Light Co) Ser 92 6.00%, 7/01/22 A 2,250 2,264,423 -------------- Mississippi-7.6% Adams Cnty Poll Ctl Rev (International Paper Co) Ser 99 AMT 6.25%, 9/01/23 BBB 5,000 5,244,550 Gulfport Hosp Fac Rev (Mem Hosp at Gulfport Proj) Ser 01A 5.75%, 7/01/31(a) A2 4,000 4,053,440 -------------- 9,297,990 -------------- Nevada-1.7% Carson City Hosp Rev (Carson-Tahoe Hosp Proj) RADIAN Ser 03A 5.00%, 9/01/23 AA 2,100 2,051,532 -------------- New Jersey-3.1% New Jersey St Edl Facs AMBAC Ser 02A-213 9.32%, 9/01/21(a)(b)(c) Aaa 3,400 3,750,336 -------------- ------------------------------------------------------------------------------- ACM Municipal Securities Income Fund o 7 Standard Principal & Poor's Amount Rating (000) Value ------------------------------------------------------------------------------- New Mexico-0.6% Dona Ana Cnty Tax Rev AMBAC Ser 03 5.25%, 5/01/25(a) Aaa $ 750 $ 769,448 -------------- New York-10.4% New York City General Obligation Ser 04I 5.00%, 8/01/21 A 3,300 3,312,870 New York City Indl Dev Agy Rev (Terminal One Group) Ser 94 AMT 6.125%, 1/01/24(a) A3 8,100 8,282,898 New York City Indl Dev Agy Rev (British Airways) Ser 98 AMT 5.25%, 12/01/32 BB+ 1,500 1,103,430 -------------- 12,699,198 -------------- North Dakota-2.5% North Dakota Hsg Fin Agy SFMR (Mortgage Rev) Ser 98E AMT 5.25%, 1/01/30(a) Aa2 3,070 3,025,516 -------------- Ohio-10.8% Cuyahoga Cnty Hosp Fac Rev (University Hosp Hlth) Ser 00 7.50%, 1/01/30 BBB 2,400 2,633,136 Fairfield Cnty Hosp Fac Rev (Fairfield Med Ctr Proj) RADIAN Ser 03 5.00%, 6/15/23 AA 1,255 1,248,825 Ohio Hsg Fin Agy MFHR (Mortgage Rev) GNMA Ser 97 AMT 6.15%, 3/01/29(a) Aaa 4,945 5,059,081 Ohio State Wtr Dev Auth (North Star) Ser 95 AMT 6.45%, 9/01/20 A+ 4,075 4,250,795 -------------- 13,191,837 -------------- Pennsylvania-7.6% Pennsylvania Parking Fac Rev (30th St Station) ACA Ser 02 AMT 5.875%, 6/01/33 A 2,050 2,107,154 Pennsylvania Hsg Fin Agy SFMR (Mortgage Rev) Ser 99-68A AMT 6.15%, 10/01/30 AA+ 7,000 7,170,450 -------------- 9,277,604 -------------- South Carolina-0.4% Richland Lexington Arpt Rev (Columbia Met Arpt) FSA Ser 04 AMT 5.125%, 1/01/25 AAA 500 484,950 -------------- ------------------------------------------------------------------------------- 8 o ACM Municipal Securities Income Fund Standard Principal & Poor's Amount Rating (000) Value ------------------------------------------------------------------------------- Tennessee-9.1% Tenn Ed Loan Rev (Educational Funding of South) Ser 97B AMT 6.20%, 12/01/21(a) Aa2 $10,600 $ 11,046,790 -------------- Texas-13.0% Dallas TX Arpt Rev (Fort Worth Intl Arpt) MBIA Ser 03A AMT 5.25%, 11/01/25 AAA 2,000 2,016,340 Harris Cnty Ser 03 5.00%, 10/01/23 AA+ 1,950 1,996,956 Harris Cnty Toll Rev FSA Ser 02 5.125%, 8/15/32 AAA 5,000 5,021,350 Lower Colorado Riv Auth AMBAC Ser 03 5.25%, 5/15/25 AAA 1,800 1,846,818 Lower Colorado Riv Auth MBIA Ser 02 5.00%, 5/15/31 AAA 3,000 2,977,950 Matagorda Cnty Rev (Centerpoint Energy Houston Electric LLC) Ser 04 5.60%, 3/01/27 BBB 1,000 999,910 Seguin Ed Fac Rev (Texas Lutheran Univ) Ser 04 5.25%, 9/01/28 BBB- 1,000 928,960 -------------- 15,788,284 -------------- Utah-2.1% Salt Lake City Wtr Rev AMBAC Ser 04 5.00%, 7/01/23(a) Aaa 1,500 1,518,975 Davis Cnty Sales Tax Rev AMBAC Ser 03B 5.25%, 10/01/23 AAA 1,005 1,037,070 -------------- 2,556,045 -------------- Washington-7.4% Pilchuck Dev Pub Corp Spec Fac (BF Goodrich) Ser 93 AMT 6.00%, 8/01/23 BBB- 7,500 7,508,025 Seattle Hsg Auth Rev MFHR (Wisteria Ct Proj) GNMA Ser 03 5.20%, 10/20/28(a) Aaa 1,475 1,491,476 -------------- 8,999,501 -------------- Wisconsin-3.0% Wisconsin General Obligation Ser 03 5.00%, 11/01/26 AA- 3,700 3,704,403 -------------- ------------------------------------------------------------------------------- ACM Municipal Securities Income Fund o 9 Value ------------------------------------------------------------------------------- Total Investments-171.3% (cost $203,289,172) $ 208,492,140 Other assets less liabilities-2.6% 3,207,245 Preferred Stock, at redemption value-(73.9)% (90,000,000) -------------- Net Assets Applicable to Common Shareholders-100%(f) $ 121,699,385 -------------- INTEREST RATE SWAP TRANSACTIONS (see Note C) Rate Type ------------------------- Payments Payments Swap Notional Termination made by received by Unrealized Counterparty Amount Date the Fund the Fund Depreciation ------------------------------------------------------------------------------- BMA* Municipal J.P. Morgan $3,400,000 11/18/2004 1.297% Swap IndexTM $ (4,163) BMA* Municipal J.P. Morgan 5,000,000 7/8/2005 1.257 Swap IndexTM (579) --------- $ (4,742) * BMA (Bond Market Association) (a) Moody's or Fitch Rating. (b) Private Placement. (c) Inverse Floater Security-Security with variable interest rate that moves in the opposite direction of short-term interest rates. (d) Variable rate coupon, rate shown as of April 30, 2004. (e) Initial yield is presented. Interest rate after 12/01/07 will be 5.00%. (f) Portfolio percentages are calculated based on net assets applicable to common shareholders. Glossary of Terms: ACA - American Capital Access (Financial Guaranty Corporation) AMBAC - American Municipal Bond Assurance Corporation AMT - Alternative Minimum Tax FGIC - Financial Guaranty Insurance Company FNMA - Federal National Mortgage Association FSA - Financial Security Assurance, Inc. GNMA - Government National Mortgage Association MBIA - Municipal Bond Investors Assurance Corporation MFHR - Multi-Family Housing Revenue RADIAN - Radian Group, Inc. SFMR - Single Family Mortgage Revenue XLCA - XL Capital Assurance, Inc. See notes to financial statements. ------------------------------------------------------------------------------- 10 o ACM Municipal Securities Income Fund STATEMENT OF ASSETS & LIABILITIES April 30, 2004 (unaudited) Assets Investments in securities, at value (cost $203,289,172) $ 208,492,140 Interest receivable 3,778,067 Receivable for investment securities sold 2,015,440 Prepaid expenses 52,872 Total assets 214,338,519 Liabilities Due to custodian 1,883,446 Unrealized depreciation of swap contracts 4,742 Payable for investment securities purchased 508,930 Advisory fee payable 102,901 Administrative fee payable 26,345 Dividend payable--preferred shares 10,037 Accrued expenses and other liabilities 102,733 Total liabilities 2,639,134 Preferred Stock, at redemption value $.01 par value per share; 3,600 shares Auction Preferred Stock authorized, issued and outstanding at $25,000 per share liquidation preference 90,000,000 Net Assets Applicable to Common Shareholders $ 121,699,385 Composition of Net Assets Applicable to Common Shareholders Common Stock, $.01 par value per share; 99,996,400 shares authorized, 11,107,575 shares issued and outstanding $ 111,076 Additional paid-in capital 140,477,630 Undistributed net investment income 764,284 Accumulated net realized loss on investment transactions (24,851,831) Net unrealized appreciation of investments 5,198,226 Net Assets Applicable to Common Shareholders $ 121,699,385 Net Asset Value Applicable to Common Shareholders (based on 11,107,575 common shares outstanding) $10.96 See notes to financial statements. ------------------------------------------------------------------------------- ACM Municipal Securities Income Fund o 11 STATEMENT OF OPERATIONS Six Months Ended April 30, 2004 (unaudited) Investment Income Interest $ 6,039,051 Expenses Advisory fee $ 542,115 Administrative fee 162,634 Auction Preferred Stock--auction agent's fees 113,554 Audit and legal 60,636 Custodian 55,645 Printing 20,884 Registration fees 17,112 Directors' fees and expenses 13,525 Transfer agency 13,189 Miscellaneous 23,388 Total expenses 1,022,682 Net investment income 5,016,369 Realized and Unrealized Gain (Loss) on Investment Transactions Net realized loss on: Investment transactions (820,532) Swap transactions (2,245) Net change in unrealized appreciation/depreciation of: Investments 73,909 Swaps (4,742) Net loss on investment transactions (753,610) Dividends to Auctioned Preferred Shareholders from Net investment income (442,315) Net Increase in Net Assets Applicable to Common Shareholders Resulting from Operations $ 3,820,444 See notes to financial statements. ------------------------------------------------------------------------------- 12 o ACM Municipal Securities Income Fund STATEMENT OF CHANGES IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS Statement of Changes in Net Assets Six Monthss Ended Year Ended April 30, 2004 October 31, (unaudited) 2003 ------------- -------------- Increase (Decrease) in Net Assets Applicable to Common Shareholders Resulting from Operations Net investment income $ 5,016,369 $ 10,678,570 Net realized loss on investment transactions (822,777) (4,988,518) Net change in unrealized appreciation/depreciation of investments 69,167 6,318,119 Dividends to Auction Preferred Shareholders from Net Investment Income (442,315) (1,026,752) Net increase in net assets applicable to common shareholders resulting from operations 3,820,444 10,981,419 Dividends and Distributions to Common Shareholders from Net investment income (4,823,288) (8,802,335) Common Stock Transactions Reinvestment of dividends resulting in the issuance of common stock 379,788 820,580 Total increase (decrease) (623,056) 2,999,664 Net Assets Applicable to Common Shareholders Beginning of period 122,322,441 119,322,777 End of period (including undistributed net investment income of $764,284 and $1,013,518, respectively) $ 121,699,385 $ 122,322,441 See notes to financial statements. ------------------------------------------------------------------------------- ACM Municipal Securities Income Fund o 13 NOTES TO FINANCIAL STATEMENTS April 30, 2004 (unaudited) NOTE A Significant Accounting Policies ACM Municipal Securities Income Fund, Inc. (the "Fund"), was incorporated in the state of Maryland on February 11, 1993 and is registered under the Investment Company Act of 1940 as a diversified, closed-end management investment company. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States, which require management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and amounts of income and expenses during the reporting period. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the Fund. 1. Security Valuation In accordance with Pricing Policies adopted by the Board of Directors of the Fund (the "Pricing Policies") and applicable law, portfolio securities are valued at current market value or at fair value. The Board of Directors has delegated to Alliance Capital Management L.P. (the "Adviser"), subject to the Board's continuing oversight, certain responsibilities with respect to the implementation of the Pricing Policies. Pursuant to the Pricing Policies, securities for which market quotations are readily available are valued at their current market value. In general, the market value of these securities is determined as follows: Securities listed on a national securities exchange or on a foreign securities exchange are valued at the last sale price at the close of the exchange or foreign securities exchange. If there has been no sale on such day, the securities are valued at the mean of the closing bid and asked prices on such day. If no bid or asked prices are quoted on such day, then the security is valued in good faith at fair value in accordance with the Pricing Policies. Securities listed on more than one exchange are valued by reference to the principal exchange on which the securities are traded; securities not listed on an exchange but traded on The Nasdaq Stock Market, Inc. ("NASDAQ") are valued in accordance with the NASDAQ Official Closing Price; listed put or call options are valued at the last sale price. If there has been no sale on that day, such securities will be valued at the closing bid prices on that day; open futures contracts and options thereon are valued using the closing settlement price or, in the absence of such a price, the most recent quoted bid price. If there are no quotations available for the day of valuations, the last available closing settlement price is used; securities traded in the over-the-counter market, (but excluding securities traded on NASDAQ) are valued at the mean of the current bid and asked prices as reported by the National Quotation Bureau or other comparable sources; U.S. Government securities and other debt instruments having 60 days or less remaining until maturity are valued at amortized cost if their original maturity was 60 days or less, or by amortizing their fair value as of the 61st day prior to maturity if their original term to maturity exceeded 60 days; fixed-income securities, including ------------------------------------------------------------------------------- 14 o ACM Municipal Securities Income Fund mortgage backed and asset backed securities, may be valued on the basis of prices provided by a pricing service or at a price obtained from one or more of the major broker/dealers. In cases where broker/dealer quotes are obtained, the Pricing Policies provide that the Adviser may establish procedures whereby changes in market yields or spreads are used to adjust, on a daily basis, a recently obtained quoted price on a security; and OTC and other derivatives are valued on the basis of a quoted bid price or spread from a major broker/dealer in such security. Securities for which market quotations are not readily available are valued at fair value in accordance with the Pricing Policies. The Fund fair values a security that it holds when a significant event (e.g., an earthquake or a major terrorist attack) occurs after the time that the latest market quotation was established, and, as a result, such market quotation cannot be said to represent the current market value of the security as of the time the Fund prices its shares. Fair valuing securities is imprecise, and there is no assurance that the Fund could dispose of the security at the price used for determining the Fund's net asset value. 2. Taxes It is the Fund's policy to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its investment company taxable income and net realized gains, if any, to shareholders. Therefore, no provisions for federal income or excise taxes are required. 3. Investment Income and Investment Transactions Interest income is accrued daily. Investment transactions are accounted for on the trade date securities are purchased or sold. Investment gains and losses are determined on the identified cost basis. The Fund amortizes premiums and accretes original issue discounts and market discounts as adjustments to interest income. 4. Dividends and Distributions Dividends and distributions to shareholders are recorded on the ex-dividend date. Income and capital gains distributions are determined in accordance with federal tax regulations and may differ from those determined in accordance with accounting principles generally accepted in the United States. To the extent these differences are permanent, such amounts are reclassified within the capital accounts based on their federal tax basis treatment; temporary differences do not require such reclassification. NOTE B Advisory, Administrative Fees and Other Transactions with Affiliates Under the terms of an investment advisory agreement, the Fund pays the Adviser an advisory fee at an annual rate of .50 of 1% of the average weekly net assets of the Fund. Such fee is accrued daily and paid monthly. ------------------------------------------------------------------------------- ACM Municipal Securities Income Fund o 15 Under the terms of a Shareholder Inquiry Agency Agreement with Alliance Global Investor Services, Inc. (AGIS), an affiliate of the Adviser, the Fund reimburses AGIS for costs relating to servicing phone inquiries for the Fund. During the six months ended April 30, 2004, there was no reimbursement paid to AGIS. Under the terms of an Administration Agreement, the Fund pays Alliance Capital Management L.P. (the "Administrator") an administration fee at an annual rate of .15 of 1% of the average weekly net assets of the Fund. Such fee is accrued daily and paid monthly. The Administrator has engaged Prudential Investments LLC (the "Sub-Administrator"), an indirect, wholly-owned subsidiary of Prudential Financial, Inc., to act as sub-administrator. The Administrator, out of its own assets, will pay the Sub-Administrator a monthly fee equal to an annual rate of .10 of 1% of the Fund's average weekly net assets. The Sub-Administrator prepares financial and regulatory reports for the Fund and provides other clerical services. NOTE C Investment Transactions Purchases and sales of investment securities (excluding short-term investments) for the six months ended April 30, 2004, were as follows: Purchases Sales --------------- -------------- Investment securities (excluding U.S. government securities) $ 29,983,167 $ 34,110,160 U.S. government securities -0- -0- The cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes. Accordingly, gross unrealized appreciation and unrealized depreciation (excluding swaps) are as follows: Gross unrealized appreciation $ 7,667,466 Gross unrealized depreciation (2,464,498) Net unrealized appreciation $ 5,202,968 1. Swap Agreements The Fund may enter into swaps to hedge its exposure to interest rates and credit risk and for investment purposes. A swap is an agreement that obligates two parties to exchange a series of cash flows at specified intervals based upon or calculated by reference to changes in specified prices or rates for a specific amount of an underlying asset. The payment flows are usually netted against each other, with the difference being paid by one party to the other. Risks may arise as a result of the failure of the counterparty to the swap contract to comply with the terms of the swap contract. The loss incurred by the failure of the counterparty is generally limited to the net interest payment to be received by the Fund, and/or the termination value at the end of the contract. Therefore, ------------------------------------------------------------------------------- 16 o ACM Municipal Securities Income Fund the Fund considers the creditworthiness of each counterparty to a swap contract in evaluating potential credit risk. Additionally, risks may arise from unanticipated movements in interest rates or in the value of the underlying securities. The Fund accrues for the interim payments on swap contracts on a daily basis, with the net amount recorded within unrealized appreciation/depreciation of swap contracts on the statement of assets and liabilities. Once the interim payments are settled in cash, the net amount is recorded as realized gain/loss on swaps, in addition to realized gain/loss recorded upon the termination of swap contracts on the statement of operations. Fluctuations in the value of swap contracts are recorded as a component of net change in unrealized appreciation/ depreciation of investments. NOTE D Distributions To Common Shareholders The tax character of distributions to be paid for the year ending October 31, 2004 will be determined at the end of the current fiscal year. The tax character of distributions paid to common shareholders during the fiscal years ended October 31, 2003 and October 31, 2002 were as follows: 2003 2002 ---------- ------------- Distributions paid from: Ordinary income $ 87,103 $ 103,452 Tax-exempt income 8,715,232 9,384,782 Total distributions paid $ 8,802,335 $ 9,488,234(a) As of October 31, 2003, the components of accumulated earnings/(deficit) applicable to common shareholders on a tax basis were as follows: Undistributed net tax exempt income $ 1,045,613 Accumulated capital and other losses (23,830,825)(b) Unrealized appreciation/(depreciation) 4,930,830(c) Total accumulated earnings/(deficit) $ (17,854,382) (a) Total distributions paid differ from the statement of changes in net assets applicable to common shareholders because for tax purposes dividends are recognized when actually paid. (b) On October 31, 2003, the Fund had a net capital loss carryforward of $23,830,825 of which $6,475,518 expires in the year 2007, $10,294,946 expires in the year 2008, $1,971,343 expires in the year 2010, and $5,089,018 expires in the year 2011. To the extent future capital gains are offset by capital loss carryforward, such gains will not be distributed. During the current fiscal year, $9,919,727 of the capital loss carryforward expired unutilized. (c) The difference between book-basis and tax-basis unrealized appreciation/(depreciation) is attributable primarily to the tax deferral of losses on wash sales. ------------------------------------------------------------------------------- ACM Municipal Securities Income Fund o 17 NOTE E Common Stock There are 99,996,400 shares of $0.01 par value common stock authorized. There are 11,107,575 shares of common stock outstanding at April 30, 2004. During the six months ended April 30, 2004 and the year ended October 31, 2003, the Fund issued 32,955 and 73,818 shares, respectively, in connection with the Fund's dividend reinvestment plan. NOTE F Preferred Stock The Fund has issued and outstanding 3,600 shares of Auction Preferred Stock, consisting of 1,200 shares each of Series A, Series B and Series C. The preferred shares have a liquidation value of $25,000 per share plus accumulated, unpaid dividends. The dividend rate on Series A is 1.323%, effective through March 9, 2005. The dividend rate on Series B is 1.07%, effective through May 3, 2004. The dividend rate on Series C is 1.00%, effective through May 6, 2004. At certain times, the Preferred Shares are redeemable by the Fund, in whole or in part, at $25,000 per share plus accumulated, unpaid dividends. Although the Fund will not ordinarily redeem the Preferred Shares, it may be required to redeem shares if, for example, the Fund does not meet an asset coverage ratio required by law or to correct a failure to meet a rating agency guideline in a timely manner. The Fund voluntarily may redeem the Preferred Shares in certain circumstances. The Preferred Shareholders, voting as a separate class, have the right to elect at least two Directors at all times and to elect a majority of the Directors in the event two years' dividends on the Preferred Shares are unpaid. In each case, the remaining Directors will be elected by the Common Shareholders and Preferred Shareholders voting together as a single class. The Preferred Shareholders will vote as a separate class on certain other matters as required under the Fund's Charter, the Investment Company Act of 1940 and Maryland law. NOTE G Risks Involved in Investing in the Fund Interest Rate Risk and Credit Risk--Interest rate risk is the risk that changes in interest rates will affect the value of the Fund's investments in fixed-income debt securities such as bonds or notes. Increases in interest rates may cause the value of the Fund's investments to decline. Credit risk is the risk that the issuer or guarantor of a debt security, or the counterparty to a derivative contract, will be ------------------------------------------------------------------------------- 18 o ACM Municipal Securities Income Fund unable or unwilling to make timely principal and/or interest payments, or to otherwise honor its obligations. The degree of risk for a particular security may be reflected in its credit risk rating. Credit risk is greater for medium quality and lower-rated securities. Lower-rated debt securities and similar unrated securities (commonly known as "junk bonds") have speculative elements or are predominantly speculative risks. In the ordinary course of business, the Fund enters into contracts that contain a variety of indemnifications. The Fund's maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these indemnification provisions and expects the risk of loss thereunder to be remote. NOTE H Legal Proceedings As has been previously reported in the press, the Staff of the U.S. Securities and Exchange Commission ("SEC") and the Office of the New York Attorney General ("NYAG") have been investigating practices in the mutual fund industry identified as "market timing" and "late trading" of mutual fund shares. Certain other regulatory authorities have also been conducting investigations into these practices within the industry and have requested that Alliance Capital Management L.P. ("Alliance Capital"), the Fund's Adviser, provide information to them. Alliance Capital has been cooperating and will continue to cooperate with all of these authorities. The shares of the Fund are not redeemable by the Fund, but are traded on an exchange at prices established by the market. Accordingly, the Fund and its shareholders are not subject to the market timing and late trading practices that are the subject of the investigations mentioned above or the lawsuits described below. Please see below for a description of the agreements reached by Alliance Capital and the SEC and NYAG in connection with the investigations mentioned above. In addition, numerous lawsuits have been filed against Alliance Capital and certain other defendants in which plaintiffs make claims purportedly based on or related to the same practices that are the subject of the SEC and NYAG investigations referred to above. Some of these lawsuits name the Fund as a party. Management of the Fund's Adviser believes that these private lawsuits are not likely to have a material adverse effect on the results of operations or financial condition of the Fund. On December 18, 2003, Alliance Capital confirmed that it had reached terms with the SEC and the NYAG for the resolution of regulatory claims relating to the practice of "market timing" mutual fund shares in some of the AllianceBernstein Mutual Funds. The agreement with the SEC is reflected in an ------------------------------------------------------------------------------- ACM Municipal Securities Income Fund o 19 Order of the Commission ("SEC Order"). The agreement with the NYAG is subject to final, definitive documentation. Among the key provisions of these agreements are the following: (i) Alliance Capital agreed to establish a $250 million fund (the "Reimbursement Fund") to compensate mutual fund shareholders for the adverse effects of market timing attributable to market timing relationships described in the SEC Order. According to the SEC Order, the Reimbursement Fund is to be paid, in order of priority, to fund investors based on (i) their aliquot share of losses suffered by the fund due to market timing, and (ii) a proportionate share of advisory fees paid by such fund during the period of such market timing; (ii) Alliance Capital agreed to reduce the advisory fees it receives from some of the AllianceBernstein long-term, open-end retail funds, commencing January 1, 2004, for a period of at least five years; and (iii) Alliance Capital agreed to implement changes to its governance and compliance procedures. Additionally, the SEC Order contemplates that Alliance Capital's registered investment company clients, including the Fund, will introduce governance and compliance changes. The shares of the Fund are not redeemable by the Fund, but are traded on an exchange at prices established by the market. Accordingly, the Fund and its shareholders are not subject to the market timing practices described in the SEC Order and are not expected to participate in the Reimbursement Fund. Since the Fund is a closed-end fund, it will not have its advisory fee reduced pursuant to the terms of the above. ------------------------------------------------------------------------------- 20 o ACM Municipal Securities Income Fund FINANCIAL HIGHLIGHTS Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period Financial Highlights Six Months Ended April 30, Year Ended October 31, 2004 ---------------------------------------------------- (unaudited) 2003 2002 2001 2000 1999 ------------------------------------------------------------------------ Net asset value, beginning of period $ 11.05 $ 10.85 $ 12.10 $ 11.71 $ 11.64 $ 13.49 Income From Investment Operations Net investment income .45 .97 1.08 1.15 1.12 1.11 Net realized and unrealized gain (loss) on investment transactions (.06) .12 (1.32) .45 .16 (1.82) Dividends to preferred shareholders from net investment income (common stock equivalent basis) (.04) (.09) (.14) (.27) (.34) (.27) Net increase (decrease) in net asset value from operations .35 1.00 (.38) 1.33 .94 (.98) Less: Dividends and Distributions to Common Shareholders Dividends from net investment income (.44) (.80) (.87) (.88) (.78) (.84) Distributions in excess of net investment income -0- -0- -0- (.06) (.09) (.03) Total dividends and distributions to common shareholders (.44) (.80) (.87) (.94) (.87) (.87) Net asset value, end of period $ 10.96 $ 11.05 $ 10.85 $ 12.10 $ 11.71 $ 11.64 Market value, end of period $ 11.55 $ 11.62 $ 11.50 $ 12.70 $ 12.56 $ 11.69 Premium 5.38% 5.16% 5.99% 4.96% 7.26% .43% Total Return Total investment return based on:(a) Market value 3.21% 8.53% (2.44)% 9.14% 16.16% (11.14)% Net asset value 2.99% 9.39% (3.35)% 11.59% 8.74% (7.76)% Ratios/Supplemental Data Net assets, applicable to common shareholders, end of period (000's omitted) $121,699 $122,322 $119,323 $132,201 $127,142 $125,850 Preferred stock, at redemption value ($25,000 per share liquidation preference) (000's omitted) $90,000 $90,000 $90,000 $90,000 $90,000 $90,000 Ratios to average net assets applicable to common shareholders of: Expenses(b) 1.62%(c) 1.71% 1.65% 1.53% 1.61% 1.45% Net investment income, before preferred stock dividends(b) 7.94%(c) 8.78% 9.32% 9.60% 9.92% 8.54% Preferred stock dividends .70%(c) .84% 1.19% 2.26% 3.03% 2.08% Net investment income, net of preferred stock dividends 7.24%(c) 7.94% 8.13% 7.34% 6.89% 6.46% Portfolio turnover rate 16% 32% 24% 82% 360% 292% Asset coverage ratio 235% 236% 233% 247% 241% 240% See footnote summary on page 22. ------------------------------------------------------------------------------- ACM Municipal Securities Income Fund o 21 (a) Total investment return is calculated assuming a purchase of common stock on the opening of the first day and a sale on the closing of the last day of each period reported. Dividends and distributions, if any, are assumed for purposes of this calculation, to be reinvested at prices obtained under the Fund's dividend reinvestment plan. Generally, total investment return based on net asset value will be higher than total investment return based on market value in periods where there is an increase in the discount or a decrease in the premium of the market value to net asset value from the beginning to the end of such periods. Conversely, total investment return based on net asset value will be lower than total investment return based on market value in periods where there is a decrease in the discount or an increase in the premium of the market value to the net asset value from the beginning to the end of the period. Total investment return calculated for a period of less than one year is not annualized. (b) These expense and net investment income ratios do not reflect the effect of dividend payments to preferred shareholders. (c) Annualized. ------------------------------------------------------------------------------- 22 o ACM Municipal Securities Income Fund SUPPLEMENTAL PROXY INFORMATION (unaudited) Supplemental Proxy Information A Joint Annual Meeting of Shareholders of ACMMunicipal Securities Income Fund, Inc. was held on March 25, 2004. The description of each proposal and number of shares voted at the meeting are as follows: Authority Voted For Withheld 1. To elect directors Class One Nominees (terms expire in 2007) John H. Dobkin 9,377,795 148,562 Clifford L. Michel 9,381,097 145,260 Donald J. Robinson 9,374,145 152,212 Class Three Nominee (terms expire in 2006) Marc O. Mayer 9,384,445 141,912 ------------------------------------------------------------------------------- ACM Municipal Securities Income Fund o 23 BOARD OF DIRECTORS William H. Foulk, Jr.(1), Chairman Marc O. Mayer, President Ruth Block(1) David H. Dievler(1) John H. Dobkin(1) Dr. James M. Hester(1) Clifford L. Michel(1) Donald J. Robinson(1) OFFICERS Robert B. Davidson, III, Senior Vice President David M. Dowden(2), Vice President Terrance T. Hults(2), Vice President Mark R. Manley, Secretary Mark D. Gersten, Treasurer & Chief Financial Officer Thomas R. Manley, Controller Administrator Alliance Capital Management L.P. 1345 Avenue of the Americas New York, NY 10105 Sub-Administrator Prudential Investments LLC Gateway Center Three 100 Mulberry Street Newark, NJ 07102-4077 Common Stock: Dividend Paying Agent, Transfer Agent and Registrar Equiserve Trust Company N.A. P.O. Box 43011 Providence, RI 02940-3011 Preferred Stock: Dividend Paying Agent, Transfer Agent and Registrar The Bank of New York 100 Church Street New York, NY 10286 Independent Auditors Ernst & Young LLP 5 Times Square New York, NY 10036-6530 Custodian The Bank of New York One Wall Street New York, NY 10286 Notice is hereby given in accordance with Section 23(c) of the Investment CompanyAct of 1940 that the Fund may purchase at market prices from time to time shares of its Common Stock in the open market. This report, including the financial statements therein, is transmitted to the shareholders of ACM Municipal Securities Income Fund for their information.This is not a prospectus, circular or representation intended for use in the purchase of shares of the Fund or any securities mentioned in the report. (1) Member of the Audit Committee. (2) Messrs. Dowden and Hults are the persons primarily responsible for the day-to-day management of the Fund's investment portfolio. ------------------------------------------------------------------------------- 24 o ACM Municipal Securities Income Fund ALLIANCEBERNSTEIN FAMILY OF FUNDS AllianceBernstein Family of Funds Wealth Strategies Funds Balanced Wealth Strategy Wealth Appreciation Strategy Wealth Preservation Strategy Tax-Managed Balanced Wealth Strategy* Tax-Managed Wealth Appreciation Strategy Tax-Managed Wealth Preservation Strategy** Blended Style Funds U.S. Large Cap Portfolio International Portfolio Tax-Managed International Portfolio Growth Funds Domestic Growth Fund Health Care Fund Mid-Cap Growth Fund Premier Growth Fund Small Cap Growth Fund Technology Fund Global & International All-Asia Investment Fund Global Research Growth Fund Global Small Cap Fund Greater China '97 Fund International Premier Growth Fund New Europe Fund Worldwide Privatization Fund Select Investor Series Biotechnology Portfolio Premier Portfolio Technology Portfolio Value Funds Domestic Balanced Shares Disciplined Value Fund Growth & Income Fund Real Estate Investment Fund Small Cap Value Fund Utility Income Fund Value Fund Global & International Global Value Fund International Value Fund Taxable Bond Funds Americas Government Income Trust Corporate Bond Portfolio Emerging Market Debt Fund Global Strategic Income Trust High Yield Fund Multi-Market Strategy Trust Quality Bond Portfolio Short Duration Portfolio U.S. Government Portfolio Municipal Bond Funds National Insured National Arizona California Insured California Florida Massachusetts Michigan Minnesota New Jersey New York Ohio Pennsylvania Virginia Intermediate Municipal Bond Funds Intermediate California Intermediate Diversified Intermediate New York Closed-End Funds All-Market Advantage Fund ACM Income Fund ACM Government Opportunity Fund ACM Managed Dollar Income Fund ACM Managed Income Fund ACM Municipal Securities Income Fund California Municipal Income Fund National Municipal Income Fund New York Municipal Income Fund The Spain Fund World Dollar Government Fund World Dollar Government Fund II We also offer Exchange Reserves,+ which serves as the money market fund exchange vehicle for the AllianceBernstein mutual funds. For more complete information on any AllianceBernstein mutual fund, including investment objectives and policies, sales charges, expenses, risks and other matters of importance to prospective investors, visit our web site at www.alliancebernstein.com or call us at (800) 227-4618 for a current prospectus. Please read the prospectus carefully before you invest or send money. * Formerly Growth Investors Fund. ** Formerly Conservative Investors Fund. + An investment in the Fund is not a deposit in a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund. ------------------------------------------------------------------------------- ACM Municipal Securities Income Fund o 25 SUMMARY OF GENERAL INFORMATION Shareholder Information Daily market prices for the Fund's shares are published in the New York Stock Exchange Composite Transaction Section of newspapers each day, under the designation "ACMMSI." The Fund's NYSEtrading symbol is "AMU." Weekly comparative net asset value (NAV) and market price information about the Fund is published each Monday in The Wall Street Journal, each Sunday in The New York Times and each Saturday in Barron's and other newspapers in a table called "Closed-End Bond Funds." Dividend Reinvestment Plan A Dividend Reinvestment Plan provides automatic reinvestment of dividends and capital gains in additional Fund shares. For questions concerning shareholder account information, or if you would like a brochure describing the Dividend Reinvestment Plan, please call Equiserve Trust Company at (800) 219-4218. ------------------------------------------------------------------------------- 26 o ACM Municipal Securities Income Fund NOTES ------------------------------------------------------------------------------- ACM Municipal Securities Income Fund o 27 NOTES ------------------------------------------------------------------------------- 28 o ACM Municipal Securities Income Fund ACM MUNICIPAL SECURITIES INCOME FUND 1345 Avenue of the Americas New York, NY 10105 (800) 221-5672 [LOGO] ALLIANCEBERNSTEIN (SM) Investment Research and Management (SM) This service mark used under license from the owner, Alliance Capital Management L.P. MSISR0404 ITEM 2. CODE OF ETHICS. Not applicable when filing a Semi-Annual report to shareholders. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable when filing a Semi-Annual report to shareholders. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable when filing a Semi-Annual report to shareholders. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable when filing a Semi-Annual report to shareholders. ITEM 6. SCHEDULE OF INVESTMENTS. Form N-CSR disclosure requirement not yet effective with respect to the registrant. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable when filing a Semi-Annual report to shareholders. ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Form N-CSR disclosure requirement not yet effective with respect to the registrant. ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. There have been no material changes to the procedures by which shareholders may recommend nominees to the Fund's Board of Directors since the Fund last provided disclosure in response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A in its proxy statement filed with the Commission on February 23, 2004. ITEM 10. CONTROLS AND PROCEDURES. (a) The registrant's principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940, as amended) are effective at the reasonable assurance level based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this document. (b) There were no significant changes in the registrant's internal controls that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. ITEM 11. EXHIBITS. The following exhibits are attached to this Form N-CSR: EXHIBIT NO. DESCRIPTION OF EXHIBIT 11 (b) (1) Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 11 (b) (2) Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 11 (c) Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant): ACM Municipal Securities Income Fund, Inc. By: /s/Marc O. Mayer -------------------------------- Marc O. Mayer President Date: June 30, 2004 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/Marc O. Mayer -------------------------------- Marc O. Mayer President Date: June 30, 2004 By: /s/Mark D. Gersten ------------------------------- Mark D. Gersten Treasurer and Chief Financial Officer Date: June 30, 2004