SecProbe.io

January 18, 2013

Via E -mail
Ruth Porat
Executive Vice President and Chief Financial Officer
Morgan Stanley
1585 Broadway
New York, N Y 10036

Re: Morgan Stanley
 Form 10 -K for Fiscal Year Ended December 31, 2011
 Filed February 27, 2012
 Definitive Proxy Statement on Schedule 14A
 Filed April 5, 2012
 Form 10 -Q for the Quarterly Period Ended March 31, 2012
 Filed May 7, 2012
 Form 10 -Q for the Quarterly Period Ended September 30 , 2012
Filed November 6, 2012
 Form 8 -K
 Filed January 18, 2013
 File No. 001 -11758

Dear Ms. Porat:

We have reviewed your response letter dated July 26, 2012 to our letter dated June 22,
2012 and have the following comments.  In some of our comments, we may ask  you to provide
us with information so we may better understand your disclosure.

Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advising us when you will provide the requested
response.   Where we have requested changes in future filings, please include a draft of your
proposed disclosures that clearly identifies new or revised disclosures.  If you do not believe our
comments apply to your facts and circumstances or do not believ e an amendment is appropriate,
please tell us why in your response.

After reviewing any amendment to your filing and the information you provide in
response to these comments, including the draft of your proposed disclosures, we may have
additional comm ents.

Ruth Porat
Morgan Stanley
January 18, 2013
Page 2

 Form 10 -K for the Year Ended December 31, 2011

1. We note your response to comment 1 in our letter dated June 22, 2012.  Based on your
response it appears that you may have experienced one or more security breaches or
cyber attacks that d id not result in a material adverse effect on your operations.  If true,
beginning with your next periodic filing, please simply state this fact so investors are
aware that you are currently experiencing these cyber risks.

Country Risk Exposure, page 1 18

2. Refer to your response to comment 7 in our letter dated June 22, 2012.  Please revise
your disclosure in future filings to clarify the nature of the credit default swap (CDS)
positions that you include in the “hedges” column, and separately clarify the nature of the
CDS positions that you incl ude in the “inventory” column.  Specifically, address how
these respective CDS positions differ, and to the extent that you have included any
indexed or tranched purchased credit derivatives in your table, indicate where they are
disclosed in the table and  quantify the related amounts.  Clearly disclose how you
computed the amounts presented related to any indexed or tranched positions.  In
addition, disclose how you reflect your exposure within the table where credit risk
crosses multiple jurisdictions.  F or example, clarify where CDS purchased from an issuer
in a specific country is reflected within the table when the reference bonds are issued by
an entity in a different country.

3. As a related matter, we note your disclosure on page 156 in your Form 10 -Q for the
Quarterly Period Ended September 30, 2012, that indirect exposures are identified
through your counterparty credit analysis as having a vulnerability or exposure to another
country or jurisdiction, and we note your examples of such counterparties.  Please further
expand your disclosure, in future filings, regarding indirect risk to certain countries by
addressing the following:

 Disclose the nature of any stress testing you conduct related to your indirect
exposures to certain countries, including the significant parameters of your stress
testing.
 Address the extent to which you evaluate the potential implications of one or more
countries exiting the Eurozone within your counterparty credit analysis and stress
tests.
 Discuss the most significant imp lications of your indirect exposure, and to the extent
that redenomination and revaluation risk are considered in your analysis and stress
tests, disclose how you consider the implications of that risk.

Note  22. Income Taxes, page 244

4. Refer to your response t o comment 12 in our letter dated June 22, 2012, and please
address the following:

Ruth Porat
Morgan Stanley
January 18, 2013
Page 3

 You state that on a consistent basis, no single Non -U.S. jurisdiction where you
routinely operate has historically had material profit before tax and contributed a
dispropor tionate amount to the tax provision to warrant separate disclosure in the
current and deferred provision table.  Please clarify this statement by telling us
whether there are single Non -U.S. jurisdictions that have had material profit before
tax and /or contributed a material  amount to the tax provision or effective tax rate
reconciliation  for any of the periods presented, regardless of whether you routinely
operate in that jurisdiction.
 If so, confirm that you will revise your future filings to provide the appropriate
quantification of these items as requested in our prior comment 12.

Definitive Proxy Statement on Schedule 14A

5. We note your response to comment 15 in our letter dated June 22, 2012 and your
disclosure indicating that your financial and non -financial priorities are not weighted and
are not formulaic.  We also note from your disclosure on page 28 of your proxy statem ent
that the 25% in Mr. Gorman’s compensation “reflect[ed] the fact that the Company did
not fully meet certain financial priorities.”  In your response you indicate that failure to
meet the ROE priority was “the significant financial factor” in determinin g to reduce Mr.
Gorman’s compensation by 25%.  When achievement or failure to meet a performance
priority, whether formulaic or not, has a significant impact on compensation decisions,
we believe the target should be disclosed.  Please provide us with draf t disclosure as it
would have appeared in your 2012 proxy statement that discloses the target.  In addition,
we note that you have committed to disclose targets if and to the extent the committee
determines incentive compensation through specific formulaic  targets.  As previously
requested, please confirm that you will disclose targets, whether formulaic or not, that
have a significant impact on compensation decisions.

Form 10 -Q for the Quarterly Period Ended March 31, 2012

Note 3. Fair Value Disclosures

Quan titative Information about and Sensitivity of Significant Unobservable Inputs…, page 27

6. We acknowledge your response to comment 20 in our letter dated June 22, 2012.  We
also note your disclosure on page 34 of your Form 10 -Q for the Quarterly Period Ended
September 30, 2012 that the level of aggregation and breadth of products cause the range
of inputs to be wide and not evenly distributed across the inventory.  Given that some
ranges of your significant unobservable inputs are wide and not evenly distribu ted across
the inventory, please revise your disclosure in future filings for those products where you
believe a weighted average may not be meaningful to include a qualitative discussion of
those wide unobservable input ranges that is specific to each fin ancial instrument type.
Each qualitative discussion should address the underlying reason that the input range is

Ruth Porat
Morgan Stanley
January 18, 2013
Page 4

 wide, and any other information that explains the range to facilitate an understanding of
your views about individual inputs as well as change s in your views about particular
unobservable inputs over time.  Refer to BC86 of ASU No. 2011 -04.  To the extent
available, revise your qualitative disclosure to address the following for each product:

 Drivers of dispersion within the range, such as a pa rticular position or instrument type
and
 Data point concentrations within the range.

7. Refer to your response to comment 22 in our letter dated June 22, 2012 where you state
that as bonds become distressed and trade significantly away from par, the standard
market convention is to quote in price (i.e., the expected recovery assuming default) as
the (implied) yield becomes too large a number to be meaningful to another market
participant.  Please revise your disclosure in future filings to state, if true, tha t price
represents the expected recovery assuming default for distressed bonds, where applicable,
and link this disclosure with the related financial instruments.  In addition, for non -
distressed bonds, confirm whether you are calculating an implied yield from comparable
bond prices and then, adjusting the yield in order to derive a value for Level 3
instruments.  If not, tell us how you utilize comparable prices in order to come up with a
fair value measurement, and how you make adjustments in order to der ive a value for a
comparable instrument.  Also, provide us with proposed disclosure to include in future
filings to clarify your valuation methodology when you utilize comparable pricing.

Fair Value Option, page 30

8. Please revise the appropriate sections of your future filings to address the following as it
relates to your response to comment 23 in our letter dated June 22, 2012, regarding the
portion of your loss due to the change in fair value of your long -term borrowings due to
factors other than change s in credit quality:

 Given that your structured debt appears to be a significant source of liquidity as well
as a source of volatility in your earnings, please tell us in detail and briefly disclose
how you manage and monitor the different types of struct ured debt that you issue,
including the exposure of these instruments to foreign currency exchange rates, to
interest rates, to movements in a reference price, and to movements in an index.
Separately address how you manage and monitor these instruments f or accounting
purposes, for valuation purposes, as well as for risk management purposes.
 More explicitly tell us whether you are able to provide quantitative information by
product type or in some other manner that is consistent with how you manage these
debt instruments, and if not, explain why you are not able to provide such
information.
 To the extent that you do not have sufficient data available to provide transparent and
granular disclosure of such activities, disclose that fact.   Also, provide proposed
disclosure to be included in future filings based on the data attributes that are

Ruth Porat
Morgan Stanley
January 18, 2013
Page 5

 currently available to you, and confirm that you will initiate appropriate data tracking
mechanisms in order to provide the requested disclosure in future filings.
 The narrative disclosure at the top of page 31 indicates that the amounts provided in
the ta ble on page 30 “do not reflect gains or losses on related hedging instruments, if
any.”   In your future filings, disclose the extent to which you offset or mitigate some
portion of the specific embedded risk.  In addition, clearly identify the level at wh ich
that risk may be economically hedged or otherwise mitigated.  Quantify the amount
of offsetting gains and losses that are excluded from this table, identify where those
gains and losses are reported on the income statement, and provide a cross referenc e
to your disclosure where any offsetting instruments are reported in your derivatives
tables.

Form 8 -K filed January 18, 2013

Exhibit 99.1

9. We note your disclosure in footnote 6 to this Exhibit that you recognized out of period
net tax provisions  in the quarter ended December 31, 2012, and for the full year ended
December 31, 2012.   We also note your statement that you have evaluated the effects of
the understatement of the income tax provision both qualitatively and quantitatively and
concluded that it  did not have a material impact on any prior annual or quarterly
consolidated results, and a comprehensive review of your deferred tax accounts
continues, and as such, the net tax provisions could be subject to revision.   Please tell us
how you considered the identification and correction of these errors in your evaluations
of disclosure controls and procedures and internal controls over financial reporting as of
the end of each related period, including December 31, 2012.   To the extent that you
identify a dditional errors, please tell us how those additional errors impact your
evaluations of disclosure controls and procedures and internal controls over financial
reporting.

We urge all persons who are responsible for the accuracy and adequacy of the disclos ure
in the filing to be certain that the filing includes the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules require.   Since the company and its management are
in possession of all facts relating to a company’s disclos ure, they are responsible for the accuracy
and adequacy of the disclosures they have made.

 In responding to our comments, please provide a written statement from the company
acknowledging that:

 the company is responsible for the adequacy and accuracy of the disclosure in the filing;

 staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and

Ruth Porat
Morgan Stanley
January 18, 2013
Page 6

  the company may not assert staff comments as a defense in any pr oceeding initiated by
the Commission or any person under the federal securities laws of the United States.

You may contact Staci Shannon  at (202) 551 -3374  or Kevin W. Vaughn  at (202) 551 -
3494 if you have questions regarding comments on the financial statements and related matters.
Please contact Ramin M. Olson at (202) 551 -3331, Michael Seaman at (202) 551 -3366 or me at
(202) 551 -3675 with any other questions you may have.

Sincerely,

        /s/ Michael Seaman for

Suzanne Hayes
Assistant Director