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SEC Correspondence Letter

CONFIDENTIAL TREATMENT OF CERTAIN DESIGNATED PORTIONS OF THIS LETTER HAS BEEN REQUESTED BY MORGAN STANLEY. SUCH CONFIDENTIAL PORTIONS HAVE BEEN OMITTED, AS INDICATED BY [*] IN THE
TEXT, AND SUBMITTED TO THE COMMISSION.

 May 28, 2010

By U.S. Mail & Facsimile to 202-775-9209

Mr. Robert Telewicz

 Senior Staff
Accountant

 Division of Corporation Finance

Securities and Exchange Commission

 100 F
Street, N.E.

 Mail Stop 4561

Washington, DC 20549

Re:
Form 10-K for Year ended December 31, 2009 Filed February 26, 2010

Definitive Proxy Statement Filed April 12, 2010

Form 8-K Filed April 21, 2010

File No. 001-11758

Dear Mr. Telewicz:

 Morgan Stanley (the
“Company”) is pleased to respond to your letter of May 4, 2010, concerning its Annual Report on Form 10-K for the year ended December 31, 2009 (“Form 10-K”), its Definitive Proxy Statement for the year ended
December 31, 2009 (“Proxy Statement”) and its Form 8-K filed April 21, 2010.

 For your convenience, we have restated your
comments below.

 Form 10-K

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

General

 1

 Comment:

1.
We understand that you have entered into repurchase transactions accounted for as collateralized financings. To the extent there are significant variations between the
average level of these transactions and the amounts outstanding at each quarter end, please explain to us why. In future periodic filings we believe the inclusion of the information described above would be useful to investors and should be
included.

 Response:

Comparing quarterly average balances with the related quarter-end balances for repurchase agreements during 2008 and 2009, the variances
were [*]. The Company considers several factors when determining significant variances, including but not limited to, the overall percentage change, dollar amount, nature of the variance, and magnitude of the impact to the Company’s statement
of financial condition. These variances are explained in more detail below.

 September 2008 (1)

 Repos totaled [*] at September 30, 2008 and averaged [*] during the quarter. [*]

December 2008 (1)

Repos totaled $92 billion at December 31, 2008 and averaged [*] during the quarter. [*]

 2

 March 2009 (1)

Repos totaled $70 billion at March 31, 2009 and averaged [*] during the quarter. [*]

(1)
Amounts in the above paragraphs were previously provided to Ms. Linda van Doorn, Senior Assistant Chief Accountant, Division of Corporation Finance, Securities and
Exchange Commission in the Company’s letter dated April 13, 2010. As described in such letter, the average balances were calculated using weekly balances in 2009 and month-end balances in 2008.

In the Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 (the “First Quarter Form 10-Q”), the Company
disclosed the following variances, which the Company did not consider significant, in “Management’s Discussion and Analysis of Financial Condition and Result of Operations (“MD&A”) - Liquidity and Capital Resources”
(page 103):

 Securities sold under agreements to repurchase and securities loaned were $206 billion at March 31, 2010
and averaged $224 billion during the quarter ended March 31, 2010. Securities purchased under agreements to resell and securities borrowed were $320 billion at March 31, 2010 and averaged $317 billion during the quarter ended
March 31, 2010.

 In future filings, the Company will provide explanations of any significant variances between the
quarter average and period-end balances for repurchase transactions.

 Business Segments

Global Wealth Management Group

 2009
Compared with Fiscal 2008

 Asset Management, Distribution and Administration Fees, page 56

Comment:

2.
We note your disclosure that beginning in June 2009, fees related to the bank deposit program are classified within ‘Asset management, distribution and
administration fees’ prospectively. Please tell us the total fees generated from the bank deposit program during 2009 and fiscal year 2008. Additionally, explain to us how you determined it was not necessary to reclassify prior period amounts
to conform to your new presentation.

 3

 Response:

Total revenues related to the bank deposit program (“BDP”) were [*] and [*] for the years ended December 31, 2009
(“2009”) and November 30, 2008 (“fiscal 2008”), respectively. The increase resulted primarily from higher deposits due to the formation of Morgan Stanley Smith Barney Holdings LLC (“MSSB”) upon the acquisition of
Smith Barney from Citigroup Inc. (“Citi”), and referral fees from increases in balances referred to and held at Citi depository institutions. Amounts recorded in Asset management, distribution and administration fees were [*] and [*] in
2009 and fiscal 2008, respectively. Amounts recorded in Interest and dividends were [*] and [*] in 2009 and fiscal 2008, respectively.

[*]

[*]

[*]

 4

 Other Matters

Real Estate, page 66

 Comment:

3.
Please tell us whether the Company’s investments in consolidated real estate subsidiaries are presented net of non-controlling interests in the Company’s
consolidated financial statements. To the extent these investments are accounted for on a gross basis, explain to us whether your presentation of consolidated real estate assets in the schedule of real estate investments on page 67 represents a
non-GAAP measure in accordance with item 10(e) of Regulation S-K. Please provide the disclosures required by item 10(e) of Regulation S-K or explain to us why these disclosures are not necessary.

Response:

The Company’s investments in consolidated real estate subsidiaries of approximately [*] were presented on a gross basis on the
consolidated statement of financial condition at December 31, 2009 in accordance with U.S. GAAP. At December 31, 2009, the related non-controlling interests on these investments were [*].

The Company considers the net presentation of consolidated real estate assets in the schedule of real estate investments on page 67 of the
Form 10-K as a non-GAAP measure in accordance with Item 10(e) of Regulation S-K. The Company considers the net presentation as a useful measure for investors as it represents the Company’s net exposure. The Company did not disclose the
amount of the related non-controlling interest of approximately [*] as it considered the amount immaterial (i.e., such amount was less than [*] of the Company’s total assets at December 31, 2009).

In future filings, the Company will include the following disclosure related to non-controlling interests for these investments and the
Company’s reason for presenting such non-GAAP measure in accordance with Item 10(e) of Regulation S-K.

 5

 At June 30, 2010 and December 31, 2009, condensed consolidated statement of
financial condition amounts represent investment assets of consolidated subsidiaries of approximately $X.X billion and $[*], respectively, net of non-controlling interests of approximately $X.X billion and $[*], respectively. The net presentation in
the table above represents a non-GAAP measure. The Company considers such presentation a useful measure for investors as it represents the Company’s net exposure.

Liquidity and Capital Resources

 The
Balance Sheet, page 74

 Comment:

4.
We note your disclosure of Tier 1 leverage ratios and Leverage ratio. Please provide us with a discussion of the uses of these ratios beyond assessing compliance with
federal banking regulators minimum guidelines. In your discussion, tell us the reasons for any significant changes in these ratios from period to period and the impact that these changes have had or are expected to have on the Company’s
operations. Consider enhancing your disclosure in future filings to include this discussion.

Response:

As described in the last paragraph on page 103 of the First Quarter Form 10-Q, the Company uses the Tier 1 leverage ratio, risk-based
capital ratios, Tier 1 common ratio and the balance sheet leverage ratio as indicators of capital adequacy when viewed in the context of the Company’s overall liquidity and capital policies. These ratios are commonly used measures to assess
capital adequacy and frequently are referred to by investors. The Company does not use these ratios for purposes beyond assessing capital adequacy.

The balance sheet leverage ratio (expressed in “times”) increase in December 2009 compared with December 2008 was driven by the
increase in assets. The increase in the leverage ratio was also due to the decrease in tangible shareholders’ equity reflecting the repurchase of Series D Preferred Stock from the U.S. Treasury (“TARP”), which was partially offset by
issuances of common stock. The Company provided an explanation for the increase in the leverage ratio in footnote 4 on page 104 of the First Quarter Form 10-Q. The Company provided explanations for the increase in the balance sheet and equity
capital on page 103 and page 105, respectively, of the First Quarter Form 10-Q.

 6

 At December 2009, the Tier 1 Leverage ratio (expressed in percentages) decreased compared
with prior quarters driven by the same items that impacted the balance sheet leverage: increase of assets and decrease of capital due to TARP repayment, partially offset by issuances of common stock. For further information on the TARP and common
stock issuance refer to Note 13 of the Form 10-K.

 [*]

In future filings, the Company will continue to include disclosure regarding significant changes in such ratios from period to period and
the Company’s expectation regarding the impact these changes might have on the Company’s operations.

 Liquidity Management
Policies

 Liquidity Reserves, page 78

Comment:

5.
We note your disclosure of your liquidity reserves. Please tell us and disclose in future filings the following additional information concerning your liquidity
reserve:

•

 total assets by type of investment;

•

 whether any portion of the assets have been pledged as collateral by the registrant on either a mandatory or voluntary basis;

•

 the ease with which the registrant could liquidate these assets; and

•

 any expected surplus or deficiency generated in your liquidity reserves after meeting all funding and regulatory requirements in a stressed
environment.

 Response:

The Company’s liquidity reserves are held in the form of cash, reverse repos or Fed eligible securities. The reverse repos are
collateralized by U.S Government, Organisation For Economic Co-operation and Development, agency and agency mortgage-backed securities. The Company’s liquidity reserves are all unencumbered and are not pledged as collateral on either a
mandatory or voluntary basis. The chart below presents the Company’s liquidity reserves by type of investment at March 31, 2010.

 7

(dollars in millions)

Cash

[*]

Reverse Repo

[*]

Fed Eligible Securities

[*]

Total Liquidity

[*]

 Given the highly liquid nature of the assets that
comprise the Company’s liquidity reserves, a vast majority of the assets can easily be converted to cash on a next day basis.

As of March 31, 2010, [*] of these assets could be converted to cash on a next day basis and the remaining portion could be converted
to cash within 2 days. In future filings, the Company will include total assets by investment and continue to review and enhance disclosures as future circumstances warrant.

At March 31, 2010, the Company maintained sufficient liquidity to meet funding and contingent obligations across
its one-year stress scenario. The Company maintains sufficient liquidity reserves that are sized to cover daily funding needs and meet strategic liquidity targets during stressed conditions as outlined in the Contingency Funding Plan
(“CFP”). The CFP is the Company’s primary liquidity risk management tool. The CFP models and sets forth a course of action for the Company to effectively manage through a stressed environment. The Company’s CFP
model incorporates various scenarios with a wide range of potential cash outflows during a range of liquidity stress events. These stress events include, but are not limited to, the following: (i) repayment of all unsecured debt maturing within
one year and no incremental unsecured debt issuance; (ii) maturity roll-off of outstanding letters of credit with no further issuance and replacement with cash collateral; (iii) return of unsecured securities borrowed and any cash raised
against these securities; (iv) additional collateral that would be required by counterparties in the event of a multi-notch long-term credit ratings downgrade; (v) higher haircuts on or lower availability of secured funding;
(vi) client cash withdrawals; (vii) drawdowns on unfunded commitments provided to third parties; and (viii) discretionary unsecured debt buybacks. For additional information on the CFP, refer to page 78 of the Form 10-K.

Item 8 Financial Statements and Supplementary Data

Notes to Consolidated Financial Statements

1. Introduction and Basis of Presentation

 8

 Discontinued Operations, page 120

Comment:

6.
It appears that you have classified the results of your Retail Asset Management business as discontinued operations despite that fact that you will receive a 9.4%
ownership in the entity that will purchase this business. Explain to us how you considered the guidance in paragraph 1 of ASC 205-20-45 in determining the appropriate classification of the results of this business.

Response:

In determining the appropriate classification of the results of the Company’s Retail Asset Management business (the
“Business”), the Company considered both of the following conditions of ASC 205-20-45-1.

•

 The operations and cash flows of the component have been (or will be) eliminated from the ongoing operations of the entity as a result of the disposal
transaction.

•

 The entity will not have any significant continuing involvement in the operations of the component after the disposal transaction.

 In assessing the first condition, the Company reviewed the cash flows expected to be generated by the
Company from either a migration or continuation of activities with the Business in accordance with the guidance in ASC 205-20-55-4 through 14. The Company concluded that significant cash inflows are not expected to be recognized as the result of a
migration of revenues from the Business. While there will not be any direct continuing cash outflows from the Company to the Business, the Company recognized that there will be a minimal level of direct cash inflows from the Business to the Company
primarily resulting from a share of certain fund distribution revenues to which the Company will be entitled. The Company, however, concluded that such cash flows are not expected to be significant. The expected gross cash inflows the Company will
receive are less than [*] of the historic gross cash inflows from the Business. Lastly, the Company considered the dividends expected to be received on its investment in Invesco. The Company, however, notes that in assessing continuing cash flows,
the above guidance specifies that “indirect” cash flows do not constitute continuing cash flows for purposes of determining whether the operations and cash flows of a disposed component have been or will be eliminated from the
Company’s ongoing operations. The Company further notes that one of the examples of “indirect” cash flows detailed in ASC 205-20-55-13 are “Dividends on an investment.” Accordingly, the Company excluded expected dividends on
its 9.4% ownership interest in Invesco from the cash flow analysis. Based on all of these facts,

 9

the Company concluded that the first condition in ASC 205-20-45-1 has been met as it expects that it will generate a less than significant amount of continuing direct cash flows with the
Business.

 In assessing the second condition, which requires that the Company not have any significant continuing involvement
in the operations