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Correspondence

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.

 September 21, 2009

 By U.S. Mail & Facsimile to 202-772-9209

 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 Fiscal Year Ended November 30, 2008 filed January 29, 2009

 Form 10-Q for Quarterly Period Ended March 31, 2009 filed May 7, 2009

 File No. 001-11758

 Dear Mr. Telewicz:

 Morgan Stanley (the
“Company”) is pleased to respond to your letter of August 6, 2009, concerning its Annual Report on Form 10-K (“Form 10-K”) for the fiscal year ended November 30, 2008 and its Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2009 (“First Quarter Form 10-Q”). For your convenience, we have restated your comments below.

 Form 10-K
for the fiscal year ended November 30, 2008

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

 General

 Comment:

1.
We note your response to our prior comment five. In future filings, please discuss your overall strategies employed in your credit derivatives portfolio as you have described them
to us.

 Response:

 The Company included a
discussion of its overall strategies with respect to its credit derivatives portfolio and the Company’s gross credit derivatives positions by type of counterparty in its Quarterly Report on Form 10-Q for the quarterly period ended June 30,
2009 (the “Second Quarter Form 10-Q”). On page 134 of the Second Quarter Form 10-Q, the Company provided the following information:

 The Company trades in a variety of derivatives and may either purchase or write protection on a single name or portfolio of referenced entities. The Company is an active market maker in the credit derivatives markets. As a market maker, the
Company works to earn a bid-offer spread on client flow business and manage any residual credit or correlation risk on a portfolio basis. The Company also trades and takes credit risk in credit default swap form on a proprietary basis. Further, the
Company uses credit derivatives to manage its exposure to residential and commercial mortgage loans and corporate lending exposures during the periods presented.

 In future filings, the Company will continue to discuss its overall strategies with its credit derivative portfolio as well as any changes in those strategies during the periods presented.

 Financial Statements

 Notes to Consolidated Financial Statements

 3. Fair Value Disclosures

 Fair Value
Measurements

 Financial Instruments Owned and Financial Instruments Sold, Not Yet Purchased

 Derivative and Other Contracts

 OTC Derivative Contracts, page 128

 Comment:

2.
We note your response to our prior comment fourteen. In future filings, please enhance your disclosure to indicate the fair value of credit derivatives classified within each level
of the fair value hierarchy.

 2

 Response:

 The fair
value of over-the-counter (“OTC”) derivative contracts, including credit default swaps, in the fair value hierarchy tables in Note 3 to the consolidated financial statements of the Company’s Form 10-K is presented on a
net-by-counterparty basis. For contracts with the same counterparty, counterparty netting amongst various derivative contracts (regardless of type, e.g. credit, non-credit) classified within the same level is included in that level. As indicated in
our response to Comment 1 above, the Company has enhanced its overall disclosures related to credit derivatives on page 134 of its Second Quarter Form 10-Q to include a discussion of its overall strategies with respect to its credit derivatives
portfolio and the Company’s gross credit derivative positions by type of counterparty. In future filings, as illustrated below, the Company will enhance the tabular presentation of the Company’s credit derivative portfolio to indicate the
fair value hierarchy level of gross receivable and gross payable credit derivative market values.

At June 30, 2009

Market Values

Notionals

Receivable

Payable

Beneficiary

Guarantor

(dollars in millions)

 Banks and securities firms

$
207,479

$
198,976

$
2,501,165

$
2,439,268

 Insurance and other financial institutions

35,808

28,607

348,901

334,233

 Monoline insurers

6,386

6

24,369

10

 Non-financial entities

534

314

2,752

4,130

 Total

$
250,207

$
227,903

$
2,877,187

$
2,777,641

(1)
The market values shown in the table above are presented before the application of any counterparty or cash collateral netting. The Company’s credit default swaps are
classified in both Level 2 and Level 3 of the fair value hierarchy. Approximately 15% of receivable market values and 9% of payable market values represent Level 3 balances.

 8. Borrowings

 Long-Term Borrowings

 Maturities and Terms, page 147

 Comment:

3.
We note your response to our prior comment fifteen. In future filings, within your footnote to the referenced table, please disclose the increase or decrease to the carrying value
by year.

 3

 Response:

 In future
annual filings, the Company will include the increase or decrease to the carrying value associated with fair value hedges by year.

 9. Commitments,
Guarantees, and Contingencies

 Contingencies, page 156

 Comment:

4.
We note your response to our prior comment seventeen. On page 28, you have disclosed you have reached an agreement in principle to settle In re Initial Public Offering Securities
Litigation. To the extent the settlement amount can be reasonably estimated, please tell us how you have determined it was not necessary to disclose if you have recorded an accrual for this pending settlement and to disclose the amount. Please
refer to paragraph 9 of SFAS No. 5.

 Response:

 The Company accrues for litigation related loss contingencies in accordance with SFAS No. 5, Accounting for Contingencies (“SFAS No. 5”). With reference to the In re Initial Public
Offering Securities Litigation, the Company has disclosed the nature of the contingency in its Annual Reports on Form 10-K since 2003. Additionally, since 2003 the Company has discussed the composition of the changes in the accrual in the
aggregate, and the effects on operations within the Company’s Management’s Discussion and Analysis (“MD&A”). On April 2, 2009, the parties to In re Initial Public Offering Securities Litigation filed a stipulation
and agreement of settlement and a motion for preliminary approval of settlement in the U.S. District Court for the Southern District of New York (the “SDNY”). This event was disclosed on page 129 of the First Quarter Form 10-Q.
Additionally, on June 9, 2009, the SDNY granted preliminary approval of settlement to the parties. This was disclosed on page 139 of the Second Quarter Form 10-Q. The Company has accrued the settlement amount of approximately [*] million, which
is subject to court approval. Upon final court approval, the Company will disclose that it has reached a settlement agreement. The Company did not disclose the settlement amount as it believes that the omission of this disclosure would not make the
financial statements misleading given the amount of the settlement.

 21. Quarterly Results (unaudited), page 187

 Comment:

5.
 We note your response to our prior comment twenty-two. Please provide us further detail of the errors corrected during the second quarter 2008 including a
description of the circumstances that lead to the error and the periods that were affected. In addition, explain

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to us how you have applied the provisions of SAB 99 in determining that the errors were not quantitatively or qualitatively material.

 Response:

 [*]

 [*]

 For the above mentioned errors, the Company evaluated the nature of the
errors, what gave rise to the errors, and the enhancement to controls that have been implemented. Based upon this assessment, the Company determined that the errors discussed above did not result in a material weakness to the Company. Furthermore,
the Company determined that the enhancements that have been implemented did not materially affect, and/or were not reasonably likely to materially affect the Company’s internal controls over financial reporting.

 5

 In order to evaluate the materiality of these errors, the Company considered guidance in Accounting Principles Board
Opinion No. 28, Interim Financial Reporting (“APB 28”), SEC Staff Accounting Bulletin Release Topic 1.M, Materiality (“SAB 99”), and SEC Staff Accounting Bulletin Release Topic 1.N, Considering the Effect of
Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements (“SAB 108”).

 In accordance with this guidance,
the Company performed a quantitative and qualitative analysis to determine whether the errors were material to any of the periods impacted.

 Quantitative analysis:

 Both errors related to derivative instruments, which are reflected in Financial instruments owned – at fair
value – Derivative and other contracts on the Company’s consolidated statement of financial condition. For all periods impacted, the Company determined that the impact of recording the non-cash adjustments related to these errors
(either individually, or in aggregate), never exceeded [*] of this financial statement line item. Accordingly, the Company determined that the quantitative impact on the consolidated statement of financial condition was not material.

 The quantitative materiality assessment on the statement of income was prepared for all periods impacted, quarterly and annually, using both the rollover and iron
curtain approaches, as described in SAB 108, on an individual and aggregate basis. Specifically, the Company reviewed the impact on the line item in which the errors occurred, Principal Transactions – Trading, as well as Income (loss)
from continuing operations before income taxes, and Net income (loss). See Appendix I and Appendix II for the tables showing the impact on these line items. Although the Company included the impact under the iron curtain approach in
Appendix II, both errors were corrected in the period in which they were identified. Accordingly, the Company believes that the rollover method is the more appropriate method under which to evaluate the impact of the errors, and have discussed the
impact under the rollover method in more detail below for all periods impacted.

 In evaluating the materiality of the above errors, the Company first
reviewed the impact on full year earnings. For fiscal years 2006 and 2007, the impact of the errors were clearly insignificant to Principal Transactions – Trading, as well as Income (loss) from continuing operations before income
taxes, and Net income, as the impact never exceeded [*], either individually or in the aggregate, using the rollover approach. For fiscal year 2008, the aggregate impact of correcting the errors in that period on Net income was less than
[*]. It should be noted that the Company’s results of operations in fiscal 2008 were significantly lower than historical levels. If the Company were to substitute the average Net income for the five-year period ended 2008 ($4,363 million), the
impact of correcting the errors on average Net income did not exceed [*], either individually or in the aggregate.

 In assessing the impact on the
quarterly periods for materiality, the Company considered the guidance in APB 28, specifically paragraph 29.

 In determining materiality for
the purpose of reporting the correction of an error, amounts should be related to the estimated income for the full fiscal year and also to the effect on the trend of earnings. Changes that are material with respect to an interim period but not
material with respect to the estimated income for the full fiscal year or to the trend of earnings should be separately disclosed in the interim period.

 On an individual basis and aggregate perspective, in performing the assessment on quarterly periods prior to the adjustment, the Company found that the percentage impact never exceeded [*].

 For the quarter ended May 31, 2008, the quarter in which the errors were corrected, the aggregate impact of correcting the errors on Principal Transactions
– Trading, Income (loss) from continuing operations before income taxes, and Net income (loss) was [*], [*] and [*], respectively. The impacts on Principal transactions – Trading, Income (loss)
from continuing operations before income taxes, and Net income (loss) of correcting the London trader valuation was [*], [*] and [*], respectively. For the valuation adjustments, the impact in the
quarter ended May 31, 2008 on Principal transactions – Trading, Income (loss) from continuing operations before income taxes, and Net income (loss) were [*], [*] and [*], respectively.

 6

 Although the impact of correcting the individual errors during the quarter ended May 31, 2008 was quantitatively
significant to the quarter, based upon the metrics discussed above, the aggregate impact of correcting the errors to Net income was approximately [*]. Additionally, as discussed below, the amounts did not impact the earnings trends of the Company
from period to period. Consistent with the guidance in APB 28, the Company determined that the impact on quarterly periods, when reviewed in the context of the impact on the annual periods, was not material to the consolidated financial statements.

 The impact of the London Trader valuation error on Net income in the quarters in which the errors originated, the fourth quarter fiscal 2007 and the first
quarter fiscal 2008, did not exceed [*], and were not considered material to those periods. The impact of the valuation adjustments error on Net income in the fiscal year in which it originated, fiscal 2006, did not exceed [*], and was not
considered material to that period.

 Qualitative Analysis:

 In addition to reviewing the percentage impact on the line items discussed above, the Company also performed a qualitative assessment of the errors and considered the factors included in SAB 99:

•

 Whether the misstatement arises from an item capable of precise measurement or whether it arises from an estimate and, if so, the degree of imprecision inherent in
the estimate

 Company Response: The misstatements both related to valuations of over-the-counter derivative
instruments, which are not items capable of precise measurement.

•

 Whether the misstatement masks a change in earnings or other trends

 Company Response: The Company’s earnings declined precipitously in the quarter ended November 30, 2007, and earnings remained significantly decreased throughout the fiscal year ended November 30,
2008. Neither the misstatements nor the correction of those misstatements masked this trend.

•

 Whether the misstatement hides a failure to meet analysts’ consensus expectations for the enterprise

 Company Response: The errors were recorded in the financial statements in the period of detection. The errors were not motivated by a desire to meet
analysts’ expectations. Additionally, the errors did not result in the Company meeting analyst expectations over the respective periods. Also, these errors and the impact of correcting these errors, were

 7

disclosed in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended May 31, 2008. Thus, investors were notified of this
correction in advance of the filing of the Form 10-K.

•

 Whether the misstatement changes a loss into income or vice versa

 Company Response: The misstatement did not change a loss into income or vice versa for any period.

•

 Whether the misstatement concerns a segment or other portion of the registrant’s business that has been identified as playing a significant role in the
regist