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SEC 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.

 July 30, 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:
Morgan Stanley 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

Form 10-Q for Quarterly Period Ended March 31, 2010 Filed May 7, 2010

File No. 001-11758

 Dear
Mr. Telewicz:

 Morgan Stanley (the “Company”) is pleased to respond to your letter of July 1, 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”), its Form 8-K filed April 21, 2010, and its Quarterly
Report on Form 10-Q for the quarterly period ended March 31, 2010 (“First Quarter Form 10-Q”).

 For your convenience, we have
restated your comments below.

 1

 Form 10-K

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

Liquidity Management Policies

Liquidity Reserves, page 78

 Comment:

 1. We note your response to our prior comment five. Please confirm for us that, in addition to including total assets by investment, you
will also disclose the ease with which these assets could be liquidated. To the extent any of these assets are pledged as collateral in the future, please include that information in your disclosure.

Response:

 Beginning
with the Form 10-Q for the Quarterly Period Ended June 30, 2010 (“Second Quarter Form 10-Q”), the Company will disclose total assets by investment, the ease with which these assets could be liquidated (number of business days in which
these assets could be converted to cash) and the extent any of these assets are pledged as collateral.

 Item 8. Financial Statements
and Supplementary Data

 Notes to Consolidated Financial Statements

4. Fair Value Disclosures, page 135

Comment:

 2. We note your response to our
prior comments 12 and 13. Please confirm for us that you will disclose further detail of the investment line item by asset type (private equity funds, real estate funds, hedge funds, etc.) and whether the Company expects to provide any financial
support to these funds on a voluntary basis.

 Response:

Beginning with the Second Quarter Form 10-Q, the Company will provide detail of the investment line item by the following asset types: Private equity
funds, Real estate funds, Hedge funds, Principal investments and Other. In the Second Quarter Form 10-Q, this detail will be provided in the disclosure of Asset and Liabilities Measured at Fair Value on a Recurring Basis at June 30, 2010 and in
the Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Three Months Ended June 30, 2010 and for the Six Months Ended June 30, 2010. In addition, the Company will disclose whether it has or expects
to provide any financial support to these funds on a voluntary basis.

 2

 Comment:

3. We note your response to our prior comment 15. Please quantify for us the impact your credit review process has had on the carrying value of loans
originated by the Company. Please tell us how you determined any negative valuation adjustment or allowance from the subsequent credit review process did not relate to factors that existed when the loans were originated.

Response:

 As noted in
the Company’s letter dated May 28, 2010, the internal credit review process includes the assignment of the internal credit ratings, the establishment of single name lending limits, and the approval of credit transactions. The
Company’s Credit Risk Management department evaluates each new obligor before a credit transaction is initially approved, and at least annually thereafter, as long as the Company continues to have credit exposure. The Company primarily
accounts for its corporate loans and lending commitments and mortgage loans, including residential and commercial mortgage loans that were originated or purchased by the Institutional Securities business segment, at fair value. As of
December 31, 2009, $26.3 billion of loans and lending commitments were measured at fair value. Subsequent to origination or purchase, in accordance with ASC 820, observable market prices or broker consensus quotes, when available, are utilized
to determine the fair value of these loans. For loans where fair value is not based upon observable market prices or broker consensus quotes, the fair value of a loan is determined using a model-based valuation technique.

The Company does not calculate the impact on fair value solely for changes in credit and in accordance with ASC 820, the Company ensures that the fair
value measurement only considers inputs that market participants would use. Accordingly, the internal credit review process only impacts the fair value of loans that are fair valued via a valuation methodology, other than an observerable market
price or broker consensus quote, and where credit improvement or deterioration is determined through changes in assumptions related to credit quality, such as probability of default grading (“PD”), loss given default (“LGD”),
cash flows from collateral values and FICO scores. Care is taken to only factor in material non-public information if that information is available to and could be used by other members of the relevant syndicate or other potential buyers in
accordance with ASC 820. The fair value of the loan, however, is also impacted by factors other than credit quality, which may include changes in sector credit spreads, interest rates, foreign exchange rates, liquidity, and tenor. The internal
credit review process could also impact dollar-based credit limits established by the Company’s Credit Risk Management department, which are typically reduced as the borrower’s risk increases and could result in risk-mitigating actions or
in an approval of the excess by the Company’s Credit Risk Management department. The Company also uses other risk metrics to manage the fair value loan portfolio, such as “PV10”, which represents the expected change in present value
given a ten percent widening in current credit spreads. Changes in the risk metrics may result in action, such as the sale or participation of loans or purchase of additional hedges, if the exposure has exceeded limits set by the Market Risk
department.

 3

 For the year ended 2009, loans held for investment were $7.3 billion with an associated allowance for loan
losses of $157 million. During the year ended 2009, the internal credit review process resulted in a $258 million provision for loan losses, which was included in Other Revenue. The allowance for loan losses was also impacted by $157 million of
charge-offs and $6.8 million of recoveries during this period.

 The Company believes it originates loans at appropriate market levels and
captures the impact of any credit deterioration on a timely basis. Loans carried at fair value are fair valued at inception and thereafter using prices and inputs that are current as of the measurement date. For loans held for investment, the
borrower’s overall financial condition and other relevant factors are considered prior to approval to extend the loan. Such loans are subsequently evaluated on a monthly basis and an allowance for loan losses is provided for when credit
deterioration is identified. The Company’s Credit Risk Management department monitors credit assumptions such as PDs and LGDs for obligors on a continuous basis. This review process helps ensure that the Company captures the impact of any
credit deterioration on a timely basis.

 Form 10-Q for the quarterly period ended March 31, 2010

General

 Comment:

4. We note your disclosure beginning on page 27 of the Form 10-K for the year ended December 31, 2009 regarding the various litigation matters to
which the Company is exposed. We also note that you have not disclosed in your financial statement footnotes:

(i)
the nature of the contingency;

(ii)
the possible loss or range of loss; or

(iii)
a statement that an estimate of the loss cannot be made.

ASC 450 (formerly SFAS 5) indicates that if an unfavorable outcome is determined to be reasonably possible but not probable, or if the
amount of loss cannot be reasonably estimated, accrual would be inappropriate, but disclosure must be made regarding the nature of the contingency and an estimate of the possible loss or range of possible loss or state that such an estimate cannot
be made. Additionally, we note that in instances, if any, where an accrual may have been recorded as all of the criteria in ASC 450-20-25-2 have been met, you have not disclosed the nature of the accrual or the amount of the accrual which may be
necessary in certain circumstances for the financial statements not to be misleading, nor has there been disclosure indicating that there is an exposure to loss in excess of the amount accrued and what the additional loss may be for each particular
litigation matter. Please revise your disclosures beginning in the second quarter Form 10-Q to include all of the disclosures required by paragraphs 1 and 3-5 of ASC 450-20-50. In this regard, we do not believe that general boilerplate disclosure
indicating that losses may be higher than reserves currently accrued by the Company or disclosure indicating that the outcome of a matter may be material to your operating results for a particular period satisfies the criteria in ASC 450.

 4

 Response:

ASC 450 provides guidance on the recognition and disclosure of loss contingencies (including those arising from pending or threatened litigation) and uses
probability and possibility thresholds and an analysis of whether a registrant is reasonably able to estimate the amount of loss. On the other hand, Item 103 of Regulation S-K in essence calls for a description of all material pending legal
proceedings based in part on “the amount involved” and in part on the nature of the proceedings but in general based on principles applicable to determining materiality from both a quantitative and qualitative perspective. As such, the
requirements and principles of Item 103 of Regulation S-K and ASC 450 are distinct and need to be analyzed and responded to differently by the Company.

Regarding the disclosures required by ASC 450-20-50-1, the Company had disclosed under “Contingencies” on page 187 of the Form 10-K the
nature of its contingencies in the first and second paragraphs, which provide detail regarding the kind of litigation involved by referring to actual or threatened litigation and to formal and informal governmental and self-regulatory agency
investigations. The Company did not disclose the amounts accrued because the Company did not believe the accruals were, individually or in the aggregate, material to the Company’s operating results, statement of cash flows or financial
condition for the periods presented and, as a result, the disclosure of the amounts accrued was not necessary for its financial statements not to be misleading. Whenever accruals for the period have been material in the past, the Company has
disclosed the amount of the specific accrual and would do so if a specific accrual in the future was material. For example, in the Company’s November 30, 2005 Form 10-K, a $360 million accrual related to the Coleman Litigation was
disclosed. However, beginning with the Second Quarter Form 10-Q, the Company will enhance its disclosure regarding the nature of its contingencies. The proposed revised disclosure is set forth below. Significant revisions have been underlined.

 Regarding the disclosure requirements of paragraphs 3-5 of ASC 450-20-50, as noted above, the Company had disclosed the nature of its
contingencies in the Form 10-K, however the Company will enhance these disclosures. In addition, the Company has not disclosed the specific amounts of any reasonably estimable possible loss or range of loss where the Company believes they,
individually or in the aggregate, would not have a material adverse effect on the Company’s results of operations, cash flows or financial condition. Furthermore, as disclosed in the Legal, Regulatory and Tax Contingencies section of Critical
Accounting Policies on page 71 of the Form 10-K, given the inherent difficulty of predicting the outcome of such matters, particularly in cases where claimants seek substantial or indeterminate damages or where investigations and proceedings are in
the early stages, the Company cannot predict with certainty the loss or range of loss, if any, related to such matters, how such matters will be resolved, when they will ultimately be resolved or what the eventual settlement, fine, penalty or other
relief, if any, might be. However, beginning with the Second Quarter Form 10-Q, the Company will revise the contingencies related disclosure to more specifically reference the requirements of paragraphs 3-5 of ASC 450-20-50. This disclosure will be
revised to specifically note that in certain cases exposure to losses and/or losses in excess of amounts accrued are not material and in other cases, such estimates cannot be made.

 5

 [*]

Comment:

 5. We note from news reports
that you have agreed to pay $102 million to the Commonwealth of Massachusetts to settle an outstanding lawsuit. With respect to this settlement, please tell us how you have complied with ASC 450-20 in prior periodic filings. Specifically, tell us
when the loss met the probable and reasonably estimable criteria described in paragraph 2 of ASC 450-20-25. Additionally, tell us how you determined that the loss contingency was not at least reasonably possible and that it was not necessary to
disclose the loss contingency related to this litigation or an estimate of the possible loss or range of loss in prior periodic filings in accordance with paragraphs 3 and 4 of ASC 450-20-50.

Response:

 The Company
believes that any estimated loss relating to its settlement with the Office of the Attorney General for the Commonwealth of Massachusetts (the “Massachusetts OAG”) did not meet the probable and reasonably estimable criteria of
ASC 450-20-25-2 prior to the filing, on May 7, 2010, of the Company’s First Quarter Form 10-Q and only met both those criteria at some point on or after May 19, 2010. In addition, the Company believes that any loss relating to
its investigation by the Massachusetts OAG was not reasonably possible until, at the earliest, April 15, 2010, when the Company and the Massachusetts OAG expressed a mutual willingness to explore resolution discussions in parallel with, and
without prejudice to, the Company’s defense against the investigation or the Massachusetts OAG’s ability to continue the investigation. However, from April 15 until May 19, the Massachusetts OAG’s claims and the terms of its
settlement demands were sufficiently uncertain and preliminary that it was not possible to estimate the amount or range of any possible loss. Accordingly, it was not appropriate to disclose an estimate of the possible loss or range of loss in
accordance with paragraphs 3 or 4 of ASC 450-20-50 in the First Quarter Form 10-Q.

 The Company is setting forth below a summarized chronology
to provide the factual background for these determinations:

i.
The investigation by the Massachusetts OAG into the Company’s residential mortgage business in Massachusetts commenced in January of 2008. Throughout 2008 and into
2009, the Company produced documents in response to requests by the Massachusetts OAG.

ii.
 In May 2009, Goldman, Sachs & Co. (“Goldman”) reached a settlement with the Massachusetts OAG regarding