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SEC Response 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.

 June 9, 2011

 By U.S. Mail & Facsimile to 202-772-9292

 Suzanne Hayes

Assistant Director

 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
the Year Ended December 31, 2010

 Filed February 28, 2011

File No. 001-11758

 Dear
Ms. Hayes:

 Morgan Stanley (the “Company”) is pleased to respond to your letter of May 6, 2011 concerning its Form 10-K for
the Year Ended December 31, 2010 (“2010 Form 10-K”).

 For your convenience, we have restated your comments below.

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 Form 10-K for Fiscal Year Ended December 31, 2010

General

 Comment:

1.
We have not completed our review of the Part III information that is incorporated into your Form 10-K by reference to your definitive proxy statement. We may have
additional comments after reviewing that information.

 Response:

 The Company acknowledges that the Staff may have additional comments upon completion of its review of the Part III information that is incorporated into the Form 10-K for the year ended December 31,
2010.

 Item 1. Business

Institutional Securities

Commodities, page 4

 Comment:

 2. We note your disclosure about your different commodities activities on pages 4, 18 and 28. Please respond to the following:

a. We note that you invest and make markets in the spot, forward, physical derivatives and futures markets in several commodities, including metals,
agricultural products, crude oil, oil products, natural gas, electric power, emission credits, coal, freight, liquefied natural gas and related products. Please describe in more detail the activities that go into making a market in these commodities
and describe the types of revenue streams earned as a result of these activities. Additionally, tell us whether other parties also make markets in the same commodities that you do.

 b. Tell us how you obtained your ownership in TransMontaigne, Inc. and tell us whether this is an area where you are considering further investments.

c. Tell us how and where the results of your ownership in TransMontaigne are reflected in your consolidated financial statements, including the amounts
involved.

 d. Describe the relationship between your market making activities in various commodities and your ownership in TransMontaigne.

 Response:

 The Company invests and makes markets in various types of commodities and commodity-related assets or instruments, not in the sense of a traditional market maker as exists in the equity markets in which
one would be expected to quote a two-sided market for all relevant products. Rather the Company conducts

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these activities as a commodity merchant that provides liquidity to the markets by providing liquidity to clients, customers and counterparties. In connection with the provision of market
making-related services, the Company conducts activities that include, but are not limited to: (i) taking positions in anticipation of, and in response to customer demand to buy or sell, and — depending on the liquidity of the relevant
market and the size of the position — holding those positions for a period of time; (ii) managing and assuming basis risk between customized customer risks and the standardized products available in the market to hedge those risks;
(iii) building, maintaining, and re-balancing inventory, through trades with other market participants, and engaging in accumulation activities to accommodate anticipated customer demand; (iv) trading in the market to remain current on
pricing and trends; and (v) engaging in arbitrage activities to provide efficiency and liquidity for markets.

 Revenue
streams are generated by each of these market making related activities either individually or in combination with one or more of the other activities as part of an overall portfolio of positions assumed by traders in physical and financial markets.
Transaction price spreads to existing market levels together with market movement on the portfolio of managed market risk generate revenue. To a lesser extent, there are also revenue streams from service fees, lease fees, and investment appreciation
or depreciation.

 Within the commodity sector, the types of other parties that make markets in the same commodities vary by
asset class. Further, within each of the commodity asset groups, the types of other parties that make markets vary based on the type of physical or financial instruments in which positions are taken. For example, depending upon the relevant market
segment, other parties that make markets in the same commodities or commodity-related instruments include subsidiaries of bank holding companies and foreign banks, major oil companies, energy merchant companies, and non-regulated U.S.-based and
foreign owned commodity trading companies.

 On September 1, 2006, Morgan Stanley Capital Group Inc. purchased all of the
issued and outstanding capital stock of TransMontaigne Inc. and thereby acquired TransMontaigne Inc. and its affiliates (“TransMontaigne”), a group of companies operating in the refined petroleum products marketing and distribution
business.

 From time to time, the Company, either through its Commodities business or other business units, considers
investing in various types of commodity-related assets, either directly or through the acquisition of interests in entities that own commodity-related assets. While the Company currently holds investments in entities engaged in the business of
developing or acquiring assets similar to those currently owned by TransMontaigne, the Company, through its Commodities business, is not currently considering any investment in an operating company of the same size, nature or legal structure as of
that of TransMontaigne.

 The acquisition of TransMontaigne and its affiliates was accounted for as a business combination.
Since the acquisition date, the results of TransMontaigne and its affiliates have been consolidated by the Company and included within the Institutional Securities business segment.

As of December 31, 2010, total assets were approximately $[*], comprised primarily of Premises, equipment and software costs of $[*]
and Receivables: Customers of [*].

 Net revenues and Net loss applicable to Morgan Stanley for the year ended
December 31, 2010 were $[*] and $[*], respectively.

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 The acquisition of TransMontaigne on September 1, 2006 enhanced the Company’s
ability to engage in market making related activities in oil and related oil products by enabling the Company to expand its supply and distribution of oil and refined oil products across a broader range of clients and regions across the U.S., as
well as increase its oil storage capacity across the U.S.

 Financial Holding Company

Scope of Permitted Activities, page 9

Comment:

 3. We note your disclosure
that you have requested and obtained an extension to conform a limited set of activities and make certain divestments in order to comply with the BHC Act. Please tell us and revise your future filings to discuss the specific activities you plan to
conform to the requirements of the BHC Act and those which you intend to divest, and identify the respective timeframes for doing so.

 Response:

 The BHC Act provides a two-year period from September 21, 2008, the date
that the Company became a bank holding company, for the Company to conform its activities to the BHC Act, subject to three one-year extensions that may be granted by the Federal Reserve upon approval of the Company’s application. [*].

 [*]. If the Federal Reserve were to determine that any of the Company’s commodities activities did not qualify for the BHC Act
grandfather exemption, then the Company would likely be required to divest any such activities that did not otherwise conform to the BHC Act by the end of any extensions of the grace period. [*].

To the extent material, the Company will revise future filings accordingly to reflect any substantive developments.

Activities Restrictions under the Volcker Rule, page 10

 Comment:

 4

 4. We note your disclosure regarding the Volcker Rule here as well as elsewhere in your filing, including
its limitations on various aspects of your business. Please revise your future filings to address the following:

 a. Clearly disclose how you
define “proprietary trading” for these purposes.

 b. Identify the trading desks and other related business units that participate in
activities you believe meet the definition of proprietary trading. Identify where these activities are located in terms of your segment breakdowns. Quantify the gross revenues and operating margin from each of these units. Clearly identify the
extent to which such activities or business units have been terminated or disposed of as well as the steps you plan to take to terminate or dispose of the rest of these components.

 c. Revise your future filings to clearly identify aspects of your business that are similar to but excluded from your definition of “proprietary trading” for these purposes. Clearly disclose how
you differentiate such activities. Tell us the extent to which you believe it is possible that such activities will be scoped into the final regulatory definition of proprietary trading.

Response:

 The Company
has begun a review of its private equity fund, hedge fund and proprietary trading operations, and has announced its plans to dispose of its in-house quantitative proprietary trading unit, Process Driven Trading (“PDT”), in 2012 in advance
of the effectiveness of the Volcker Rule. However, given that the regulations implementing the substantive Volcker Rule provisions have not been published, the Company is unable to identify which other parts of its businesses will or might be
defined to be “proprietary trading” or, even if they were defined as “proprietary trading,” whether the Company would benefit from a “permitted activity” exception, such as market-making and hedging. As a result, the
Company cannot currently identify the trading desks and other related business units or other activities that might be within the scope of the final regulatory definition of proprietary trading. The Company is closely monitoring regulatory
developments related to the Volcker Rule and when the regulations are final, will be in a position to complete its review of its relevant activities and make plans to implement compliance with the Rule, which will likely not require full conformance
until July 2014, subject to extensions. To the extent material, the Company will revise future filings accordingly to reflect any substantive developments.

 Item 1A. Risk Factors, page 23

 Comment:

5. Please provide us with draft disclosure to be included in future filings that describes any risks that may result from the restrictions imposed on
proprietary trading by the Dodd-Frank Act, including a quantification of revenues generated from your proprietary trading business. If you do not believe this risk is likely to have a material effect on your operations, please explain the basis for
your belief.

 Response:

 As disclosed in response 4 above, while the Company has begun a review of its private equity fund, hedge fund and proprietary trading operations in light of the Volcker Rule, the regulations implementing
the substantive Volcker Rule provisions have not been published. As a result, it is too early for the Company to quantify how the Volcker Rule may impact the Company’s businesses. The Company has disclosed the indeterminate but potentially
significant impact that the Dodd Frank Act and other financial regulatory

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reform initiatives globally may have on its business. For example, in “Risk Factors—Legal and Regulatory Risk—The financial services industry is subject to extensive regulation,
which is undergoing major changes that will impact our business” the Company states:

 “In response to the financial
crisis, legislators and regulators, both in the U.S. and worldwide, have adopted, or are currently considering to enact, financial market reforms that result in major changes to the way our global operations are regulated. In particular, as a result
of the Dodd-Frank Act, we are subject to significantly revised and expanded regulation and supervision, to new activities limitations, to a systemic risk regime which will impose especially high capital and liquidity requirements, and to
comprehensive new derivatives regulation. Additional restrictions on our activities would result if we were to no longer meet certain capital or management requirements at the financial holding company level. Certain portions of the Dodd-Frank Act
were effective immediately, while other portions will be effective only following extended transition periods, but many of these changes could in the future materially impact the profitability of our businesses, the value of assets we hold, expose
us to additional costs, require changes to business practices or force us to discontinue businesses, could adversely affect our ability to pay dividends, or could require us to raise capital, including in ways that may adversely impact our
shareholders or creditors.”

 At this stage, the Company does not think its disclosure could more adequately or accurately inform
investors of the regulatory reform risks facing its business. As is well publicized, there are numerous rule-making initiatives being conducted by the Company’s principal regulators to implement the Dodd-Frank Act and address other banking
industry policy matters, which will reduce the uncertainties currently characterizing regulatory reform risks. As the rule making initiatives progress and their implementation impact crystallizes, the Company will provide disclosure of material
consequences to investors in future periodic filings. Where it is possible to provide a reasonable approximation of the material impact of regulatory proposals, the Company has provided that information to investors. An example of this is the
Company’s approximation of the impact on the Company’s risk weighted assets that might result from the implementation of the “Basel III” proposals (see page 93 of the 2010 Form 10-K). To the extent material, the Company will
revise future filings accordingly to reflect any substantive developments.

 Comment:

6. We note that your exposure to the Monolines at December 31, 2010 included $1.5 billion in insured municipal bond securities and $326 million of
mortgage and asset backed securities enhanced by financial guarantees. Additionally, we note your disclosure that your hedging program continues to become more costly and difficult to effect and that significant additiona1 losses could be incurred
as market conditions evolve. Please provide risk factor disclosure in future filings or tell us why you believe risk factor disclosure is not appropriate.

 Response:

 The Company believes its current risk factor and other disclosures in its
periodic filings are accurate and meaningful. However, to address the Staff’s comment, the Company will provide revised risk factor disclosure in its Form 10-Q filing for the quarterly period ending June 30, 2011 (“Second Quarter Form
10-Q”) as set forth below (additional disclosures underlined):

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 Holding large and concentrated positions may expose us to losses.

Concentration of risk may reduce revenues or result in losses in our market-making, investing, block trading, underwriting and lending
businesses in the event of unfavorable market movements. We commit substantial amounts of capital to these businesses, which often results in our taking large positions in the securities of, or making large loans to, a particular issuer or issuers
in a part